Blockchain Platform for Combating Corruption

                                                                                           Viribus unitis res parvae crescunt

                    

Blockchain Platform for Combating Corruption

      The improvement and increasingly versatile use of the blockchain technology create fundamentally new conditions for the development of society based on decentralisation, transparency and openness, on business of mutual trust and cooperation and on direct participation of people in the economy and management.

      Therefore, it is so important not to remain inertial observers, but actively participate in the process of the ongoing changes and make full use of progressive novelties, becoming full-fledged participants, as well as initiators of modern IT innovations.

      Blockchain as the General Ledger (the main consolidated register) of global decentralised accounting provides an opportunity to keep verified accounting records of any kind of values fixed in the digital code at minimal cost. Thanks to the universal accounting organised is this way, mutual trust in business environment and public administration is being strengthened. The efficiency of decision-making procedures, transparency, honesty of social partners, respect, as well as mutual responsibility in fulfilling obligations are all being boosted.

      In the conditions of a digital society, the blockchain platform also provides the necessary prerequisites for an objective assessment of the merits of the representatives of public authorities. For determining their adequate responsibility to the electorate, which corresponds to the individual contribution of everyone to the results achieved. Thus, the purposeful improvement of state administration and its professionalisation in the form of meritocracy are being encouraged.... Read more: https://www.amazon.com/HOW-GET-RID-SHACKLES-TOTALITARIANISM-ebook/dp/B0C9543B4L/ref=sr_1_1?crid=19WW1TG75ZU79&keywords=HOW+TO+GET+RID+OF+THE+SHACKLES+OF+TOTALITARIANISM&qid=1687700500&s=books&sprefix=how+to+get+rid+of+the+shackles+of+totalitarianism%2Cstripbooks-intl-ship%2C181&sr=1-1

     

Zero Trust

Since 2012, a sophisticated artificial intelligence has dug through big data to find signs of corruption in the Chinese government — but local officials in many areas are now shutting it down, according to the South China Morning Post.

One researcher involved in the program, which is portentously called “Zero Trust,” told the Hong Kong newspaper that local officials might be shutting the program down because they don’t “feel quite comfortable with the new technology.”

But the SCMP has another explanation: the AI works too well.

Corruption Eruption

Zero Trust sifts through data from banks, property and construction records, and even satellite data to flag signs of corruption, according to the paper. It might notice a suspicious transfer of money, for instance, or a new car or property registered to the name of a government official’s family or friends.

“We just use the machine’s result as reference,” Zhang Yi, an official in a province that’s still using the software, told the SCMP. “We need to check and verify its validity. The machine cannot pick up the phone and call the person with a problem. The final decision is always made by humans.”

Algorithmic Justice

Though corruption in China is reportedly widespread, officials are probably right to be suspicious of a black box algorithm that can bring down the hammer of justice without explaining its reasoning.

“AI may quickly point out a corrupt official, but it is not very good at explaining the process it has gone through to reach such a conclusion,” an unidentified researcher who worked on Zero Trust told the SCMP. “Although it gets it right in most cases, you need a human to work closely with it.”

READ MORE: Is China’s Corruption-Busting AI System ‘Zero Trust’ Being Turned off for Being Too Efficient? [South China Morning Post]

https://futurism.com/the-byte/china-ai-corruption

The dynamical structure of political corruption networks

Haroldo V. Ribeiro, Luiz G. A. Alves, Alvaro F. Martins, Ervin K. Lenzi, Matjaz Perc

(Submitted on 5 Jan 2018)

Corruptive behaviour in politics limits economic growth, embezzles public funds, and promotes socio-economic inequality in modern democracies. We analyse well-documented political corruption scandals in Brazil over the past 27 years, focusing on the dynamical structure of networks where two individuals are connected if they were involved in the same scandal. Our research reveals that corruption runs in small groups that rarely comprise more than eight people, in networks that have hubs and a modular structure that encompasses more than one corruption scandal. We observe abrupt changes in the size of the largest connected component and in the degree distribution, which are due to the coalescence of different modules when new scandals come to light or when governments change. We show further that the dynamical structure of political corruption networks can be used for successfully predicting partners in future scandals. We discuss the important role of network science in detecting and mitigating political corruption: https://arxiv.org/abs/1801.01869

Ten years in, nobody has come up with a use for blockchain

Everyone says the blockchain, the technology underpinning cryptocurrencies such as bitcoin, is going to change EVERYTHING. And yet, after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain—besides currency speculation and illegal transactions.

Each purported use case — from payments to legal documents, from escrow to voting systems—amounts to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed. What if there isn’t actually any use for a distributed ledger at all? What if, ten years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it?

Payments and banking

The original intended use of the blockchain was to power currencies like bitcoin — a way to store and exchange value much like any other currency. Visa and MasterCard were dinosaurs, everyone proclaimed, because there was now a costless, instant way to exchange value without the middleman taking a cut. A revolution in banking was just the start… governments, unable to issue currency by fiat anymore, would take a back seat as individual citizens transacted freely outside any national system.

The killer feature: knowing you can get your money back

It didn’t take long for that dream to fall apart. For one thing, there’s already a costless, instant way to exchange value without a middleman: cash. Bitcoins substitute for dollars, but Visa and MasterCard actually sit on top of dollar-based banking transactions, providing a set of value-added services like enabling banks to track fraud disputes, and verifying the identity of the buyer and seller. It turns out that for the person paying for a product, the key feature of a new payment system — think of PayPal in its early days — is the confidence that if the goods aren’t as described you’ll get your money back. And for the person accepting payment, basically the key feature is that their customer has it, and is willing to use it. Add in points, credit lines, and a free checked bag on any United flight and you have something that consumers choose and merchants accept. Nobody actually wants to pay with bitcoin, which is why it hasn’t taken off.

The key feature of a new payment system — think of PayPal in its early days — is the confidence that if the goods aren’t as described you’ll get your money back.

It would take 5,000 nuclear reactors to run Visa on the blockchain.

Plus, it’s not actually that good a payment system — Visa can handle sixty thousand transactions per second, while Bitcoin historically taps out at seven. There are technical modifications going on to improve Bitcoin’s efficiency, but as a starting point, you have something that’s about 0.01% as good at clearing transactions. (And, worth noting, for those seven transactions a second Bitcoin is already estimated to use 35 times as much energy as Visa. If you brought Bitcoin’s transaction volume up to Visa’s it would be using as much electricity as the rest of the world put together.)

Freedom to transact without government supervision

In many countries, and often our own, a little bit of ability to keep a few things private from the authorities probably makes the world a better place. In places like Cuba or Venezuela, many prefer to transact in dollars, and bitcoin could in theory serve a similar function. Yet there are two reasons this hasn’t been the panacea it’s assumed: the advantages of government to the individual, and the advantages of government to society.

The government-backed banking system provides FDIC guarantees, reversibility of ACH, identity verification, audit standards, and an investigation system when things go wrong. Bitcoin, by design, has none of these things. I saw a remarkable message thread by someone whose bitcoin account got drained because their email had been hacked and their password was stolen. They were stunned to have no recourse! And this is widespread — in 2014, the then-#1 bitcoin trader, Mt. Gox, also lost $400m of investor money due to security failures. The subsequent #1 bitcoin trader, Bitfinex, also shut down after a loss of customer funds. Imagine the world if more banks had been drained of customer funds than not. Bitcoin is what banking looked like in the middle ages — “here’s your libertarian paradise, have a nice day.”

Bitcoin is what banking looked like in the middle ages — “here’s your libertarian paradise, have a nice day.

[This issue is particularly near and dear to my heart because my own company, True Link, is designed to help vulnerable seniors — people likely to give out their credit card number over the phone, enter sketchy sweepstakes or donate to sketchy charities, participate in scam investments, or install password-stealing malware. As the people who most need security enhancements in banking and payments, they depend heavily on the existing protections and would absolutely be harmed by many of the proposed changes in favor of private-key authenticated, instant, and irreversible transfers. Someone starting from a human perspective on banking security—who is currently harmed and how can we help them?—would come up with something very different from blockchain!]

Mongolian banks experienced +400% transaction volume with new sanctions against Russia. New slogan –“Bitcoin: less cops than Mongolia.”

Second, government policies are designed to disrupt terrorist financing and organized crime, and prevent traffic in illegal goods like stolen credit card numbers or child pornography. The mainstream preference is to have transactions private but not undiscoverable under warrant — ask “should the government have a list everyone you’ve paid money to,” and most will say no; ask “should the government be able under warrant to get a list everyone a child pornography collector has paid money to,” and most will say yes. Nobody wants bitcoin to 100x the total traffic in goods and services our government defines as illegal — as one bitcoin enthusiast pointed out to me, “If you invented cash today, it would be illegal too.”

Micropayments and bank-to-bank transfers

It’s worth noting two particular payment use cases where people are particularly excited about blockchain-based currencies: micropayments and bank-to-bank transfers. In terms of micropayments, people enthuse that bitcoin transactions are free and instant. Actually, they take about eight minutes to clear and cost about four cents to process. People have proposed that you will use bitcoins for micropayments — for example, paying two cents to a musician to listen to their song on the internet, or four cents to read a newspaper article. Yet the infrastructure to do this — for example, advance authorization with the source of funds so you don’t have to wait eight minutes to read the article you just clicked — actually eliminates the need for bitcoin at all. If you’re happy to pay four cents an article or two cents a song, you can set it up to bill once a month from your bank account and read to your heart’s content. And in practice, people prefer subscription services to micropayments.

Three years in, Ripple is to SWIFT what toothpicks are to the US GDP

In terms of interbank payments, many people mention Ripple as a promising way to transfer money between banks. Over the last 30 days it processed two billion dollars (as of this writing) worth of interbank and interpersonal transactions — about 40 seconds’ worth of volume on the SWIFT interbank network — after three years of being available to banks to trade 90% of the world’s high-volume currencies. This is like the proportion of US GDP comprised by toothpick sales. Why haven’t banks preferred this new technology? The answer is that setting up a Ripple Gateway isn’t actually much different than using the existing corresponding-account system — except that a lost password or security token can lead to much larger and more instant actual losses — which, as a reminder, has happened to more leading bitcoin exchanges than have managed to avoid it. The same features that make the banking system attractive to end users also make it attractive to banks. They already have ledgers, and don’t need to distribute them, anonymize them, encrypt them, publish them, and make them irreversible.

“Smart” contracts

“Smart” contracts are contracts written as software, rather than written as legal text. Because you can encode them directly on the blockchain, they can involve the transfer of value based directly on the cryptographic consent of the parties involved — in other words, they are “self-executing.” And in theory, contracts written in software are cheaper to interpret — because their operation is literally mathematical and automatic, there are no two ways to interpret them, which means there’s no need for expensive legal battles.

And yet the real-world examples show the ways this is problematic. The most prominent and largest smart contract to date, an investment vehicle called the Distributed Autonomous Organization (DAO), enabled its members to invest directly using their private cryptographic keys to vote on what to invest in. No lawyers, no management fees, no opaque boardrooms, the DAO “removes the ability of directors and fund managers to misdirect and waste investor funds.” And yet, due to a software bug, the DAO “voted” to “invest” $50m, a third of its members’ money, into a vehicle controlled by very clever programmers who knew a lot about recursion issues during balance updates. Some said this was a hack or an exploit because the software had not functioned as intended, while others said that there was no such thing as a hack — the whole point was that the software made decisions autonomously and there were no two ways to interpret it, and if you didn’t understand how the software worked you shouldn’t have participated. In the end, everyone got together and voted to retroactively amend the software contract and move the money back to its original owners. What’s the takeaway? Even the most die-hard blockchain enthusiasts actually want a bunch of humans arguing about the underlying intention behind a contract, rather than letting the software self-execute. Maybe the “dumb” way is smart after all?

The DAO was an illustrative experiment, but what about for routine transactions at big companies? The investors and startups in the smart-contract space promise that the block chain will enable super-fast execution and payment — for example that in healthcare applications, “instead of waiting 90–180 days for a claim to be processed, or spending hours on the phone trying to get your bill paid, it can in theory be processed on the spot.” But that’s true for any software-enabled purchasing system. My company’s Amazon servers scale automatically based on website traffic and bill us for how much we use. The idea that smart contracts would change this is a fallacy — it conflates the legal arrangement being put into effect with software with the legal arrangement itself being coded as software. Amazon’s terms of service are not a smart contract, but the billing system that implements those terms is automated. To the extent that health insurance billing, for example, is not automated, the problem isn’t that existing software isn’t “smart” enough to handle submitting claims and paying them electronically, it’s that the insurance company is slow moving, either by accident or because they on-purpose prefer a human review.

In the end, everyone from blockchain enthusiasts to health insurers actually wants to argue out in human language what the business relationship is and interpret it on an ongoing basis, and then to write software that handles the fulfillment and payment. That already exists — it’s the status quo.

Distributed storage, computing, and messaging

Another implausible idea is using the blockchain as a distributed storage mechanism. On its face it makes sense — you break your document up into “blocks”, encrypt them, and put them in a distributed ledger… it’s backed up across multiple locations, it’s secure, and easy to track everything that happened.

Yet there are multiple excellent ways to break up files, encrypt them, and replicate them across multiple storage media in different locations. There is already a company that bills itself as a cheaper, distributed Dropbox, which encrypts and stores files across multiple users’ hard drives and pays them a small fee for the free space on their hard drives. The block chain is just a particularly inefficient and insecure way of doing this.

There are four additional problems with a blockchain-driven approach. First, you’re relying on single-point encryption — your own private keys — rather than a more sophisticated system that might involve two-factor authorization, intrusion detection, volume limits, firewalls, remote IP tracking, and the ability to disconnect the system in an emergency. Second, price tradeoffs are entirely implausible — the bitcoin blockchain has consumed almost a billion dollars worth of electricity to hash an amount of data equivalent to about a sixth of what I get for my ten dollar a month dropbox subscription. Fourth, systematically choosing where and how much to replicate data is an advantage in the long run — the blockchain’s defaults on data replication just aren’t that smart. And finally, Dropbox and Box.com and Google and Microsoft and Apple and Amazon and everyone else provide a set of valuable other features that you don’t actually want to go develop on your own. Analogous to Visa, the problem isn’t storing data, it’s managing permissions, un-sharing what you shared before, getting an easy-to-view document history, syncing it on multiple devices, and so on.

The same argument holds for proposed distributed computing and secure messaging applications. Encrypting it, storing it forever, and replicating it across the entire network is just a ton of overhead relative to what you’re actually trying to accomplish. There are excellent computing, messaging, and storage solutions out there that have all the encryption and replication anyone needs — actually better than blockchain based solutions — and have plenty of other great features in addition.

Stock issuance

It was much-heralded when NASDAQ launched an internal blockchain-driven exchange for privately-held stocks. But wait: correct me if I’m wrong, but the whole purpose of NASDAQ (or the DTCC trade clearing system, for example) is that it has a ledger of who owns what stocks? Were they nervous that their systems, absent blockchain, would soon be unable to keep track of who owns what?

Similar to other transaction-tracking problems such as customer-to-merchant payments, the difference between NASDAQ’s ledger and blockchain’s ledger is that blockchain is distributed — it addresses the problem of lack of a trusted intermediary. And yet (for legal transactions) the company itself, its transfer agent of record, a clearinghouse, or an exchange are all trusted intermediaries and typically provide value-added services in addition. The reason NASDAQ is the right home for a blockchain-driven exchange is that they’re expert in the compliance and security aspects of trading stock. Cut out the middleman (here, NASDAQ itself) and the government and you’ll ultimately be limited to companies that choose to make an end-run around the legal, compliance, and tracking systems common to the mainstream market. As people who trade in unlisted stocks will tell you, that’s a recipe for getting your money stolen.

And we’re already seeing this. New companies have also begun creating blockchain-based “coins” convertible into company stock, and selling them to the public in Initial Coin Offerings, or ICOs, as a cheaper and more flexible way to raise money than a traditional Initial Public Offering of stocks on an exchange. It will be interesting to see how long this craze lasts — among other things, offering tokens convertible to stock counts as a securities offering, and so the SEC rules presumably apply to these securities offerings just like any other. Either the “coins” are just less-secure electronic stock certificates — protected by however carefully you store your password, rather than by the laws and protections of a securities exchange — or it’s another attempt to do an end-run around the law.

Authenticity verification

Another plausible use of the blockchain is that if you want to make a public, unalterable, undeleteable signed statement, you can “publish” it to the block chain — thinking of the distributed ledger as more like a diary than a way to buy and sell. In theory you could use this for recording vote tallies, verifying the origin of diamonds or brand-name gear, verifying people’s identity, resolving the ownership of domain names, keeping items in escrow, disclosing provisional patents under seal, notarizing documents, and so on.

Without diving too thoroughly into the details of each of these, it seems the use cases all fall apart pretty quickly. For voting, the status quo is recording the total number of ballots cast, with the voter dropping a visible paper ballot in a box, and journalists and observers from both sides watching the ballot boxes the whole time. The tough problem in voting is keeping who voted for who anonymous and yet making sure that voters and votes are one to one. Paper does this somuch better than blockchain.

For a public notary or similar, verifying your driver’s license or having witnesses known to you present means that it wasn’t signed with a stolen password or private key — but, if a password or private key is adequate, you can just publish it signed with a PGP key. For establishing the authenticity of brand name goods like watches or handbags, or that a diamond was ethically mined, the ledger being distributed and encrypted doesn’t add any value — the originating company can just include a certificate you can verify online, just as they have done in the past. In cases of escrow, a smart contract can automatically pay for the goods without a need for a third party to verify and hold the funds, but you still need a trusted party to verify that the goods are delivered and as-promised.

And finally, if you want to irrefutably prove that you knew X at time Y without disclosing the actual knowledge publicly, encrypt it and email it to yourself at both a gmail and a hotmail address or post it on bitbucket, or print it out and notarize it, or postmark it by mailing it to yourself, or tweet an md5 of it, or whatever. But then again, how large is the irrefutably-prove-you-knew-X-at-time-Y-without-disclosing-X industry? Can you think of any leading company, or any company at all, that provides this service?

For domain resolution — the process of figuring out whose servers get to see the traffic and respond to your requests when you type a URL into your address bar — it’s promising to imagine that an all-digital record of smart contracts, where the actual act of payment being published to the ledger also updates who the domain resolves to, obviating the need for domain escrow services. Yet in practice, as with the DAO or other smart contracts, if valuable domains change hands due to theft or security issues, you actually need a way to override the ledger — as the result of a court order, for example. Just like with government-backed, law-backed bank accounts, real companies won’t prefer a situation in which a security breach or stolen password could result in someone else permanently and irrevocably owning bankofamerica.com or disney.com or sony.com or whatever. Adopting block chain technology makes theft or impersonation more likely rather than less. It sounds hypothetical until you realize more leading bitcoin exchanges have been hacked than not — something that very rarely happens with the leading domain name providers.

Each of these seems trivial — yes, everyone knows handbags already come with certificates of authenticity with an ID number you can look up online — except that in each case, millions if not tens of millions of dollars have been spent on entire companies dedicated to just that particular use case. And you can get even more esoteric — Second Life on the blockchain, or blockchain-enabled appliances so your washing machine can smart-contract for its own detergent, or a sports league where the coaching decisions are written on the blockchain. (For real!)

In the end, the advantages of the existing human and software systems surrounding transactions — from verifying identity with a driver’s license to calling and clarifying the statements made in a credit disputed transaction to automatically billing your credit card for a newspaper subscription — outweigh the purported benefits, as well as hidden costs, of irrevocable, automated execution. Blockchain enthusiasts often act as if the hard part is getting money from A to B or keeping a record of what happened. In each case, moving money and recording the transaction is actually the cheap, easy, highly-automated part of a much more complex system.

Nobody went out and did a survey about whether most credit card users would be willing to give up their frequent flyer miles in return for also losing the ability to dispute a transaction.

Which leaves us where we started — currency speculation and illegal transactions — along with perhaps a lesson. In conversations with bitcoin entrepreneurs and investors and consultants, there was often a lack of knowledge or even interest in how the jobs were being done today or what the value to the end user was. With all the money spent on bitcoin cash registers, nobody went out and did a survey about whether most credit card users would be willing to give up their frequent flyer miles in return for also losing the ability to dispute a transaction. Presumably, they thought, the reason IPOs are so expensive or venture fund formation paperwork is so onerous is because all those lawyers and accountants are just getting rich sitting around pushing paper… a bunch of smart engineers in their 20s with no industry experience could certainly do their jobs, automatically, in a matter of months, with just a few million bucks of venture capital.

So far, not so much.: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

Andrew Wedeman «Looters, Rent-Scrapers, and Dividend-сollectors»: https://projects.iq.harvard.edu/gov2126/files/wedeman_looters_rentscrapers.pdf 

Crypto’s weird and wild year: 8 moments that defined the blockchain in 2021

From Musk to meme coins, the blockchain saw no shortage of headline-grabbing news this year.

BY CONNIE LIN

The year 2021 was one for the ages. COVID-19 raged on. The metaverse stepped into the limelight. The stock market popped, with the tally of public debuts soaring to new heights. Billionaires—and the rest of the world—looked skyward, imagining a future beyond our Earthly boundaries.

At the same time, some of the most headline-grabbing stories of the year revolved around the evolving landscape of finance, which is quickly being pioneered by the brave and the bold. From Elon Musk and NFTs to meme coins and cryptocurrency crackdowns, these were some of the biggest moments that defined the blockchain in 2021:

BITCOIN REACHED RECORD HIGHS—AGAIN AND AGAIN

Bitcoin repeatedly defied the expectation of skeptics in 2021, soaring to dizzying heights with mind-numbing effect. It rose meteorically from $30,000 at the beginning of the year, to $40,000, to $50,000, and then—after an early-summer cratering of the crypto economy, with Bitcoin losing over 30% of its value during the course of a single day—back up to a record high of $68,000 in November.

The roller-coaster ride in price—which, before December 2020, had never hit $20,000—made millionaires out of small-time hobby investors nearly overnight, and also probably gave them whiplash after it then dropped repeatedly in volatile swings. But hey, the thrill is part of the game: Big risk, big rewards.

SHIBA INU SURPASSED DOGECOIN

You could also call it the year of the meme coin. Dogecoin had a heck of a run, surging over 12,000% from the start of the year to early May, meaning—try not to cry—if you invested just $500, you would have earned over $60,000 from doing nothing, really.

But those who bought into the joke token—which is based on a popular meme and bears the face of a Shiba Inu dog—are a lion-hearted bunch, matched only perhaps by the fervent investors of the rival joke token, Shiba Inu coin, which was engineered in August 2020 specifically to become the “Dogecoin killer” (and which bears the face of an animated Shiba Inu—get it?).

Despite the best efforts of Elon Musk—possibly DOGE’s most influential fan—SHIB finally completed its mission in November, temporarily overtaking its predecessor in the cryptocurrency rankings by market capitalization. (However, SHIB has since fallen back to the spot just below DOGE—and the internet culture wars continue.)

ELON MUSK BROUGHT CRYPTO LOVE TO SNL

It doesn’t get much more mainstream than Saturday Night Live, the sketch comedy TV show that features the most iconic and/or beloved celebrities of our time as host. In May, it tapped Elon Musk, of Tesla and SpaceX fame, who’s recognized in the crypto universe as one of its most powerful trend makers. He can send tokens spiking or spiraling, depending on his mood, all with the post of a cryptic tweet.

There was great hype over Musk’s appearance, particularly when he suggested via Twitter that it would include a skit about a “Dogefather”; fans then bought Dogecoin en masse, sending its price to a record high of 73 cents.

Unfortunately, the gold rush didn’t pan out—minutes into the episode, Dogecoin’s value fell off a cliff, tumbling as much as 30%, as guest host Musk quipped that the whole thing was a “hustle.” (He made up for it, perhaps, when he later adopted a pet Shiba Inu puppy named Floki, sparking another jump in Dogecoin’s price.)

NFTS SPAWNED A BURGEONING MARKET

NFTs, or digital tokens that let purchasers claim ownership of items that exist solely online, exploded this year much like a supernova: quickly and with far-reaching consequence. These digital collectibles were being minted left and right, by artists in every medium—from the famous to the obscure—and megacompanies in every industry; often they sold for millions of dollars.

Call it a fast-growing market or a bubble about to burst, but a new genre of consumerism has been created, and it’s one that embraces the spectacle. Among the trendiest NFTs of the moment are digital avatars in various species, including “cool cats” and “mutant apes,” which go for roughly $30,000 in Ether. (A CryptoPunk human, meanwhile, once fetched $500 million.) Sometimes you know what you’re getting, and sometimes you don’t; each comes with a mishmash of characteristics, and it’s a gamble whether the one wearing the flat-brim hat will be worth more than the one with brains oozing down its face. But again, that’s just part of the fun.

EL SALVADOR BLAZED A CRYPTOCURRENCY TRAIL

In June, the Central American nation of El Salvador said it would become the first country to make Bitcoin legal tender. While exciting for crypto-heads, the move prompted mass protests from the small country’s impoverished population, which feared the volatile cryptocurrency would bring instability and inflation.

Never mind that the policy’s rollout in September was plagued by glitches—that the government-sponsored digital wallet crashed almost immediately, and the system’s failure to check new users’ photos resulted in rampant identity fraud. President Nayib Bukele’s response was instead to double down, taking the stage at a November blockchain conference—clad in a backwards baseball cap—to describe his forthcoming Bitcoin city, which would be shaped like a large coin and use geothermal energy from a surrounding volcano to power Bitcoin mining.

Bukele’s vision also involved $1 billion in bonds tied to the volcano—half of which would be used, naturally, to buy and sell more Bitcoin, a scheme many analysts see as the administration’s desperate ploy to claw its way out of a financial hole.

CHINA’S TOUGH CRACKDOWN

Following China’s militant crackdown this year was like watching a blood sport. Beijing took aim at massive companies like Ant Group and Didi, video games like Fortnite, and fandoms like the BTS Army. And cryptocurrency was among the most vilified of institutions, with officials likening it to the currency of scam artists and money launderers.

In May, the government tightened its grip by outlawing crypto mining—an industry that was booming in China due to the country’s coal-rich energy plants, which can fuel supercomputers that solve complex puzzles to verify the blockchain and unlock new coins. Just like that, the region that supplied roughly three-quarters of the world’s mining power in 2019 was suddenly offline under threat of stiff punishment, contributing to a major crypto-economy meltdown that lasted through the summer as brand-name coins like Binance and Ethereum shed up to 50% or more of their value.

STAPLES CENTER GETS A 21ST CENTURY REBRAND

In a glaring sign of the times, the legendary Los Angeles Staples Center—home of the NBA’s Lakers, and an often-namechecked venue where the likes of Bruce Springsteen, U2, Madonna, and Taylor Swift played to sold-out crowds—is becoming the Crypto.com Arena, it was revealed in November. The Singapore-based cryptocurrency exchange, which currently boasts 10 million users, paid a reported $700 million for the rebrand in what’s believed to be the richest naming-rights deal in sports history, taking the the arena’s title away from an increasingly obsolete metal clamp for paper printouts.

The new logo will be unveiled on Christmas Day, when the word “crypto” will start rolling off the tongues of, well, probably a few hundred thousand more people than before. Crypto.com, meanwhile, gets to be the cool new kid in town with lots of cash, flashing sponsorship deals with Formula One, UFC, and Hollywood star Matt Damon.

CRYPTO INVESTORS PLOT TO SNATCH THE CONSTITUTION

In November, an internet collective called ConstitutionDAO sought to raise the flag of a DeFi revolution, crowdfunding nearly $47 million in Ether to purchase an original copy of the United States Constitution, which it said would finally be owned by “we the people.” DAO, an acronym for decentralized autonomous organization, refers to a group with no top leadership, that governs itself by voting on rules automatically enforced through blockchain technology; ConstitutionDAO agreed it would turn over the prized document to a charitable organization dedicated to furthering democracy. It would have been a caper for the ages, had the group not ultimately lost their bid to Wall Street giant Citadel’s billionaire executive. But setback aside, the campaign embodied the spirit of DeFi—that power belongs in the hands of the many. Vive la revolution.

https://www.fastcompany.com/90709061/cryptos-weird-and-wild-year 

Decentralized Society: Finding Web3's Soul

by EG Weyl · 2022 

 We call this richer, pluralistic ecosystem “Decentralized Society” (DeSoc)—a co-determined sociality, where Souls and communities come ... :

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763