Connect with us

Blockchain

UAE notes surging crypto demand as country deliberates regulations

Published

on

Blockchain

Crypto Co-ops and Game Theory: Why the Internet Must Learn to Collaborate to Survive

Published

on

If the internet was a person, ARPANET was its first tooth, Facebook was the pubescent rage of middle school and Bitcoin was the key to its first car. Today, we find ourselves riding shotgun, unsure of what direction the internet will take next.

There are those who feel we’re about to careen off a cliff, and others who write off the internet’s dangers as inevitable growing pains of innovation. 

The internet allows us to work together while simultaneously incentivizing us to tear each other apart. That dynamic isn’t sustainable for long. Perhaps over the next 10 years the internet will go through one more phase of reckless adolescence (who could forget their post-college twenties?) before arriving at the plateau of middle age and all of the wisdom, maturity and better judgment that comes with it. 

Elena Giralt is product marketing manager at Electric Coin Co., the team that launched zcash. She runs Blockchain Latinx, a monthly meetup group that discusses blockchain, cryptocurrencies and emerging technologies. This post is part of CoinDesk’s “Internet 2030” series about the future of the crypto economy.  

Positive-sum games

At any given time on the internet, more than four billion people have the ability to collaborate or compete with one another. Through social networks, memes and subcultures take on a life of their own, iterating off of each other like a psychedelic fractal. On the internet, we create, play and share new games that have never before existed.

These games are helpful frameworks to model out the tension between selfish incentives and community benefits. Informally, a zero-sum game is a competition where one player’s gain is the other player’s loss. In contrast, a positive sum game is generally thought of as a win-win situation. 

What is the optimal balance between cooperation and competition?

The key feature of positive-sum games is that collaboration leads to better outcomes than competition. That sounds great doesn’t it? But, in practice, collaboration often gives way to competition.

A decade ago, many people considered social networks like Facebook and Twitter positive sum games (look at all of the connections! all of the value generated! how fun!). Now the pervasive narrative is that our attention, our data and democracies around the world were a dear price to pay for the explosive growth of digital advertising.

Credit cards were also once considered positive-sum games – until you factor in predatory loans, crippling interest rates and discriminatory scoring systems. And for a moment it looked like liquidity mining was turning out to be another zero-sum wolf in positive sheep’s clothing. Or was it?

As communities shift from the monolithic platforms of Web 2.0 to the decentralized protocols of Web 3.0, it raises the question: what is the optimal balance between cooperation and competition? 

See also: Yearn, YAM and the Rise of Crypto’s ‘Weird DeFi’ Moment

Platform cooperativism

“Platform cooperativism,” coined in 2014 by New School Professor Trebor Scholz, establishes a framework for digital platforms that are cooperatively owned and governed by their users. Advocates of cooperative business models say they are more resilient, more equitable and more sustainable. To a crypto audience, this narrative should sound temptingly familiar. 

More and more, people are demanding input over how platforms are governed and managed. They want to weigh in on content moderation on Facebook, ad standards for children on Youtube and predictive AI models used by law enforcement. 

In his essay “Exit to Community,” Nathan Schneider said platforms should let the users decide these questions. He extolls the benefits of platform cooperativism and cites examples of big tech companies like Twitter considering this option. Vitalik Buterin seems to be a fan of this approach as well.

Governance tokens and auditable open-source code allow individual contributors to work together to determine the direction of a project. Airdrops and developer funds align incentives between end users and developers. Don’t think that cooperative models mean the absence of competitive mechanisms. In proof-of-work mining, individual nodes are pit against each other to compete for the block reward.

What makes these systems cooperative is that projects can update rules and redefine the game so long as they reach (and maintain) consensus among their members. On Ethereum, what started with gerbils in 2017 morphed into sushi three years later.

As we get better at coordinating, we will get better at reinventing and redefining the world we want to live in. 

Twitterswap: What does this look like in practice?

Is platform cooperativism the way to turn a zero-sum game into a value-add system? It’s probably part of the solution but you can’t just shill some tokens and expect the community to follow. Let’s consider a hypothetical to better understand what positive sum games and participatory business models look like in practice.

See also: Jack Dorsey Details Twitter’s Blockchain Strategy at Oslo Freedom Forum

From Twitter to Uniswap

In December 2019, Jack Dorsey announced that a special R&D team at Twitter was developing “an open and decentralized standard for social media.” Imagine if such a standard was released and widely adopted within the next decade. 

This move could help correct some of the challenges faced by social media today. For starters, it could assuage antitrust concerns. It could also cut down on bot activity and ad fraud. These platforms already have enormous developer communities who could quickly start building, hacking and integrating these networks to other services, spreading more open, decentralized standards across the web. 

Uniswap’s new governance token illustrates how powerful aligning incentives can be to protect a cooperative platform. By rewarding its users, Uniswap not only doubled its liquidity but also ensured the continued cooperation of community members. While people have been writing about crypto coops and Ostrom’s principles for years, examples like Uniswap prove that these models can bear fruit and are worth implementing.

It is imperative that we consider a better future is possible without deluding ourselves into thinking it will happen naturally and without sacrifice.

Now, imagine a governance token for Twitter. Imagine a mechanism that would allow users to weigh in on protocol upgrades, community rules and business strategies. While this scenario is extremely unlikely given that the top three investors of Twitter are Vanguard, BlackRock and Morgan Stanley, it is still fun to consider. 

In this world, Twitter users would not only have an incentive to improve the platform, but they would also have to coordinate with each other to do so. Developers would need to coordinate with each other to maintain a reliable and secure standard. End users would need to coordinate to understand the impacts and second-order effects of community decisions. If users in the United States want to remove all political advertising on the platform or censure politicians for violating community guidelines, how does that impact political dissidents in China or Belarus?

There are challenges with decentralized governance and cooperativism. Earlier this year, when a single hacker hijacked multiple high profile accounts, Twitter admins were able to freeze accounts and isolate the issue. This would have been a feat more difficult to coordinate in a decentralized system.

Keep your hands on the wheel

Whether you believe the internet is driving us through dark forests or digital gardens, this is not going to be a smooth ride. It is imperative we consider a better future is possible without deluding ourselves into thinking it will happen naturally and without sacrifice. 

See also: Jonathan Beller – How We Short Capitalism – And Finance the Revolution

In his latest post on Coordination, Buterin describes an unsettling feature about cooperative games, “We can prove that there are large classes of [cooperative] games that do not have any stable outcome … In such games, whatever the current state of affairs is, there is always some coalition that can profitably deviate from it.”

The internet in 2030 will be exciting and in flux. However, if we keep our hands on the wheel, focusing on shared objectives and aligned incentives, we should be able to steer ourselves in the right direction.

internet 2030
Disclosure

Source: https://www.coindesk.com/crypto-co-ops-game-theory-internet-collaborate

Continue Reading

Blockchain

Bitcoin Difficulty Ribbon Could Indicate Imminent Price Increase

Published

on

One is called the difficulty ribbon, and it has just broken out of the green buy zone for the first time since March in terms of compression. The metric was reported by analytics provider Glassnode, which added that historically, these had been periods characterized by a positive momentum indicating significant price increases.

Historical Bitcoin Buy Signal

The Bitcoin difficulty ribbon was created by chartist Willy Woo. It consists of simple moving averages of network difficulty enabling the rate of change of difficulty to be easily seen. Periods of high ribbon compression, such as the current situation, have been historically good buying opportunities.

There have been several significant price increases over Bitcoin’s lifespan that followed this ribbon compression breaking out of the green zone. The most recent was around April 2019 when BTC prices surged from below $5k to top out over $13k just three months later.

It was also observed that there had been a massive divergence in difficulty ribbon compression and Bitcoin price over the past six years. However, the chart has used a logarithmic price chart, which may have caused that anomaly.

Bitcoin’s hash ribbon is a similar metric, and CryptoPotato reported that it was flashing buy signals back in July. In the five weeks that followed, BTC price surged 34% to make its 2020 high.

You Might Also Like:

BTC Price Action Update

Looking at the shorter term, Bitcoin’s price chart has just printed another ‘Bart Simpson’ pattern with a sharp 2.3% decline in just over an hour, wiping Monday’s gains.

Prices had recovered to $10,725 at the time of writing, and sentiment appears to be bullish for BTC, according to a recent poll by analyst and trader Josh Rager.

Bitcoin is currently trading right on the 50-day moving average, which is acting as resistance at the moment. The next step above this is a break above $11k, while on the low side, there is strong support at the $10k level. Analyst ‘CryptoHamster’ added:

“After the breakout the resistance line became support. Now it is getting tested. If it holds, it would be a very nice sign. But it has to hold, otherwise the whole growth is just a short squeeze.”

Short term charts suggest price could go either way, but longer-term on-chain analytics, such as the difficulty ribbon, are more bullish.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited – first 200 sign-ups & exclusive to CryptoPotato).

Click here to start trading on BitMEX and receive 10% discount on fees for 6 months.


Source: https://cryptopotato.com/bitcoin-difficulty-ribbon-could-indicate-imminent-price-increase/

Continue Reading

Blockchain

Bulgarian National Convicted For His Role in a Bitcoin-Related Crypto Exchage Scam

Published

on

The owner of a cryptocurrency exchange has been recently convicted in a transnational scheme of defrauding people through an online auction fraud. Court says the scam reached a multi-million dollar scale.

At Least 900 Americans Victimized

As per a recent report, people who suffered from the fraud were probably more than 900 American citizens. According to the official statement, 53-years-old Rossen Iossifov, formerly of Bulgaria and reported owner of a Bulgaria-based Bitcoin exchange R.G. Coins, was convicted of both conspiracy to commit racketeering and money laundering. After a two-week trial, the jury in Frankfort, Kentucky and U.S. District Judge Robert E. Wier scheduled the sentencing to Jan 12, 2021.

Reportedly, some of the Romania-based members of the group posted a false advertisement to promote an online auction and sales websites, among which Craigslist and eBay. The ad promised its victims high-cost goods (typically vehicles) that did not exist.

As per the release, members of the scam would use stolen identities to promote and convince their victims to send money for the advertised items via “persuasive narratives”. For example, some of the ads had impersonated a military member in need of selling the advertised item before deployment.

The scammers also provided invoices with trademarks of reputable companies to their victims, making the transactions seem legit. The legal document also reveals that members of the conspiracy set up call centers, offering customer support. This way they would provide advice to client questions and “alleviate concerns over the advertisements”.

You Might Also Like:

Converting The Stolen Funds Into Crypto Assets

According to the official statement, once Iosiffov received the victims’ funds, he and his fellows would convert them into crypto assets and transfer them to off-shore money launderers.

As per the court documents, “since at least September 2015 to December 2018, the Bulgarian exchanged crypto assets into local fiat currency on behalf of his Romania-based partners in the scam, knowing that Bitcoin presented the proceeds of illegal activity.”

According to the court statement, in just two and a half years, Iossifov exchanged more than $4.9 million worth of Bitcoin for only four of the members of the criminal team.

A total of seventeen defendants have been convicted in the case. Three others are fugitives. Police departments in the U.S. and Romania have led the procedures on the case.

It’s worth noting that the US DOJ is becoming increasingly active in pursuing crypto-related fraud. As CryptoPotato reported earlier, it went after 280 cryptocurrency accounts related to hackers from North Korea.

SPECIAL OFFER (Sponsored)
Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited – first 200 sign-ups & exclusive to CryptoPotato).

Click here to start trading on BitMEX and receive 10% discount on fees for 6 months.


Source: https://cryptopotato.com/bulgarian-national-convicted-for-his-role-in-a-bitcoin-related-crypto-exchage-scam/

Continue Reading

Trending