FYI Weekly - For Your Inspiration
Ripples from the backend - 3 surprising features of blockchain and AI technology
This week’s FYI Weekly uncovers 3 surprising features at the intersection of blockchain, wallets, tokenization and AI.
Beware, the post touches on advanced crypto and far-in-the-future economic topics. I am not an expert. The only thing provided here is an inspiration to contemplate, think about things, and ask new questions! Please do your own research! DYOR!
1/ Smart Contract Wallets
Self-custodial wallets
Not your keys, not your coins. This was one of the principles that I learned early on my blockchain journey. These private keys or seed phrases can be written down on a piece of paper, stored on a secure hardware device, or software-only.
Problem: How to keep the keys safe and protected? Well… with the advancement of technology today the following solutions appeared on the market
Claimed Solutions (Remember: DYOR and verify for yourself!)
Argent Vault gives you “peace of mind with multisig security and no seed phrase”. And it offers to protect your wallet with all the latest security features of iOS and Android. Read the docs.
AirGap allows you to turn a spare phone into a Cold Wallet. Generate and manage your private keys offline in cold storage. “1, 2, 3 Done – Seamless Usability” they claim. Check out the docs.
Torus claims “Feels like Web 2.0 login flows”. A non-custodial key management network allows splitting a user’s key between a device, an input, and an existing web 2.0 login. A user can reconstruct their key by combining any of the two. Learn more in the docs.
Risk
You start using tools without actually being able to verify their trustworthiness. A thorough understanding of blockchain architecture and mechanisms is required to actually be able to verify and test if you can potentially trust these solutions.
You trust the tools and decide to use them, but because of the fact that the tool provider is new on the market, it may face all sorts of challenges and the tool provider or open-source community fails to deliver updates, bug-fixes and patches, and does not properly maintain the product.
There are many more…
Impact
With the offering of recovery features, you might even involve other people who are even less experienced than you are. So if something goes wrong on their side… you might face trouble. Sounds nice, but comes at a cost!
Partial or total loss of your funds
Your funds are stuck in the smart contract wallet
Loss of access to funds
Learnings
Use technological innovation as a driver to try out new approaches and tools
Test new tools with small transaction amounts only
Think about the long-term sustainability of solutions
To work out your own wallet-handling strategy, know your needs, skills, and risk tolerance
2/ Unbundling of Companies
Digital Enterprise Revolution
There is something happening in the backend of our systems The development of private and public blockchain-based ecosystems, and their cryptographic coins, and tokens are likely to cause ripples spreading to all sorts of service industries and companies as a whole.
Think of enterprise blockchain adoption as the unbundling and rewiring of services, as well as the unbundling of their business model along the value streams and supply chains.
Moreover, the biggest silo, the company itself, the elephant in the room, can be sliced into smaller pieces and made investable on the market! Utilizing tokenization we are able to fractionalize and unbundle the whole company including their tangible and intangible assets.
How does the tokenization of assets of a company affect its total valuation?
Let’s assume that a company tokenizes its prime commercial real estate and offers it to investors. Is it also possible for the company to simultaneously tokenize its business model and its brand as well as services and offer these as separate token offerings to investors? And how does a loss in these tokens affect the share price of the company? And does the offering of traditional shares and going through an IPO still make sense? And what if investors prefer the company’s commercial real estate token and sell the business model token? While at the same time, their customers heavily hype their brand by buying items from their most recent NFT collection.
And what if the investor (or customer) is an AI agent?
And what are the broader consequences of new mechanisms of how to calculate the valuation of a company or ecosystem?
3/ Why Bitcoin as the currency of AI
Tech-led Societal Revolution?
A fascinating idea is discussed in ARK’s Bitcoin Brainstorm. Listen in for yourself. Technically speaking the Lightning API (docs) cleverly utilizes the capabilities of macaroons (think of sophisticated browser cookies) with that of a Lightning payment on the Lightning network. Therefore making it easy to charge fees for API requests. Can this mechanism now be used to automatically pay for AI model computations on a pay-per-use basis?
After digesting this week’s FYI, which questions do pop up for you? Where is your intuition leading you?
Well… to me this feels more like a revolution, than an evolution! And it is already rolling, slowly but steadily accelerating! We all are aware of the fall of Kodak and Nokia, but with these massive new opportunities arising from the backend, we might see a need to think more exponential, systemic, infinite, and non-linear.
I hope this has been inspiring for you!