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Web3, AI and the Internet of Things: Exploring the Trivergence of Emerging Technologies

By Alex Tapscott

The rise of new technology has time again transformed business, consumer behavior, and society. But often it is the combination, or convergence, of several technologies that creates the most lasting impact on our world.

For example, the combination of smartphones and wireless networks lead to the rise of mobile apps, location-based services, and mobile-centric business models, transforming human behavior. The convergence of digital photography and the internet transformed the way people capture, share, and store photos. Earlier in history, steam engines, combined with improvements in metallurgy and manufacturing processes, revolutionized transportation, agriculture, and manufacturing. Telegraph lines were laid down beside railways making them arteries for freight and information.

Today, we stand at the brink of another transformative era and when all is said and done it is the convergence of Artificial Intelligence, Blockchain and the Internet of Things – that will combine for maximum impact.

Call it The Trivergence.

First a primer: The Internet of Things describes the growing connectivity of everyday objects and the physical world to the Internet. Today’s IoT applications range from the mundane—such as your fridge ordering milk from Amazon—to the miraculous. AI describes the ability for computers to perform tasks that used to require human intelligence, from writing investment memos to writing poetry to writing code to generating art and music. And of course, blockchains have unleashed Web3. They enable us to store, manage, and exchange anything of value—money, securities, intellectual property, deeds and contracts, music, votes, and our personal data—in a secure, private, and peer-to-peer manner.

I have been revisiting this idea of the trivergence considering the news that ChatGPT Creator Sam Altman’s Worldcoin is about to close on another $100 million in funding. Launched in 2019, Worldcoin’s ambitious vision revolves around building the largest identity and financial network worldwide as a public utility to enable everyone to own and participate in the global economy regardless of their background or geographic location.

Altman’s vision of the future assumes AI transforms the economy, culture, and the nature of human work in big ways, where massive gains in productivity are offset by potential dislocation and displacement of workers. The solution to the disruption is a universal basic income (UBI) where we all participate in the bounty of AI.  In order to access Worldcoin, users must first verify their “humanness” via an eye scanning device that looks kind of like the love-child of Hal-9000 and a basketball. From there, they receive a wallet with access to a free token that comes with future utility and governance as a reward. This project has continued to gain momentum with over 1.7 million sign ups, and investment from noteworthy backers including a16z crypto, Coinbase ventures, and Khosla Ventures.

It also exemplifies the trivergence in action. The retinal scanning orb is an example of cheap, durable and useful IoT technology, while the Worldcoin token and wallet illuminates the ease of deploying a global system for moving and storing money. Users benefit from AI disruption, getting airdropped AI dividends to their wallet. Worldcoin has courted controversy, with some critics alleging that retinal scans undermine privacy, and who owns the data anyway? But in my view, this is a bold and visionary plan that clarifies for me just how important the trivergence will be to our future.


Federal Reserve Bank of Atlanta Publishes Glowing Report on Web3

The Federal Reserve Bank of Atlanta recently published a Web3 report on its intersection with financial services, which highlighted Web3, decentralized finance (DeFi), financial infrastructure, and regulatory challenges in a well-researched and positive light. As the report summarizes, Web3 is “the next iteration of the world wide web or internet,” which will impact finance through reduced costs and fuel innovation within traditional financial service practices. Furthermore, it emphasizes the novel way in which DeFi leverages decentralized applications (dApps) to automate financial market activities like exchanging value, collateralized lending, and making payments.

Binance Bids Farewell to Canada, Cites Unfavourable Environment

The world's largest crypto exchange, Binance, has officially announced departure plans from the Canadian market due to its new regulations governing stablecoins and investor thresholds for digital currency trading platforms. While competitors like Coinbase, Kraken, and Gemini have expressed their intentions to pursue registrations, the more stringent regulations also fueled Canadian exits from Paxos and dYdX. In Binance's official statement released last Friday, the company expressed its hope to re-enter the Canadian market "when users once again have the freedom to access a broader suite of digital assets" in the future.

Unstake In A Minute, Queue For A Month: Ethereum’s Validator Rush Following Shanghai

On April 12th, Ethereum's Shanghai network went live, allowing investors to withdraw their staked ETH at will. Despite this, demand for staking ETH to earn a current 5.5% annualized yield has surged, resulting in wait times of nearly a month to become an active validator. As of now, there are 50,000 validators queued up to enter the network and start staking, with the wait time currently at 653 hours, or just over 27 days. In contrast, it takes less than a minute for a validator to unstake their ETH. These upcoming validators include new market participants and previous stakers reentering after testing the seamless withdrawal process enabled by the Shanghai upgrade.

NFT’s through your TV?

South Korean tech giant LG Electronics has filed a patent for a television that allows users to buy, sell, and trade non-fungible tokens (NFTs) from the comfort of their living rooms. The patent states that the TV would connect to an NFT market server, display various artworks, and enable purchases through the user's cryptocurrency wallet linked to the TV. This move follows LG's previous initiatives in the Metaverse and NFT space, including launching their own NFT marketplace, LG Art Labs, and introducing the Blade Wallet for NFT trading. Despite the recent slowdown in Metaverse attention, LG’s patent filing showcases their confidence and continued interest in the future of the NFT market.

Opening Your Eyes to Sam Altman’s WorldCoin Crypto Project
Join Alex Tapscott and Andrew Young as they decode the world of DeFi. Listen in as they discuss a roundup of current macroeconomic themes, the looming debt ceiling situation in the United States, potential Bitcoin selling pressure resulting from the U.S. government’s Silk Road seizure, newfound popularity of Bitcoin ordinals, and all things OpenAI CEO Sam Altman’s crypto project, WorldCoin!

The United States’ Treasury Department has marked June 1st as the deadline in which the U.S. government may no longer be able to service its debt, barring any raise or suspension to the limit; Alex and Andrew break the situation down and debate its influences on crypto. There have been two sizeable Bitcoin “flash crashes” in the past few weeks, with many individuals in the space pointing fingers at the U.S. government, who obtained and announced plans to periodically sell 50,000 BTC from the Silk Road seizure. Sam Altman’s WorldCoin is a crypto project that was launched in 2019 to establish the largest identity and financial network in the world; it has amassed cumulative funding of $100 million to date with over 1.7 million users. WorldCoin distributes a free token for future utility and governance in the ultimate “global economy” to users who participate in an iris-scan, proving their unique “humanness,” and could serve as an effective channel in the distribution of a universal basic income.

Tune in to the 96th DeFi Decoded episode to hear Alex and Andrew discuss all things DeFi and WorldCoin. What’s the latest on the approaching deadline for the U.S. debt ceiling limit, and how has this affected the crypto market? What is WorldCoin, and which global challenges does it aim to solve? How might WorldCoin holders capture value, and is it a realistic universal basic income opportunity?
Chart #1.png
Source: The Block
Chart #1: Life After Shanghai Upgrade: Ethereum Staking and Validators Reach New Highs
Ethereum's Shanghai network upgrade on April 12th led to a decline in the total number of validators and staked ETH on the Beacon Chain as contributors gained the ability to unstake ETH; however, this downturn was temporary and short-lived. Within a month, the Beacon Chain witnessed a remarkable resurgence, surpassing pre-upgrade levels. Currently, the Beacon Chain boasts impressive figures, with 18.24 million ETH staked, approximately 15% of ETH's total circulating supply, and a staggering 573 thousand active validators. The surge in demand to earn attractive annualized yields of 5.5% and the flexibility to stake and unstake at will have been significant catalysts for this remarkable rise in the number of validators and the cumulative amount staked.
Chart #2.png
Source: Messari
Chart #2: Transaction Fees on Fire: BRC-20 Tokens Push Bitcoin to the Limit
On May 8, Bitcoin witnessed an extraordinary surge in network activity, propelling fees to an all-time daily high of $17.42 million. This remarkable milestone, only previously observed in December 2017 and April 2021, was primarily fueled by the skyrocketing popularity of BRC-20 tokens. These experimental tokens, enabling the creation and transfer of fungible tokens on the Bitcoin blockchain, commanded a staggering market capitalization of $990 million, now reduced to under $500 million. The overwhelming demand for BRC-20 tokens caused significant congestion on the network, ultimately resulting in a large fee escalation. As the trading frenzy and volumes have, for now cooled, the number of transactions and associated fees have since subdued.
Chart #3.png
Source: glassnode
Chart #3: Lightning Strikes: Bitcoin’s Turbocharged Transaction Solution for Less
The Lightning Network is a Layer 2 payment protocol technology built on Bitcoin's blockchain to help facilitate instant, secure, and cost-effective transactions; the solution aims to overcome the limitations of Bitcoin's seven transactions per second (TPS) processing capacity. With the Lightning Network's capacity increasing by 530% since the start of 2020, it provides a real solution to Bitcoin's fast-growing network activity and transaction fees. By leveraging bidirectional payment channels and smart contracts, it empowers users with lightning-fast payments, scalability to achieve a TPS in the millions, and seamless cross-chain transactions.