Ethereum Merge for Attorneys is yet another installment in a series to help busy executives take a dive into the new world of crypto in bite-sized chunks. The purpose of this week's entry is to give the reader a basic understanding of the Ethereum Merge, how it is being implemented, and where thought leaders project it going. Here are this edition's nuggets for the Ethereum Merge for Attorneys.
- If you have been paying attention to Ethereum headlines in the news, you may have heard about the big upgrade to ETH 2.0. Well, I have news for you. It occurred last night at around 11pm PT.
- The Merge is an upgrade to the Ethereum network that will move the system from a proof-of-work model to proof-of-stake (explained here in previous post). The result is that Ethereum will use 99% less energy.
- Ethereum is the second largest cryptocurrency with a market cap of over $200B and thousands of successful projects have been built on top of it including Polygon, Decentraland, The Sandbox, Chainlink, the OpenSea marketplace, the Brave browser, and even Tom Brady's Autograph.
- Ethereum will use much less energy than it does now. Massive energy consumption has been a big hurdle for crypto adoption. Many institutions simply aren’t allowed to use it because of the carbon footprint. This is expected to remedy some of that.
- Since Ethereum will use less energy to run, the payouts will be lower. Experts have said that this means Ethereum will become deflationary.
- The upgrade will not make the Ethereum network noticeably faster. This upgrade the first of five major upgrades. Speed may, or may not, be the focus of a future upgrade.
- Fees will not be reduced by the upgrade. For context, transaction (“gas”) fees are imposed by Layer 2 companies that bridge use of the network and third party services. However, this upgrade will make it easier for those companies to scale, so it is conceivable that these savings will be passed down to the consumer.
- There is nothing you need to do to prepare for the merge. It is supposed to be a seamless. In fact, if anyone says you need to do something… run! They are scamming you.
Crypto Mining for Attorneys is yet another installment in a series to help busy executives take a dive into the new world of crypto in bite-sized chunks. The purpose of this week's entry is to give the reader a basic understanding of Crypto Mining, how it is currently being implemented, and where thought leaders project it going. Here are this edition's nuggets for Crypto Mining for Attorneys.
- The process of mining is solving math problems to confirm transactions on the blockchain. This work is rewarded in small amounts of digital currency. For example, my basic, run-of-the-mill work PC mines during off-hours and nets me a meager $7/month in BTC.
- Crypto mining was invented to give users incentive to host transactions on their own computers. While mining, the user is volunteering their computer as a ‘node’, or ‘link’. in the blockchain.
- It is the redundancy of this process that ensures the unhackability of a decentralized blockchain. Many iterations of the same transaction are confirmed on so many independent machines the information then excludes errors and attempted fraud.
- The more computing power one has, the more one can mine. Some people use their personal computers and reap very small rewards (better than nothing), and some build farms of mining rigs and reap thousands of dollars a month. A $15,000 BTC mining rig could net $1K per month. Some folks build entire farms of these.
- Video cards, or GPU’s, have skyrocketed in price since the crypto mining goldrush began. Sort of the opposite of business computing, a mining rig needs very little RAM, and CPU power, but a lot of video memory. This has affected the gaming industry greatly because miners will often pay much more for these cards than gamers.
- Crypto mining uses so much electricity in its current state, it is not considered environmentally friendly, nor do electrical bills often justify mining. The current state of mining is called Proof of Work, where miners all work at the same time and, the more work, the more transaction verification. This creates more redundancy than needed and more coin doled out for unneeded work.
- The next generation of mining, called Proof of Stake, promises to be much more efficient. This is where miners wait in line to confirm transactions in an orderly fashion as needed.
- Etherium 2.0 (coming very soon) promises to be the gold standard for Proof of Stake and, hence, the new standard for crypto going forward. I believe this is true and am banking on it.
Crypto Wallets for Attorneys is yet another installment in a series to help busy executives take a dive into the new world of crypto in bite-sized chunks. Here is this week’s bulleted list for Crypto Wallets for Attorneys:
- Cryptocurrency wallets can be physical, software-based, or even hosted. Each has a different level of privacy.
- Physical crypto wallets are still technically software-based, but the assets only exist on physical media that you hold in your hand. However, providers of physical wallets offer backup software so that your assets can be recovered if the physical media is lost or destroyed.
- Most software wallets are encrypted and usually stored on a central server so that a customer can recover their assets with a passphrase, and without the need to track the whereabouts of storage media.
- Wallets are a completely separate ‘place’ than an exchange, where your assets are deposited right after you make a purchase. Think of the most popular exchanges like Coinbase or Crypto.com.
- Any wallet that is private, and not visible on an exchange is considered a DeFi (decentralized finance) wallet. This includes the wallet products sold by the exchanges themselves.
- Purchases on the Coinbase or Crypto.com exchanges are not private. That information is easily subpoenaed, similar to the balance of your bank account.
- In order for your assets to be private, you must move them into a wallet. Exchanges like Coinbase and Crypto.com provide separate wallet products, as do countless other organizations.
- Think of your wallet as a safe or a safe deposit box. A subpoena can reveal the balance of a bank account, but only the existence of a safe deposit box, not its contents. No one knows about the existence of a safe except people to whom you reveal it.
- Everyone charges a fee to move from the exchange to a wallet. For example, if you decide to move your $10K in Bitcoin from an exchange, you will likely pay a sizeable fee. Even if the wallet is branded the same as the exchange. To many people, this is called double-dipping.
- Most wallets are created to support specific blockchain-based assets, including NFT’s. For example, a Bitcoin-specific wallet will not hold NFT’s because most NFT’s are minted on other blockchains.
- Your crypto assets are only as safe as your passphrase. So you need to memorize them, print them and put them in a safe, or encrypt them. Once someone has the phrase and your wallet address, your assets are as good as theirs. Including the government. If that phrase is hidden, so are your assets.
Metaverse for Attorneys is yet another installment in a series to help busy executives take a dive into the new world of crypto in bite-sized chunks. Here is this week’s bulleted list of Metaverse for Attorneys:
- Facebook changed their parent company name to ‘Meta’ in anticipation of the mass adoption of the Metaverse. The Facebook product still remains the same. The change is similar to Google’s parent company now being called Alphabet.
- Metaverses are not new. World of Warcraft and Pokemon Go are examples of popular online metaverses that utilize alternate identities/avatars, maps, and proprietary in-app currencies. Second Life was the first of its kind to allow general gathering, living, partying and real estate without a game plot.
- Steven Spielberg’s 2018 film “Ready Player One” is the perfect example of what the general online community expects from the Metaverse. The film was adapted from a 2011 novel by the same name. I recommend watching it for insight into this culture.
- None of the above incorporate blockchain technology. However, Facebook and other global leaders infer their intention to do so.
- Sandbox and Decentraland are the two most popular blockchain-based metaverses. In fact, major brands like McDonald’s, Gucci and Panera have already spent millions of dollars investing in real estate there.
- There is no one Metaverse. There are, and will be, many. Just as there have been hundreds of Social Media startups, a few will eventually remain.
- Sales of real estate in the metaverse topped $500 million last year and could double this year, according to investors and analytics firms. In my experience, land grabs like this over the last two decades have not paid off. Who knows? This time might be the charm.
- Brands are racing to monetize NFT’s in this space, which will entail both digital items for in-game use and the redemption of physical goods IRL (in real life).
- Ethereum is the current blockchain on which many of these Metaverses exist. However, there are countless startups that are either competing, or plan to compete, in this space. Metaverses utilize their own currencies called ‘tokens’ which are sort of sub-currencies based on the parent blockchain.