Is this Bitcoin's 'Last Cycle'?
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
Is this Bitcoin's 'Last Cycle'?
The EU is all for user privacy…until it messes with their tax revenue
RESOURCE: WTF is a DAO?
Cardano founder says Web3 is about to get uncomfortable
Is this Bitcoin's 'Last Cycle'?
This isn't supposed to happen...
Bitcoin is breaking its traditional four year boom and bust cycle.
Sure, it's still volatile, but its usually returned to pre-boom prices by now:
Why this is important:
Bitcoin is the tide that rises all ships.
If BTC goes up, so does the rest of the market.
When that tide goes out, it takes a good chunk of interest, development and investment with it.
This leaves the crypto evangelists to stay behind and pick up the pieces, with depleted resources and cratered communities.
The jury is still out, but the sustained crypto adoption that we've experienced over the past 24 months may be stemming this cyclical famine of resources and investment.
Meaning continued development and uninterrupted progress may be on the table for the first time (ever?).
The European Union is considering a regulatory approach that will crack down on non-custodial wallets.
What in the world does that mean?
We're glad you asked.
Non-custodial wallets are essentially crypto bank accounts that aren't tied to an individual identity. No ID on file, no home address, no contact details - and especially no Tax ID.
Sure, the money sent between these 'accounts' can be tracked on the blockchain, but in the EU's eyes, if they don't know where to send the tax bill - it's not going to cut it.
Ok, that makes sense. "Nothing is certain except death and taxes" - got it.
So what's the issue on the user's end?
Security.
In the legacy financial system, we pay banks to protect and insure the money we keep with them.
With decentralised finance, it's on us to protect our cash as 'custodians' (see what we did there?).
So here's the issue in black and white:
If there's a central database linking an individual's location and identity to their wallet(s), hackers will be incentivised to get those records, find who's holding a large amount of crypto and target them in physical robberies.
And that's no fun. No fun at all.
Resource of the day
WTF is a Decentralised Autonomous Organisation (DAO)?
Cardano founder says Web3 is about to get uncomfortable
We have this friend, we'll call him 'Joe', because that's his name.
Joe was about to go on his first camping trip and was fantasising out loud about 'being in the great outdoors', 'breathing the fresh air' and 'sleeping soundly after a big hike'.
He came back, covered in mosquito bites, cursing the fact that he had to bathe in a cold river and eat freeze dried food.
Cardano founder, Charles Hoskinson, has hinted at similar 'uncomfortable' situations on the road ahead for Web3.
(Boom! Stuck the landing)
Hoskinson highlighted that the Web3 community is currently full of optimism, but will have to answer some tough questions for mass-adoption to take place.
Particularly, questions from regulators that go directly against the ideals of a decentralised monetary system, like:
“At what point can we reverse a transaction?” and “If we can, at what point can we freeze your funds?”.
Hoskinson's answer, while not definitive, hinted a future where DAOs (see today's resource for an explanation of what that is) may be the key to proving that these communities are capable of self governance.
“If we’re truly decentralized, we have to figure this out for ourselves.”
Your Daily Dose of Web3
Alright, that’s it for today!
Love to the family,