Recently, Mark Zuckerberg shared Facebook’s plans to turn its social media business into a metaverse. And other companies are already developing metaverse-like products, such as Christian Louboutin and Fortnite. What is the metaverse? And how can blockchain technology help shape this? More on that in my newest blog.

Wi-Fi, smartphones, cryptocurrencies and augmented reality, they were all predicted in 1992 by ‘tech nostradamus’ Neal Stephenson in his book Snow Crash. Also known as the “Bible of Silicon Valley”. The book was even the source of inspiration for Google Maps. The metaverse is now starting to gain momentum.

What is the metaverse?

The metaverse is a valid social network. Besides communicating with each other here, you can also build and do things that were not possible in real life. Inspired by Burning Man, Second Life was founded 15 years ago, the first major metaverse.

Millions of people were part of this virtual community, including Barack Obama and a few hundred thousand Dutch people. Companies such as Philips, Nike and ABN AMRO had a virtual branch. Artists such as Direct performed on the virtual island ‘DropZone’ and the Dutch Political Party CDA even took to the virtual street to win souls. People paid with the virtual currency ‘Linden Dollar’ and met in the virtual bar, the predecessors of Bitcoin and Tinder.

The hype passed and the idea of ​​a metaverse was brought to the market in light variants, think of Facebook and Reddit. In the meantime, developments in the field of augmented reality and virtual reality have accelerated. Also through the acquisition of Facebook, Microsoft and Google of various companies in the sector.

Online gaming has undergone an insane growth and development in recent years, where various Second Life elements can also be found. Such as buying and setting up virtual environments and developing an online identity. Billions of dollars a year are now being spent in this in-game economy.

Facebook’s plans

Facebook also wants to transform the company into a metaverse. Now all kinds of companies were already developing metaverse-like products, from metaverse Christian Louboutin fashion shows to metaverse mushroom trips. The creator Epic of the wildly popular game Fortnite recently won $1 billion on its own metaverse vision.

It will be a massively participatory medium of a type that we really haven’t seen yet, with a fair economy in which all creators can participate, make money and be rewarded. — Tim Sweeney, CEO Epic Games

A company like Facebook takes this to a much higher level. This is due to the number of users of the platform, the knowledge of setting up a social medium and AR/VR and of course a large pocket of money to develop it.

This is going to be a really big part of the next chapter for the technology industry, It will be the next generation of the internet — Mark Zuckerberg

Zuckerberg wants to connect more than a billion people in this way. So this goes a bit further than reading a status on Facebook from a friend from another country. And also beyond an augmented reality app, with which you can see in real time what IKEA furniture in your home or make-up on your face might look like.

An environment that you are part of
What really matters is that as a user you feel that you are part of it. As if you are physically in it with other people, in a different place. That’s something most Frankwatching readers have probably never experienced, but many gamers have. Gaming platform Roblox, with over 120 million users, already offers such an environment. It is complete with its own identity, social network, its own rules and enforcement and even a functioning economy.

It’s the newest macro-goal for many of the world’s tech giants — Matthew Ball, Amazon

Facebook has now put 10,000 employees on metaverse projects, Google has already launched many cool projects, as has Amazon with Lumberyard and Sumerian. Apple will most likely launch its own AR glasses soon. With an amazing reach, the company obviously has great potential to set up its own metaverse with all kinds of different functionalities, which fit in nicely with its own products. But just like with Second Life, the strength will come from all organizations that will set up one metaverse together. Instead of all making their own world

A vision that spans many companies; the whole industry. It will be an embodied internet — Mark Zuckerberg

Get rid of the walled gardens
Leaving aside the cool plans of the big technology giants… the metaverse could, in my view, put many wrong developments around the internet back on the right track. The endless stream of disclosures and lawsuits surrounding privacy violations, the data silos that give an almost unassailable advantage in the field of AI, but also the far-reaching influence on many aspects of our lives, provide a fairly negative image of the big technology companies.

Everybody from an individual participant to a major developer should participate on equal terms. Only that way can you get a really enduring free and fair economy that is built on the same foundational principles as our country. If the metaverse is open, each company will still want to own some things. The principle here is every creator owns their original creations and has the right to make the profit from them — Tim Sweeney, CEO Epic Games

Within the developments I see a great role for blockchain technology, in 4 ways:

1. Decentralized organization

No central control by a company such as Facebook or Google, a government or a person, but by all participants collectively. In a decentralized way. Decentralized autonomous organizations (DAOs) are organizations without a central authority, which are governed on the basis of pre-programmed smart contracts. What Bitcoin does to money, a DAO does to organizations.

Within a DAO there are no hierarchies, everything is transparent and people who do work for the DAO are paid in cryptocurrencies.

You can already see this nicely in action at Decentraland, an open-source virtual reality initiative. It calls itself the first truly decentralized world, fully operating as DAO. In this interactive 3D world, anyone can buy a piece of LAND, visit a museum or club and take a gamble in a casino. Companies such as Coca-Cola sell virtual products and recently the first VR music festival was also organised.

2. Self-sovereign identity

Decentralized organizations are also nicely in line with a topic I wrote about in my previous article on Frankwatching: Self-sovereign identity (SSI). As a user, you are completely in control of your own identity and data. An ‘open metaverse’, built with ‘privacy by design’ and SSI, provides a great foundation for a world where the user decides with whom he/she shares his data and in what way.

No more creating an account for every part of the virtual environment, where you are obliged to leave all your identity and name and address details. Only 1 account that you manage yourself, carry with you and of which you only share the necessary.

3. Zero knowledge proofs

Going a step further Zero-knowledge proofs (ZKP), a blockchain solution that allows you to prove to another party that you are real. Or that you share your age or gender, for example, without revealing your identity.

An example is a mortgage at Rabobank or ING, which ZKP uses to verify whether your income is in the range to get a certain mortgage amount. Without disclosing your actual income. This principle can of course be used very widely, in metaverse, for example, if you speak white to a medical specialist and want to share certain data, but you prefer not to identify yourself.

4. Non-fungible tokens

One of the major contributions of blockchain technology to the metaverse is the Non-fungible tokens (NFTs), which I also wrote about before on Frankwatching. The buyer of the digital artwork Beeple, who paid $69 million for this NFT, has now built up an NFT collection of $189 million and wants to use it to set up virtual museums within metaverse.

Adidas held a virtual fashion show at Decentraland, where the designs were auctioned as NFT. Gucci has sold exclusive virtual bags for $4,000 each, more than the regular physical retail price. Rapper Travis Scott has sold 27.7 million tickets as NFT with his in-game Fortnite concert. Pieces of land on Decentraland have recently sold for more than $500,000.

Online environments are going to be very very big. NFT real estate could one day fetch millions of dollars — Frederic Chesnais, voormalig CEO

More and more companies and industries are working on concepts within metaverse environments. I can already see different brands capitalizing on the metaverse trend in all sorts of cool ways by launching products or boosting their branding. Accenture is even taking it a step further with the ‘Nth Floor Project’, building a metaverse for its more than half a million employees worldwide. This way these employees can come together.

Metaverse: Critical Sounds

As with many other technological developments, metaverse is also dismissed as a bubble and doomed. Think of online gaming and Bitcoin. The amounts paid for a virtual Gucci bag or a piece of virtual land are also grist to the mill for critics. In metaverse, everyone should be equal and the big differences that we see in our contemporary society should not exist.

Unfortunately, social networks without central control and monitoring have already shown what they can cause. Parler and Gab are ‘good’ examples of this. The main criticism, however, remains that “big tech” should not be given too much power within the metaverse, as they already control more and more of our daily lives. However, it is the parties that have the reach, the money and the knowledge to set up a metaverse.

A sandbox for nerds and innovators

In the past year we have rapidly started organizing, arranging and experiencing many more things virtually. Not only the vrimibo, entire weddings and funerals were organized online and the fitness industry is trembling with the masses of athletes who have exchanged the gym for online classes. Although the technology still seems far away, developments are moving very fast.

Although it is still mainly a sandbox for nerds and innovators to play in, I can already see a broad, far-reaching metaverse emerging in 2025. I’m looking forward to going to a virtual concert with a good friend from Singapore with a beer in hand. And doing a calisthenics workout with my sister. Until then, I will continue to satisfy my skin hunger in the old, familiar, physical world.

See, the world is full of things more powerful than us. But if you know how to catch a ride, you can go places — Neal Stephenson

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Jan Scheele

Jan Scheele werkt dertien jaar op het snijvlak van deep tech, strategie en leiderschap. Als keynote spreker en dagvoorzitter maakt hij technologie tastbaar voor boardrooms, directieteams en grote podia, zonder de complexiteit te versimpelen of te verbergen achter buzzwords.

Zijn achtergrond ligt in het bouwen. Als CEO van een technologie scale-up, oprichter van meerdere techbedrijven en organisator van meer dan vijftig TED-events wereldwijd zag hij van dichtbij hoe technologische keuzes doorwerken in strategie, governance en cultuur. Vanuit zijn betrokkenheid bij het World Economic Forum en de BCNL Foundation kijkt hij daarbij niet alleen naar wat technisch mogelijk is, maar ook naar wat bestuurlijk houdbaar en maatschappelijk wenselijk is.

Hij publiceerde vijf boeken, waarvan twee Amazon-bestsellers, en schrijft wekelijks over AI, blockchain en de organisatorische gevolgen van deep tech. Zijn blogs bereikten inmiddels meer dan twee miljoen lezers.

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Having a driver’s license or identity in your wallet is something normal in our Western society. It’s something everyone has as standard, so we hardly think about it. Whether you are rich or poor, young or old. From the moment the parents register a child with the Municipality, the official identity is recorded in the Personal Records Database and you will receive a Citizen Service Number. Will it soon be replaced by a digital identity, or a Self-Sovereign Identity? In this article I will tell you all the ins and outs about this new form of identity.

An official identity is important and necessary in arranging many things in life. From arranging a bank account and insurance, to obtaining a loan or mortgage. And for access to almost all government services and nowadays even buildings. The privacy laws and regulations have only made this more strict. As a result, more and more people are asked to identify themselves.

Lack of formal identity and identity fraud

But an identity is not so self-evident; more than 1 billion people worldwide have no official identity. As a result, they cannot open a bank account, set up a business, vote, receive healthcare or get an official job. One of the United Nations’ Sustainable Development Goals is that all people on our planet should have a formal identity by 2030. It has set up the ID2020 Alliance for this purpose.

But it is not only people who do not have a formal identity who experience major problems in their lives as a result. People with a formal identity in Western countries have problems with their formal identity due to large-scale fraud. In the Netherlands, 1 in 10 people is a victim of identity fraud, worldwide there were as many as there were people living in the Netherlands last year, and another victim is added every two seconds. Last year, the damage to consumers was $56 billion.

One of the most underexposed, but promising areas where blockchain technology will have a tremendous impact, is Self Sovereign Identity (SSI): a digital identity. You are back in control of your own identity. Not only physically, but also digitally. Control how your personal data is shared with other persons and/or parties, so that you only share the necessary data in a transaction or interaction.

One ID to rule them all

Just think in how many places your address details are known because of online shopping. What if you move? What if your password becomes known to hackers due to a data breach? Then you would rather update everything once from your ‘wallet app’ on the phone, than go through all parties one by one.

Storing and monitoring your identity on your own phone is not only much easier to use, but also much safer according to studies. The controlled sharing of your personal data also offers countless invaluable opportunities in terms of analysis, collaboration and predictions. Concrete proposals for this were already made in 1985 by the creator of one of Bitcoin’s predecessors, David Chaum, but it is now really starting to take shape.

Digital identity (SSI) in practice

The best example of the use of blockchain technology within the SSI movement, I continue to find the World Food Program of the United Nations in Jordan. Where 400,000 refugees have been given a digital ID on their mobile phone. By scanning the eye, for example, one can pay in a store without the need for money. Or conjure up your own current medical file with a healthcare provider. Refugees cannot be deprived of money they have received from the UN. And the UN can see perfectly real-time which goods it has to deliver to which stores and the medical file is always up-to-date and never lost again.

The largest democracy in the world, India, already works with a digital ID based on biometric data: Aadhaar. Today, 99% of adult residents have an Aadhaar ID, which is used in all interactions with the government. From paying taxes to enrolling in education. This makes the government a lot more efficient and less sensitive to fraud. The World Bank has already called it the most advanced ID system in the world.

Baby on the blockchain

Many governments are working on a digital identity in the background. From Tanzania, where the first baby has already been registered on the blockchain, to Dubai, which will copy the Indian Aadhaar 1–1. It is one of the fundamental building blocks of European governments for the European Union to focus on in the coming period. A start was made on this in 2014 with the electronic IDentification, Authentication and Trust Services (eIDAS) legislation. It was thoroughly reformed last year after many experiments and experiences from frontrunner Estonia and should really get fleshed out next October.

In our own country, Rabobank has been researching the use of SSI since 2016 and there are great startups like Tykn that offer turnkey SSI solutions. The Dutch Blockchain Coalition and Digicampus have been investigating concrete options for the Dutch government since last year.

DigiD already works well as a central ID solution for governments. So we have to wait for a decentralized SSI, with which you can also authenticate at companies. The corona pandemic has accelerated the urgency of an eID, because of the vaccination passport. All European governments are working individually and jointly on SSI. So we have to wait for the concrete translation, as with the Indian Aadhaar.

Concerns about privacy at SSI

The opponents mainly state their concerns about privacy with a digital identity. Blockchain is known for its immutable nature. While in Europe we know the ‘right to be forgotten’ within the GDPR legislation. Something the EU Blockchain Observatory is currently cracking its brains on. Nevertheless, India is also looking to put Aadhaar on the blockchain, because the system still centrally stores the data. Which of course creates a huge security risk.

In addition, the question arises; do you have to make the ID mandatory when, for example, creating a social media profile, so that you can never respond anonymously again? Fake news, hate speech and rigged elections could disappear like snow in the sun, but one of the most basic fundamental rights; freedom of expression can be seriously compromised.

The many hacks that we see in the news every day are creating more and more pressure to take concrete steps in the SSI field in the short term. The coming year will therefore be an interesting one within the European Union, because of all the concrete plans that will be unfolded. As with new technological developments such as autonomous driving and the CBDCs, the technology is already quite advanced. It is precisely the ethical dilemmas and practical implications that still prevent its introduction. In any case, we are well on our way. And I look forward to all the cool developments in the coming months.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Jan Scheele

Jan Scheele werkt dertien jaar op het snijvlak van deep tech, strategie en leiderschap. Als keynote spreker en dagvoorzitter maakt hij technologie tastbaar voor boardrooms, directieteams en grote podia, zonder de complexiteit te versimpelen of te verbergen achter buzzwords.

Zijn achtergrond ligt in het bouwen. Als CEO van een technologie scale-up, oprichter van meerdere techbedrijven en organisator van meer dan vijftig TED-events wereldwijd zag hij van dichtbij hoe technologische keuzes doorwerken in strategie, governance en cultuur. Vanuit zijn betrokkenheid bij het World Economic Forum en de BCNL Foundation kijkt hij daarbij niet alleen naar wat technisch mogelijk is, maar ook naar wat bestuurlijk houdbaar en maatschappelijk wenselijk is.

Hij publiceerde vijf boeken, waarvan twee Amazon-bestsellers, en schrijft wekelijks over AI, blockchain en de organisatorische gevolgen van deep tech. Zijn blogs bereikten inmiddels meer dan twee miljoen lezers.

janscheele.nl

Gucci shoes, chicken nuggets, chips and beer. They could be ingredients for an evening in a bar of how we still know it before corona. They are also all products of which a Non Fungible Token (NFT) is made. In this article I discuss the latest developments in the field of NFTs and how you can do one yourself.

It’s not just a few innovative creatives who have launched an NFT. Celebrities such as Snoop Dog, Paris Hilton and Edward Snowden, and companies such as McDonald’s, Pringles and Lego are also stepping in. There are more than 3 million items for sale at the time of writing and sales worldwide in the last two months are up 2882%. The marketplaces where you can create an NFT are popping up like virtual mushrooms with more than $750 million in investments in the past quarter. Wonderful developments, but I do see 4 of them all.

1. Tragedy of the meet
The idea makers of NFTs who first came up with NFTs in 2014 did so with an ideology that technology should give artists control over their own work. This would make it easy to sell and they can protect work from misuse by others. In my view, this is also not the basic principle why many creatives put their work on the blockchain, with an NFT.

That’s why I think it’s really cool to see how DJs like Don Diablo are now making money through NFTs by selling a unique song. Or how Nigerians can suddenly serve a simple market. But things like beer from the sound of a fart don’t give the concept a good name in my opinion. Not to mention the red pixel, which is currently on offer for $900,000.

The warnings are therefore flying around the ears of various experts on all sides. And not with the general warnings for sharp price falls and financial losses of investment. NFTs are recorded on the blockchain. Even though this technology has already been nicely developed in many areas in recent years, NFTs are still new.

Garrett Hardin described this as beautifully as ‘tragedy of the commons’. If there is a common resource that everyone has an individual incentive to exploit, it will eventually dry up for lack of regulation of common standards. I now see this happening in NFT land and that makes an impossible search.

2. 404! Artwork not found
The number of cases of people suddenly losing their NFT and getting a 404 for the place is very strong. As the owner of an NFT, you are really dependent on the platform where you bought the NFT. Just like for cryptocurrencies, there are no clear laws and regulations that describe what your rights are. You can therefore not knock on the door of any authorities if a platform appears to be off if you make a mistake yourself when digitally storing your NFT.

As a digital thief you no longer have to go to a museum with a crowbar in your bag. You can rob a digital museum from home. The number of reports of digital robberies and scams therefore strongly influenced.

3. Not your keys, not your art
As with cryptocurrencies, an NFT is managed by a so-called ‘private key’. This is a cryptographic key of numbers and letters. You can store it, just like with cryptocurrencies, or have it stored in the place where you bought it. In the latter case, the platform holds the private key. In a recent hack of an NFT exchange Nifty, all keys were stolen and moved to the hackers’ wallets. Lost their NFT as well. The hackers only have the private key to the wallets of the hackers. These are, because of the cryptographic background, uncrackable.

The credo ‘not your keys, not your wallet’, or in this context ‘not your art’, is very relevant here. Setting up your own wallet for your NFTs is highly recommended. Online with a browser plugin such as Metamask or offline with, for example, a Ledger. You can check whether your NFT is stored securely on the Checkmynft website.

4. Copyright Confusion
The work of several well-known artists, such as Shakespeare, Beethoven and Charles Dickens, has become cultural heritage after their deaths. This is free for everyone to use. Quarrels between Italy and Italy over the use of the opera La Bohème Germany resulted in a general European directive. This makes the work of the author, 70 years after his death, a public good. Something the owners of Disney and Superman have long held back in the United States.

The new, NFT way of making, selling and distributing art automatically raises the copyright question. The digital artwork of Beeple, which was sold for $69 million, has now been made into a website, with which you can generate a new Beeple with a simple click on the button. Can that just happen?

I toured several lawyers in the Netherlands, specialized in intellectual property and technology law. They mainly point to the fact that when you buy a work of art you have the right to use it for personal consumption or to resell it. You are purchasing ownership of the item, not copyright. An NFT is nothing more than a digital proof, a receipt, with which you can prove the authenticity and prove that you are the owner. That receipt is on the blockchain and can therefore not be adjusted and is transparent for everyone.

In principle, the artist can make and sell an infinite number of copies of the digital artwork, with a unique NFT associated with it. As a buyer, it is therefore highly recommended to do good due diligence with the artist before buying a work of art. Is it a unique work or a copy?

How do you make an NFT yourself?
Many creatives I speak to and poll about this are enthusiastic. It provides a worldwide sales market with a few mouse clicks. And because of the removal of all kinds of intermediaries, it also ensures a greater yield for the creative person himself. It is also easy to make and put up for sale an NFT yourself. I list the steps below, and also watch the video for more explanation.

Step 1: Why do you want to make an NFT?
Before you start, I recommend that you first ask yourself why you want to make an NFT. In my previous article on NFTs, I wrote about the obscene energy consumption required to make an NFT. That touches a lot of sensitive strings worldwide. Are you doing it for fun? Or really because you have a serious creation that you would like to sell?

Step 2: elaborate the legal framework
Also work out the legal framework well. What about property when selling? In the field of copyright, intellectual property and possible royalties. Look carefully at the conditions of the platform where you upload. What do you all agree to?

Step 3: choose a sales platform
The largest NFT selling platform is OpenSea. This is also the easiest to use, so I’ll use that in the next steps. You need a digital wallet for this, of which Metamask is the most used and can easily be added as a plugin in, for example, Chrome or on the iPhone.

Step 4: Link your wallet
At the top right of the OpenSea site, click Create > Submit NFTs. Then you link your MetaMask account to OpenSea in the next step.

Step 5: Upload your artwork
If MetaMask is linked, you will see the My Collections screen. There is also a big blue button with Create, with which you can upload your digital artwork just as easily as you do with a video on YouTube. Just upload the file, enter the correct title, description and keywords and the NFT is ready!

Step 6: Verify the work
You just need to verify the NFT. You can do this by clicking the Create button again and clicking authorize in the automatically opened MetaMask window. After that, the NFT will be live on the platform.

Using a platform like OpenSea is free, so you can repeat this process as many times as you want.

Tulip bulbs and bubbles
Tens of billions of basketball cards were printed in the United States in the 1980s, after respected media outlets like the Wall Street Journal and the New York Times labeled them inflation hedges and millions of Americans bought them as investments. Like the internet bubble that emerged decades later and the previous cryptocurrency bubble in 2017, they all eventually burst due to oversupply.

The current madness will continue for a while. Respected analysts expect the market to be worth many billions by the end of this year. Work is now underway on environmentally friendly NFTs and NFT museums have been opened in China, Russia and the United States. The sector is developing so fast that there are new developments every week. I watch them with enthusiasm.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Jan Scheele

Jan Scheele werkt dertien jaar op het snijvlak van deep tech, strategie en leiderschap. Als keynote spreker en dagvoorzitter maakt hij technologie tastbaar voor boardrooms, directieteams en grote podia, zonder de complexiteit te versimpelen of te verbergen achter buzzwords.

Zijn achtergrond ligt in het bouwen. Als CEO van een technologie scale-up, oprichter van meerdere techbedrijven en organisator van meer dan vijftig TED-events wereldwijd zag hij van dichtbij hoe technologische keuzes doorwerken in strategie, governance en cultuur. Vanuit zijn betrokkenheid bij het World Economic Forum en de BCNL Foundation kijkt hij daarbij niet alleen naar wat technisch mogelijk is, maar ook naar wat bestuurlijk houdbaar en maatschappelijk wenselijk is.

Hij publiceerde vijf boeken, waarvan twee Amazon-bestsellers, en schrijft wekelijks over AI, blockchain en de organisatorische gevolgen van deep tech. Zijn blogs bereikten inmiddels meer dan twee miljoen lezers.

janscheele.nl

Full piggy banks, negative interest rates, mistrust of governments and banks, but also enthusiasm for new startups, new possibilities and new technology. The hype surrounding cryptocurrency is getting bigger and crazier by the day. What can we expect in the coming months? In my latest article, I share the 6 key developments that will impact the cryptocurrency industry this coming summer. If you are only used to euros in your wallet, the names of the more than 9,600 different cryptocurrencies probably sound crazy to you. Dogs, hamburgers, Dracula and sperm… You can think of it as crazy as a digital currency has been named after it. It is no longer just the early adopters who buy these digital currencies.

According to a recent market effect study, 700,000 Dutch people have already invested in it and 3.5 million plan to do so in the coming months. According to research by Mastercard, that percentage is 40% worldwide.

Elon Musk has shown how strongly the sector can still be influenced with 1 tweet. If we zoom out and look at the previous bull run in 2017, we also saw a strong correction of -20% every month, which then quickly recovered. It will certainly not be the last correction in the market. Especially because in recent weeks it has been proven again how easy this is to achieve.

The Indomitable Bull

After the major crash of Bitcoin in late 2017 and the demise of hundreds of other digital currencies — the so-called ‘altcoins’ in early 2018 — I saw interest in the underlying blockchain technology and currencies fall just as much as the value of the currency itself. The few articles that appeared in the media were mainly negative in nature, focusing on the failed experiments of many organizations and the many myths surrounding crime and energy consumption, which were clearly not properly researched and substantiated. Bitcoin has since been declared “dead” 411 times.

It is wonderful to see how various startups and organizations have continued to build their products in the lee in recent years. Now that the flowers are blooming again, many of these products are being launched and enthusiastically received by investors. The insane amount of money saved during corona, the negative interest and the fact that saving is no longer profitable, has certainly ensured that interest in cryptocurrencies has taken a bird’s-eye view. And, The market is now very bullish.

The predictions of renowned institutions such as Bloomberg and banks such as Goldman Sachs that the price of Bitcoin can still rise to 100–150 thousand euros, only reinforces this. Moreover, The market value has risen from $200 billion to $2 trillion in just a few months. With the predictions about the number of new investors in cryptocurrencies, this will certainly have a strong positive effect on prices and market value.

2. To the moon… or not?

Unfortunately, the madness also creates various shadow sides. During the previous bull run in 2017/2018, I wrote about the importance of doing your due diligence before putting money into a cryptocurrency somewhere.

Bloomberg’s research into the previous bull run showed that 75% of the underlying cryptocurrency projects were outright scams. According to many reports, this resulted in billions of euros in damage, which the (mostly small) investors lost overnight and could not get back.

The many hacks of exchanges, where the cryptocurrencies are traded, also cause people to lose their digital currencies. North Korea has already made more than $2 billion from these hacks, according to a United Nations study.

People are looking for a still relatively unknown currency, which they hope will certainly ‘m00nen’ (go to the moon, crypto language for very strong rise in value). For example, the second best known and largest cryptocurrency, Ethereum, was worth 30 cents at its opening sale and has already surpassed $3,000 in value.

Crypto Influencers

In the search for these hidden gems, people quickly come across the crypto influencers on channels like Twitter and YouTube, who promote various cryptocurrencies with texts like “going to explode” and “going to the moon”. Some do this with a good financial-technical substantiation, as is also the case with stock prices, some purely with an unsubstantiated story, which later turns out to be paid for by the promoted projects themselves.

With the greatly increased value of cryptocurrencies, the number of investors and trading exchanges, it is becoming more and more lucrative for hackers and scammers to be active in the market. Even though security measures are increasing, it is becoming increasingly important as an owner / investor to take a good look at the security of your accounts and storage of the cryptocurrency itself. This is often not thought of, with all the consequences that entails.

3. Tulip bulbs in 2021

Just like in 2017/2018, I expect that the bubble will burst again at some point and the prices of many cryptocurrencies will fall very sharply. After the previous crash, the total market value fell by 80% in a few months, which was even more than the ‘dot-com crash’.

The fundamentals are stronger now. I expect that many projects will not suddenly disappear, because they already offer products and services and have thus become a full-fledged startup / scale-up. In addition, many large companies, banks and investors have invested in the various cryptocurrencies and have indicated that they will do so for the long term. Bitcoin treasuries provides a wonderful overview. All major banks worldwide have now also switched and are offering, or are going to offer, crypto to their customers: UBS, Goldman Sachs, Morgan Stanley and Deutsche bank. Dutch banks have indicated that they are not yet a fan.

In my view, various cryptocurrencies are therefore really here to stay. But currencies that even the creators have indicated that they created for fun (such as Dogecoin), I see in value and attention collapsing again in due course. There’s even a “dog token category” already, with token names like Shiba, Dogelon, Akita, and Ourshib.

Bubbles are good!

As I wrote in 2019: bubbles are good in my opinion. To separate the wheat from the chaff, take the hype off something and focus on real problems that a technology can tackle. They are rapidly providing wider acceptance, lots of PR and growth money for startups and budgets for organizations to experiment with and build on.

Think before you invest

As an investor in cryptocurrencies, it is extremely important to take a sober look at this yourself. Do you buy a cryptocurrency because just like in a regular company that you buy a share of, you believe in the mission / vision / product of the company? Or do you mainly want to gamble high risk high reward on a strong price increase? Unfortunately, research shows that 95% of people who choose the latter lose their money.

So take a good look at your current portfolio and any future purchase plans, to avoid coming home from a cold fair in the coming months.

4. Digital El Dorado

One of the biggest and fastest growing hypes in cryptocurrency and blockchain right now is certainly Non-Fungible Tokens (NFTs). More and more individuals and organizations are embracing digital art and collectibles. Recently, the total trading volume rose to the all-time high of $1.5 billion in one day. It’s not just the individual digital artworks anymore, like Beeple, which sold for $69 million. On the record day, half a billion worth of digital items were sold from the American basketball league NBA.

Traditional financial institutions are now slowly entering the world of cryptocurrencies, and so will the creative sector. From makers of art, music, films and books, to sports clubs and game developers, who put unique digital items on the blockchain.

Former employees of the two largest auction houses in the world (Christie’s and Sotheby’s) have set up Lobus, which makes it easier to manage art collections with NFTs, but also to (sell) partial ones. For example, you can purchase a digital artwork together with a few friends.

Meanwhile, the largest cryptocurrency trading platform in the world (Binance) has also announced that they are setting up an NFT platform. This will further increase the number of NFTs and their sales worldwide. As a result, the opportunities to trade in NFTs as a cryptocurrency investor are growing.

5. Bitcoin banking

The financial world is being shaken on all sides. The European PSD2 directive makes it possible for large technology companies such as Google and Facebook to enter the market.

A bit overshadowed by the NFT hype, but in my view at least as interesting is Decentralized Finance (DeFi). This revolves around decentralized financing instruments such as loans, savings and insurance, but also trade. The same products that we already know from banks and insurers, but the decentralized blockchain character ensures that the intermediary is removed.

Last year this market was worth a few hundred million, now the total value at the time of writing has grown to $130 billion, as much as the market value of banks like Deutsche Bank. In fact, the products have generated $250 million in the past month for the people who have invested in them.

DeFi on the rise

The various DeFi cryptocurrencies are growing at the same pace in numbers and value. The projects are growing and developing at lightning speed due to the madness in the cryptocurrency market. Not only the free PR, but also the amount of money invested in it, ensures rapid, major technological breakthroughs.

These are no longer just individual startups. Entire ecosystems are built with DeFi platforms, such as Persistence. Where the libertine-anarchist approach of Bitcoin was mainly aimed at making banks superfluous, you now see an interesting merger in many areas between the traditional financial institutions (CeFi, Centralized Finance) and DeFi. The Spunta project came from the European Payment Council, a large group of banks has set up the Marco Polo project and a large group of insurers B3i. The most recent highlight was the move by the European Investment Bank, which raised 100 million with a bond on the Ethereum network.

ING has indicated in a recent report (pdf) that they find DeFi more interesting than Bitcoin. A big step in the amalgamation of traditional institutions and these new decentralized variants and a starting point for an insane development around digital currencies.

6.Crypto Catch22

It is an interesting field of tension to exchange ideas with supporters and opponents of cryptocurrencies about regulation versus innovation. Governments are working in all kinds of areas to stimulate innovation, facilitate start-ups and organize a business climate, so that companies like to do business in our country. On the other hand, one of its core tasks is to protect citizens in the broadest sense of the word.

Current policy too strict
Media these days are full of articles about manipulation within the cryptocurrency market and the lack of understanding surrounding the lack of the right regulation. After the European Union announced that it would allow cryptocurrencies, the Netherlands wanted to become a frontrunner and example in terms of legislation and regulations in that area. Unfortunately, due to these strict laws and regulations, many companies have already stopped or moved to another country.

Now I am a big proponent of setting up a good legal framework in the field of cryptocurrencies. But if that stands in the way of innovation or even drives it away, I have my doubts about it. A recent court ruling between De Nederlandsche Bank and a cryptocurrency trader also confirmed that the current policy is too strict.

International cooperation needed

The recent IPO of cryptocurrency company Coinbase has been an important step for the industry, as the company has signaled from the outset that it is working with lawmakers to ensure a well-functioning industry. With the size and very large trading volumes now taking place within the sector, governments can no longer sit back and watch. This requires international cooperation. If it is made difficult for people to buy Bitcoin in the Netherlands, then they are with 1 click at a trading platform located in Malta, where they do have all the freedoms.

The most recent Crypto Crime Report from Chainalysis (the largest blockchain analysis company in the world) shows that less than 0.3% of cryptocurrency transactions are “suspicious” and that this percentage continues to decline. Something that former CIA director Michael Morell also endorses (pdf). Governments are still fully committed to the so-called ‘Know Your Customer’ and ‘Anti Money Laundering’ laws and regulations, even though they are widely known to be ineffective.

Governments react completely differently

We are currently seeing governments react completely differently. India, like Turkey, wants to ban cryptocurrencies. China is leading the way with the development of its own Central Bank Digital Currency, the most blockchain patents worldwide. And recently there was also the statement from the central bank that Bitcoin is an ‘alternative investment’. Even though it is causing power blackouts, according to the government, Iran continues to encourage the mining of cryptocurrencies such as Bitcoin.

In recent years we have seen how many companies have emerged and grown, despite increasingly strict legislation. From Uber and Airbnb to Google and AliBaba. I also expect that legislation and regulations will have an impact on the services within cryptocurrencies in the coming months. Important steps to make the sector more mature and thus more accessible to the general public.

More than a coin

In my view, due to the focus of many media on the prices of cryptocurrencies, we almost forget what all innovation is about: the cool products and services that are being developed.

The Limburg Fortuna Sittard was the first Dutch football club to release its own fan token. This allows fans to become more involved with the club in all sorts of ways. With his ‘Podcast 2.0’ model, Adam Curry offers podcast listeners the opportunity to thank / reward the creator with Bitcoin for every minute listened. In Heerlen, citizens are rewarded for volunteering with cryptocurrencies. Facebook is busy building its own digital currency ‘DIEM’ and has therefore teamed up with a company that will arrange the issuance of the coins. New developments are added daily, fueled by the large new amount of innovation money that is currently being pumped into the sector.

The new, the next, the never heard off

Steve Jobs wanted to put a cool phone on the market with the introduction of the iPhone. At the time, no one could have imagined that in 2021 we would work more than 4 hours a day with the device, with applications such as Instagram, Uber and Google Maps.

The same is the case with cryptocurrencies: we can only dream about what the next steps will be. Ethereum started out as the ‘supercomputer of the world’ with so-called ‘smart contracts’, but has now also become the foundation for the entire DeFi and NFT world. Waiting for the latest, brilliant invention. One thing is certain: crypto is here to stay.

This article is not financial advice and should not be viewed as such. It is my opinion and should only be seen from an info point

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Jan Scheele

Jan Scheele werkt dertien jaar op het snijvlak van deep tech, strategie en leiderschap. Als keynote spreker en dagvoorzitter maakt hij technologie tastbaar voor boardrooms, directieteams en grote podia, zonder de complexiteit te versimpelen of te verbergen achter buzzwords.

Zijn achtergrond ligt in het bouwen. Als CEO van een technologie scale-up, oprichter van meerdere techbedrijven en organisator van meer dan vijftig TED-events wereldwijd zag hij van dichtbij hoe technologische keuzes doorwerken in strategie, governance en cultuur. Vanuit zijn betrokkenheid bij het World Economic Forum en de BCNL Foundation kijkt hij daarbij niet alleen naar wat technisch mogelijk is, maar ook naar wat bestuurlijk houdbaar en maatschappelijk wenselijk is.

Hij publiceerde vijf boeken, waarvan twee Amazon-bestsellers, en schrijft wekelijks over AI, blockchain en de organisatorische gevolgen van deep tech. Zijn blogs bereikten inmiddels meer dan twee miljoen lezers.

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