Cryptoland rollercoaster

I've lost money in crypto.

Unimportant.

The real issue: I didn’t understand how.

I'm surrounded with winners. To learn more, I created my own NFTs, currency, and DAO.

Web3 is a hilltop castle. Everything is valuable, decentralized, and on-chain.

The castle is Disneyland: beautiful in images, but chaotic with lengthy lines and kids spending too much money on dressed-up animals.

When the throng and businesses are gone, Disneyland still has enchantment.

The Real Story of Web3

NFTs

Scarcity. Scarce NFTs. That's their worth.

Skull. Rare-looking!

Nonsense.

Bored Ape Yacht Club vs. my NFTs?

Marketing.

BAYC is amazing, but not for the reasons people believe. Apecoin and Otherside's art, celebrity following, and innovation? Stunning.

No other endeavor captured the zeitgeist better. Yet how long did you think it took to actually mint the NFTs?

1 hour? Maybe a week for the website?

Minting NFTs is incredibly easy. Kid-friendly. Developers are rare. Think about that next time somebody posts “DevS dO SMt!?”

NFTs will remain popular. These projects are like our Van Goghs and Monets. Still, be wary. It still uses exclusivity and wash selling like the OG art market.

Not all NFTs are art-related.

Soulbound and anonymous NFTs could offer up new use cases. Property rights, privacy-focused ID, open-source project verification. Everything.

NFTs build online trust through ownership.

We just need to evolve from the apes first.

NFTs' superpower is marketing until then.

Crypto currency

What the hell is a token?

99% of people are clueless.

So I invested in both coins and tokens. Same same. Only that they are not.

Coins have their own blockchain and developer/validator community. It's hard.

Creating a token on top of a blockchain? Five minutes.

Most consumers don’t understand the difference, creating an arbitrage opportunity: pretend you’re a serious project without having developers on your payroll.

Few market sites help. Take a look. See any tokens?

There's a hint one click deeper.

Some tokens are legitimate. Some coins are bad investments.

Tokens are utilized for DAO governance and DApp payments. Still, know who's behind a token. They might be 12 years old.

Coins take time and money. The recent LUNA meltdown indicates that currency investing requires research.

DAOs

Decentralized Autonomous Organizations (DAOs) don't work as you assume.

Yes, members can vote.

A productive organization requires more.

I've observed two types of DAOs.

• Total decentralization total dysfunction

• Centralized just partially. Community-driven.

A core team executes the DAO's strategy and roadmap in successful DAOs. The community owns part of the organization, votes on decisions, and holds the team accountable.

DAOs are public companies.

Amazing.

A shareholder meeting's logistics are staggering. DAOs may hold anonymous, secure voting quickly. No need for intermediaries like banks to chase up every shareholder.

Successful DAOs aren't totally decentralized. Large-scale voting and collaboration have never been easier.

And that’s all that matters.

Scale, speed.

My Web3 learnings

Disneyland is enchanting. Web3 too.

In a few cycles, NFTs may be used to build trust, not clout. Not speculating with coins. DAOs run organizations, not themselves.

Finally, some final thoughts:

• NFTs will be a very helpful tool for building trust online. NFTs are successful now because of excellent marketing.

• Tokens are not the same as coins. Look into any project before making a purchase. Make sure it isn't run by three 9-year-olds piled on top of one another in a trench coat, at the very least.

• Not entirely decentralized, DAOs. We shall see a future where community ownership becomes the rule rather than the exception once we acknowledge this fact.

Crypto Disneyland is a rollercoaster with loops that make you sick.

Always buckle up.

Have fun!

The 2008 Bitcoin white paper solves the classic computer science consensus problem.

Issue Statement

The Byzantine Generals Problem (BGP) is called after an allegory in which several generals must collaborate and attack a city at the same time to win (figure 1-left). Any general who retreats at the last minute loses the fight (figure 1-right). Thus, precise messengers and no rogue generals are essential. This is difficult without a trusted central authority.

In their 1982 publication, Leslie Lamport, Robert Shostak, and Marshall Please termed this topic the Byzantine Generals Problem to simplify distributed computer systems.

Consensus in a distributed computer network is the issue. Reaching a consensus on which systems work (and stay in the network) and which don't makes maintaining a network tough (i.e., needs to be removed from network). Challenges include unreliable communication routes between systems and mis-reporting systems.

Solving BGP can let us construct machine learning solutions without single points of failure or trusted central entities. One server hosts model parameters while numerous workers train the model. This study describes fault-tolerant Distributed Byzantine Machine Learning.

Bitcoin invented a mechanism for a distributed network of nodes to agree on which transactions should go into the distributed ledger (blockchain) without a trusted central body. It solved BGP implementation. Satoshi Nakamoto, the pseudonymous bitcoin creator, solved the challenge by cleverly combining cryptography and consensus mechanisms.

Disclaimer

This is not financial advice. It discusses a unique computer science solution.

Bitcoin

Bitcoin's white paper begins:

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” Source: https://www.ussc.gov/sites/default/files/pdf/training/annual-national-training-seminar/2018/Emerging_Tech_Bitcoin_Crypto.pdf

Bitcoin's main parts:

1. The open-source and versioned bitcoin software that governs how nodes, miners, and the bitcoin token operate.

2. The native kind of token, known as a bitcoin token, may be created by mining (up to 21 million can be created), and it can be transferred between wallet addresses in the bitcoin network.

3. Distributed Ledger, which contains exact copies of the database (or "blockchain") containing each transaction since the first one in January 2009.

4. distributed network of nodes (computers) running the distributed ledger replica together with the bitcoin software. They broadcast the transactions to other peer nodes after validating and accepting them.

5. Proof of work (PoW) is a cryptographic requirement that must be met in order for a miner to be granted permission to add a new block of transactions to the blockchain of the cryptocurrency bitcoin. It takes the form of a valid hash digest. In order to produce new blocks on average every 10 minutes, Bitcoin features a built-in difficulty adjustment function that modifies the valid hash requirement (length of nonce). PoW requires a lot of energy since it must continually generate new hashes at random until it satisfies the criteria.

6. The competing parties known as miners carry out continuous computing processing to address recurrent cryptography issues. Transaction fees and some freshly minted (mined) bitcoin are the rewards they receive. The amount of hashes produced each second—or hash rate—is a measure of mining capacity.

Cryptography, decentralization, and the proof-of-work consensus method are Bitcoin's most unique features.

Bitcoin uses encryption

Bitcoin employs this established cryptography.

1. Hashing

2. digital signatures based on asymmetric encryption

Hashing (SHA-256) (SHA-256)

Hashing converts unique plaintext data into a digest. Creating the plaintext from the digest is impossible. Bitcoin miners generate new hashes using SHA-256 to win block rewards.

A new hash is created from the current block header and a variable value called nonce. To achieve the required hash, mining involves altering the nonce and re-hashing.

The block header contains the previous block hash and a Merkle root, which contains hashes of all transactions in the block. Thus, a chain of blocks with increasing hashes links back to the first block. Hashing protects new transactions and makes the bitcoin blockchain immutable. After a transaction block is mined, it becomes hard to fabricate even a little entry.

Asymmetric Cryptography Digital Signatures

Asymmetric cryptography (public-key encryption) requires each side to have a secret and public key. Public keys (wallet addresses) can be shared with the transaction party, but private keys should not. A message (e.g., bitcoin payment record) can only be signed by the owner (sender) with the private key, but any node or anybody with access to the public key (visible in the blockchain) can verify it. Alex will submit a digitally signed transaction with a desired amount of bitcoin addressed to Bob's wallet to a node to send bitcoin to Bob. Alex alone has the secret keys to authorize that amount. Alex's blockchain public key allows anyone to verify the transaction.

Solution

Now, apply bitcoin to BGP. BGP generals resemble bitcoin nodes. The generals' consensus is like bitcoin nodes' blockchain block selection. Bitcoin software on all nodes can:

Check transactions (i.e., validate digital signatures)

2. Accept and propagate just the first miner to receive the valid hash and verify it accomplished the task. The only way to guess the proper hash is to brute force it by repeatedly producing one with the fixed/current block header and a fresh nonce value.

Thus, PoW and a dispersed network of nodes that accept blocks from miners that solve the unfalsifiable cryptographic challenge solve consensus.

Suppose:

1. Unreliable nodes

2. Unreliable miners

Bitcoin accepts the longest chain if rogue nodes cause divergence in accepted blocks. Thus, rogue nodes must outnumber honest nodes in accepting/forming the longer chain for invalid transactions to reach the blockchain. As of November 2022, 7000 coordinated rogue nodes are needed to takeover the bitcoin network.

Dishonest miners could also try to insert blocks with falsified transactions (double spend, reverse, censor, etc.) into the chain. This requires over 50% (51% attack) of miners (total computational power) to outguess the hash and attack the network. Mining hash rate exceeds 200 million (source). Rewards and transaction fees encourage miners to cooperate rather than attack. Quantum computers may become a threat.

Visit my Quantum Computing post.

Quantum computers—what are they? Quantum computers will have a big influence. towardsdatascience.com

Nodes have more power than miners since they can validate transactions and reject fake blocks. Thus, the network is secure if honest nodes are the majority.

Summary

Table 1 compares three Byzantine Generals Problem implementations.

Bitcoin white paper and implementation solved the consensus challenge of distributed systems without central governance. It solved the illusive Byzantine Generals Problem.

Resources

Resources

1. https://en.wikipedia.org/wiki/Byzantine_fault

2. Source-code for Bitcoin Core Software — https://github.com/bitcoin/bitcoin

3. Bitcoin white paper — https://bitcoin.org/bitcoin.pdf

4. https://en.wikipedia.org/wiki/Bitcoin

5. https://www.microsoft.com/en-us/research/publication/byzantine-generals-problem/

6. https://www.microsoft.com/en-us/research/uploads/prod/2016/12/The-Byzantine-Generals-Problem.pdf

7. https://en.wikipedia.org/wiki/Hash_function

8. https://en.wikipedia.org/wiki/Merkle_tree

9. https://en.wikipedia.org/wiki/SHA-2

10. https://en.wikipedia.org/wiki/Public-key_cryptography

11. https://en.wikipedia.org/wiki/Digital_signature

12. https://en.wikipedia.org/wiki/Proof_of_work

13. https://en.wikipedia.org/wiki/Quantum_cryptography

14. https://dci.mit.edu/bitcoin-security-initiative

15. https://dci.mit.edu/51-attacks

16. Genuinely Distributed Byzantine Machine Learning, El-Mahdi El-Mhamdi et al., 2020. ACM, New York, NY, https://doi.org/10.1145/3382734.3405695

WRITE FOR THE WEB3

Why web3’s messaging is lost and how crypto winter is growing growth seeds

People interested in crypto, blockchain, and web3 typically read Bitcoin and Ethereum's white papers. It's a good idea. Documents produced for developers and academia aren't always the ideal resource for beginners.

Given the surge of extremely technical material and the number of fly-by-nights, rug pulls, and other scams, it's little wonder mainstream audiences regard the blockchain sector as an expensive sideshow act.

What's the solution?

Web3 needs more than just builders.

After joining TikTok, I followed Amy Suto of SutoScience. Amy switched from TV scriptwriting to IT copywriting years ago. She concentrates on web3 now. Decentralized autonomous organizations (DAOs) are seeking skilled copywriters for web3.

Amy has found that web3's basics are easy to grasp; you don't need technical knowledge. There's a paradigm shift in knowing the basics; be persistent and patient.

Apple is positioning itself as a data privacy advocate, leveraging web3's zero-trust ethos on data ownership.

Finn Lobsien, who writes about web3 copywriting for the Mirror and Twitter, agrees: acronyms and abstractions won't do.

Web3 preached to the choir. Curious newcomers have only found whitepapers and scams when trying to learn why the community loves it. No wonder people resist education and buy-in.

Due to the gender gap in crypto (Crypto Bro is not just a stereotype), it attracts people singing to the choir or trying to cash in on the next big thing.

Last year, the industry was booming, so writing wasn't necessary. Now that the bear market has returned (for everyone, but especially web3), holding readers' attention is a valuable skill.

White papers and the Web3

Why does web3 rely so much on non-growth content?

Businesses must polish and improve their messaging moving into the 2022 recession. The 2021 tech boom provided such a sense of affluence and (unsustainable) growth that no one needed great marketing material. The market found them.

This was especially true for web3 and the first-time crypto believers. Obviously. If they knew which was good.

White papers help. White papers are highly technical texts that walk a reader through a product's details. How Does a White Paper Help Your Business and That White Paper Guy discuss them.

They're meant for knowledgeable readers. Investors and the technical (academic/developer) community read web3 white papers. White papers are used when a product is extremely technical or difficult to assist an informed reader to a conclusion. Web3 uses them most often for ICOs (initial coin offerings).

White papers for web3 education help newcomers learn about the web3 industry's components. It's like sending a first-grader to the Annotated Oxford English Dictionary to learn to read. It's a reference, not a learning tool, for words.

Newcomers can use platforms that teach the basics. These included Coinbase's Crypto Basics tutorials or Cryptochicks Academy, founded by the mother of Ethereum's inventor to get more women utilizing and working in crypto.

Discord and Web3 communities

Discord communities are web3's opposite. Discord communities involve personal communications and group involvement.

Online audience growth begins with community building. User personas prefer 1000 dedicated admirers over 1 million lukewarm followers, and the language is much more easygoing. Discord groups are renowned for phishing scams, compromised wallets, and incorrect information, especially since the crypto crisis.

White papers and Discord increase industry insularity. White papers are complicated, and Discord has a high risk threshold.

Web3 and writing ads

Copywriting is emotional, but white papers are logical. It uses the brain's quick-decision centers. It's meant to make the reader invest immediately.

Not bad. People think sales are sleazy, but they can spot the poor things.

Ethical copywriting helps you reach the correct audience. People who gain a following on Medium are likely to have copywriting training and a readership (or three) in mind when they publish. Tim Denning and Sinem Günel know how to identify a target audience and make them want to learn more.

In a fast-moving market, copywriting is less about long-form content like sales pages or blogs, but many organizations do. Instead, the copy is concise, individualized, and high-value. Tweets, email marketing, and IM apps (Discord, Telegram, Slack to a lesser extent) keep engagement high.

What does web3's messaging lack? As DAOs add stricter copyrighting, narrative and connecting tales seem to be missing.

Web3 is passionate about constructing the next internet. Now, they can connect their passion to a specific audience so newcomers understand why.

I thought it would be interesting to share how much TikTok paid me in 2021.

Onward!

Oh, you get paid by TikTok?

Yes.

They compensate thousands of creators. My Tik Tok account

I launched my account in March 2020 and generally post about money, finance, and side hustles.

TikTok creators are paid in several ways.

• Fund for TikTok creators

• Sponsorships (aka brand deals)

• Affiliate promotion

• My own creations

Only one, the TikTok Creator Fund, pays me.

The TikTok Creator Fund: What Is It?

TikTok's initiative pays creators.

YouTube's Shorts Fund, Snapchat Spotlight, and other platforms have similar programs.

Creator Fund doesn't pay everyone. Some prerequisites are:

• age requirement of at least 18 years

• In the past 30 days, there must have been 100,000 views.

• a minimum of 10,000 followers

If you qualify, you can apply using your TikTok account, and once accepted, your videos can earn money.

My earnings from the TikTok Creator Fund

Since 2020, I've made $273.65. My 2021 payment is $77.36.

Yikes!

I made between $4.91 to around $13 payout each time I got paid.

TikTok reportedly pays 3 to 5 cents per thousand views.

To live off the Creator Fund, you'd need billions of monthly views.

Top personal finance creator Sara Finance has millions (if not billions) of views and over 700,000 followers yet only received $3,000 from the TikTok Creator Fund.

Goals for 2022

TikTok pays me in different ways, as listed above.

My largest TikTok account isn't my only one.

In 2022, I'll revamp my channel.

It's been a tumultuous year on TikTok for my account, from getting shadow-banned to being banned from the Creator Fund to being accepted back (not at my wish).

What I've experienced isn't rare. I've read about other creators' experiences.

So, some quick goals for this account…

• 200,000 fans by the year 2023

• Consistent monthly income of $5,000

• two brand deals each month

For now, that's all.