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Howey Test and Cryptocurrencies: 'Every ICO Is a Security'
What Is the Howey Test?
To determine whether a transaction qualifies as a "investment contract" and thus qualifies as a security, the Howey Test refers to the U.S. Supreme Court cass: the Securities Act of 1933 and the Securities Exchange Act of 1934. According to the Howey Test, an investment contract exists when "money is invested in a common enterprise with a reasonable expectation of profits from others' efforts."
The test applies to any contract, scheme, or transaction. The Howey Test helps investors and project backers understand blockchain and digital currency projects. ICOs and certain cryptocurrencies may be found to be "investment contracts" under the test.
Understanding the Howey Test
The Howey Test comes from the 1946 Supreme Court case SEC v. W.J. Howey Co. The Howey Company sold citrus groves to Florida buyers who leased them back to Howey. The company would maintain the groves and sell the fruit for the owners. Both parties benefited. Most buyers had no farming experience and were not required to farm the land.
The SEC intervened because Howey failed to register the transactions. The court ruled that the leaseback agreements were investment contracts.
This established four criteria for determining an investment contract. Investing contract:
- An investment of money
- n a common enterprise
- With the expectation of profit
- To be derived from the efforts of others
In the case of Howey, the buyers saw the transactions as valuable because others provided the labor and expertise. An income stream was obtained by only investing capital. As a result of the Howey Test, the transaction had to be registered with the SEC.
Howey Test and Cryptocurrencies
Bitcoin is notoriously difficult to categorize. Decentralized, they evade regulation in many ways. Regardless, the SEC is looking into digital assets and determining when their sale qualifies as an investment contract.
The SEC claims that selling digital assets meets the "investment of money" test because fiat money or other digital assets are being exchanged. Like the "common enterprise" test.
Whether a digital asset qualifies as an investment contract depends on whether there is a "expectation of profit from others' efforts."
For example, buyers of digital assets may be relying on others' efforts if they expect the project's backers to build and maintain the digital network, rather than a dispersed community of unaffiliated users. Also, if the project's backers create scarcity by burning tokens, the test is met. Another way the "efforts of others" test is met is if the project's backers continue to act in a managerial role.
These are just a few examples given by the SEC. If a project's success is dependent on ongoing support from backers, the buyer of the digital asset is likely relying on "others' efforts."
Special Considerations
If the SEC determines a cryptocurrency token is a security, many issues arise. It means the SEC can decide whether a token can be sold to US investors and forces the project to register.
In 2017, the SEC ruled that selling DAO tokens for Ether violated federal securities laws. Instead of enforcing securities laws, the SEC issued a warning to the cryptocurrency industry.
Due to the Howey Test, most ICOs today are likely inaccessible to US investors. After a year of ICOs, then-SEC Chair Jay Clayton declared them all securities.
SEC Chairman Gensler Agrees With Predecessor: 'Every ICO Is a Security'
Howey Test FAQs
How Do You Determine If Something Is a Security?
The Howey Test determines whether certain transactions are "investment contracts." Securities are transactions that qualify as "investment contracts" under the Securities Act of 1933 and the Securities Exchange Act of 1934.
The Howey Test looks for a "investment of money in a common enterprise with a reasonable expectation of profits from others' efforts." If so, the Securities Act of 1933 and the Securities Exchange Act of 1934 require disclosure and registration.
Why Is Bitcoin Not a Security?
Former SEC Chair Jay Clayton clarified in June 2018 that bitcoin is not a security: "Cryptocurrencies: Replace the dollar, euro, and yen with bitcoin. That type of currency is not a security," said Clayton.
Bitcoin, which has never sought public funding to develop its technology, fails the SEC's Howey Test. However, according to Clayton, ICO tokens are securities.
A Security Defined by the SEC
In the public and private markets, securities are fungible and tradeable financial instruments. The SEC regulates public securities sales.
The Supreme Court defined a security offering in SEC v. W.J. Howey Co. In its judgment, the court defines a security using four criteria:
- An investment contract's existence
- The formation of a common enterprise
- The issuer's profit promise
- Third-party promotion of the offering
Read original post.
More on Web3 & Crypto
Farhan Ali Khan
2 years ago
Introduction to Zero-Knowledge Proofs: The Art of Proving Without Revealing
Zero-Knowledge Proofs for Beginners
Published here originally.
Introduction
I Spy—did you play as a kid? One person chose a room object, and the other had to guess it by answering yes or no questions. I Spy was entertaining, but did you know it could teach you cryptography?
Zero Knowledge Proofs let you show your pal you know what they picked without exposing how. Math replaces electronics in this secret spy mission. Zero-knowledge proofs (ZKPs) are sophisticated cryptographic tools that allow one party to prove they have particular knowledge without revealing it. This proves identification and ownership, secures financial transactions, and more. This article explains zero-knowledge proofs and provides examples to help you comprehend this powerful technology.
What is a Proof of Zero Knowledge?
Zero-knowledge proofs prove a proposition is true without revealing any other information. This lets the prover show the verifier that they know a fact without revealing it. So, a zero-knowledge proof is like a magician's trick: the prover proves they know something without revealing how or what. Complex mathematical procedures create a proof the verifier can verify.
Want to find an easy way to test it out? Try out with tis awesome example! ZK Crush
Describe it as if I'm 5
Alex and Jack found a cave with a center entrance that only opens when someone knows the secret. Alex knows how to open the cave door and wants to show Jack without telling him.
Alex and Jack name both pathways (let’s call them paths A and B).
In the first phase, Alex is already inside the cave and is free to select either path, in this case A or B.
As Alex made his decision, Jack entered the cave and asked him to exit from the B path.
Jack can confirm that Alex really does know the key to open the door because he came out for the B path and used it.
To conclude, Alex and Jack repeat:
Alex walks into the cave.
Alex follows a random route.
Jack walks into the cave.
Alex is asked to follow a random route by Jack.
Alex follows Jack's advice and heads back that way.
What is a Zero Knowledge Proof?
At a high level, the aim is to construct a secure and confidential conversation between the prover and the verifier, where the prover convinces the verifier that they have the requisite information without disclosing it. The prover and verifier exchange messages and calculate in each round of the dialogue.
The prover uses their knowledge to prove they have the information the verifier wants during these rounds. The verifier can verify the prover's truthfulness without learning more by checking the proof's mathematical statement or computation.
Zero knowledge proofs use advanced mathematical procedures and cryptography methods to secure communication. These methods ensure the evidence is authentic while preventing the prover from creating a phony proof or the verifier from extracting unnecessary information.
ZK proofs require examples to grasp. Before the examples, there are some preconditions.
Criteria for Proofs of Zero Knowledge
Completeness: If the proposition being proved is true, then an honest prover will persuade an honest verifier that it is true.
Soundness: If the proposition being proved is untrue, no dishonest prover can persuade a sincere verifier that it is true.
Zero-knowledge: The verifier only realizes that the proposition being proved is true. In other words, the proof only establishes the veracity of the proposition being supported and nothing more.
The zero-knowledge condition is crucial. Zero-knowledge proofs show only the secret's veracity. The verifier shouldn't know the secret's value or other details.
Example after example after example
To illustrate, take a zero-knowledge proof with several examples:
Initial Password Verification Example
You want to confirm you know a password or secret phrase without revealing it.
Use a zero-knowledge proof:
You and the verifier settle on a mathematical conundrum or issue, such as figuring out a big number's components.
The puzzle or problem is then solved using the hidden knowledge that you have learned. You may, for instance, utilize your understanding of the password to determine the components of a particular number.
You provide your answer to the verifier, who can assess its accuracy without knowing anything about your private data.
You go through this process several times with various riddles or issues to persuade the verifier that you actually are aware of the secret knowledge.
You solved the mathematical puzzles or problems, proving to the verifier that you know the hidden information. The proof is zero-knowledge since the verifier only sees puzzle solutions, not the secret information.
In this scenario, the mathematical challenge or problem represents the secret, and solving it proves you know it. The evidence does not expose the secret, and the verifier just learns that you know it.
My simple example meets the zero-knowledge proof conditions:
Completeness: If you actually know the hidden information, you will be able to solve the mathematical puzzles or problems, hence the proof is conclusive.
Soundness: The proof is sound because the verifier can use a publicly known algorithm to confirm that your answer to the mathematical conundrum or difficulty is accurate.
Zero-knowledge: The proof is zero-knowledge because all the verifier learns is that you are aware of the confidential information. Beyond the fact that you are aware of it, the verifier does not learn anything about the secret information itself, such as the password or the factors of the number. As a result, the proof does not provide any new insights into the secret.
Explanation #2: Toss a coin.
One coin is biased to come up heads more often than tails, while the other is fair (i.e., comes up heads and tails with equal probability). You know which coin is which, but you want to show a friend you can tell them apart without telling them.
Use a zero-knowledge proof:
One of the two coins is chosen at random, and you secretly flip it more than once.
You show your pal the following series of coin flips without revealing which coin you actually flipped.
Next, as one of the two coins is flipped in front of you, your friend asks you to tell which one it is.
Then, without revealing which coin is which, you can use your understanding of the secret order of coin flips to determine which coin your friend flipped.
To persuade your friend that you can actually differentiate between the coins, you repeat this process multiple times using various secret coin-flipping sequences.
In this example, the series of coin flips represents the knowledge of biased and fair coins. You can prove you know which coin is which without revealing which is biased or fair by employing a different secret sequence of coin flips for each round.
The evidence is zero-knowledge since your friend does not learn anything about which coin is biased and which is fair other than that you can tell them differently. The proof does not indicate which coin you flipped or how many times you flipped it.
The coin-flipping example meets zero-knowledge proof requirements:
Completeness: If you actually know which coin is biased and which is fair, you should be able to distinguish between them based on the order of coin flips, and your friend should be persuaded that you can.
Soundness: Your friend may confirm that you are correctly recognizing the coins by flipping one of them in front of you and validating your answer, thus the proof is sound in that regard. Because of this, your acquaintance can be sure that you are not just speculating or picking a coin at random.
Zero-knowledge: The argument is that your friend has no idea which coin is biased and which is fair beyond your ability to distinguish between them. Your friend is not made aware of the coin you used to make your decision or the order in which you flipped the coins. Consequently, except from letting you know which coin is biased and which is fair, the proof does not give any additional information about the coins themselves.
Figure out the prime number in Example #3.
You want to prove to a friend that you know their product n=pq without revealing p and q. Zero-knowledge proof?
Use a variant of the RSA algorithm. Method:
You determine a new number s = r2 mod n by computing a random number r.
You email your friend s and a declaration that you are aware of the values of p and q necessary for n to equal pq.
A random number (either 0 or 1) is selected by your friend and sent to you.
You send your friend r as evidence that you are aware of the values of p and q if e=0. You calculate and communicate your friend's s/r if e=1.
Without knowing the values of p and q, your friend can confirm that you know p and q (in the case where e=0) or that s/r is a legitimate square root of s mod n (in the situation where e=1).
This is a zero-knowledge proof since your friend learns nothing about p and q other than their product is n and your ability to verify it without exposing any other information. You can prove that you know p and q by sending r or by computing s/r and sending that instead (if e=1), and your friend can verify that you know p and q or that s/r is a valid square root of s mod n without learning anything else about their values. This meets the conditions of completeness, soundness, and zero-knowledge.
Zero-knowledge proofs satisfy the following:
Completeness: The prover can demonstrate this to the verifier by computing q = n/p and sending both p and q to the verifier. The prover also knows a prime number p and a factorization of n as p*q.
Soundness: Since it is impossible to identify any pair of numbers that correctly factorize n without being aware of its prime factors, the prover is unable to demonstrate knowledge of any p and q that do not do so.
Zero knowledge: The prover only admits that they are aware of a prime number p and its associated factor q, which is already known to the verifier. This is the extent of their knowledge of the prime factors of n. As a result, the prover does not provide any new details regarding n's prime factors.
Types of Proofs of Zero Knowledge
Each zero-knowledge proof has pros and cons. Most zero-knowledge proofs are:
Interactive Zero Knowledge Proofs: The prover and the verifier work together to establish the proof in this sort of zero-knowledge proof. The verifier disputes the prover's assertions after receiving a sequence of messages from the prover. When the evidence has been established, the prover will employ these new problems to generate additional responses.
Non-Interactive Zero Knowledge Proofs: For this kind of zero-knowledge proof, the prover and verifier just need to exchange a single message. Without further interaction between the two parties, the proof is established.
A statistical zero-knowledge proof is one in which the conclusion is reached with a high degree of probability but not with certainty. This indicates that there is a remote possibility that the proof is false, but that this possibility is so remote as to be unimportant.
Succinct Non-Interactive Argument of Knowledge (SNARKs): SNARKs are an extremely effective and scalable form of zero-knowledge proof. They are utilized in many different applications, such as machine learning, blockchain technology, and more. Similar to other zero-knowledge proof techniques, SNARKs enable one party—the prover—to demonstrate to another—the verifier—that they are aware of a specific piece of information without disclosing any more information about that information.
The main characteristic of SNARKs is their succinctness, which refers to the fact that the size of the proof is substantially smaller than the amount of the original data being proved. Because to its high efficiency and scalability, SNARKs can be used in a wide range of applications, such as machine learning, blockchain technology, and more.
Uses for Zero Knowledge Proofs
ZKP applications include:
Verifying Identity ZKPs can be used to verify your identity without disclosing any personal information. This has uses in access control, digital signatures, and online authentication.
Proof of Ownership ZKPs can be used to demonstrate ownership of a certain asset without divulging any details about the asset itself. This has uses for protecting intellectual property, managing supply chains, and owning digital assets.
Financial Exchanges Without disclosing any details about the transaction itself, ZKPs can be used to validate financial transactions. Cryptocurrency, internet payments, and other digital financial transactions can all use this.
By enabling parties to make calculations on the data without disclosing the data itself, Data Privacy ZKPs can be used to preserve the privacy of sensitive data. Applications for this can be found in the financial, healthcare, and other sectors that handle sensitive data.
By enabling voters to confirm that their vote was counted without disclosing how they voted, elections ZKPs can be used to ensure the integrity of elections. This is applicable to electronic voting, including internet voting.
Cryptography Modern cryptography's ZKPs are a potent instrument that enable secure communication and authentication. This can be used for encrypted messaging and other purposes in the business sector as well as for military and intelligence operations.
Proofs of Zero Knowledge and Compliance
Kubernetes and regulatory compliance use ZKPs in many ways. Examples:
Security for Kubernetes ZKPs offer a mechanism to authenticate nodes without disclosing any sensitive information, enhancing the security of Kubernetes clusters. ZKPs, for instance, can be used to verify, without disclosing the specifics of the program, that the nodes in a Kubernetes cluster are running permitted software.
Compliance Inspection Without disclosing any sensitive information, ZKPs can be used to demonstrate compliance with rules like the GDPR, HIPAA, and PCI DSS. ZKPs, for instance, can be used to demonstrate that data has been encrypted and stored securely without divulging the specifics of the mechanism employed for either encryption or storage.
Access Management Without disclosing any private data, ZKPs can be used to offer safe access control to Kubernetes resources. ZKPs can be used, for instance, to demonstrate that a user has the necessary permissions to access a particular Kubernetes resource without disclosing the details of those permissions.
Safe Data Exchange Without disclosing any sensitive information, ZKPs can be used to securely transmit data between Kubernetes clusters or between several businesses. ZKPs, for instance, can be used to demonstrate the sharing of a specific piece of data between two parties without disclosing the details of the data itself.
Kubernetes deployments audited Without disclosing the specifics of the deployment or the data being processed, ZKPs can be used to demonstrate that Kubernetes deployments are working as planned. This can be helpful for auditing purposes and for ensuring that Kubernetes deployments are operating as planned.
ZKPs preserve data and maintain regulatory compliance by letting parties prove things without revealing sensitive information. ZKPs will be used more in Kubernetes as it grows.
Sam Hickmann
3 years ago
Token taxonomy: Utility vs Security vs NFT
Let's examine the differences between the three main token types and their functions.
As Ethereum grew, the term "token" became a catch-all term for all assets built on the Ethereum blockchain. However, different tokens were grouped based on their applications and features, causing some confusion. Let's examine the modification of three main token types: security, utility, and non-fungible.
Utility tokens
They provide a specific utility benefit (or a number of such). A utility token is similar to a casino chip, a table game ticket, or a voucher. Depending on the terms of issuing, they can be earned and used in various ways. A utility token is a type of token that represents a tool or mechanism required to use the application in question. Like a service, a utility token's price is determined by supply and demand. Tokens can also be used as a bonus or reward mechanism in decentralized systems: for example, if you like someone's work, give them an upvote and they get a certain number of tokens. This is a way for authors or creators to earn money indirectly.
The most common way to use a utility token is to pay with them instead of cash for discounted goods or services.
Utility tokens are the most widely used by blockchain companies. Most cryptocurrency exchanges accept fees in native utility tokens.
Utility tokens can also be used as a reward. Companies tokenize their loyalty programs so that points can be bought and sold on blockchain exchanges. These tokens are widely used in decentralized companies as a bonus system. You can use utility tokens to reward creators for their contributions to a platform, for example. It also allows members to exchange tokens for specific bonuses and rewards on your site.
Unlike security tokens, which are subject to legal restrictions, utility tokens can be freely traded.
Security tokens
Security tokens are essentially traditional securities like shares, bonds, and investment fund units in a crypto token form.
The key distinction is that security tokens are typically issued by private firms (rather than public companies) that are not listed on stock exchanges and in which you can not invest right now. Banks and large venture funds used to be the only sources of funding. A person could only invest in private firms if they had millions of dollars in their bank account. Privately issued security tokens outperform traditional public stocks in terms of yield. Private markets grew 50% faster than public markets over the last decade, according to McKinsey Private Equity Research.
A security token is a crypto token whose value is derived from an external asset or company. So it is governed as security (read about the Howey test further in this article). That is, an ownership token derives its value from the company's valuation, assets on the balance sheet, or dividends paid to token holders.
Why are Security Tokens Important?
Cryptocurrency is a lucrative investment. Choosing from thousands of crypto assets can mean the difference between millionaire and bankrupt. Without security tokens, crypto investing becomes riskier and generating long-term profits becomes difficult. These tokens have lower risk than other cryptocurrencies because they are backed by real assets or business cash flows. So having them helps to diversify a portfolio and preserve the return on investment in riskier assets.
Security tokens open up new funding avenues for businesses. As a result, investors can invest in high-profit businesses that are not listed on the stock exchange.
The distinction between utility and security tokens isn't as clear as it seems. However, this increases the risk for token issuers, especially in the USA. The Howey test is the main pillar regulating judicial precedent in this area.
What is a Howey Test?
An "investment contract" is determined by the Howey Test, a lawsuit settled by the US Supreme Court. If it does, it's a security and must be disclosed and registered under the Securities Act of 1933 and the Securities Exchange Act of 1934.
If the SEC decides that a cryptocurrency token is a security, a slew of issues arise. In practice, this ensures that the SEC will decide when a token can be offered to US investors and if the project is required to file a registration statement with the SEC.
Due to the Howey test's extensive wording, most utility tokens will be classified as securities, even if not intended to be. Because of these restrictions, most ICOs are not available to US investors. When asked about ICOs in 2018, then-SEC Chairman Jay Clayton said they were securities. The given statement adds to the risk. If a company issues utility tokens without registering them as securities, the regulator may impose huge fines or even criminal charges.
What other documents regulate tokens?
Securities Act (1993) or Securities Exchange Act (1934) in the USA; MiFID directive and Prospectus Regulation in the EU. These laws require registering the placement of security tokens, limiting their transfer, but protecting investors.
Utility tokens have much less regulation. The Howey test determines whether a given utility token is a security. Tokens recognized as securities are now regulated as such. Having a legal opinion that your token isn't makes the implementation process much easier. Most countries don't have strict regulations regarding utility tokens except KYC (Know Your Client) and AML (Anti Money-Laundering).
As cryptocurrency and blockchain technologies evolve, more countries create UT regulations. If your company is based in the US, be aware of the Howey test and the Bank Secrecy Act. It classifies UTs and their issuance as money transmission services in most states, necessitating a license and strict regulations. Due to high regulatory demands, UT issuers try to avoid the United States as a whole. A new law separating utility tokens from bank secrecy act will be introduced in the near future, giving hope to American issuers.
The rest of the world has much simpler rules requiring issuers to create basic investor disclosures. For example, the latest European legislation (MiCA) allows businesses to issue utility tokens without regulator approval. They must also prepare a paper with all the necessary information for the investors.
A payment token is a utility token that is used to make a payment. They may be subject to electronic money laws.
Because non-fungible tokens are a new instrument, there is no regulating paper yet. However, if the NFT is fractionalized, the smaller tokens acquired may be seen as securities.
NFT Tokens
Collectible tokens are also known as non-fungible tokens. Their distinctive feature is that they denote unique items such as artwork, merch, or ranks. Unlike utility tokens, which are fungible, meaning that two of the same tokens are identical, NFTs represent a unit of possession that is strictly one of a kind. In a way, NFTs are like baseball cards, each one unique and valuable.
As for today, the most recognizable NFT function is to preserve the fact of possession. Owning an NFT with a particular gif, meme, or sketch does not transfer the intellectual right to the possessor, but is analogous to owning an original painting signed by the author.
Collectible tokens can also be used as digital souvenirs, so to say. Businesses can improve their brand image by issuing their own branded NFTs, which represent ranks or achievements within the corporate ecosystem. Gamifying business ecosystems would allow people to connect with a brand and feel part of a community.
Which type of tokens is right for you as a business to raise capital?
For most businesses, it's best to raise capital with security tokens by selling existing shares to global investors. Utility tokens aren't meant to increase in value over time, so leave them for gamification and community engagement. In a blockchain-based business, however, a utility token is often the lifeblood of the operation, and its appreciation potential is directly linked to the company's growth. You can issue multiple tokens at once, rather than just one type. It exposes you to various investors and maximizes the use of digital assets.
Which tokens should I buy?
There are no universally best tokens. Their volatility, industry, and risk-reward profile vary. This means evaluating tokens in relation to your overall portfolio and personal preferences: what industries do you understand best, what excites you, how do you approach taxes, and what is your planning horizon? To build a balanced portfolio, you need to know these factors.
Conclusion
The three most common types of tokens today are security, utility, and NFT. Security tokens represent stocks, mutual funds, and bonds. Utility tokens can be perceived as an inside-product "currency" or "ignition key" that grants you access to goods and services or empowers with other perks. NFTs are unique collectible units that identify you as the owner of something.
joyce shen
3 years ago
Framework to Evaluate Metaverse and Web3
Everywhere we turn, there's a new metaverse or Web3 debut. Microsoft recently announced a $68.7 BILLION cash purchase of Activision.
Like AI in 2013 and blockchain in 2014, NFT growth in 2021 feels like this year's metaverse and Web3 growth. We are all bombarded with information, conflicting signals, and a sensation of FOMO.
How can we evaluate the metaverse and Web3 in a noisy, new world? My framework for evaluating upcoming technologies and themes is shown below. I hope you will also find them helpful.
Understand the “pipes” in a new space.
Whatever people say, Metaverse and Web3 will have to coexist with the current Internet. Companies who host, move, and store data over the Internet have a lot of intriguing use cases in Metaverse and Web3, whether in infrastructure, data analytics, or compliance. Hence the following point.
## Understand the apps layer and their infrastructure.
Gaming, crypto exchanges, and NFT marketplaces would not exist today if not for technology that enables rapid app creation. Yes, according to Chainalysis and other research, 30–40% of Ethereum is self-hosted, with the rest hosted by large cloud providers. For Microsoft to acquire Activision makes strategic sense. It's not only about the games, but also the infrastructure that supports them.
Follow the money
Understanding how money and wealth flow in a complex and dynamic environment helps build clarity. Unless you are exceedingly wealthy, you have limited ability to significantly engage in the Web3 economy today. Few can just buy 10 ETH and spend it in one day. You must comprehend who benefits from the process, and how that 10 ETH circulates now and possibly tomorrow. Major holders and players control supply and liquidity in any market. Today, most Web3 apps are designed to increase capital inflow so existing significant holders can utilize it to create a nascent Web3 economy. When you see a new Metaverse or Web3 application, remember how money flows.
What is the use case?
What does the app do? If there is no clear use case with clear makers and consumers solving a real problem, then the euphoria soon fades, and the only stakeholders who remain enthused are those who have too much to lose.
Time is a major competition that is often overlooked.
We're only busier, but each day is still 24 hours. Using new apps may mean that time is lost doing other things. The user must be eager to learn. Metaverse and Web3 vs. our time? I don't think we know the answer yet (at least for working adults whose cost of time is higher).
I don't think we know the answer yet (at least for working adults whose cost of time is higher).
People and organizations need security and transparency.
For new technologies or apps to be widely used, they must be safe, transparent, and trustworthy. What does secure Metaverse and Web3 mean? This is an intriguing subject for both the business and public sectors. Cloud adoption grew in part due to improved security and data protection regulations.
The following frameworks can help analyze and understand new technologies and emerging technological topics, unless you are a significant investment fund with the financial ability to gamble on numerous initiatives and essentially form your own “index fund”.
I write on VC, startups, and leadership.
More on https://www.linkedin.com/in/joycejshen/ and https://joyceshen.substack.com/
This writing is my own opinion and does not represent investment advice.
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Sarah Bird
3 years ago
Memes Help This YouTube Channel Earn Over $12k Per Month
Take a look at a YouTube channel making anything up to over $12k a month from making very simple videos.
And the best part? Its replicable by anyone. Basic videos can be generated for free without design abilities.
Join me as I deconstruct the channel to estimate how much they make, how they do it, and how you can too.
What Do They Do Exactly?
Happy Land posts memes with a simple caption they wrote. So, it's new. The videos are a slideshow of meme photos with stock music.
The site posts 12 times a day.
8-10-minute videos show 10 second images. Thus, each video needs 48-60 memes.
Memes are video titles (e.g. times a boyfriend was hilarious, back to school fails, funny restaurant signs).
Some stats about the channel:
Founded on October 30, 2020
873 videos were added.
81.8k subscribers
67,244,196 views of the video
What Value Are They Adding?
Everyone can find free memes online. This channel collects similar memes into a single video so you don't have to scroll or click for more. It’s right there, you just keep watching and more will come.
By theming it, the audience is prepared for the video's content.
If you want hilarious animal memes or restaurant signs, choose the video and you'll get up to 60 memes without having to look for them. Genius!
How much money do they make?
According to www.socialblade.com, the channel earns $800-12.8k (image shown in my home currency of GBP).
That's a crazy estimate, but it highlights the unbelievable potential of a channel that presents memes.
This channel thrives on quantity, thus putting out videos is necessary to keep the flow continuing and capture its audience's attention.
How Are the Videos Made?
Straightforward. Memes are added to a presentation without editing (so you could make this in PowerPoint or Keynote).
Each slide should include a unique image and caption. Set 10 seconds per slide.
Add music and post the video.
Finding enough memes for the material and theming is difficult, but if you enjoy memes, this is a fun job.
This case study should have shown you that you don't need expensive software or design expertise to make entertaining videos. Why not try fresh, easy-to-do ideas and see where they lead?
Niharikaa Kaur Sodhi
3 years ago
The Only Paid Resources I Turn to as a Solopreneur
4 Pricey Tools That Are Valuable
I pay based on ROI (return on investment).
If a $20/month tool or $500 online course doubles my return, I'm in.
Investing helps me build wealth.
Canva Pro
I initially refused to pay.
My course content needed updating a few months ago. My Google Docs text looked cleaner and more professional in Canva.
I've used it to:
product cover pages
eBook covers
Product page infographics
See my Google Sheets vs. Canva product page graph.
Google Sheets vs Canva
Yesterday, I used it to make a LinkedIn video thumbnail. It took less than 5 minutes and improved my video.
In 30 hours, the video had 39,000 views.
Here's more.
HypeFury
Hypefury rocks!
It builds my brand as I sleep. What else?
Because I'm traveling this weekend, I planned tweets for 10 days. It took me 80 minutes.
So while I travel or am absent, my content mill keeps producing.
Also I like:
I can reach hundreds of people thanks to auto-DMs. I utilize it to advertise freebies; for instance, leave an emoji remark to receive my checklist. And they automatically receive a message in their DM.
Scheduled Retweets: By appearing in a different time zone, they give my tweet a second chance.
It helps me save time and expand my following, so that's my favorite part.
It’s also super neat:
Zoom Pro
My course involves weekly and monthly calls for alumni.
Google Meet isn't great for group calls. The interface isn't great.
Zoom Pro is expensive, and the monthly payments suck, but it's necessary.
It gives my students a smooth experience.
Previously, we'd do 40-minute meetings and then reconvene.
Zoom's free edition limits group calls to 40 minutes.
This wouldn't be a good online course if I paid hundreds of dollars.
So I felt obligated to help.
YouTube Premium
My laptop has an ad blocker.
I bought an iPad recently.
When you're self-employed and work from home, the line between the two blurs. My bed is only 5 steps away!
When I read or watched videos on my laptop, I'd slide into work mode. Only option was to view on phone, which is awkward.
YouTube premium handles it. No more advertisements and I can listen on the move.
3 Expensive Tools That Aren't Valuable
Marketing strategies are sometimes aimed to make you feel you need 38474 cool features when you don’t.
Certain tools are useless.
I found it useless.
Depending on your needs. As a writer and creator, I get no return.
They could for other jobs.
Shield Analytics
It tracks LinkedIn stats, like:
follower growth
trend chart for impressions
Engagement, views, and comment stats for posts
and much more.
Middle-tier creator costs $12/month.
I got a 25% off coupon but canceled my free trial before writing this. It's not worth the discount.
Why?
LinkedIn provides free analytics. See:
Not thorough and won't show top posts.
I don't need to see my top posts because I love experimenting with writing.
Slack Premium
Slack was my classroom. Slack provided me a premium trial during the prior cohort.
I skipped it.
Sure, voice notes are better than a big paragraph. I didn't require pro features.
Marketing methods sometimes make you think you need 38474 amazing features. Don’t fall for it.
Calendly Pro
This may be worth it if you get many calls.
I avoid calls. During my 9-5, I had too many pointless calls.
I don't need:
ability to schedule calls for 15, 30, or 60 minutes: I just distribute each link separately.
I have a Gumroad consultation page with a payment option.
follow-up emails: I hardly ever make calls, so
I just use one calendar, therefore I link to various calendars.
I'll admit, the integrations are cool. Not for me.
If you're a coach or consultant, the features may be helpful. Or book meetings.
Conclusion
Investing is spending to make money.
Use my technique — put money in tools that help you make money. This separates it from being an investment instead of an expense.
Try free versions of these tools before buying them since everyone else is.
Julie Zhuo
2 years ago
Comparing poor and excellent managers
10-sketch explanation
Choosing Tasks
Bringing News
carrying out 1:1s
providing critique
Managing Turbulence
