Category Archives: Decentralization
Decoding Digital Subscription Success – Egon Zehnder
The rise of digital subscription businesses has revolutionized the way we consume products and services. From entertainment to health and wellness, people want tailored experiences that can be delivered right to their phones or inboxes. But a looming global recession, unstable markets, rising inflation and cost of living has caused many people to cut back on subscriptions, prompting companies to focus on retention over acquisition.
Our conversations with more than 20 leaders in consumer subscriptions organizations over the past few months underscored the need for this strategy change, but also shone a spotlight on the internal impact these shifts have on priorities, organizational structures and leadership. In this article, we explore key actions leaders need to take now to ensure their teams are able to capitalize on this strategy shift instead of being hampered by it.
While centralized structures are often the most cost-effective and have a clear leadership structure, most digital subscription companies need an element of decentralization to be competitive today. Innovation and entrepreneurship tend to thrive in decentralized environments, where leaders feel and act like empowered owners and have the freedom to make decisions quickly and take necessary risks.
However, there are a few caveats to decentralization. When theres a wholesale shift in strategy (e.g., the change from acquisition to retention), functional teams can suffer if they don't have a voice in large-scale organizational decisions. Additionally, decentralization also often means there is duplicate work and positions. The willingness of a company to accept this duplication of effort depends on whether the primary focus is on growth or profitability. For companies focusing on growth, its more likely this duplication is part of the trade off in rapid scaling. For those focusing on profit, the cost of duplicative work is likely less palatable.
Before making a shift to a different organizational model because of a strategy change, take stock of what is working and where you can improve. It may turn out that you dont need to make a structural change, but instead you could work on developing employees muscles around communications and creating clarity across decentralized teams. Leaders can also focus on building cross-functional rituals to ensure communication is intentional and deepens relationships across teams.
If youre asking this question, you may have already reached the limit your current leaders and workforce can handle. Reorganizations in digital companies happen rather frequently, triggered by personnel changes, mergers and acquisitions, new business priorities and market expansion. However, even for the most agile employees, frequent reorganizations can take a toll. Employees who are part of companies that reorganize every six months or every year may experience burnout and stress among their teams, as they are expected to deliver results on their current projects while also implementing new operating models and ways of working at the same time. This high level of stress and expectation can erode employee morale over time, leading to burnout and disengagement from the purpose and outputs of the organization.
A finding from one of our recent studies across generations and roles in the workplace found that employees value their physical and mental wellbeing above all else, including compensation. While you may not be able to limit your reorganizations, consider offering your employees relevant additional perks. This could include paid time off for additional professional development or mental health days for recharging or simple ideas like eliminating internal meetings on Friday afternoons. Its also important that people feel heard when it comes to voicing their frustrations. Leaders need to actively listen and take stock of company morale. An environment that constantly feels unstable and employees who feel underappreciated will undermine productivity and engagement, potentially leading to an increase in talent turnover.
As subscription businesses shift from focusing on acquisition to retention, they need strong functional leaders across the critical areas of product, data, marketing, engineering and others, who are aligned across the companys goals, strategies, and decision-making processes. For example, your Chief Marketing Officer, Chief Product Officer and Chief Data Officer should operate in lockstep, with data at the core of driving both product development and product positioning. Bringing the strengths of each of these teams together creates a powerful cross-functional trio able to understand the business strategy from multiple angles and add context from each of their functions. For this deep alignment to be successful, these leaders must also possess high emotional intelligence, comfort with ambiguity and approach every challenge with the mindset of the customer.
In addition to being strongly connected across functions, these functional leaders should have a voice at the very top of the organization, with access to the CEO and the board when applicable. This is extremely important when new strategies and products are being considered. They will have the business insights that are critical to making informed decisions.
This doesnt mean endless WhatsApp and Slack messages at all hours. What it does mean is intentional time for connecting on shared leadership priorities and establishing agreed upon rules of engagement and a decision-making framework. Then these leaders must translate this shared passion for connection to their teams, which will result in higher employee morale and will benefit the business with greater alignment across functions. This collaboration may take some time to build, especially if your company is accustomed to frequent reorganizations. The teams you work with may shift and you need to devote time to building trust in these new relationships. It may also be a time to consider team coaching to help build stronger alignment across functions.
Digital subscription businesses that change customer strategy without considering their organizational structure and people may find themselves in danger of being canceledfirst by their employees and then by customers if they lack the talent to fulfill customer needs. Leaders must remember that customer centricity shouldnt come at the cost of their employees; businesses that thrive know that to build customer loyalty they need to build employee loyalty first.
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Bluesky Social, another Twitter killer – Manila Bulletin
Before the free-speech-absolutist who blocks and bans journalists who criticize him bought Twitter, Twitter announced a project to create a decentralized social network. Starting with the AT Protocol (ATP) specifications (seehttps://atproto.com/), the project, now a company, developed the reference implementation, IMHO, which is Bluesky Social (seehttps://bsky.app/).
Bluesky recently released its free iOS app (download athttps://apps.apple.com/us/app/bluesky-social/id6444370199). Whilst readily available, the service is still not open to the public, i.e., you will need an invitation to be able to create an account. Luckily I was able to secure one through a friend I met on Micro.blog (hihttps://maique.omg.lol!).
So what's it like to be under Bluesky? Creating an account starts with a screen that shows you Bluesky as one of the servers (it defaults to this as I don't know of any other instance running ATP at the moment), then it asks the invite code before you can proceed with your email and your bsky.social handle.
Once you are in, the interface is similar to the Twitter of old. Your timeline shows as default (Following) and then there's the popular timeline (What's Hot). There are four icons at the bottom: home, search, notifications and your profile. Pretty basic, yes. Mind you, it is not yet open to the public.
Bluesky has several priorities in the pipeline (seehttps://blueskyweb.xyz/blogto know what they're working on), so do not expect it to be at par with Twitter yet, not that it is planning to be exactly like Twitter! Heck, it is not yet at par even with Mastodon, Misskey, Calckey or Pleroma, considering it is barely a few months old. That being said, it is already functional as a social network!
Based on the AT Protocol, Bluesky is intentionally designed to be decentralized. Yes, decentralization is the future-enough with centralized services like Twitter, Facebook, Instagram, Tiktok, and others. If anything, decentralization and federation have been proven to work by the ActivityPub-based federated universe, aka fediverse. Don't believe naysayers saying that the fediverse user-base is shrinking (it is not), but look at how much engagement has grown instead! Anyway, at the moment, Bluesky is in its own decentralized universe running on ATP, and hopefully someone is working on bridging both ATP and ActivityPub in the future. So Bluesky is on its own (again, I have said that I have not see any implementation of ATP yet-I am sure there are developers working on this already) at the moment.
One thing that I noticed, content moderation and algorithmic timeline are high on their priority list. Out of the bat, the app already has MUTE capability, and with the recent app update, users can choose which type of content to filter out.
Another thing that I like is that there is subscription needed to get your account verified as yours. Similar to how it is done on Mastodon, where you link your account with your website, Bluesky, albeit requiring more technical-jitsu, does this by allowing you to link your handle from the default @.bsky.social to your own domain, e.g., me.null.dev. The assumption, like on Mastodon, you have full control of your own domain's DNS. Neat, huh?
If you were on Twitter during the early days, then you'd find Bluesky to be familiar-where everyone is friendly. If you are sick of the current Twitter (I am!), then go secure an invite by joining the waitlist at
Personally, I alternate between Bluesky and Mastodon, and yes, I find both to be far better than Twitter!
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5 Benefits Of Blockchain: Types And Examples – Dataconomy
Benefits of blockchain are becoming increasingly evident, as businesses and industries across the world are recognizing the immense potential of this revolutionary technology. With its secure, transparent, and efficient platform for transactions and data management, blockchain is poised to disrupt various industries and change the way we interact with each other and with businesses.
From enhanced security and transparency to improved supply chain management and customer experience, blockchain technology is paving the way for a brighter future. In this article, we will explore the benefits of blockchain technology and its potential to transform the world as we know it.
Blockchain is a decentralized and distributed digital ledger that records transactions on a peer-to-peer network. It allows multiple parties to have a shared view of a particular data or transaction, making it highly secure and transparent.
In simple terms, a blockchain is a digital database that stores data across a network of computers, with each block of data linked to the previous one, forming a chain. Each block in the chain contains a cryptographic hash of the previous block, a timestamp, and transaction data.
When a transaction is initiated, it is broadcast to a network of computers called nodes. Each node verifies the transaction and records it in a block. The block is then added to the chain, which is stored across the network. The distributed nature of the network ensures that the data on the blockchain is transparent, immutable, and highly secure.
To ensure the integrity of the blockchain, transactions are validated by a network of nodes through a consensus mechanism. Different blockchains use different consensus mechanisms, such as proof-of-work or proof-of-stake, to validate transactions.
The main purpose of blockchain technology is to provide a secure, transparent, and decentralized platform for recording and verifying transactions. It eliminates the need for intermediaries, such as banks or government agencies, to facilitate transactions, making it a more efficient and cost-effective alternative.
Blockchain technology also provides a tamper-proof and immutable record of transactions, making it ideal for applications that require a high level of security and transparency.
Trust is a critical component in any transaction. However, in the digital world, trust is often compromised due to the risk of fraud, cyber attacks, and other malicious activities. Blockchain technology solves the problem of trust by providing a secure, transparent, and tamper-proof platform for recording and verifying transactions.
With blockchain, transactions are verified by a network of nodes, making it virtually impossible to manipulate or alter the data. This decentralized approach ensures that the data on the blockchain is transparent and secure, and eliminates the need for intermediaries, such as banks or government agencies, to facilitate transactions.
Decoding the potential of enterprise blockchain
Blockchain technology offers numerous benefits, making it an ideal solution for a wide range of industries and applications. Some of the main benefits of blockchain technology are:
One of the key benefits of blockchain technology is its high level of security and transparency. Blockchain eliminates the need for intermediaries, such as banks or government agencies, to facilitate transactions, making it a more secure and transparent alternative. The distributed nature of the network ensures that data on the blockchain is tamper-proof and virtually impossible to hack or manipulate.
Blockchain technology is decentralized and distributed, meaning that it is not controlled by any single entity or organization. This eliminates the risk of centralization, which can lead to corruption and abuse of power. Instead, power is distributed among the network of nodes, ensuring that no single entity has control over the network.
Blockchain technology enables faster and more efficient transactions, as intermediaries are eliminated, and transactions can be processed in near real-time. This results in cost savings for businesses, as they no longer need to pay for the services of intermediaries.
Blockchain technology provides a secure and transparent platform for storing and sharing data. This eliminates the risk of data loss or corruption, and enables businesses to access and share data in a more efficient and secure manner.
Blockchain technology enables businesses to track and verify the origin, authenticity, and movement of goods and transactions. This enhances traceability and accountability, making it easier to detect fraud or other malicious activities.
Blockchain technology offers numerous benefits, including increased security and transparency, decentralization and distribution of power, efficiency and cost savings, better data management and sharing, and enhanced traceability and accountability. These benefits make blockchain technology an ideal solution for a wide range of industries and applications, and its potential for revolutionizing various industries is truly remarkable.
Blockchain technology has a wide range of use cases across various industries. Some of the most common use cases include:
What is the best blockchain for smart contracts and why?
Several industries can benefit from the use of blockchain technology, including:
Blockchain technology has the potential to revolutionize various industries by providing a secure, transparent, and efficient way to store and manage data and transactions. It eliminates the need for intermediaries, ensures the integrity of transactions, and offers numerous benefits to businesses and consumers alike.
There are three main types of blockchain: public, private, and hybrid. Each type of blockchain has its own unique characteristics, use cases, and benefits.
A public blockchain is a decentralized blockchain that is open to anyone to join and participate in the network. In a public blockchain, anyone can create a new block, validate transactions, and participate in the consensus mechanism.
A private blockchain is a blockchain that is controlled by a single entity or organization. It is not open to the public, and access to the network is restricted to a select group of participants who are authorized to participate in the network.
A hybrid blockchain is a combination of public and private blockchains. It combines the security and transparency of a public blockchain with the control and privacy of a private blockchain.
The main differences between the types of blockchain are:
Each type of blockchain has its own unique use cases and benefits:
The different types of blockchain offer unique benefits and use cases, depending on the needs of the application. Public blockchains provide high levels of transparency and decentralization, private blockchains provide control and privacy, and hybrid blockchains offer a balance of security, control, and transparency.
While blockchain technology offers numerous benefits, it also has some disadvantages that should be considered. Some of the main disadvantages of blockchain technology are:
One of the main disadvantages of blockchain technology is its high energy consumption. Blockchain technology relies on a consensus mechanism, such as proof-of-work, that requires a significant amount of computational power to validate transactions. This results in high energy consumption, which can have a negative impact on the environment and result in higher costs for businesses.
How to become a blockchain maestro?
Blockchain technology has scalability issues, which can limit its ability to handle a large volume of transactions. As the number of transactions on the blockchain increases, the size of the blockchain also increases, making it more difficult and time-consuming to process transactions.
Blockchain technology is still in its early stages, and there is a lack of regulation and standardization in the industry. This can create uncertainty for businesses and consumers, as they may not fully understand the risks and benefits of using blockchain technology. Additionally, the lack of standardization can make it difficult for businesses to integrate blockchain technology into their existing systems.
While the disadvantages of blockchain technology should be considered, there are steps that can be taken to mitigate these disadvantages, including:
While blockchain technology offers numerous benefits, it also has some disadvantages that should be considered. However, with the development of new technologies and best practices, these disadvantages can be mitigated, making blockchain technology an increasingly attractive solution for businesses and industries.
Blockchain technology offers numerous benefits that can enhance customer value and improve the overall customer experience. Some of the main benefits of blockchain technology for customers are:
Blockchain technology provides a secure and transparent platform for storing and sharing data. This eliminates the risk of data loss or corruption, and ensures that personal data is protected from unauthorized access or manipulation. By using blockchain technology, businesses can provide their customers with better protection of their personal data, which can enhance trust and loyalty.
Blockchain technology enables faster and more secure transactions, as intermediaries are eliminated, and transactions can be processed in near real-time. This results in a faster and more convenient experience for customers, while also reducing the risk of fraud or other malicious activities.
Blockchain technology can enhance the overall customer experience by providing a more efficient and transparent platform for transactions. By eliminating intermediaries and reducing the time and cost associated with transactions, businesses can provide their customers with a more seamless and convenient experience.
Blockchain technology can improve supply chain management by providing a transparent and secure platform for tracking and verifying the origin, authenticity, and movement of goods. This enables businesses to provide their customers with better quality products, as well as enhanced traceability and accountability.
Blockchain technology has the potential to revolutionize various industries and change the way we interact with each other and with businesses.
Leaders should act now to maintain their market positions and take advantage of the opportunity to set industry standards.
McKinsey
There are several reasons why blockchain is considered the future:
Blockchain technology has the potential to disrupt various industries, including finance, healthcare, supply chain management, and more. By providing a secure, transparent, and efficient platform for transactions and data management, blockchain technology can streamline processes, reduce costs, and enhance trust and accountability.
Blockchain technology is gaining widespread adoption and investment, with more and more businesses and governments recognizing its potential. This growing interest in blockchain technology is driving innovation and development, as well as increasing awareness and education about its benefits and use cases.
Where does your data go: Inside the world of blockchain storage
The future of blockchain is promising, with experts predicting continued growth and development. Some of the main predictions for the future of blockchain include:
Blockchain technology is the future due to its potential for disrupting various industries, growing adoption and investment, and predictions for continued growth and development. As blockchain technology continues to evolve and mature, it has the potential to change the way we live, work, and interact with each other.
Benefits of blockchain technology are clear and undeniable. From increased security and transparency to improved efficiency and cost savings, blockchain has the potential to transform industries and revolutionize the way we interact with each other and with businesses.
As blockchain technology continues to evolve and mature, we can expect to see even greater benefits and use cases emerge. By leveraging the power of blockchain, businesses and individuals can unlock new opportunities, enhance trust and accountability, and build a brighter and more prosperous future.
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Layin’ It on the Line: Why is Bitcoin not covered by FDIC? – Standard-Examiner
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that provides insurance to depositors in case their bank fails. However, the FDIC does not cover Bitcoin, the most popular cryptocurrency. There are several reasons for this.
First, Bitcoin is not a traditional deposit. When people deposit money in a bank, they essentially loan their money to the bank, which the bank then uses to make loans and investments. In exchange, the bank pays interest to the depositor. In contrast, when people buy Bitcoin, they are not depositing money in a bank; they are purchasing a digital asset that has value based on supply and demand. Bitcoin is not a legal tender backed by the government, nor is it backed by any assets or commodities, making it difficult to classify it as a traditional deposit.
Second, Bitcoin is a decentralized currency. A central authority, such as a government or a financial institution, does not control it. This decentralization is a fundamental characteristic of Bitcoin and a key reason why many people find it appealing. However, it also means that there is no centralized entity to insure Bitcoin holdings. The FDIC is designed to protect deposits at banks, which are centralized institutions with a physical presence. On the other hand, Bitcoin is a decentralized digital asset stored on a distributed ledger known as the blockchain. No central authority can ensure the safety and security of Bitcoin holdings.
Third, Bitcoin is a relatively new technology that is still in the process of being regulated. Governments and financial institutions are still trying to figure out how to classify and regulate cryptocurrencies, and until there is greater clarity on this issue, it is unlikely that the FDIC will cover Bitcoin. Some countries have already taken steps to regulate cryptocurrencies, while others have banned them outright. The United States has taken a somewhat cautious approach, with the SEC (Securities and Exchange Commission) and other regulatory bodies issuing guidelines and rules for using and trading cryptocurrencies.
Fourth, the FDIC only insures deposits up to a certain amount. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. If a bank fails, the FDIC will insure each depositor up to $250,000. However, Bitcoin holdings can be worth much more than this, and there is no way for the FDIC to insure such large holdings. Additionally, Bitcoin is highly volatile and its value can fluctuate rapidly, making it difficult to determine its worth at any given time.
In conclusion, Bitcoin is not covered by the FDIC for several reasons. It is not a traditional deposit it is a decentralized currency, it is a new technology that is still being regulated and it can be worth much more than the FDICs insurance limit. While this lack of coverage may be a concern for some people, it is also one of the reasons why many others are attracted to Bitcoin. The decentralization and lack of central authority make it appealing to some users, and its status as a new technology means that there is still a lot of potential for growth and innovation in the cryptocurrency space.
Lyle Boss, a native Utahn, is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.
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Layin' It on the Line: Why is Bitcoin not covered by FDIC? - Standard-Examiner
18 industry vets share tips for launching a crypto startup in a bear … – Cointelegraph
Launching a startup in any industry is hard. Launching during a bear market is even harder. Launching a startup in a bear market in a relatively new industry like crypto which many investors dont fully understand and which has had its share of recent negative headlines brings a whole additional slate of challenges. But as many industry pioneers have proven, its not impossible, as long as founders follow a few smart strategies.
Many of the members of Cointelegraph Innovation Circle are startup founders themselves, and all are longtime industry veterans and market watchers. Here, 18 of them share their tested tips for crypto companies starting out during these volatile times.
When I look over the history of influencers and people who are dominating the market now, I see that many of them started in the previous bear market. New crypto companies should not build anything until they pitch it to the community on Twitter and to investors. Once they have refined their ideas and know that their offering is truly valuable, then its time to build a community around it. Arvin Khamseh, SOLDOUT NFTs
In this environment, capital is much harder to come by. Assess the complexity of your product, and make sure you overestimate how long it will take to build and the people you will need to build it. When times are good in crypto, it is easy to overpay contractors for quick results, but this is a bad strategy for long-term survival. Simon Harman, Chainflip Labs
This is a difficult time for fundraising. Companies should focus on growing their communities and partnerships to ensure they are perfectly placed when the market improves. Chasing funds right now will drain precious resources. Depending on how new a company is, spending excess early funds on development can doom projects to solving problems the markets dont care about or are reluctant to fund. Jason Fernandes, AdLunam Inc.
If your company is starting out in the crypto space, make sure you have a good business plan and a team of qualified and experienced advisers, including attorneys and CPAs, helping you. Pay close attention to things like entity structuring, funding, licensing, and tax and accounting compliance requirements early on. As the saying goes, failing to plan is planning to fail, especially in this volatile market. Sharon Yip, Polygon Advisory Group, LLC
Crypto capital raising allows liquidity and price discovery right from the start. An important part of the crypto capital-raising process is understanding what is behind the volatility in crypto markets. These price swing signals and changes can communicate information to entrepreneurs, giving a level of transparency that is not possible in the traditional finance capital-raising space. Tammy Paola, Zerocap
Crypto markets have proven to be volatile since their inception, so new companies entering the field should learn from the mistakes of some of their predecessors. Start small and lean, and focus on organic growth. Attempts to start high growth too early can be a recipe for failure, especially in the current market. Hugo Lee, Haru Invest
Celo launched during a bear market with an early focus on real-world projects and use cases driving positive impact for communities and the climate. Rallying around a shared purpose or mission helps projects prioritize goals and tasks critically. Rene Reinsberg, Celo Foundation
Be transparent, stick to your roadmap and timeline and dont tout decentralization for decentralizations sake. Sometimes decentralization hinders progress, particularly early in the life of a project. Crypto investors have become savvier, so you really need legitimate, creative ways to drive value into the token for any degree of success. Timothy Enneking, Digital Capital Management
Join the community where you can transform the future. Cointelegraph Innovation Circle brings blockchain technology leaders together to connect, collaborate and publish.Apply today
People say that a bear market is the best time to build. But thats not easy for companies just starting out. Find your first few true fans who really believe in your vision and can help you grow. Expand it to the next dozen by further validating your idea. Blockchain and Web3 are here to stay; use this time to find your path to real adoption use cases. Cindy Jin, Mintology
Focus 99% of your energy on solving the user experience challenges for the category youre building in. Deliver value for users and give them a reason to become advocates. By solving a problem that users say is their top priority, your solution becomes universal, and your product wont be limited just to the U.S. or certain geographies. With regulations coming, if your product fills human needs, youll survive. Chris Ghent, Parkhaus Holdings
Give people a reason to come to your platform regardless of market conditions. Web3 is here to stay, and it will only become more widely adopted, so by focusing on building a tool or platform with genuine utility thats easy to use and access, you will attract users during the bear market and will be ready when the market recovers. Sandy Carter, Unstoppable Domains
Be 100% mission-focused, be incredibly cost-conscious when analyzing expenses and understand that you might not see an immediate ROI on most activities. Crypto companies see insane booms, and most people building in the space now are doing so under the impression they are setting themselves up for success when the market turns more positive. It pays to be resilient and determined in down markets. Ty Smith, Coinbound
Understand the real needs and gaps in the market and connect them to real-world use cases. Be cognizant of the core drivers of adoption, and solve real-world problems. Dont launch a token for the sake of it, and dont be a me too player. Nitin Kumar, zblocks
One piece of advice for new crypto companies starting during volatile times is to prioritize building a strong, adaptable business model. Focus on creating real-world value, addressing market needs and establishing a solid product or service foundation. This resilience can help your company navigate market fluctuations and foster long-term success in the rapidly evolving crypto landscape. Tomer Warschauer Nuni, Kryptomon
Focus on your product and on bringing value to the ecosystem. Do not pay attention to the volatility of the times. This is crypto, and volatility will always play a part at least for now. As long as you focus on actually benefiting the community, people will appreciate you and adapt your technology. Stay focused, and dont let others deter you. Ayelet Noff, SlicedBrand
Resist the urge to increase your overhead expenses by renting out a fancy corporate space. Hire and train locally. Consider basing operations outside of one of the overpriced tech hubs. Be generous to your employees to encourage commitment, hard work and ingenuity. Jae Yang, Tacen
First, build a thoughtful, technologically sound project, and give the public a strong understanding of its purpose. Second, keep motivation high for teams through tangible, attainable goals and a clear vision. Third, make long-term decisions rather than impulsive ones that are based on the current state of the market. Always prioritize communication and transparency with users and teams. Anthony Georgiades, Pastel Network
Find three to five of your top competitors and analyze their messaging. List what theyre doing well and what theyre communicating poorly. Focus on this, and home in on where your competitors are weak to gain an edge. If they use too much jargon, ensure your messaging is clear and straightforward. Sheraz Ahmed, STORM Partners
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
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18 industry vets share tips for launching a crypto startup in a bear ... - Cointelegraph
Crypto Decentralization Identified as U.S. Security Risk by Treasury Department – U.Today
Alex Dovbnya
The United States Treasury Department has issued a report warning of the growing security risks associated with the decentralized finance (DeFi) sector, highlighting vulnerabilities that illicit actors exploit for money laundering and evasion of regulator
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The United States Treasury Department has recently published a report emphasizing the potential security threats arising from the expanding decentralized finance (DeFi) industry.
The report points out the vulnerabilities in DeFi services that are being exploited by malicious actors, including ransomware hackers and North Korean cyber operatives, to launder illegal funds.
Moreover, the report highlights the difficulties in supervising and enforcing obligations related to anti-money laundering and countering terrorist financing due to the often obscure nature of DeFi services' organizational structures.
The assessment reveals that numerous DeFi services do not comply with existing rules. Consequently, the report suggests intensifying supervision and enforcement effortsas well as engaging more with the industry to clarify how current regulations apply to DeFi services.
The report also mentions that if a DeFi service is not classified as a financial institution under the Bank Secrecy Act (BSA), it may create a potential vulnerability as there is a lower chance of implementing anti-money laundering and terrorist financing measures.
Lastly, the assessment urges increased cooperation with international partners to promote the adoption of global anti-money laundering and counter-terrorist financing standards, along with better cybersecurity practices among digital asset firms.
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Crypto Decentralization Identified as U.S. Security Risk by Treasury Department - U.Today
How DAOs Factor Into Litigation, Enforcement, and Restructuring – Bloomberg Law
Following the collapse of FTX and the landmark Commodity Futures Trading Commission case concerning Ooki DAO, corporate law questions around decentralized autonomous organizations are crystalizing through court cases and regulatory enforcement actions. Meanwhile, prices for cryptoassets have begun to rebound.
If and when the crypto winter fades into spring, it could bring along renewed interest in participating in DAOs. For users and investors to safely do so, much still depends on closely watched current court cases that test the parameters of open legal questions around DAOs.
DAOs are an emerging type of corporate structure designed to fit the decentralized culture behind blockchain technology. Unlike traditional corporate structures such as limited liability corporations, which centralize decision-making, the DAO structure exists to decentralize control, vesting decision-making power in the tokenholders themselves.
This formation challenges the definition of what legal personhood is intended to do, prompting potential investors, the CFTC, and the Securities and Exchange Commission to ask questions such as: who bears the burden of accountability, who owes a fiduciary duty to investors, how does a DAO take action and who can effectuate that action on its behalf, who are the equity holders, and how do you know with whom you have co-invested in a DAO?
Several recent and ongoing cases working their way through the courts have begun to shed light on possible answers to these questions. Below are a select few that investors, regulators and industry lawyers are watching closely:
The CFTCs enforcement action found that the DAO is a general partnership or unincorporated association, as a matter of state law, and that a DAO was a legal person subject to suit. It also found that tokenholders who actively participate in governance are general partners and thus liable for the activities of the DAO, and therefore they can be liable for the debts and regulatory violations of the DAO.
The DAO founders thought they couldnt be sued because they formed a DAO. This enforcement action shows that the reach of the government extends to activities committed in the blockchain space, whether through DAOs, on decentralized exchanges, or otherwise.
Multiple coordinated enforcement actions filed over the past month by the SEC, Department of Justice, and CFTC accuse trader Avraham Eisenberg of violating federal law by fraudulently manipulating the price of Mango DAOs MNGO token to unlawfully obtain over $110 million in digital assets.
Eisenberg publicly defended his conduct on Twitter after he stole from the Mango protocol, saying that because the flawed computer code of the protocol let him do it, he was allowed to do it.
Through its enforcement actions, the government has countered with a different interpretation: Code is code, but law is law. Simply taking actions within the parameters of a code will not shield token holders from legal liability if such actions otherwise violate the law.
This first-of-its-kind private class action alleges that bZx DAO, its co-founders, and members failed to adequately secure their funds, resulting in the theft of $55 million. This suit is seeking class action certification for damages caused by these alleged actions.
A March 27 ruling denied the motion to dismiss filed by members of the DAO who held governance tokens, finding that: the DAO is plausibly alleged to be a general partnership, the US founders attempted to avoid US law by changing the corporate form from an LLC to a DAO, and the members holding governance tokens may have a duty of care to the other token holders, and corresponding liability for failure to secure the DAOs sensitive information.
The biggest concern here for DAOs is that even losses which are too small for any one investor to economically sue over can be aggregated together into a class action suit, leaving the DAO staring down the barrel of private recoupment of losses.
This private class action filed by a software engineer alleges that PoolTogether, a blockchain-based app that encourages users to save their cryptocurrencies by offering awards, is essentially a lottery and therefore prohibited under New York Law. The plaintiffs attorneys are increasingly trying to apply broader laws and tactics to go after DAOs and their token holders.
As DAOs increase in total assets, they will become bigger and easier targets for these types of claims. It is more critical now for DAOs to retain good legal counsel and work within the parameters of their advice to mitigate their potential losses.
So where does all this leave current or potential DAOs? DAOs are not immune from federal law or lawsuits. Therefore investors and participants in DAOs must act with an appropriate level of skepticism and cautionand in coordination with good legal counsel.
We also have more clarity on the question of liability. The Ooki DAO case demonstrates that courts appear to be leaning toward finding that DAOs are unincorporated associations with general partners. If that interpretation holds, tokenholders who actively participate in governance may be personally liable under general partnership liability doctrines.
But the dissenting opinion in the Ooki case lays out several alternate theories of liability that the CFTC or SEC could rely onsuch as control person or aiding and abetting, which go beyond this current updatethat one could argue better apply to tokenholders. We will have to wait for more decisions to learn whether the general partnership theory will be applied instead of these potential theories of liability.
And simply because the government attempts one theory of liability does not mean that private plaintiffs cant attempt to recover losses under alternative theories.
Another conclusion we might draw from these rulings is that the risk level for tokenholders may depend on their level of participation. If there is a direct vote on an action that results in liabilitytokenholders approve a self-dealing transactionit seems more likely that a court would find a higher level of culpability.
On the other hand, when management takes action on its own, tokenholders who were not part of that action could be at a lower risk. But the specific level of participation where increased risk of personal liability kicks in for tokenholders has not yet been settled.
Finally, the moderate clarity we now have on liability can guide a decentralized finance entity in deciding how to structure. A DAO may make a philosophical compromise on absolute decentralization by forming within an LLC wrapper and thereby trading some centralization of organizational decision-making authority in exchange for greater liability protections/limitations.
In addition to limiting personal liability, the wrapper may address issues around how DAOs can take actions, enabling DAOs to sign contracts, hire employees, pay taxes, and take other practical steps. Finally, an LLC wrapper may also provide some level of protection against future regulation in the decentralized finance space, which is very much a moving target.
For now, these structures will operate in the shadow of significant legal uncertainty. Approaching DAOs with caution and limiting personal liability through more traditional structures, and active close engagement with legal counsel, are the most prudent steps until courts provide additional guidance.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Andrew Gilbert, partner at Croke Fairchild Duarte & Beres, focuses his practice on private M&A transactions, venture capital, and business counseling.
Michael Frisch, partner at Croke Fairchild Duarte & Beres, counsels clients on regulatory compliance, investigations, and enforcement matters involving digital assets
Rob Isham, partner at Croke Fairchild Duarte & Beres, represents major financial institutions and borrowers in a range of credit facilities.
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How DAOs Factor Into Litigation, Enforcement, and Restructuring - Bloomberg Law
Internet Computer: Hurdles of Decentralizing the Internet – BeInCrypto
The digital landscape continues to evolve, with the Internet Computer (ICP) protocol potentially playing a significant role in this change. ICP aims to decentralize the internet using blockchain technology, offering increased capacity and presenting potential opportunities for developers, entrepreneurs, and users. However, it is important to consider both the advantages and challenges associated with this innovative approach.
In this article, BeInCrypto explores ICPs impact on democratizing web infrastructure and the advancements in smart contract capabilities.
We also examine the projects rise and fall, exploring the reasons behind its spectacular downfall and the lessons to be learned from its trajectory.
For years, the internet has been dominated by tech giants and government institutions, controlling large swathes of the digital space. ICP seeks to disrupt this status quo by decentralizing web infrastructure and empowering individuals to access and develop on the internet freely.
One of ICPs primary advantages is fostering a more inclusive, accessible internet. By breaking down barriers to entry and reducing reliance on centralized platforms, the protocol empowers smaller businesses and entrepreneurs to compete with large corporations.
This shift enables a fairer, more competitive market and sparks innovation in the digital space.
However, ICPs decentralization comes with potential drawbacks. Decentralized systems can face scalability issues, and ensuring adequate security becomes increasingly challenging.
While ICPs architecture aims to mitigate these concerns, they still pose potential risks to users.
ICPs enhanced smart contract capabilities are transforming industries like finance, healthcare, and supply chain, driving innovation and efficiency.
ICPs smart contracts offer flexibility and speed, enabling secure, tamper-proof automation of complex processes.
With ICP, industries can streamline operations, reduce costs, and improve overall efficiency, all while maintaining a high level of security and trust.
Nonetheless, smart contracts on ICP are not without obstacles. Integrating these revolutionary contracts into legacy systems may prove challenging, and gaining widespread adoption might be slow due to hesitance from traditional industries. While ICP has the potential to transform sectors, its success depends on overcoming these barriers.
ICPs technology allows developers to build open, decentralized applications, leading to a new era of innovation and collaboration.
Developers can harness ICPs decentralized infrastructure to build novel applications and services, free from the constraints of centralized platforms. This environment fosters collaboration, cross-pollination of ideas, and rapid innovation, ultimately benefiting end-users and the broader digital ecosystem.
However, the complexity of ICPs technology may present challenges for developers. Building decentralized applications requires learning new programming paradigms, and the intricacies of ICPs system can be daunting. Consequently, some developers may struggle to adapt or be reluctant to adopt the protocol.
Internet Computer took the world by storm in 2021, with a meteoric rise in its token value and a promise to disrupt the cloud computing industry. However, less than two years later, the project has experienced a spectacular fall from grace. In this section, we explore the reasons behind ICPs downfall and the lessons that can be learned from its trajectory.
The Internet Computer project was launched by DFINITY, a Swiss non-profit organization, amidst a frenzy of excitement for new cryptocurrencies. As a result, its token, ICP, soared in value, and the project quickly became one of the worlds top ten largest coins. With over $166 million in funding from reputable investors such as Andreessen Horowitz and Polychain Capital, Internet Computer seemed poised to revolutionize the digital landscape.
The project aimed to build a decentralized supercomputer capable of running blockchain-based applications comparable to popular services like WhatsApp and Venmo. This ambitious vision garnered significant attention, with some even claiming that Internet Computer could disrupt giants like AWS and Google Cloud.
Despite its initial hype and substantial funding, Internet Computer has failed to live up to expectations. The ICP tokens value plummeted by over 98%, and its total market cap plunged from $9.5 billion to around $1 billion.
One of the primary factors contributing to Internet Computers downfall is the lack of transparency regarding its ecosystem. Unlike other popular blockchains like Ethereum, Polkadot, and Binance Chain, it is difficult to ascertain what has been built on Internet Computer. Many of the apps in its ecosystem have either ceased development or show little to no activity.
Internet Computers dApps, like OpenChat and DSCVR, have faced challenges in gaining user adoption. The process of creating an account on OpenChat, for example, is lengthy, and new members are no longer being accepted. Similarly, DSCVR, a community-owned professional network, lacks meaningful content, leading to a disappointing user experience.
Other dApps, such as DFinance, Portal, and NFT Studio, have faced similar issues, with little to no meaningful activity in their ecosystems.
Despite its struggles, Internet Computer is not entirely dead. Activity within its ecosystem still exists, as evidenced by its explorer. The question remains, however, whether this activity justifies a market cap of over $1 billion.
Internet Computers meteoric rise and subsequent fall offer valuable insights into the volatile nature of the cryptocurrency and blockchain industry. While its ambitious goals and substantial funding initially garnered excitement, the projects inability to deliver on its promises and the lack of user adoption ultimately led to its downfall.
As the world of decentralized technology continues to evolve, projects like Internet Computer serve as cautionary tales. To succeed in this competitive landscape, blockchain projects must offer transparent development, user-friendly experiences, and the ability to adapt to changing market conditions. Only then can they hope to achieve lasting impact and growth in the digital ecosystem.
Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content.
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Internet Computer: Hurdles of Decentralizing the Internet - BeInCrypto
Decentralizing the Manufacturing of Cell and Gene Therapies – Genetic Engineering & Biotechnology News
In cell and gene therapies, access and cost limit the use of these treatments. Historically, the genesis of cell therapy and later cell and gene therapy emerged in academic centers combining scientific discoveries of the immune system and implementing these discoveries in clinical trials to address unmet medical needs, particularly in cancer and infectious diseases, says ystein mellem, PhD, director of cell therapy at Thermo Fisher Scientific. Today, decentralization of cell and gene therapy is emerging as a response to the high cost of such therapies, but also to reduce logistical complexity, risk, and time that ultimately will give patients and their families better healthcare.
So far, decentralizing the manufacturing of cell and gene therapies gains more attention than traction. Decentralization of cell and gene therapy is a hot topic discussed in conferences and publications and thus a strategy that most players in this industry are discussing, mellem notes. There are nonprofit organizations, governmental sponsors, and a few industrial companies that sit in the drivers seat. Despite the clinical studies underway, mellem points out that as always with innovation in the healthcare industry, someone needs to demonstrate a sustainable business model for decentralized cell and gene therapy before the majority follows.
Manufacturing cell and gene therapies closer to the patients makes many steps easier. The vision is a scenario without the need for the cost and time associated with airplanes and, for many countries, the complexity of customs clearance, mellem explains. In autologous cell and gene therapy, the time required to manufacture the personalized drug ready for re-injectionreferred to as vein-to-vein timerangesbetween three and four weeks. Decentralized manufacturing could cut that time in half or more.
Beyond the cost in money and time, the vein-to-vein time impacts a patients experience or even being eligible for a treatment. This period can be daunting for the patients awaiting treatment, and vein-to-vein time can make cell and gene therapies unsuitable for patients with rapidly progressing disease, mellem says.
Making this leap to decentralization, though, depends on technology, such as using modular equipment. All decentralization manufacturing needs robust systems that are easy to transfer from a centralized process development and validation site to all the decentralized drug manufacturing sites, mellem explains. Those systems should be closed, automated, and flexible. The cell and gene therapy industry is in rapid evolution towards high volumesuch as in various allogeneic drug platformsand miniaturizationfor instance in autologous CAR-T therapies, mellem says. So, flexibility is required for development of the next generation of cell and gene therapy drugs.
In essence, decentralization depends on ecosystem-wide changes. I believe we are at a crossroads in the cell and gene therapy industry, mellem says. The need for a modular approach will continue to benefit the industry related to the flexibility and scalability required to support the evolution of cell and gene therapies. Developing the best technologies, though, will depend on partnerships across the industry, mellem says.
As mellem concludes: The vision is that decentralization will make cell and gene therapies more attainable for more patients from an accessibility, cost, and time perspective. Making that transition, though, will take more development and time.
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Unleashing the Power of Decentralization for a Better Tomorrow w/ Bernard Perez, Web3 Foundation – CryptoSlate
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