Hi there,
It hasn’t been crypto’s year so far, but it feels like I can’t get enough of writing about them. This entire month at work was focused on writing posts about various coins and how it affects the entire crypto ecosystem.
I wrote three separate LinkedIn pieces about these coins as thought leadership posts for my boss. I am sharing them with you below.
One of them was part of a government’s attempt to move away from the USD, the other is based on a meme and the third is an attempt at creating a global currency.
But before we begin, do consider sharing this with a friend or family member who likes reading interesting stories. It helps the newsletter grow and keeps me motivated.
With that out of the way, let’s dig in.
Does Bitcoin still have a use case after El Salvador’s bitcoin gamble failed to pay off?
El Salvador passed the Bitcoin Law in September 2021, making Bitcoin legal tender and compelling businesses to accept it as payment.
The idea was conceived by President Nayib Bukele, with the hope that by adopting Bitcoin dependency on the US dollar would reduce and bitcoin enthusiasts would be tempted to invest in the country.
To accept Bitcoin, El Salvadorians signed up for a government-backed digital wallet called Chivo but ever since launching, the initiative has been plagued with problems and technical glitches.
The biggest issue has been the fluctuations in Bitcoin prices which ended up harming local businesses. These small businesses did not fully understand the cons of holding a cryptocurrency. Given the problems, establishments have refused to transact in Bitcoin and have gone back to dealing in cash.
The President’s heavy-handed approach to forcing adoption has backfired and a chunk of public money has evaporated in lockstep with the falling Bitcoin prices.
Bitcoin enthusiasts continue to believe that Bitcoin is a store of value like gold, in times of uncertainty it is a safe asset to hold. But the dream that Bitcoin can replace hard cash and facilitate banking to the unbanked has a long way to go before becoming a reality.
When Memes Collide: The Inevitable Rise and Fall of Pepecoin Culture
Launched in mid- April 2023, $PEPE’s market capitalization skyrocketed to $1.61 billion within weeks of its launch.
The memecoin is based on “Pepe the Frog” meme and the supply of PEPE tokens is upwards of 420 trillion, a reference to cannabis culture’s “4/20.”
Memecoins in recent history have drawn both investor attention and eyerolls over a perceived lack of seriousness. But the potential for risk takers to score big with memecoins is seemingly real, nonetheless.
Pepecoin garnered attention after an investor swapped 0.125 ETH, worth about $250, for a whopping 5.9 trillion PEPE tokens. As interest in the memecoin grew, the value of those tokens surged to about $1.02 million by April 19, 2023 from $250, yielding a potential return of roughly 4,000 times the initial investment within a span of a few days.
However, the investor who bought those 5.9 trillion tokens may have a difficult time selling them at the current price, given PEPE’s relatively low liquidity. Attempts to exit the entire position could lead to a crash in price.
This is why it’s important to be cautious when trading with coins that have spectacular returns as the market for them might be extremely shallow.
Currently the token’s price has dropped 66% since hitting an all-time high of $1.61 billion on May 6. It’s current market cap has fallen below $700 million. The top performing traders have increasingly been reducing their $PEPE holdings, a sign that the meme coin mania of the past weeks may be losing steam.
Speculative investments such as memecoins offer eye watering returns to early investors or founders of the project who have the ability to market the coin and generate interest around it. Once the euphoria dies investors late to the party who entered at the peak are faced with losses as the price enters a downward cycle.
It’s important to be cautious before entering into speculative cryptocurrency trades, given the possibility of the entire investment going to zero and not let fear of missing out drive investment decisions.
P.S I invested in dogecoin at the height of dogecoin mania believing that I could make a quick profit. Oh, how wrong I was.😔
Currency for All: Will Worldcoin Truly Be Money for the Masses?
Worldcoin is a billion-dollar startup co-founded by Sam Altman - of OpenAI fame. The startup’s plan is to give its token for free in exchange for scanning a user’s iris. It hopes to use this method to rapidly expand around the world and build up its database of users.
The venture has succeeded in raising money from the who’s who of Silicon Valley ranging from Andreessen Horowitz, Khosla Ventures and Tiger Global.
Worldcoin is trying to solve for “proof of personhood”. That is establishing that an entity is a unique person by scanning the user’s iris to verify their identity. This is to ensure that that user is not a bot.
The technology being deployed for the iris scan is the Worldcoin orb. It’s a shiny, chrome-surfaced, melon-sized sphere which can take a detailed picture of a person’s iris in a matter of seconds.
Once the scan is complete, the individual is added to a database of verified humans, and Worldcoin creates a unique cryptographic hash or equation that’s tied to that person. The scan isn’t saved, but the hash can be used in the future to prove the person’s identity anonymously.
The company has a three-part mission — to create a global ID linked to the scan, a global currency and an app that enables payment, purchases and transfers using its own token, along with other digital assets and traditional currencies. A global currency that could for example, help people send money to their families overseas without paying middlemen or wire fees.
The project has the lofty goal of building an inclusive financial network as a global public utility. The aim is to deliver benefits, such as future currency drops as part of universal basic income programs which could help in offsetting job losses caused by AI.
However, it’s not all smooth sailing, the project has seen its share of negative coverage with privacy experts raising alarm bells over a crypto project having access to people’s biometric data.
With newfangled crypto projects coming and going and buzzwords such as inclusivity being thrown around, it remains to be seen whether Worldcoin has learned from the criticism of other moonshot projects such as Facebook’s Libra.
Will this be a pathbreaking technology which will lead humanity to a more equal society or just another disastrous project which could leak the biometric data of millions?
Diving down rabbit holes like this is always fun and leaves me wiser. If you have any suggestions of topics for me do share them in the comments.
Finally, as these pieces were written for work, it would really help me if you went over to LinkedIn and gave them a like or left a comment on them.
They are posted as
Does Bitcoin still have a use case after El Salvador’s bitcoin gamble failed to pay off?
When Memes Collide: The Inevitable Rise and Fall of Pepecoin Culture
Currency for All: Will #worldcoin Truly Be Money for the Masses?
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Leave a comment if something struck a chord with you
Filtered Kapi #44 - Someone sent you this?
On the worldcoin piece, I understand the Step 1 to build a database of people, but I wonder how the verification will be done at the time of transaction. At the time of a transaction, the biometric needs to be scanned and matched to the hash stored in the DB. So will there be a need to have orbs everywhere, like the PayTM QR code scanner? Even if that is possible, the problem would be tha the orb would always have to be connected to the DB, so internet would be required. No offline mode there.