Held in the wake of the collapse of cryptocurrency exchange FTX, Benzinga’s Future of Crypto event this week seemed aptly named.
Crypto, at least as a mainstream asset class, still has yet to fully arrive.
When Kevin O’Leary, the entrepreneur and co-host of Shark Tank, was asked why he first got into the crypto space a few years ago, he said: “The regulatory environment changed, so I changed.”
More still needs to change. The onus is now squarely on the regulators to regulate, O’Leary said, after $51 billion in funds evaporated at the hands of Sam Bankman-Fried and FTX.
“Any unregulated exchange is not investable by institutions, and we’ve just seen proof of that,” O’Leary said, noting that he’d even invest in a Bankman-Fried venture again under the right circumstances. “
Or, as Anthony Scaramucci put it in the same panel discussion, “This has been a shitty year.”
That isn’t to say people and companies aren’t doing exciting things with innovative technologies that have the potential to change the worlds of finance, gaming, social media and more.
Take Web3, an umbrella term used to define a third wave of internet usage, built on the concepts of decentralization, blockchain and tokenization.
In a panel discussion on blockchains at scale and the various layers involved (from the literal hardware, to how data is transmitted and where it's stored), there was tension between the promise of Web 3 without regulation — truly democratized ownership of digital assets in everything from markets to media to real estate — and what’s possible now in terms of user experience.
READ: Shark Tank's Kevin O'Leary predicts increased crypto regulation following FTX collapse: "I'm one pissed off cowboy"
“Decentralization is part of our ethos,” said Brandon Doyle, who founded an NFT marketing and consulting agency. “...But to onboard the masses, we need to create a user experience that is super simple ... we have to make a lot of improvements on the UX side and on the tech side.”
To end the discussion, the moderator asked the panelists if they could define Web3 in one sentence. Here are there answers, verbatim.
“Truly peer-to-peer solutions,” said one member.
“I would say it’s sovereignty, in a word. The ability to have control over decision-making assets,” answered another.
“I would just say ownership,’ said Doyle.
Then there’s the concept of play-to-earn gaming, a model in which players pay a fee in order to collect cryptocurrencies or NFTs produced in a blockchain-based game, which they then own and can use or sell as they see fit.
It’s a fascinating concept that, in theory, gives players more utility and more ownership than the traditional game model, in which players own a copy of a game but nothing they produce using it.
Digital fashion items, weapons or in-game currencies could even be transferred between games on the same blockchain, or potentially between multiple chains. But, again, the next step is mass market adaptation, panelists said.
They say that infinite monkeys on infinite typewriters will eventually generate the works of Williams Shakespeare. So too, do infinite BoredApes have the opportunity to generate a viable future for Web3, blockchain at scale, the metaverse and more.
Who will do so, and where investors should put their money in the space, is much murkier.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel