Three generations theory: Aleksander Svetski’s latest op-ed gives Bitcoin maxis hope for new utopia
“Large-scale, socio-economic shifts take generations to settle in and normalize. The old guard needs to die, so that those born into the new paradigm can lead,” said Aleksander Svetski.
Svetski is the author of “The UnCommunist Manifesto,” The Bitcoin Times, and the viral and controversial “Remnant Series” in a recent op-ed for Bitcoin Magazine.
“I like to think that I am maturing in how I view Bitcoin,” Svetski adds before outlining three major epochal shifts leading toward mass Bitcoin adoption.
Generation One: The Infection Stage
Svetski calls this the first-era of mass adoption set to span 20 years.
“In this stage, Bitcoin had to prove that it was something someone would trade for money (or pizza). It had to show a significant commercial “proof of concept,” which it did with Silk Road. It needed to proceed through an early stage of monetization (Mt. Gox) and it had to then inspire an entire industry of copycats because what it did was so transformative — which we’ve seen with shitcoins.”
Generation Two: The Infrastructure Stage
Svetski predicts within this stage things like the Lightning Network will be more advanced — alongside other abstracted layers anchored in Bitcoin.
“Bitcoin has matured and the volatility has dampened a bit, and b, so many services now offer bitcoin as a funding option, you decide that it’s the standard against which you’ll measure your gains. It’s no longer the speculative asset first.”
Generation Three: The Mass Adoption Stage
Svetski predicts this is when Bitcoin becomes a truly global force integrated into every aspect of personal and institutional finance, a zero-sum approach to Bitcoin as an all-or-noting asset of the future.
“Bitcoin is where we’ll end up, but the wealth needs to change hands first and that will take time. This is why I believe this third generation is where the mass adoption phase occurs. They will come of age in a world where we have superior financial technology and an economic infrastructure that will allow them to use bitcoin as capital. The most liquid, the most widely-accessible, the most significant, trusted form of capital available.”
He predicts this will take several more decades, likely not until the late 2060s.
“Take this to 2069, and you’re talking about a completely different world. This is when Bitcoin truly comes of age. It’s the stage when fiat either dissolves, dies or becomes some relic of the past, while Bitcoin becomes both a global settlement layer and the global money.”
Conclusion – Bitcoin as the Web2 Assassin
Ultimately, Svetski posits some interesting theories about the future of not only Bitcoin, but the future of broader social and economic transitions — many of which are already beginning to take shape.
“What matters,” according to Svetski, “is to recognize that Bitcoin is a multi-generational phenomenon. It’s not Google, Apple, Facebook, Twitter, a smartphone, PayPal, Visa, a stock or a mere commodity. It’s so much bigger than all of these combined and, because of how fundamentally significant this is, it will take people time to adopt it.”
Crypto Industry Celebrates as Bitcoin Turns 14 Today
It is a milestone that the crypto community can always look forward to. A birthday to celebrate as you’re still cleaning up after your New Year’s Eve party. So get the balloons out because today is the day Bitcoin turns fourteen. To help you celebrate this milestone, BeInCrypto is taking you on a quick jaunt through the currency’s storied history.
Bitcoin (BTC) first appeared in Satoshi Nakamoto’s Bitcoin Whitepaper, which was first published on October 31, 2008. The paper, called ‘Bitcoin: A Peer-to-Peer Electronic Cash System,’ laid out the basic tenets of the Bitcoin network. Namely, it was to be decentralized on a blockchain and would operate independently of any financial institution. No central bank and no central server. The anonymous programmer designed it to be moderated by code, computers, and the people who used it.
Satoshi’s project was also how the vast majority of the world came to know the concept of Proof-Of-Work. Which, until recently, was the favored consensus mechanism for blockchain-based cryptocurrencies. The Proof-of-Work algorithm wasn’t created by Bitcoin, as is widely believed; it merely propelled it into the mainstream.
The concept first appeared in a 1999 academic essay by Ari Juels and Markus Jakobsson called “Proofs of Work and Bread Pudding Protocols.” In the essay, the authors describe it as “a protocol in which a prover demonstrates to a verifier that she has expended a certain level of computational effort in a specified interval of time.”
Bitcoin introduced the concept of ‘mining’ as a competitive task and added an economic incentive in the form of a coin reward. Satoshi mined the first block of Bitcoin on January 3, 2009, less than four months after the whitepaper was published. Fourteen years ago this week.
Hobbyists, Eccentrics, And The Dark Web
It took some time for the project to lift off. It wasn’t until May 22, 2010, that the first reported real-world financial transaction took place. A Florida man traded 10,000 BTC for two Papa John’s pizzas worth about $25. In that transaction, the value of one Bitcoin was approximately four cents. To this day, the Bitcoin community continues to celebrate Pizza Day on May 22.
For many millions around the globe, the first time they ever actually traded bitcoin would have been on the Dark Web, a domain of the internet designed to be free from censorship and surveillance. In this respect, Bitcoin and the Dark Web were perfect companions. Whereas Bitcoin cannot offer true privacy (all transactions are immutable and public on its blockchain), its lack of a central authority added a double layer of security and anonymity when used in conjunction with the Dark Web browser, Tor.
These elements were not just to the advantage of activists and dissidents. Unsurprisingly, Bitcoin caught the attention of criminal elements too. Two years after Bitcoin’s first transaction, on February 11, 2011, Ross Ulbricht launched The Silk Road, the first efficient online marketplace for trading illicit substances and services. According to the US government, Bitcoin facilitated a total revenue of approximately $183 million, involving 146,946 buyers and 3,877 vendors.
Ethereum and the ICO Boom
The birth of Ethereum (ETH) also makes a key turning point in the lifecycle of Bitcoin. Whereas Naksmoto’s original currency had merged two things, a digital asset run and a public blockchain, its critics say that this paradigm was profoundly limiting.
Whereas Bitcoin was conceived as a store of value and a method of exchange, Ethereum employed smart contracts. A self-executing contract written using code that would initiate when certain preconditions were met. Vitalik Buterin, the author of Ethereum’s initial whitepaper, first brought the project to the world’s attention at a Bitcoin conference in Miami, Florida, in 2014.
The success of both Bitcoin and Ethereum was the necessary precondition for the ICO boom of 2017. The name is given to an explosion of tech startups that would issue new digital currencies to help fund their development. None of these projects, nor any of the so-called “Ethereum killers,” would come close to the success of Bitcoin itself. On February 1, 2017, before the ICO boom had really caught wind, Bitcoin’s dominance sat at a whopping 96%. (Bitcoin dominance refers to the coin’s current share of the global crypto market.)
By the beginning of 2018, Bitcoin’s dominance sat at a record low of 38%. As investors balked at the masses of scamcoins and shitcoins, people returned to bitcoin in their droves. The prevailing sentiment was that no other coin could compete with Bitcoin’s tried and tested value offer.
Bitcoin To The Moon?
There have been other projects that have taken Bitcoin’s structure and built on it. One of the most renowned that does not enable smart contracts is ZCASH (ZEC). A payment cryptocurrency that takes the fundamentals of Bitcoin but adds a layer of optional privacy. Despite innovations and thousands and thousands of “altcoins,” the health and price of Bitcoin is still used as a metric for the wider cryptocurrency market. Altcoins often track its predecessor in value, and alongside USD, is the primary method of measuring a cryptocurrency’s price.
BTC reached its ATH (or all-time high) in November 2021, at the tail-end of that year’s bull run. Despite a drop of 76% in a little over a year, people are still stubbornly bullish on Bitcoin’s ability to replace fiat currency and reach new ATHs. In the fourteen years since its first mint, it has spawned an active community of backers that would make the most popular sports teams blush. The co-founder and former CEO of Twitter, Jack Dorsey, has said he believes ‘the world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be Bitcoin.’
Dear Crypto Billionaires: Don’t Brag About Giving Away Your Fortunes, Just Do It
Nas Daily’s video profiling Sam Bankman-Fried has aged badly. We all know that.
But even when it was released, it was oh so painful to watch.
There’s the slow-motion shot of SBF giving a woman a banknote, paving the way for a cringeworthy introduction.
Nas — real name Nuseir Yassin — gesticulates with glee and talks about the one-time crypto wunderkind to the camera…who is standing awkwardly next to him.
The YouTuber then documents how “normal” SBF is, in a breathless tone that’s a jarring mismatch for the facts.
“Sam has CRAZY HAIR! Sam is VEGAN! Sam sleeps FIVE HOURS A NIGHT!”
Animal-loving insomniacs with an untameable mane are so hard to come by, aren’t they?
To be fair to Nas, the focus of his video — released in January 2022 — was worth being breathless about. Or so we thought.
“The guy you see next to me is the most generous billionaire in the world…and I found him!”
Little did Nas know that he would soon wish he hadn’t found him — and when FTX’s bankruptcy hit, the influencer had little choice but to record a video offering his sympathy to its customers.
What happened isn’t the YouTuber’s fault. SBF wasn’t shy about his supposed ambitions of getting rich to give the money away to charity. He had long spoken of his belief in “effective altruism” — and how he was driven by earning to give.
But even before FTX went down in flames, there were warning signs that SBF was all mouth and no trousers.
When Forbes released its 2021 rundown of the 400 richest people in America — two months before Nas Daily’s video — Steven Ehrlich noted that SBF was worth $22.5 billion.
And how much had he given away, we hear you ask? Just $25 million — 0.1% of his fortune — meaning he was among the least charitable members of that esteemed list.
As Ehrlich said, that’s “mathematically equivalent to a typical 29-year-old American stuffing $15 into a Salvation Army bucket.”
(If you just have — Nas Daily is on his way to record you, I’m sure.)
SBF’s bluster is a symptom of a long-running disease in crypto: promising the world before you’ve delivered the goods.
We’ve seen it in the countless initial coin offerings that have raised millions, despite the fact they didn’t even have a working product.
And we’ve seen it in the entrepreneurs who would rent Lamborghinis and take them to crypto conferences — offering them the illusion of success at a fraction of the cost.
No one disputes that the goals of effective altruism and earning to give are admirable. But garnering column inches and YouTube views by saying you’re going to do it — rather than quietly getting on with it — is cheap and vain.
SBF isn’t the only crypto entrepreneur who risks falling into this trap, and he won’t be the last. But let’s be honest: It’s the billionaire’s equivalent of a TikTokker who films themselves giving a pizza or $100 to a homeless person. They’re not trying to do what’s right — they’re trying to get engagement.
It wasn’t always like this.
Back in December 2017 — shortly before Bitcoin broke $20,000 for the first time — a philanthropic project called the Pineapple Fund opened its doors.
It was started by an early adopter of Bitcoin who wished to remain anonymous. On Reddit at the time, they wrote: “Bitcoin has changed my life, and I have far more money than I can ever spend. My aims, goals, and motivations in life have nothing to do with having XX million or being the mega rich. So I’m doing something else: donating the majority of my bitcoins to charitable causes.”
And rather than waiting for Nas Daily to swing round with his camera crew, “Pine” got to work. A whopping 5,104 BTC was shared between more than 60 charities — organizations that provided everything from clean water to clinical trials exploring whether MDMA could treat post-traumatic stress disorder. That war chest was worth $55 million back then, and would have a value of well over $140 million now.
It was an incredible achievement — and to this day, “Pine” remains anonymous. Instead of blowing smoke up their you-know-where, they let the fund do the talking. And unlike FTX, these charities had the added bonus that they’ll never face immense pressure to return funds because they were stolen from unsuspecting customers.
Crypto has started to cultivate a compelling track record when it comes to charitable donations. Crypto Giving Tuesday goes from strength to strength every year, and Ukraine has received over $100 million since Russia’s invasion began. (But even then, contributions only spiked when an airdrop was rumored.)
The digital assets space is often consumed with talking about the future — where we’ll be in a year’s time, five years, a decade. And that’s fine. But when it comes to charity, maybe — just maybe — it’s better to follow Nike’s mantra: Just Do It.
Crypto’s Banking Problem Is Not Ironic
The institution of personal banking is incredibly powerful.
You don’t even need to read a research report or some harrowing personal account to prove it. Instead, just pretend for a moment that all your bank accounts are frozen. Your credit cards don’t work either.
How will you get on?
Well, hopefully you have a stash of cash under your mattress. Or you have bitcoin and you live near enough places that genuinely participate in the Bitcoin circular economy. Maybe you live in Argentina and you can use a crypto dollar stablecoin like tether because your sovereign currency has let you down since the 1980s.
Otherwise, you’re in a tough place.
The low-hanging fruit here is a clear call to action: We need more of these circular crypto economies. Communities, counties, states, entire countries – an example being El Salvador’s Bitcoin Beach – that operate completely separate from the legacy banking system.
But while these circular economies continue to build out, banking and crypto are still intimately tied. Just look at last week’s news dominated by Silvergate Bank running into a brick wall of trouble that was punctuated by its stock (SI) losing over 50% of its value on Thursday.
Before Silvergate and after Silvergate
Silvergate is the bank for a lot of crypto businesses that tend to have problems maintaining banking relationships.
Silvergate opening up its doors to crypto is viewed as a critical juncture for crypto businesses, especially crypto exchanges. My colleague Daniel Kuhn highlighted as much in a piece published last week titled “Before Silvergate and After Silvergate” borrowing from a quote by now-disgraced FTX founder Sam Bankman-Fried about how life was better for crypto companies with Silvergate in the fold.
If we look at crypto exchanges, Silvergate is so well-liked because a) it gives access to banking in the first place and b) Silvergate ran the Silvergate Exchange Network (SEN). SEN, which was recently disabled, allowed 24/7 instant settlement between Silvergate bank clients at any time, including nights and weekends. It functioned sort of like how Venmo or CashApp settles debts between friends for late-night ramen or pizza or whatever. Access to SEN attracted a lot of crypto exchange clients including Binance.US, Kraken and Gemini.
And then the FTX collapse happened, which had Silvergate customers antsy and led to billions of dollars in deposit withdrawals. Silvergate subsequently dipped into the Federal Home Loan Bank system to prop up operations.
Things were obviously tough for Silvergate (and other crypto banks, surely), and it got even tougher when U.S. Senator Elizabeth Warren (D-Mass.) sent Silvergate a scathing letter while the White House was publishing blog posts about its crypto concerns. Cue even more withdrawals from Silvergate and the shutdown of the lauded SEN last week.
To be clear, the regulators and politicians didn’t actually say crypto exchanges and companies shouldn’t be banked, but they injected uncertainty into the industry. And the funny thing about Silvergate is that it didn’t run into issues because it was making loans using bitcoin and crypto as collateral. It ran into issues because of a bank run. A bank run encouraged by the U.S. government.
This is where a good argument about the potential ill effects of Choke Point 2.0 comes into play, to use CoinDesk columnist and venture capitalist Nic Carter’s phrase. I’m not going to dive into the intimate details of Choke Point 2.0 (basically the idea that the government can threaten regulation against banks if they service certain companies or certain industries), but I want to tackle the banking problem in engenders.
Crypto’s banking problem is not ironic
Silvergate’s issues have made it somewhat obvious now that crypto does in fact have a banking problem. And most crypto critics see this and say: Crypto was made to skirt the banking system, it’s really funny that crypto needs banks to skirt the banking system.
Funny? Well, maybe. But I’m not laughing.
First off, banks and crypto can coexist (yes, even in a hyperbitcoinized world) and in my view they will and should. Just because the option to opt out of using a bank exists with bitcoin or some other crypto doesn’t mean that everyone will shun banks entirely. In fact, honest banking can be a net positive.
There will, of course, be (and are) a hardcore subset of self-sovereign individuals who buck third parties entirely, but there are billions of people in this world. Organization of those people is far easier with some reliance on third parties. The world that bitcoin and crypto can encourage is a world where those third parties are more honest. More honest banks in the business of keeping your money safe and providing responsible lenders access to future capital (i.e., credit) is better than fewer honest banks.
Hand-wavy, I know. But potentially true.
Lastly, crypto companies needing banks to “skirt the banking system” highlights exactly why the banking system needs to be skirted (or at least somehow broken up). Imagine for a moment there is an institution in a country that is so critically important that the simple threat of regulation against that institution for servicing a client in an undesirable industry brings that undesirable industry to its knees. But no need for imagination: This is exactly what is happening in the United States. We now see an implicit promise of future regulation from the executive and legislative branch of the U.S. government if the banks that service crypto companies don’t shape up. Whatever that means.
While I don’t think this is a good thing, it can be if not overdone. If there is a higher bar for banking access for crypto companies that leads to more thorough diligence that somehow results in fewer bad companies in the ecosystem, ultimately retail will be safer and the system less sensitive to future crypto shocks.
Maybe that is what happens. For now, I choose cautious optimism.
2023 Predictions: The Year of Web3 Pets
Crouched at the ocean’s edge, her skeletal figure was a rude juxtaposition against the idyllic scenery of Seven Commandos Beach, a tiny island skirting the west Philippine archipelago. Once a tourist hotspot with hundreds of visitors dropping delicious pizza crusts and burger scraps daily, none had stepped foot there since the country closed over a year earlier. Just a 10 minute boat ride from the place where my boyfriend and I had bunkered amid the pandemic, we’d headed there for an afternoon for snorkeling and sunsets only to find a hungry old dog instead. Kneeling to meet her, I traced my fingers over her dirty, straw-like fur and nubby ribs. The animal was starving to death but somehow she mustered a tailwag, and in that moment, we knew we weren’t leaving that island without her and her two babies in tow.
Leah Callon-Butler, a CoinDesk columnist, is the Director of Emfarsis, a consulting firm based in Southeast Asia that represents play-to-earn sector clients including Animoca Brands, Yield Guild Games, Blockchain Game Alliance and others. This piece is part of CoinDesk’s Crypto 2023 package.
Over the next year we treated them as our own. We fed them only the best food, got them the veterinary attention they needed, and spoiled them silly with squeaky toys and bones from the butcher and all the things that doggy dreams are made of. The whole exercise cost a bomb, but we didn’t care. It was high-COVID and they provided us with much-needed respite from the digital grippings of lockdown life. Between tummy rubs, new tricks, and those little things they do to let you know how much they love you… The time we spent with them was priceless.
It was always the plan to get them adopted out. Whilst we would have preferred to keep them, sadly, pet ownership does not gel well with a career that calls for constant global travel; I’m sure crypto people can relate. And now, with borders open, we are rarely at home. So, of course, I’m grateful that we were able to find forever-homes for our rescue dogs, but saying goodbye was immensely difficult, and now there’s a giant gaping hole in my life where my pets used to be. Which may offer a clue as to why I’ve become increasingly obsessed with my Crypto Unicorns.
Built on Polygon, Crypto Unicorns is a farming game of which I was first a player, and then later, an investor and advisor. I don’t know how many people care to hear my stories of farming nail seeds and picking up rainbow poop — but I tell them anyway. Every chance I get, I’m whipping out my phone to bring up OpenSea to show off my collection of these adorable NFT pets. By now, I’ve collected way too many corns to remember each one by name, but I have my favorites. Like Pinstripe Atticus, a baby Double Mythic that I bred all by myself. In the game, they do the cutest things; like yesterday, Minty Raja was licking his crotch with his leg over his head, just like a cat. I’d never seen him do that before; devs must have pushed an update. I rushed to open QuickTime so I could capture the precious moment but I wasn’t quick enough.
Read more: It’s Been a Year Since NFTs Exploded. Where Are We Headed?
Digital pets are obviously not new. Released in 1995 by video game developer P.F. Magic, Petz was the world’s first. I got the PC game from Santa for Christmas that year and spent much of 1996 utterly petrified that my Chihuahua might run away if I didn’t give it enough attention. Then came Tamagotchi, and while classroom teachers were pushed to the limits of their patience with the beep-beep-beeping that kept kids hooked to their little egg device, others saw the benefit in learning about the responsibility that goes with caring for a living creature.
Starting out simple, later versions of these games allowed customization, training and breeding. With the advent of the internet, it was also possible to socialize virtual pets with other virtual pets and their meatspace owners. Massive online communities formed, run mostly by women, and they initiated all sorts of events external to the game, from art competitions to pet shows.
Recalling the reason as to why they felt such a deep connection with their pixelated pets, countless articles, tributes and forum posts cite “a sense of ownership.” But this ownership was imaginary at best; these pet owners never owned anything at all, for their animals existed only within the confines of the platform on which they were built.
To put this into context: Imagine you bought a puppy from the pet store, but you can’t take it home. You can play with it anytime you like, you just have to go back into the pet store and interact with the animal inside its permanent enclosure. Most people will scoff at this, as they should! It’s ludicrous. But it underscores the difference between the web2 and Web3 experience of ownership. Web2 pets never get out of the pet store, while Web3 pets are free to roam.
Read more: Jeff Wilser, Xinyi Luo – 10 Predictions for the Future of Crypto in 2023
Web3, as a collection of blockchain-based tech including cryptocurrencies and NFTs, facilitates the decentralization of internet-based platforms in a way that wasn’t possible before, so that digital pet owners can take personal control of their pets. As per our pet store analogy, an NFT pet lives in the owner’s self-controlled crypto wallet instead of being stuck inside a game.
Now, with your web2-pet-owner-hat still on, imagine you showed up to the pet store only to find that it was closed. Or worse, there’s a sign on the door saying the store has shut permanently with your puppy inside. No matter how much time you spent together, no matter how many tricks you taught them… All you have left are memories. This is the frustration and devastation experienced by players of web2 games that go down for extended periods of time or shutter altogether, and the graveyard of games past is strewn with tombstones of virtual pet titles. Like Club Penguin, a Disney-owned social network that had 200 million users in 2013, but didn’t allow any of them to port over their game items or coins when a new site was launched in 2017.
The concept of ownership is fundamental to our relationship with pets. You give it a name. You are responsible for it. It relies on you for food, shelter, medicine and love. You protect it. You are its owner. And wherever property rights are critical, there is an excellent use case for Web3. So it isn’t surprising that there are already loads of pet projects popping up with NFTs at the core.
In Crabada, a game on Avalanche, you can be a keeper of fierce, fighting crustaceans. In Nyan Heroes, an upcoming Battle Royale Shooter on Solana, you can own an adorable kitty and its deadly guardian robot and feel good about it, since the game’s developer plans to donate part of its revenue to animal charities. And then there’s NFT games like Petaverse and Digital Dogs that combine blockchain with other tech such as AI, AR and extended reality (XR) to deliver new ways of interacting with virtual pets. Many PFP projects have pet-like qualities too, such as Pudgy Penguins, Cool Cats, CrypToadz, Sup Ducks and Moonbirds to name a few.
So if digital property rights are so important to digital pet owners, why haven’t they demanded them before? Virtual pet communities were always tech-forward. Taking the Petz community as an example, members went to lengths to learn and hand code HTML to build their own sites (with blinking and marquee scrolling text and all) to display their virtual floofs. This is remarkable because it was just everyday enthusiasts with the passion and drive to create. There was no drag-and-drop; it was pre-WordPress, pre-Facebook and MySpace, even before GeoCities.
Super zealots even learned to reverse engineer their pets, playing into the binary code of the project to edit their hexadecimal codes and alter everything from body shape to coloring to fur texture. Sometimes, hexers on-sold their modified breeds but there was no way to protect or prove the uniqueness of a digital pet, and no way to prevent its .pet files from being freely shared for anyone to download. If you wanted a one-off, you just had to trust that it wouldn’t be re-sold. But realistically, there were countless Petz clones proliferating all across the world.
NFTs could have solved this problem of authenticity and provenance but they only took off over the past few years. Virtual pets have been around for nearly three decades.
The earliest advocate for NFT pets that I met was Jeffrey “Jihoz” Zirlin, co-founder of Sky Mavis and Axie Infinity. Sky Mavis just launched Axie Core, a new in-game experience designed to strengthen the emotional connection between owners and their Axies. This has been a long time coming. The first chat I ever had with Jihoz, in August 2020, he talked a lot about his vision for Axies to be thought of as virtual pets. He had a strong rationale too, pointing to the amount that people spent on real-world pets — the global pet care market is projected to grow from US $222.93 billion in 2021 to US $325.74 billion in 2028 — and how part of that spend could be captured by the virtual pet market since people were living more and more of their lives online.
But at the time, few people knew what an NFT was, let alone owned one, and most who got into Axie from 2020 onward (me included) thought of Axies less like pet ponies and more like workhorses meant for hard labor. We were coming off the back of DeFi summer and everyone was all about yield farming. Then COVID hit, destroying livelihoods, particularly for those in countries where government relief was limited, and millions were left desperate for income. So play-to-earn (P2E) ended up being the thing that catapulted Axie into the mainstream.
In hindsight, the original P2E model was unsustainable. Players were incentivized to extract more from the game than they put in, leading to hyperinflation of the game’s currency and eventual collapse of the virtual economy. Opportunistic players cleared out once there were no more easy gains to be made, and developers refocused on building fun-first blockchain games to attract players who could spend big (as opposed to seeking payouts). Add to this the reckoning that crypto is down bad (as is global macros) and will be for a while. Anyone who was in it purely for financial gain has fled for greener pastures and the only NFT folk still holding are either long crypto or subscribed to the “would you still love it if it went to zero” mantra.
Jay Chang, co-founder of Genopets, a move-to-earn game on Solana where players nurture their very own NFT spirit animal, told me he’s observed that players of his game are motivated to invest in upgrading their virtual pets. To level up and evolve a Genopet, players complete daily quests like taking their mobile phone — I mean, virtual pet — out for walkies. A pedometer counts the number of steps and converts them to energy points in the game. According to Chang, the majority of players opt to reinvest those points into improving their pet.
“Since our beta started, around 65% of our daily active users (DAU) consistently choose to use their daily energy earned to upgrade their pet rather than taking an on-chain action to convert it to a token and be ‘paid to play’ like with typical Web3 games,” Chang told me via Telegram DM, adding that petcare games are a nostalgic game loop that are proven to appeal to a very wide demographic. “NFT pets are just a modern twist in that players can own the economy,” he said.
Web3 pet owners tick all the boxes: They care about property rights, they put more value in than they extract, and they’re not abandoning their beloved NFTs just because of a dip in the market. For these reasons, they will also place significantly higher expectations on the projects that they back and they will not hesitate to air their pet peeves over the current lack of true ownership, security, transparency, good governance, interoperability and composability in this space.
Right now, we’re in an awkward transition phase where there’s lots of big claims going around about Web3’s ultimate utility. But in reality, NFT ownership is flimsy and each one of our virtual playgrounds is a self-contained silo. Add to this, what “utility” we’ve seen so far is non-scalable web2-esque partnerships and permissioned integrations that don’t exploit Web3’s true potential.
Big strides in innovation come about when there’s big enough groundswell to demand it. Like when CryptoKitties broke the Ethereum blockchain or when Axie Infinity made more revenue in protocol fees than Bitcoin, Ethereum and the 11 next dapps combined. Virtual pets have mass market appeal — more than skins, weapons, or art — and pet owners will drive Web3 forward by putting their money where their NFT is. Like when BAYC flipped CryptoPunks because the former delivered better IP rights, allowing the IP of each NFT to be managed by its owner.
In Web3, we talk a lot about earning rewards but the premise is almost always financial. This is a missed opportunity because the most rewarding experiences of our lives tend to be driven by emotion, not money. If something of financial value is lost, in theory it can be replaced or compensated for. The same cannot be said for things of a non fungible nature with which we have a relationship. Like a rescue dog. Or a Crypto Unicorn. Where this type of connection exists, we care about the concept of ownership because we recognize these creatures as a part of ourselves. And, as we look back on a year of carnage and heartbreak throughout the crypto industry… I think we could all use a friend to keep us company throughout the long, cold winter.
Thanks to Nathan Smale, Nico Odulio, Chris Verceles and Owl of Moistness for their help to review this article.