Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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Allmight founder Kevin Ricoy knew he wanted to create a media company after realizing that policy and social change are downstream from culture — and culture that is funny or entertaining is most effective of all.



“What affected culture more? Was it CNN or MTV News? It was MTV News,” Ricoy opined on a call this week.



Ricoy is the founder of Allmight, a new media startup focused on furthering the United States’ leadership in crypto. The initiative caught a nice boost from the recent US presidential election and a growing sense that a friendlier regulatory environment could drive crypto business back to the world’s biggest economy.



Allmight’s first product is “This Week in Crypto,” a late night talk-style show that summarizes crypto news with a punchy, irreverent bent. A couple of these videos have <a href="https://x.com/TheRealRicoy/status/1845141583106036032">garnered</a> hundreds of thousands of views on X. He plans to expand Allmight’s content offerings, creating what he calls next-gen Americana — “low noise, high signal, and actually entertaining.” When I asked if Ricoy wants to become a sort of crypto version of Jon Stewart, he responded: “I would love that.”



On top of monetizing content with ads and sponsorships, Allmight plans to host events and help in job placement for US-based candidates. It also hopes to boost awareness of policymakers&#8217; efforts to legislate on crypto. Further down the road, it might even explore something like crowdfunded investment, Ricoy said.



This was all in the works in the lead up to the US presidential election, but in the aftermath of a Trump win and presumably more crypto-friendly regulatory environment, Ricoy said he’s seen a “500% increase in interest and optimism” surrounding his project.



With crypto prices at record highs and crypto’s fear of US regulators seeming to abate, America’s crypto scene seems to be having a moment.



“I’m in the right place at the right time, and it’s pretty cool,” Ricoy said.



Years ago, Ricoy was running a construction labor company when he decided to found a crypto app. With the help of some developers, he launched an app to promote SoundCloud music with Kin, the cryptocurrency debuted by the messaging app Kik during crypto’s 2017 initial coin offering (ICO) boom. Kik liked the app and extended Ricoy an offer to become its head of communications.&nbsp;



Kin would spark a knock-down-drag-out fight with the SEC, and Kik messenger eventually shut down amid the legal battle. After some time working for Kin’s foundation, Ricoy joined the Solana Foundation as community relations manager, where he drove the launch of Solana’s community grants program. After a little over a year, Ricoy resigned to pursue Allmight.



Allmight received a grant from the Solana Foundation, but Ricoy said he was clear that his mandate is to grow crypto outside of just Solana, and the foundation was supportive. I asked later in a text how Ricoy plans to grow a blockchain-agnostic crypto community in the US given all the sectarian fighting that seems to happen constantly between crypto ecosystems.



Ricoy said a rising tide can lift all boats, and noted how the Solana Foundation and Polygon Labs have worked together on policy in Washington, DC.&nbsp;



“[W]ho knows, maybe efforts like these can even help bridge communities and put a dent in the tribalism overall,” Ricoy wrote.



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Elections

Former Solana Foundation employee starts US media company

Carl Vogel

Opinions are like assholes; everyone has one. Polls have long been the predominant method to capture public opinion and collective insight, largely because they offer a quick and scalable way to gauge public sentiment on a variety of topics. However, they are also subject to low engagement, spam and chicanery. Just ask the UK how it ended up with a research vessel named “Boaty McBoatface.”



Opinion markets offer an alternative way to address the flaws in traditional polling. They can be a superior method to gauge market sentiment because they obviate the failure modes of traditional polls through blockchain-enabled capabilities like economic incentives, social credibility and credentialing.&nbsp;



Beyond gauging sentiment or merely wagering on the outcome of events in prediction markets, opinion markets can be used to influence the outcomes themselves. Everyone from AI agents to big brands can use them to mine insights and make decisions in a way that is transparent, efficient, globally accessible and highly engaging.



Read more from our opinion section: <a href="https://blockworks.co/news/without-web3-media-credibility-will-crumble">Implement Web3 solutions now, or the media’s credibility will crumble</a>



Opinion markets are not new. One famous example is the “Keynesian Beauty Contest,” which was popularized by economist John Maynard Keynes. In this thought experiment, contest participants were shown photographs of people in a newspaper and asked to select the faces they believed others would find the most attractive. Participants who successfully chose the most popular faces were awarded a prize.



For the sophisticated, the goal was not to choose based on individual preferences, but to predict which faces would be the most popular overall.



When applied to the stock market, one of Keynes’s core insights was that participants can get trapped in an “infinite loop” of trying to out-predict what others will select, showcasing the challenges of investing based on market sentiment vs. fundamentals.&nbsp;



However, I posit two more insights. The polls effectively codified the UK’s collective definition of beauty, and people loved playing the game! Unlike the largest opinion market in which few have an edge — the stock market — everyone believes they have an advantage in many aspects of regular everyday life, such as determining who’s prettiest. For example: “Who is a better match for Taylor Swift than Travis Kelce?” (We all know they are an odd match.) “What is the best French restaurant in Manhattan?” “Which of these outfits is best for a first date?” These are all examples of markets where certain individuals believe they have an advantage, making them more likely to participate.



While the stock market represents a narrow goal of economic valuation with well-defined frameworks for valuation (e.g. discounted cash flow models and P/E ratios), opinion markets can have a broad range of subjects, objection functions and analysis methods. This of course creates a much more qualitative (vs. quantitative), relatable set of markets for broad appeal.



Beyond the fun market examples discussed above, opinion markets represent a major opportunity for businesses to gauge sentiment and build loyalty with their customers in a hyperlocal way.



For example, Starbucks could submit, “What street corner would be best for a new store?” Netflix could ask, “What should be our next city for ‘Love is Blind’?” A creator may ask, “What product should I review next?”&nbsp;



Today, corporations spend billions of dollars trying to identify these answers with advanced analytics teams. Opinion markets could provide a fast (and in many cases more accurate) answer while simultaneously creating direct meaningful engagement with customers.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/crypto-innovation-suffering-inside-closed-networks">Crypto is becoming the same broken system it promised to fix</a>



In addition to the shortcomings of polls discussed earlier, they do not have intrinsic virality the way economic markets do. In an age of infinite content, gamification of opinion markets with economic outcomes will drive radically more engagement and virality than polls.



What will these opinion markets look like, and can we trust their outputs? The “wisdom of the crowd” is a well researched phenomena, suggesting that collective decision-making, when aggregated, often leads to more accurate outcomes than individual judgments. Unlike traditional polls or one-off surveys, crypto-based markets offer new primitives, such as economic incentives and participation history, to increase accuracy. We don’t know what the end-state will be, but the most effective form-factor will be determined by an explosion of research and experimentation, and the crypto advantages will undoubtedly produce better outcomes.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Political candidates can no longer ignore crypto voters</a>



The next generation of crypto builders will have the opportunity to create products that transform how we engage with public sentiment, forecast trends and make decisions — both as individuals and as communities.



The final question is: How will opinion markets <a href="https://blockworks.co/news/ai-future-is-decentralized-compute-networks">evolve in an age of AI</a>, where advanced algorithms can sift through massive datasets to predict social outcomes? AI agents will undoubtedly participate alongside human users, contributing their data-driven insights to the mix. I think rather than replacing human judgment, AI will compete with it to create a dynamic interplay between machine intelligence and human intuition. This will make opinion markets a unique arena for collaboration and competition between AI and human participants.



Opinions are like assholes; everyone has one. Does yours stink? Wanna bet?



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Artificial Intelligence

Forget polls — crypto-based opinion markets are the future of collective wisdom

Ciarán Murray

Web3 is our best hope to save the declining news media industry. By leveraging its associated technologies, we can introduce a new incentive system that addresses misinformation, bias and dwindling revenues. By introducing a new incentive system that rewards accuracy and builds public trust, we can save journalism from its current decline. If we fail to act, economic pressures could lead to its collapse.



In the digital age, news media often struggles to provide content that accurately informs the public it is meant to serve. With even the briefest introspection, it becomes clear just how dire the consequences already are for society. Many consumers have become passive in seeking out accuracy and truth, preferring instead to prioritize easy access to content that gratifies their immediate emotional desires. Despite the resulting freefall in media trust, there is a growing awareness that the population is being manipulated. Unfortunately, those who reject mainstream media output often choose instead to turn to alternative sources — many of which are rife with conspiratorial messaging.



Read more from our opinion section: <a href="https://blockworks.co/news/blockchain-media-governance-immutable">Blockchain can save the media</a>



The problems in existing media can be traced back to centralized ownership and a reliance on business models that are poorly suited to truth-seeking. Traditional media outlets are controlled by a few authoritative entities, creating a hierarchical structure that manipulates content to suit the interests of those in power. Current models prioritize clicks and ad revenue over the accuracy and integrity of information, leading to a proliferation of fake news, bad data and sometimes outright propaganda.



But all is not lost. Web3 technologies can propel the media industry into a new age, where trust in the content we read online is restored through a healthier and more sustainable economic model. By creating a knowledge-sharing system underpinned by blockchain technology, decentralized identities and prediction markets, journalists will be freed from the control of media moguls. Implementing decentralized mechanisms would ensure that all information is transparently recorded and cannot be altered retroactively. This would allow for increased transparency, which in turn would build trust among consumers who would be able to verify the authenticity and source of information themselves.



Both readers and journalists are starved for actionable methods to fulfill their demand for factual information. This is exemplified by legacy media platforms, many of which have invested in expert fact-checking divisions and community submission processes: CNN, Reuters and community notes on X, to name a few. However, such initiatives struggle to make progress due to the sheer amount of material that must be validated. Unfortunately, the truth doesn’t always pay, leading to conflicts of interest when it comes to reporting the facts.



Reputation-based systems can establish verifiable credentials without relying on centralized institutions and hone the crowd’s ability to deliver accurate information. Core participants would wield reputation scores that affect their ability to earn and contribute to the platform. Reputations would be built and maintained based on merit and accuracy, rather than affiliation with a particular media outlet.



To tackle disinformation, prediction markets could enable the crowd to evaluate the accuracy of stories and the credibility of their sources. By allowing people to bet on the outcomes of news stories or the validity of certain claims, these markets harness collective wisdom to weed out misinformation and highlight trustworthy content.



Research by MIT supports this idea, proving that crowdsourced accuracy judgments from groups of normal readers can be virtually as effective as the work of professional fact-checkers. Studies have shown that when economic incentives are offered to the crowd, its wisdom becomes even greater. By designing markets to prevent collusion and introducing participatory incentives for those with minority views, we can further enhance the predictive ability of the crowd.



We must also employ a funding mechanism rooted in decentralization and community involvement. This approach democratizes support for good-faith actors in news media while curbing the ability of bad actors to participate. As a result, we can expect greatly improved economic sustainability for journalists, aligning media incentives with the public interest rather than advertising revenue.



We should draw on the novel fundraising mechanism known as Quadratic Funding, invented by Vitalik Buterin, Zoe Hitzig and Glen Weyl. This model better reflects the community&#8217;s collective value by matching individual contributions using a quadratic formula to ensure that small contributions from many people achieve their maximum impact. This ensures that information is reviewed and funded democratically. The promise of this model lies in releasing journalists from the shackles of the advertising model, which is currently optimized for clicks above all else.



Finally, a decentralized media platform must implement robust decentralized identity protocols with proof-of-humanity included. These protocols ensure each user has a unique, verifiable identity, thus preventing Sybil attacks and the creation of multiple bot accounts by a single user. Anti-collusion infrastructure is essential to prevent groups of individuals from conspiring to manipulate outcomes in their favor. This helps the platform to remain fair and unbiased, protecting it from being hijacked by special interests.



The combination of these ideas will reduce the incentive to provoke emotional reactions aimed at securing greater advertising revenue. Instead, rewards will be determined by the accuracy and usefulness of the information provided. I fear that failure to adopt these Web3 technologies will result in the continued decline of the media industry, leading to a further loss of public trust, the spread of misinformation and the dominance of private agendas. It’s up to us to leverage the benefits inherent in Web3 technologies to save a crucial industry from failing before it is too late.



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media

Implement Web3 solutions now, or the media’s credibility will crumble

Darren Kleine

The founder of Vessel Steph Alinsug sees on-chain media as a “huge unlock” for how brands will develop relationships with consumers in the “next era of brand-building.”



Alinsug reflects on earlier days in social media. When Instagram launched, she says, “it changed the way we build brands.”



“Now, all of a sudden, you had to have a content strategy.”



Speaking with host Chase Chapman on the On the Other Side podcast (<a href="https://open.spotify.com/episode/3uzurPD5IPfz5gGSpSKLJW">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/83-onchain-media-w-steph-alinsug-cryptohun3y/id1570685120?i=1000623913400">Apple</a>), Alinsug explains how social media transformed marketing. “You had to produce assets like JPEGs or video or you just had to produce content, and we didn&#8217;t really know what the implications of that was going to be. We just knew that it was something we had to do.”



Brands could connect directly to customers through social media and email marketing, Alinsug explains. Direct-to-consumer brands ballooned into an “enormous industry,” she says. “It&#8217;s somewhere around like a hundred billion right now, so it&#8217;s huge.”



Alinsug mentions brands like Glossier and Quip, who took advantage of the new direct-to-consumer (DTC) formula and grew into successful companies. She sees a strong resemblance between DTC in 2011 and the nascent <a href="https://blockworks.co/tag/web3">Web3</a> marketing space today.



“We&#8217;re in the part of the market cycle where there&#8217;s a very niche set of brands that can effectively launch an on-chain media strategy right now.”



“As our understanding of the technology, and the opportunities, and as more consumer behaviors emerge,” Alinsug says. “We&#8217;re going to see more and more brands understand the power of this.”



<h2 class="wp-block-heading">Shared identity</h2>



Alinsug says that no one could have predicted the impact of direct-to-consumer marketing in its early days. She said she’s curious to see what a Web3-native version of direct-to-consumer marketing will look like as it develops.



Her company Vessel will “push forward” with <a href="https://blockworks.co/news/drip-haus-mass-adoption-strategy">collectible media</a>, she says. “We&#8217;re going to run our own experiments on how we might ‘emerge’ some of those novel consumer behaviors.”



Chapman notes that on-chain media is “uniquely empowered” to create what she calls internet “cults,” or highly dedicated online communities, creating a sense of shared identity with a group of people and brands.



“I think of my physical body as a version of an interface,” Alinsug says. As an example, she explains she wears a pair of branded socks that allows her, in a sense, to participate in the creation of a meme or a sort of brand “cult.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG8872316734" width="100%"></iframe>







“I&#8217;ve had people come up to me and say, ‘sick hat,’ or ‘sick socks,’” she says, “because they recognize the brand.” 



It’s a sort of user behavior that happens in real life, she says. “On-chain media is just another version of that, but it happens digitally.”



Alinsug cautions that pigeonholing on-chain media into the <a href="https://blockworks.co/news/meta-metaverse-division-bleeding">tired metaverse concept</a> is not a viable approach. The current barrier to brand visibility in the market, she explains, is the interface.&nbsp;



“How do you make that legible? How do you make that visible? I don&#8217;t actually think it&#8217;s some sort of virtual metaverse thing.”



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Web3 is the ‘next era of brand-building’ says Vessel founder Alinsug

Molly Jane Zuckerman

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="256" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=1024&amp;h=1024" alt="" class="wp-image-60166" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=80 80w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>



Are you a Barbie or a Ken?



Even if you haven’t seen the Barbie movie yet, there’s absolutely no way you could have missed the Barbie fever that has enveloped the nation in the past few weeks. The news cycle has fed us Barbie (and don’t forget Oppenheimer, too, or Barbenheimer for short) to the extent that wearing a pink dress out in public will put you on the receiving end of many a “Hey, Barbie!”



Probably feeling left out, the crypto news cycle somehow this week got wind of a <a href="https://www.youtube.com/watch?v=35FbTkEXe2s">month-old interview</a> with some of the Barbie movie cast and decided it was time to worm its own way into the Barbie marketing wave.



In the interview, Margot Robbie (who plays Stereotypical Barbie) tosses back her blonde hair in frustration as she tells the interviewer: “When David and Tom [producers] would start talking about Bitcoin, Greta [Gerwig] and I would say, ‘They’re being such Kens!’”



Is this an insult? Is being a Ken a bad thing? Does this mean, God forbid, that stereotypically pretty women like Robbie think that Bitcoin is bad?



I must note that the Barbie movie — as much as I enjoyed watching it, as an adult myself —&nbsp;is a movie for children. Nonetheless, this has not stopped both established and only-real-on-the-internet movie critics from having loud opinions about what Barbie is trying to tell us about feminism, patriarchy, gender, or capitalism —&nbsp;and why this is so good/fantastic/harmful/disastrous for society to watch.



Why shouldn’t crypto jump in too and try to subject Robbie’s innocuous Bitcoin comments to the same level of pseudo-university level analysis?



One of the biggest sticking points in all these grown-up analyses of a children’s movie is what it means to be Ken — because along with Stereotypical Ken played by Ryan Gosling, all other movie Kens are part of a larger pack of smiling, ready-to-please himbos (male bimbos).&nbsp;



(Until they discover the patriarchy, but please, this isn’t a movie review column, go watch the movie yourself if you want to learn more than my pick-and-choose, flippant analysis of Barbie and Bitcoin.)



In a nutshell, Kens are beautiful, relatively empty-headed boy toys with no real unique personalities of their own, living just to please their Barbie counterparts.



Does this sound like a crypto bro to you? It certainly doesn’t to me.&nbsp;



Close your eyes and picture a man talking about crypto. Is he wearing glasses? Maybe a nerdy graphic t-shirt? Is he constantly checking crypto prices on his phone? Does he obsessively tweet “gm”? Does he perhaps live in mother’s basement?



I’d like to put on my own pseudo-intellectual hat and offer a critique of Robbie’s classification of the crypto-obsessed as Kens. Because I do believe that Margot Robbie has gotten it all wrong —&nbsp;crypto enthusiasts are most certainly not Kens. They are Allans through and through.



In the Barbie universe, Allan is just Allan. Unlike the many interesting lives and professions of Barbie, and the slightly less interesting lives and professions for Ken, there has only ever been <a href="https://www.thedailybeast.com/obsessed/michael-cera-as-allan-in-barbie-is-the-best-performance-of-his-career">one Allan</a>.&nbsp;



In the movie, Allan stands alone, not quite fitting in. He’s dorky in a shy way. His shorts are too short, and not really in line with everyone else’s fashion. He’s trying to be the good guy, but his plans keep getting thwarted.



Sound familiar?



Could a crypto bro be described this way, even down to their desire to change the financial system for the better, if only all of these pesky bad actors, hacks, technological hiccups and regulations stopped getting in the way?



The Allan we meet in this movie (played by Michael Cera) is no villain. He doesn’t try to overthrow the Barbies at all, he gets the most intense fighting scenes, and his tiny, striped shorts are actually kind of cool. If you’re in crypto, you’d probably prefer to be Allan than Ken.



But I would now like to point out that my Ken-alysis cannot be taken too seriously. There are too similarities between Kens and crypto guys —&nbsp;if women have ever experienced a man playing a guitar at them, women have also experienced men explaining Bitcoin at them. I’m also purposefully avoiding trying to draw a line between Allan’s seemingly gay-coded personality and crypto bros, that would just be nonsensical.&nbsp;



But all of this is nonsensical — both the over-the-top interpretations of the Barbie kids-movie-as-a-feminist-manifesto and the <a href="https://twitter.com/LayahHeilpern/status/1685385923297452032?s=20">silly</a> <a href="https://twitter.com/saylor/status/1685049723458142209?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1685049723458142209%7Ctwgr%5E93c27213fcf6819e7341ea28a539c3c9b12fcb54%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.coindesk.com%2Fbusiness%2F2023%2F07%2F31%2Fbarbies-margot-robbie-has-a-take-on-bitcoin-says-its-a-ken-thing%2F">interpretations</a> of what it means to be a Ken in the crypto world.



At the end of the day, maybe it’s best if we stopped labeling people as Barbies or Kens or Allans and let everyone choose how they want to see themselves. If a crypto Allan prefers to be seen as a Ken, that should be Kenough for you.



I rest my case. Next week, tune back in to this column for a scathing comparison of Bitcoin mining’s effect on the environment and Oppenheimer’s bomb’s effect on the world.



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I don’t care much about tech, I don’t care a whole lot about finance, either. I care about writing stories and watching weird things unfold. And that’s why I’ve ended up in crypto. But because I’m missing that passion for what crypto and blockchain are all about — finance, tech, privacy, yadda yadda — I’m going to write instead about what I am actually interested in. Everything about crypto that has very little to do with crypto. That’s what this column will be about. All the tangential stories that come out of the blockchain and crypto space, what I think about them, and how I navigate it all as a skeptical former Russian literature major. It’s precisely my perch as an outsider that lets me do what I do: Opine on all sides of any crypto issue, no strings attached, no skin in the game. If you want to talk crypto with me, let’s go off topic.

Bitcoin

If you’re in crypto, you’re an Allan

Illia Polosukhin

It will soon become incredibly difficult to know for sure what is real and what is fake.



We’re already seeing more maliciously generated content online, especially around high-stakes events like elections or periods of social unrest. While political misinformation is by no means a new problem, it can be scaled up dramatically with artificial intelligence (AI) tools — as well as personalized to an extent not possible before now.&nbsp;&nbsp;



Imagine not just fake videos of real politicians speaking, but fake videos of entirely fake politicians spewing fake quotes targeted at a particular audience’s beliefs or even at one single person’s views. This is already possible with powerful LLMs like ChatGPT and Bard, and it could spin out of control sooner than we think.&nbsp;



Large language models (LLMs) can gain outsized influence quickly because they are language-based, as is most of our society — from media and communication, to politics, to law — making it harder to detect which information is real versus generated.&nbsp;



In the very near future, one of the biggest negative impacts of powerful AI models is this inevitable explosion of generated content and fake news –– and the best way to manage this is with blockchains.&nbsp;



By introducing blockchain-based “sign-and-trace” systems for content authentication to important media outlets, we can reliably source and validate real news stories when they are published, leaving a legitimate trail of sources that can be followed online.



<h2 class="wp-block-heading">It’s not all bad</h2>



To be clear, I am an AI optimist at my core.&nbsp;



Before founding NEAR Protocol, I spent a decade as an AI researcher primarily at Google. I’m also a co-author of the landmark AI paper, “Attention Is All You Need,” which introduced transformers, the model architecture powering the LLMs in the news today. I am well aware of both the amazing potential and the risks that today’s LLMs present to society.&nbsp;



I also strongly believe that AI and Web3 can complement each other, and that blockchains and Web3 communities are a good match for addressing the current system challenges that LLMs help exploit. The Web3 solutions that I’m proposing will be more effective than old-school Big Tech regulation, which is neither practical nor possible at this point in time.



We can introduce provenance tracking around a piece of content — an article, a quote, or even an image or video — when it is created as well as each time users interact with it: hence, sign-and-trace.&nbsp;



Content authentication systems are well-suited to run on blockchains for a few simple reasons: They can be linked to a persistent digital identity, there is an on-chain immutable record of every action or transaction that can’t be changed later, and they can be connected to a governance structure and set of rules that must be followed to interact with the system.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/tv-decentralization-web3" target="_blank" rel="noreferrer noopener">TV is dying, but decentralization is the cure</a>



This type of system —&nbsp;using cryptographic signatures to verify content —&nbsp;will make it easier to trace where information comes from, as well as who is using that information and how they are using it. Sign-and-trace also makes it possible to clearly see what information online has been mislabeled or misattributed.



Whenever anyone references content within this system, it is recorded and audited in a tamper-proof way: This creates an immutable record of every interaction that is visible to everyone. These interactions can be linked to digital identities that can build reputation over time, so people know which sources are trustworthy and verified.&nbsp;



Because these records would be open source and transparent, the burden of auditing and monitoring content could be spread across different communities with a greater diversity of opinions. Putting this monitoring and authentication work on an open market — which blockchains are perhaps better at than anything else — would supercharge our collective ability to tackle this important, but likely overwhelming, mission.&nbsp;



Combating misinformation and fake content is a clear example of the kind of problem Web3 is best at solving: natively open and global, transparent yet verifiable, and proactively managed by a community without single-party bias.&nbsp;



Blockchain-based content management and sign-and-trace systems for media are necessary: We need to get a handle on what is real online and keep it that way, because soon, it will be too late.



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<div class="wp-block-post-author-biography">Illia Polosukhin is Co-Founder of NEAR Protocol, a decentralized development platform powered by a sharded smart contract blockchain. NEAR’s vision of a scalable, robust, and highly usable blockchain began in 2018 when they couldn&#8217;t find a protocol that met the needs of builders. NEAR Protocol launched its mainnet in 2020 and is focused on scaling to global mainstream adoption. Illia has more than 10 years of industry experience, including 3 years at Google Research where he was a major TensorFlow contributor and managed the team building question-answering capabilities for core Google search, as well as an author of several notable research papers including &#8220;Attention Is All You Need.&#8221; Illia has appeared in the Wall Street Journal, CNBC, Bloomberg, TIME, Wired, New York Magazine, Forbes, and TechCrunch.

</div>


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blockchain

Blockchain can save the media

Jon Rice

When you’ve been around crypto for a while, you learn to be skeptical. Technology is neutral (despite the posturing of politicians), but people are not.



No matter how many tens of thousands of developers are out there building next-generation infrastructure layers and applications with positive intentions, some small minority will always find a way to put neutral technology to nefarious use. And others will simply be incompetent.



These things tend to come in waves, often driven by buzzword-abusing platforms masquerading as crowdfunding mechanisms. Crypto has been particularly susceptible to the machinations of the people behind these constructs: the Initial Coin Offering, the Initial Dex Offering, the DeFi rugpull, the NFT scams.



So when both CoinDesk and The Block ran a story yesterday on a project called ‘CryptoGPT,’ I was surprised. Like previous projects that have capitalized on trending terms (Squid Game Token, the innumerable and insufferable Doge clones) the project sounds scammy from its name alone.



And one look at the website for CryptoGPT reinforces that sense of deep skepticism.



Profiles of a team that appears to have no verifiable background in crypto? Check.



Lead investor is DWF Labs, which has gained a <a href="https://twitter.com/nay_gmy/status/1645426187160924161">reputation</a> in the industry for presenting over-the-counter trades as investments? Check.



Unverifiable claims about outrageous user growth that seem absurd (because, in all likelihood, they are)? Check.



Details on their “$10M raise” at a “$250 million valuation” continue to suggest that all is not what it seems at CryptoGPT. The Block reported that only $420,000 of DWF Labs’ commitment has actually been received by CryptoGPT. (Hey! A weed reference! That bodes well!)



And The Block <a href="https://www.theblock.co/post/225531/cryptogpt-raises-dwf-labs">added</a> that the investor is also the market maker. Which suggests that industry sources are correct: DWF Labs is very likely paying for discounted unlocked tokens, rather than truly investing in a company. “DWF Labs follows the vesting schedule that&#8217;s outlined in our tokenomics. The investment is done over a 285-day period, aligning with the vesting of those tokens,” The Block quoted co-founder Dejan Erja as saying.



A prominent market maker who discussed the situation with Blockworks today said that over-the-counter trades don’t make headlines — investments do. Media interest lends legitimacy to projects that seem otherwise to be inconsequential…which is why, he believes, DWF Labs has presented these trades to crypto-focused publications as investments.



And the strategy has worked. DWF Labs has managed to get stories about itself or its investments into CoinDesk on <a href="https://www.coindesk.com/business/2023/03/20/market-maker-dwf-labs-invests-20m-in-defi-liquidity-protocol-synthetix/">March 20</a>, <a href="https://www.coindesk.com/business/2023/03/21/alternative-internet-builder-tomi-raises-40m-to-attract-content-creators/">March 21</a>, <a href="https://www.coindesk.com/business/2023/03/23/radix-tokens-raises-10m-ahead-of-introducing-smart-contract-capability/">March 23</a>, <a href="https://www.coindesk.com/business/2023/03/29/market-maker-dwf-labs-emerges-as-top-crypto-investor/">March 29</a>, <a href="https://www.coindesk.com/business/2023/04/03/alchemy-pay-raises-10m-at-400m-to-push-south-korean-expansion-plans/">April 2</a>, <a href="https://www.coindesk.com/business/2023/04/05/dwf-labs-invests-16m-in-raca-to-spur-web3-gaming-ecosystem/">April 5</a>, <a href="https://www.coindesk.com/business/2023/04/10/ai-focused-blockchain-cryptogpt-raises-10m-funding-at-250m-valuation/">April 10,</a> and <a href="https://www.coindesk.com/business/2023/04/11/information-protocol-rss3-raises-10m-via-token-sale-to-dwf-labs/">April 11</a>.



Is that unusual? Not really. Unprecedented, maybe, but unusual doesn’t do the success of this strategy justice.



Back to CryptoGPT, and the website that should have tipped off anyone looking to cover their “raise.”



As Scott Melker put it in <a href="https://thewolfden.substack.com/p/the-wolf-den-711-bitcoin-is-risen?sd=pf">his newsletter</a>, &#8220;The first article published failed to mention that CryptoGPT has no affiliation with ChatGPT.&#8221; Which, as he notes, may be obvious to seasoned investors, but isn&#8217;t necessarily so to newcomers to crypto.



Their app ecosystem lead is ‘Art Bagdonas’ who’s apparently led multiple European startups, despite having virtually no online presence and looking very much like an AI-generated avatar… oh, and ‘Bagdonas’ could even be a reference to the term ‘Joey Bag O’Donuts’, Italian-American slang for a gentleman carrying a few extra pounds.



The hits keep on comin’.



Liberally plastering the logos of reputable projects all over your website? Check.



Nonsense statements such as “CryptoGPT innovates the core business model of blockchains” and “Apps onboard due to new cashflow from monetizing user data upon user consent” and “CryptoGPT is the Ethereum layer-2 that is the dedicated blockchain for AI development.” Check.



CryptoGPT even includes the following sentence on its website, and if this doesn’t scare the bejeezus out of you, I don’t know what will: “All the upside, zero of the downside.”



I’m not going to spend more time on CryptoGPT because I’ve been around crypto for years, and 2017 was full of projects that looked like this, sounded like this, and included helpful charts like this. 


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh3.googleusercontent.com/Fw7s56DI2LgsvqowCvJLHDuvVPeMfLQe_gAuLO5R4D9TuZRodpU--jhRYU4vEszj1BzzA5g-P0nQHngwDi62GfH-aTeTAhNrMXAhOgulQOEmVAy7DxRcIrLzYosbkhKPvgel0fuIW83PlsoDEq6duUA" alt=""/><figcaption class="wp-element-caption">Source: CryptoGPT website. (Yes, really.)</figcaption></figure></div>


Blockworks doesn’t have the resources to deeply research every aspect of every project that appears in our inbox.



But we do apply a modicum of common sense to our coverage, attempting to filter out the more obvious red flags before we present a plethora of uncritical stories that culminate in covering a round that doesn’t look like a real round, led by an investor that doesn’t look like a real investor, for a project that doesn’t look like a real project.



Do your own research. It’s not just a catchphrase.







Updated 4/11/23 at 5:15pm ET to note that CoinDesk covered another DWF Labs story today. 



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cryptocurrency

CryptoGPT Made Headlines Yesterday Because… Errrr… Hmmm

Shalini Nagarajan

One of the largest bitcoin miners rejected claims that miners generate extensive carbon pollution and find ways to make big bucks from pressuring power grids.



A <a href="https://www.nytimes.com/2023/04/09/business/bitcoin-mining-electricity-pollution.html#:~:text=The%20computers%20were%20performing%20trillions,in%20recent%20weeks%2C%20about%20%24170%2C000." target="_blank" rel="noreferrer noopener">New York Times article</a> dated April 9 states a Riot Platforms-owned mine in Rockdale, Texas uses as much electricity as 300,000 homes in the vicinity. This makes it the most power-intensive miner in the US, according to the NYT.&nbsp;



The NYT further states that among 34 bitcoin mines, Riot has the highest power consumption of 450 megawatts, equal to 1.9 million tons of carbon emissions annually.&nbsp;



But Riot pushed back against the newspaper’s claims, issuing a <a href="https://www.globenewswire.com/news-release/2023/04/10/2643988/0/en/Riot-Platforms-Inc-Statement-The-New-York-Times-Politically-Driven-Attack-On-Bitcoin-Mining-Is-Full-of-Distortions-Outright-Falsehoods.html" target="_blank" rel="noreferrer noopener">statement</a> on April 10 that said the company was disappointed at the “false and distorted view” published.



Riot said its <a href="https://blockworks.co/tag/bitcoin-mining">bitcoin mining</a> operations don’t generate any greenhouse gas emissions, just like any other data center used by Facebook, Amazon or Google. Its data center consumes electricity from the Texas power grid, which Riot described as the “cleanest and most renewable energy-sourced grid in the US.”



An independent review of renewable energy production <a href="https://yaleclimateconnections.org/2023/02/us-state-with-most-renewable-energy-production/" target="_blank" rel="noreferrer noopener">shows</a> that while Texas produces the most total renewable energy, the percentage of the state’s energy use that comes from renewables is 26%, due to the large amount of fossil fuel-derived energy the state also produces. The most renewable energy as a percentage of in-state usage is produced by South Dakota, with 83%.



Riot also pointed to other energy-related benefits of its operations.



“We also proudly participate in various programs that help to stabilize the electric grid and actually reduce power prices, despite what critics incorrectly assume,” Riot said.&nbsp;



“Unlike other industries, we can shut down at a moment’s notice, making power available to other users and critical infrastructure during extreme weather events, while offsetting losses from curtailing our operations.”



The NYT seems to have done its research, saying one of its reporters traveled to Texas and North Dakota, and probed not just bitcoin miners, but energy experts, scientists and politicians. They also reviewed records on mining operations.



But Riot claimed that NYT’s reporting was driven by “fringe political interests,” and published a <a href="https://d1io3yog0oux5.cloudfront.net/_62cf7102149a060eda7aa5d946d4c26d/riotblockchain/db/447/4245/pdf/Riot+Response+to+NYT+Statements.pdf" target="_blank" rel="noreferrer noopener">document</a> detailing its responses to the questions the outlet posed prior to the article’s publication.



NYT further claimed that the power used by bitcoin mining centers is “as if another New York City’s worth of residences were now drawing on the nation’s power supply.”



Choosing to compare electricity usage to people’s homes “is an arbitrary, inflammatory, and political choice,” Riot said in response.



“The obvious implication by the NYT is that New York City residents should be allowed to consume electricity; data centers in rural America should not.”



Riot also pushed back against NYT saying that bitcoin companies are paid by the Texas grid operator for “promising to quickly power down if necessary to prevent blackouts.” But Riot said it isn’t compensated for “promises,” and instead is paid for providing the grid the ability to directly manage its power load.



“By implication, the NYT’s preference appears to be that Riot should refuse to curtail so that it pays higher fees; yet the implication of the entire article is that Bitcoin miners should not be allowed to operate at all. Both of these alternate realities are incongruous and insidious.”



Riot’s concerns about politically-motivated allegations are not unfounded because miners are indeed facing a tough time. Lawmakers in Texas recently moved to <a href="https://blockworks.co/news/texas-bitcoin-mining-incentives">approve a bill</a> that would cut incentives for bitcoin miners, including the unwinding of tax breaks for local operations.



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Bitcoin mining

Riot Slams New York Times For ‘Inflammatory’ Bitcoin Mining Post

Global media company Semafor is reportedly set to surrender Sam Bankman-Fried’s pool of investment after being criticized for keeping dirty money.&nbsp;



<a href="https://www.thewrap.com/semafor-sam-bankman-fried-investment-redeem-return/" target="_blank" rel="noreferrer noopener">The Wrap</a> reported on Monday that the New York-based media firm “intends to redeem” the investment, of which the size is unknown as yet. 



Sam Bankman-Fried, and his brother Gabriel, made undisclosed investments in Semafor as part of a $25 million funding round, according to <a href="https://www.crunchbase.com/organization/semafor/company_financials" target="_blank" rel="noreferrer noopener">Crunchbase</a> data. He is said to have funneled millions to other media outlets including ProPublica, the Intercept, Vox, the Law and Justice Project and Fox Media. 



“They all took it, and none of them broke the story,” podcaster Jack Posobiec <a href="https://twitter.com/jackposobiec/status/1593975446261338115" target="_blank" rel="noreferrer noopener">tweeted</a>.



However, ProPublica said last month that it would <a href="https://www.propublica.org/atpropublica/bankman-fried-family-donates-5-million-to-propublica" target="_blank" rel="noreferrer noopener">return the $1.6 million</a> it had received so far from Bankman-Fried’s family foundation.



<a href="https://www.reuters.com/business/media-telecom/semafor-news-platform-launches-2022-10-18/" target="_blank" rel="noreferrer noopener">Launched</a> less than three months ago by former Bloomberg CEO Justin Smith and former New York Times columnist Ben Smith (who are not related), Semafor calls itself a global news-focused digital media firm for “college-educated readers.”  



Bankman-Fried’s exact stake in Semafor isn’t clear, but Justin Smith told employees in a <a href="https://twitter.com/Justin_B_Smith/status/1598712692025528323" target="_blank" rel="noreferrer noopener">Dec. 2 memo</a> that the crypto boss’ investment hadn’t yet been converted to equity. He also had no influence over editorial coverage, Smith added.



The former FTX CEO’s investment in Semafor first drew attention when the outlet reported <a href="https://www.semafor.com/article/11/22/2022/sam-bankman-fried-elon-and-a-secret-text" target="_blank" rel="noreferrer noopener">Elon Musk had asked Bankman-Fried</a> to “roll the $100 million stake he had owned for a few months into a privately held Twitter.” Musk debunked the claim, and called out the outlet for a conflict of interest due to its ties to Bankman-Fried.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">As I said, neither I nor Twitter have taken any investment from SBF/FTX. Your article is a lie. Now, I’m asking again, how much of you does SBF own?&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1595494411579711490?ref_src=twsrc%5Etfw">November 23, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Meanwhile, Semafor’s editor-in-chief Ben Smith told Musk: “Like you and many others, we took an investment from him. We have covered him aggressively, and disclose it every time we write about him.”



Semafor and a spokesperson for Bankman-Fried didn’t return Blockworks’ request for comment by press time.



After FTX’s implosion, Semafor came under attack for not returning the disgraced crypto boss’ investment. The outlet provided a statement to blogger Mickey Klaus that it had received all investments “in full in USD,” and that it wasn’t expecting its business to be financially impacted.&nbsp;



But Klaus hit back, saying <a href="https://kaus.substack.com/p/send-it-back-ben" target="_blank" rel="noreferrer noopener">in a blog</a>: “That&#8217;s nice, but actually I wasn’t worried that Semafor wouldn’t be able to hold on to its Bankman bucks. The question is more: Will Semafor give the money back?”



“If only to be able to hold their heads up, they should send the money back,” he added. Bankman-Fried was arrested in December and most recently <a href="https://blockworks.co/news/sam-bankman-fried-issues-not-guilty-plea">pleaded not guilty to criminal charges</a> that US prosecutors have described as an “epic” fraud.



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Elon musk

News Startup Semafor To Return Funds Linked to FTX Founder

Sam Bankman-Fried, who turned from crypto billionaire to villain nearly overnight, sat for back-to-back interviews this week with appearances at the New York Times DealBook symposium and on Good Morning America.



Observers have drawn comparisons with Bernie Madoff, the Wall Street financier turned Ponzi scheme kingpin, who pleaded guilty to 11 federal crimes. And wewly-appointed FTX CEO John Ray III says FTX’s disintegration is <a href="https://blockworks.co/news/ftx-bankruptcy-like-enron">worse than Enron</a>, the energy company that went down as the largest accounting scandal in recent history. 



Crypto Twitter has dragged mainstream media for massaging Bankman-Fried&#8217;s image instead of asking truly tough questions, although Andrew Sorkin was widely thought to have given him a harder time than most. So, here’s a choice selection of Bankman-Fried corkers to get your blood boiling.



<ol class="wp-block-list"><li>‘Got a little cocky’</li></ol>



Bankman-Fried has echoed several of his comments across interviews, but he was smug enough to admit that he may have been overconfident about the potential of his business.



“I think I got a little cocky — I mean, more than a little bit,” he told <a href="https://edition.cnn.com/2022/12/01/business/sbf-interview-gma/index.html">ABC’s George Stephanopoulous</a> on Good Morning America.



<ol class="wp-block-list" start="2"><li>‘Close to nothing’</li></ol>



<a href="https://www.nytimes.com/2022/12/01/business/sam-bankman-fried-interview-sbf-ftx.html">Speaking virtually to Andrew Sorkin</a> of the New York Times, he claimed that he’s lost most of his money and that he didn’t stash away any of it.&nbsp;



He added that he’s disclosing everything he has, and that he has no hidden funds. He’s allegedly down to $100,000 “or something like that” and just has one working credit card.



<ol class="wp-block-list" start="3"><li>Vacation home was not intended to be parents’ ‘long-term property’</li></ol>



The exchange spent millions on at least 19 properties worth $121 million in the Bahamas, according to <a href="https://www.reuters.com/technology/exclusive-bankman-frieds-ftx-parents-bought-bahamas-property-worth-121-mln-2022-11-22/">Reuters</a>. These included at least seven condominiums worth $72 million and a vacation property in which Bankman-Fried’s parents were listed as signatories.&nbsp;



“I think they may have stayed there while working, you know, with the company sometime over the last year. When you look at the rest of it, there were a lot of property purchases in the Bahamas,” Bankman-Fried told Sorkin.



<ol class="wp-block-list" start="4"><li>Mixed messages</li></ol>



Bankman-Fried made some statements that appeared ill-thought-out when asked whether customer funds were used inappropriately. “I didn&#8217;t knowingly commingle funds,” he said. 



“I wasn’t trying to commingle funds,” he added later.



<ol class="wp-block-list" start="5"><li>Ignorance of FTX/Alameda’s balance sheet</li></ol>



Bankman-Fried admitted to not knowing much about the finances of his companies, saying he was “frankly surprised” by how big Alameda’s position was in FTX’s native token FTT.&nbsp;



He also claimed he was not worried about customer losses or potential insolvency until Nov. 2, when CoinDesk published Alameda&#8217;s partial balance sheet.



<ol class="wp-block-list" start="6"><li>Alleged dark money donations to Republicans</li></ol>



Bankman-Fried claimed he donated millions of “about the same amount” to both Democrats ahead of the 2022 midterm elections. Only his donations to Democrats were <a href="https://www.businessinsider.in/investment/news/ftx-founder-sam-bankman-fried-donated-40-million-to-political-campaigns-leading-into-the-midterms-leaving-some-concerned-about-cryptos-place-in-washington-report-says/articleshow/95646968.cms">publicly known</a> and well-documented, prior to his recent admission. But he kept the Republican donations quiet.&nbsp;



“All my Republican donations were dark,” he said. “The reason was not for regulatory reasons, it’s because reporters freak the f— out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight.”



He has denied making any donations to politicians in the Bahamas.



<ol class="wp-block-list" start="7"><li>Spot money and margin money are totally the same</li></ol>



During a Twitter Spaces appearance on Thursday, Bankman-Fried was asked whether funds for spot and margin accounts were commingled behind the scenes.



“Yes that’s right, in general, balances were generally treated as effectively fungible with each other.”



FTX International offered 20x leverage while FTX US offered 10x with a minimum required balance of $100,000.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Have your own favorite Sam Bankman-Fried media quote or tweet from over the years? Let us know in the thread below!



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">When asked if his lawyers thought his interviews were a good idea, Bankman-Fried said “They very much do not.” And reading this, you’ll see why… Add your own favorite SBF quotes below!<a href="https://t.co/WatJn8ylfY">https://t.co/WatJn8ylfY</a>&mdash; Blockworks (@Blockworks_) <a href="https://twitter.com/Blockworks_/status/1598770698679242753?ref_src=twsrc%5Etfw">December 2, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>

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