There has been some cynicism in web3 and cryptocurrency circles over the, let's put it mildly, change in basic attitude toward crypto and ai, from presidential candidate Kamala Harris. While it makes perfect sense that a politician cannot directly attack the policies of the former party leader, especially the sitting president.
On Aug. 4, I wrote: "Crypto regulation is proving to be a divisive issue. I expect Harris to propose a different policy on crypto before the election than President Biden implemented with the SEC during his presidency."
Millions, especially young, male voters who are pro-crypto appear to consider the issue so important that it is even decisive in their voting behavior. But hardly anyone would vote for Harris because of a strong anti-crypto policy. In an exciting presidential race, it therefore makes sense that Harris is now trying to appease crypto voters. The Washington Post reports:
"In a speech in Pittsburgh about the economy on Wednesday, Harris said it was important for the United States to maintain its dominance in blockchain technology, which facilitates trade of cryptocurrencies such as bitcoin. The Harris campaign on Wednesday also released a policy document that said she would “encourage innovative technologies like AI and digital assets,” a reference to cryptocurrencies and similar technologies such as stablecoins. Harris had on Sunday promised donors in New York City a “safer business environment” for digital assets, as well.
Harris has not detailed a specific plan for promoting crypto, and her statements have also affirmed the importance of protecting consumers from predatory practices. But her comments were intended in part to reassure investors nervous that the Democratic presidential nominee would maintain what they view as President Joe Biden’s hostile approach to the sector, said two outside advisers to the campaign who spoke on the condition of anonymity to describe its tactics.
The olive branch comes amid a wave of pressure from donors and crypto groups, who have massively stepped up their spending on politics this year, as well as electoral concerns among Democrats about antagonizing the millions of Americans who have invested in cryptocurrencies."
In short, it is political suicide for a politician to turn against an issue that alienates one group of voters without scoring with another electoral group. And all the more so if the potential voters can also lavish your campaign coffers with hundreds of millions of dollars.
I am sending this newsletter from Singapore, where the area around Marina Bay has been dominated for the past week by over twenty thousand visitors to Token2049, the largest Web3 event in the world. Although the conference officially ended on Thursday, some of the more than 800(!) side events are still going on. Solana even held its own event Solana Breakpoint on Friday and Saturday, when the Formula 1 weekend was already in full swing.
'Hate the game, don't hate the players.' Some pre-war marketing tactics are still current in the Web3 world
Vitalik Buterin star of Token2049
Amid the usual self-promotional talk and non-discussion, one speaker stood out: Vitalik Buterin, co-founder of Ethereum. Buterin emphasized that Ethereum, once plagued by slow and expensive transactions that prevented mass adoption, can now perform large numbers of transactions quickly and cheaply.
Buterin then overshadowed the content of his own speech by breaking into a song. Still, it was an engaging and rare human moment at an otherwise marketing-dominated event.
It remains painful to see top athletes such as Lando Norris and Max Verstappen sit on panels with their crypto sponsors. McLaren is sponsored by crypto exchange OKX while rival exchange Bybit is a major contributor to Red Bull Racing's immense budget.
Verstappen and Norris had to answer hard hitting questions such as "is teamwork in Formula 1 as important as in business". It would be nice if for once Verstappen would answer: 'how nice that you asked, those other 900 employees of the team are just goofing around and I actually do everything myself; I put the stickers on the car myself the night before a race, pump up the tires in the morning and refuel the car neatly after the race as well'.
It remains unclear whether, apart from the ego of the proud sponsor parading next to "his" driver on the podium, anyone is any the wiser from such a kind of obligatory freestyle. Other crypto-sponsors in Formula One such as Stake (Alfa Romeo), Tezos (Red Bull), Kraken (Williams) and Fantom (Alpine) were less visible.
Buterin's presentation made one curious about the film that has been released about him. Investor Fred Wilson said:
"This film is about the Ethereum blockchain and the developer ecosystem. But in reality, it's a chance to spend just under ninety minutes with Vitalik, where you learn more about him, how he lives, thinks and how he became who he is today. I've been in the blockchain business for almost 15 years. I am a fan and holder of Bitcoin. I am a fan and holder of Solana. I am a fan and holder of Ethereum. I am a fan and holder of many other protocols, tokens and communities. I am fully into all of these. But I must say that Vitalik has a special place in my mind and heart. He doesn't just talk pretty words; he lives by his beliefs and leads from those principles. He is a very special human being. And this film manages to show that in a great way."
Hopefully the film will soon be available to the general public, as at the moment it can only be seen through a complicated streaming service - which is onchain, of course.
Solana with its own phone
Token2049 covered four floors of booths and stages in the immense Marina Bay Sands convention center, but the main networking took place during the side events. For days, it was virtually impossible to eat or drink anything in the dozens of restaurants around Marina Bay, as all the hospitality venues had been rented out by companies for private events.
Although Token2049 officially ended on Thursday, Solana took over with the Solana Breakpoint conference on Friday and Saturday. Here it introduced the Seeker, a cell phone integrated with the Solana ecosystem. Linking a proprietary hardware device like a phone to a crypto ecosystem offers a new dimension to the growing diversity of Web3 applications, and in a market dominated by Apple, Samsung and Chinese phone makers, it is a very brave move. Whether it becomes successful is a question for another day.
Another theme that kept popping up during Token2049 was the increasing integration of the Web3 industry with the traditional financial sector, or TradFi. Still, the future of this arranged marriage remains unclear for now, at least until after the U.S. presidential election.
The Web3 world is openly hoping for a victory for Trump, who is more crypto-friendly than Harris. Or as one Indian-American Web3 insider said, ''I am brown and I know Trump doesn't like brown people; but he is pro-business and pro-crypto. So if he wins and helps our business grow, I'll make sure I help myself. Then we won't need Kamala." This rather cynical sentiment was quite prevalent this week.
Spotlight 9: Nvidia remains in the lead
Following the interest rate cut announced by the Fed, the stock market closed at record highs and the U.S. jobs market also did extremely well. It is interesting to end the third quarter by looking back at the performance of tech stocks in this calendar year so far.
At three quarters of 2024, the bottom line: Nvidia is not a one-day wonder
The clear winner this year is without a doubt Nvidia, up over 140%. If we look back a little further at what buying Nvidia shares would have yielded exactly one year ago, the chipmaker's success is even more eclatant. A $4,351 investment in 100 shares of Nvidia a year ago would be worth $11,338.71 today, which is an incredible gain of $6,987.71.
Again, I repeat it almost every week, I don't give financial advice, but I also don't want to shy away from what I think is an inescapable conclusion: Nvidia can hardly go wrong in the coming years because the demand for its products will remain high as long as the AI hype among the big players like Microsoft, Google, Meta, Amazon and Oracle continues.
Only when the world's biggest tech companies begin to doubt the return on their investments in AI, will Nvidia have a harder time growing in revenue and profits. Until then, it is an industry leader with no direct competitor.
Meta's more than 60% increase this year should not go unmentioned. Although that is partly explained by the sharp correction last year, the ad-driven network's margins remain as high as ever.
TON fastest riser in crypto
Despite the arrest of Telegram founder Pavel Durov, Telegram-affiliated TON has been a phenomenon this year, with 144% increase
Total3, an index that tracks the market capitalization of the top 125 cryptocurrencies, excluding Bitcoin and ether (ETH), was up 5.68% since the announcement of the rate cut. In contrast, Bitcoin's market capitalization rose only 4.4%.
The success of TON, which today stands for The Open Network but evolved from Telegram Open Network, continues to be linked to the growth of Telegram. A whole ecosystem of "Telegram Mini Apps"(TMA) is now emerging around Telegram that enable all sorts of applications, from gaming to fund raising, from which the TONcoin benefits.
Today the exciting week in Singapore concluded with the always spectacular Formula One Grand Prix at the Marina Bay circuit. As an opening act for Lando Norris and Max Verstappen, 30 Seconds to Mars (with multi-talented Jared Leto) and Kylie Minogue performed, while after the race Lenny Kravitz demonstrated how to stay cool in leather pants in 90 degrees and almost 90% humidity. All in all, it was a fantastic week.
It was an exciting week for Microsoft. On Tuesday, it was passed by Nvidia as the world's most valuable company, but after Nvidia shares fell Thursday, Microsoft closed the week as the number one again. It will prove to be a temporary hegemony, as Nvidia's rise is unstoppable for now.
More interestingly, Microsoft signed a record-breaking deal this week in which it committed to purchasing eight million carbon removal credits, representing the largest ever carbon dioxide removal transaction.
In my not so humble opinion, it is the start of a race in a new billion-dollar market; the CO2 removal market. I hope to be able to contribute to this myself through the Tracer project, which could be an important tool in the fight against global warming. I would like to invite you to make a contribution as well!
An almost entirely self-painted survey of the various sources of carbon removal credits.
It is about CO2 removal, not just avoidance or reduction
The record purchase was a notable action by Microsoft because the reduction of one ton of CO2 emissions, commonly described as a carbon credit, is used by airlines, among others, for the worst kind of greenwashing. The lack of transparency and control in the market led to projects that often fail to deliver the promised environmental benefits and gave carbon credits a bad reputation.
The interesting thing is that Microsoft has not only set a goal of being climate neutral by 2030, but actually carbon negative. This means Microsoft will reduce greenhouse gas (GHG) emissions by more than half, remove the rest and then aim to remove the equivalent of its historical emissions by 2050.
In doing so, Microsoft recognizes that carbon dioxide emissions are so high that emissions reductions alone are no longer sufficient to achieve "only" a degree and a half of warming, the goal of the Paris climate accord COP21; this will require actual removal of CO2.
Tech giants embrace carbon removal credits
Microsoft is not the only tech giant focused on carbon removal credits, because along with Google, Meta and Salesforce, companies that rarely play together nicely, it recently announced the formation of the Symbiosis Coalition, a signal that the world's largest companies are willing to invest in high-quality carbon removal credits.
A trillion-dollar market: countless solutions for CO2 removal, but the key is the duration of CO2 removal, expressed in years.
The tech giants' move toward carbon removal credits obviously also has an economic consideration. The economic potential of the carbon removal sector is enormous. McKinsey estimates the size of this sector by 2050 to be as much as $1.2 trillion, or $1,200 billion. This is based on increasingly stringent government taxes on carbon emissions and rapidly improving technology.
But 2050 is still a long way off. It is therefore relevant that Morgan Stanley estimates that the market for carbon credits, most of which will be based on CO2 removal, will reach $100 billion as early as six years from now, in 2030. Now I always distrust forecasts with nice round numbers, but in this case, due to global warming, there is an undeniable need for companies to invest heavily in CO2 removal. After all, without a livable planet, it's hard to make money.
What is unique about Tracer?
Since Hans Tobé and I founded Blue City Solutions in 2016, after our visit to COP21 in Paris, we have been looking for projects that can accelerate CO2 removal in a cost-effective way; that is, without subsidies or donations. With Tracer, we think we have found an extraordinary solution that, without, false modesty, benefits the world.
Tracer is the answer to the question: how do you scale the carbon credit market from small, opaque and without liquidity, to huge, transparent and liquid? This is extraordinary, because so far the solutions have been either liquid or transparent. Either efficient, or reliable.
The Tracer ecosystem: two smart contracts, Tracer for governance and Carrot for tokenization and qualification of the carbon removal credit
Tracer's solution is based on a smart contract, a blockchain application, by Chief Technology Officer Philippe Tarbouriech. For enthusiasts, the "secret sauce" is the combination of a fungible and a non-fungible token in the same smart contract making it possible to offer buyers a single portfolio with multiple projects as the source of the carbon removal credits.
Compare it to a "basket" of stocks among fund investors. Buying carbon removal credits that way from different sources was not possible until now, which made this market hell for companies like Microsoft, Amazon, Apple etc who buy large amounts of credits. How can they ensure quality of carbon removal credits, especially if they buy from various projects worldwide where the removal at each project varies per year? This is so far unfeasible and complicates the growth of the market.
More details about Tracer's solution to this are in the tech white paper. The entire outline, from a summary of a few pages to the entire white paper, is in the, yes, Tracer Knowledge Center.
But rather than summarize all of Tracer's documentation, I think it would be more useful to share my own analysis.
Market and solution are clear
For nearly two decades, I have tried to assess every innovation through Guy Kawasaki's lens , which reduces every startup to ten slides. When Philippe explained his idea of Tracer to me, the problem that Tracer solves (the poorly functioning market of carbon removal credits), the value it brings users (transactions of higher quality carbon removal credits at lower management costs) and the "underlying magic" (an open source smart contract that documents the entire life cycle of a carbon removal credit) were quickly apparent.
What always helps to spark my enthusiasm: a huge market potential with solid customers (Microsoft & Co have budgets) and a pressing problem (climate change). What I find special about Tracer is that it offers a solution to large buyers such as Microsoft and Salesforce by providing complete transparency, through an assessment model based on "persistence"; by this is meant the duration of carbon removal.
Choosing that persistence as the most important factor - because some projects provide 100-year removal and others over a thousand years - also ensures right away that large amounts of CO2 removal credits are more easily comparable and thus tradable.
Real world assets new phase in crypto, pardon me, Web3
As an old man, I have long been very skeptical about the lack of underlying value components of crypto projects. In short, there was nothing more than supply and demand.
I think the nice thing about Tracer, from a business perspective, is that there is continuous influx of capital from the "real" world. Boston Consulting Group has done a fascinating study on the kind of "asset tokenization" of which the Tracer project is an example.
'Buy and burn' sounds strange, but is a modern way for the community to share in success.
Because a percentage of each carbon removal credit "tokenized" through the Carrot smart contract is used to purchase the Tracer governance token. This reduces the number of Tracer tokens in circulation and creates a deflationary effect, as is the case with Ethereum. Simply put: upward price pressure. And people both outside and inside crypto, or Web 3 as we have to say these days, are very keen on that.
Tracer is open source and decentralized
Once upon a time, Finn Linus Torvalds, with the open source operating system Linux and a group of volunteers, destroyed a billion-dollar industry of closed operating systems, making cloud computing many times cheaper. In short, without Linux, there would be no Amazon, social media or Netflix and certainly no AI.
Linux became an inspiration for other open source projects such as Ethereum, which does struggle with the image of being run too centralistically. An alternative governance structure is the Decentralized Autonomous Organization (DAO), which Tracer uses.
I won't go through the legal details of this, but at its core it comes down to the owners of Tracer tokens making the most important decisions. There is no corporate ownership of the software.
American investment firm Andreessen Horowitz, known for investments in Facebook, Twitter and Airbnb, among others, has written a legal framework for DAOs, but especially the Europeans will recognize many elements of the old-fashioned association structure.
In my opinion, this decentralized approach is a basic part of blockchain technology, which is still used too rarely.
Tracer DAO: one token, one vote.
The difference between tokens and shares
As a former investor in startups, I have experienced firsthand how long it usually takes even the successful startups to get some return to shareholders. Waiting five to 10 years is not unusual.
In Web3, I see the advantage of being able to start for relatively little money and quickly see if a product catches on, so that money doesn't disappear into a bottomless pit for years. So you try something, you adjust something where necessary, but then it's also: either stop, or a success.
In doing so, as with Tracer, there is often the possibility of getting at least the initial deposit out within a few months of launch. Tracer is funded through a phased token sale, with prices rising at each stage. This model is designed to reward early buyers as the project becomes less risky.
Tracer private round: 0.75 cents USD per token, half the price in the upcoming public sale.
The advantage for early buyers is that they could trade ten percent of their tokens immediately after the public sale, while their remaining tokens are subject to a one-year vesting period. Such an approach shows long horizons and professionalism in Web3.
Dedicated team
This long-term vision is also evident in the tokens that the team itself bought early on. Almost twenty percent of the tokens are reserved for the team, with a so-called cliff of one year applying. This means that those tokens are only released and can be traded after a year, with this also applying to only a third of these tokens; the vesting period for the team tokens is thirty-six months.
Important: team and advisors have tokens that can only be traded after a year and then only partially (33%)
Without wanting to portray them as superheroes who really deserve a cape, it is relevant to point out my personal involvement. I have no formal position at Tracer, but I have been instrumental in putting together the international team as an advisor.
For example, I introduced CTO Philippe Tarbouriech to Gert-Jan Lasterie, the Chief Business Officer (CBO) of Tracer, whom I knew from the days when I was a small shareholder in his company Flabber, which he sold to American media company Vice. Gert-Jan once gave me the excellent book he wrote about on cryptocurrencies and played an important role in accelerating my learning curve about crypto and blockchain.
I once introduced CFO Hans Tobé, who managed the international offices of the Dutch Center for Trade Promotion (NCH) for many years, with energy and sustainability expert Andrew Barbeau, who became our U.S. partner and strategist.
Notable names also include Hubert Shio-Hsien Tai, once one of the first hundred employees at eBay, who was later involved in the IPOs of two Chinese Internet giants as CTO and COO; not to mention Dr. Alberto Pace, Tracer's scientific advisor, who in daily life works at CERN as head of data management. I always joke that it must be nice for Alberto that at Tracer, he finally gets a chance to deal with a serious challenge.
All people with long and outstanding track records, each in their own field, and not types who will soon be offering a so called 'Masterclass' on "how to get rich quick by dropshipping crap". More key collaborations, team members and advisors will be announced in the coming months.
Join us and ... and what?
Nothing I say or write is advice, it is just my opinion. I do not own Bitcoin myself. Many people start drooling while staring at Bitcoin's 113% rise, Solana' s nearly 700% rise or even memecoin Pepe' s over 20,000% rise, all in the last year, but my advice is: only do this with money you can afford to lose, and for peace of mind, assume you've lost it too.
But if Tracer becomes successful, you will probably get back many times more than you put into it. In addition, I personally think it is important that Tracer is a governance token, allowing you to vote on the important decisions with your tokens. The fight against global warming is important enough to think seriously about and contribute seriously to. If you are interested in Tracer, click here.
And any comments, questions or other feedback I would love to hear!
