Crypto IRL

Tomorrow (3/14) is Pi day! Yes, guilty as charged. I’m a recovering math and science nerd. Pi day is an annual celebration of the mathematical constant “pi” which relates to the circumference of a circle. It’s also a great excuse to eat lots of pie.

In honor of Pi day, I wanted to take a walk around the world and touch on a couple crypto relevant stories

* Ukraine vs Russia: Crypto in war?

* EU may ban proof of work - misguided?

* Jambo: Can Play to earn take off in Africa?

* Holy metaverse?

1. Ukraine 🇺🇦 vs Russia 🇷🇺: Crypto in war?

The good:

* War is an ugly business. It brings out the worst of humanity. Yet even in those dark days, heroes emerge and necessity gives birth to innovation.

* Over $100M of crypto has been donated to Ukraine from around the world. Without crypto, many of these donations would have taken 2+ business days to be processed and charged up to 6% fees. But with crypto, we have solutions that provide instant, free-to-near-free international payments.

* Speed can be the difference between life and death. Imagine you lived in the US but your loved ones were under siege in Ukraine. They urgently requested money to flee. It could be heart wrenching having to wait 2+ business days. Mind you, if the request came on Friday, funds might not arrive till Tuesday. This could be unnecessary exposure.

The ban:

* Many Western governments and companies have put in place sanctions against Russians. This culminated in 7 leading Russian banks being cut-off from the SWIFT global payment network.

* SWIFT is a global payment messaging system. It links over 11,000 banks across 200+ countries. The system does not transfer money rather its like an email system for banks. It conducts about 42 million messages every day. The ban on 7 Russian banks would cause inconvenience but I expect they might eventually develop workarounds over time. It remains to be seen how effective the sanctions are. Could crypto provide a workaround?

The other side

* In Nigeria, we say, when two elephants fight, the grass suffers. Deep wounds are being gored on both sides. Much of the US news coverage is focused on Ukrainian courage amidst Putin’s over-reach. I have also been thinking about regular Russian citizens - they did not choose this war.

* The sanctions and exits of Western companies are dealing a heavy blow to the their economy. Global companies like McKinsey & Company, Visa, PWC, McDonald’s are among the dozens which have ceased operations in the country. Many Russians now find themselves without a job at the exact moment their local currency (the ruble) has lost 40% of value against the US dollar and inflation rising.

* Crypto could offer some solutions for them too. Russians could convert their life savings from rubles to US-dollar backed stablecoins or Bitcoin. Out-of-work Russians could consider Play-to-Earn games. Crypto payments could provide optionality in the event that sanctions.

My heart goes out to Ukraine 🇺🇦 and all who have had their lives disrupted by the invasion.

2. EU 🇪🇺may ban proof-of-work

* The European Union (EU) has a legislative framework for governing digital currencies, it’s called Markets in Crypto Assets (MiCA). It contains a provision that could limit the use of proof-of-work cryptocurrencies like Bitcoin and Ethereum

* Proof-of-work has been a lightning rod as it is an energy-intensive mechanism. Some environmentalists have decried coal-powered bitcoin mining in China as detrimental to the fight against climate change. It is in the in this vein that proof-of-work came under heavy scrutiny. However, I don’t think this premise is based on full understanding of the current state.

* Bitcoin miners are highly mobile and incentivized to pursue the lowest energy source. Today, 39% of bitcoin mining is powered by renewable energy while only 13% of US power generation is renewable (EIA). Bitcoin mining can subsidize capital investments to build more renewable energy facilities.

* The EU is right to consider opportunities to reduce carbon footprint. But it is odd to start with Bitcoin mining given its miniscule carbon footprint compared to other related activities like the traditional banking system (650x), gold mining (90x), and paper currency printing (11x). Furthermore, a 1% reduction in carbon emissions from global aviation sector would be 5x larger than total carbon emissions associated with Bitcoin mining. Shouldn’t we focus on that?

3. Jambo: Play to earn in Africa💰

* Last year, I shared the story of how Play-to-earn NFT games were providing thousands of Filipinos a means of livelihood. Africa has many of the same strong fundamentals: 60% of the population is below 24 years old and almost 50% of university graduates in Africa are unemployed.

* James Zhang, a 3rd-generation Chinese-Congolese, founded Jambo in Kinshasa to capitalize on the same trends in Africa. Jambo’s goal is to become the Web 3.0 super app for Africa. They have already reached 12,000 students across 14 countries (Morocco, Nigeria, Ethiopia, Equatorial Guinea, Kenya, Congo, Uganda, Rwanda, DR Congo, Tanzania, Zambia, Namibia, Madagascar and South Africa).

* The students go through a 10-weeek program to explore opportunities in play-to-earn gaming and decentralized finance (DeFi). Jambo also takes on some of the students to become local ambassadors. Jambo provides scholarships which enables students to earn money. In some cases, students are making 2x what their salary might be.

* Jambo recently raised $7.5M from a group of investors including Coinbase Ventures, Alameda Research and other notable crypto investors. The goal is to achieve 1M downloads by the end of year.

* Too often, US VCs looking to invest in Africa focus in on Nigeria, South Africa and Kenya. It makes sense these are some of the most mature and dynamic hubs on the continent. However, it belies the difference and opportunities in the other 51 countries in Africa. I’ve been impressed by Jambo’s strategy of quickly getting boots on the ground in a a variety of countries.

4. Holy Metaverse ⛪️✝️

* This week, I learned that there is a VR Church in the metaverse! They host Sunday services, weekly groups, and offer volunteer opportunities…100% in the metaverse. The clincher is that it was established in 2017!

* One of the great hopes of the metaverse is to improve access. This has proved true in the VR Church. One of the leaders shared how she had been diagnosed with a neuro-muscular condition which effectively left her homebound since 2010. VR Church has given her an avenue to be actively engaged in a community.

* Just when I was thinking this was pretty fringe stuff, today my sister and brother-in-law shared that their church was planning to run part of their youth summer program in the metaverse.

* Church attendance in the US has declined in recent decades. It makes sense to leverage technology to reach the next generation. However, VR Church proves that there is staying power. It delivers on creating a more accessible and global experience. What a great time to be alive.

I hope you have a wonderful Pi Day and week ahead.

O dabo

Afo

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

What’s your favorite animal? For a long time I really didn’t have one. When asked, I’d sometimes pick a random African animal or something philosophical to try and impress whoever I was with. Ugh. Thankfully I’ve passed that stage. Lately, I’ve been watching squirrels. I see them everywhere from our backyard to the parks when I’m out cycling. Beyond their cute fluffy tails, squirrels just always seem happy, energetic and playful. They seemingly bound from tree to tree without losing enthusiasm. Have you ever seen a sad or moody squirrel 🐿 ?

Crypto prices crashed this week. How did you fare? I hope you channeled your inner squirrel. I’ve been zen. My approach is to devise a strategy then automate execution over the long-term. If prices continue to slide then there might be some very attractive opportunities. Are you ready? What projects are on your shopping list? Remember, Uncle Warren Buffett said “be fearful when others are greedy and be greedy when others are fearful”.

Crypto shopping list🛒

One of my goals this year is to significantly expand my crypto portfolio beyond my bitcoin and ethereum base. I missed out on a TON of upside last year by playing it very safe and not executing on recommendations from my friends. If the crypto price slide extends there might be opportunities to pick up some coins at decent entry points.

I recently finished reading “The Psychology of Money” by Morgan Housel. It argues that we all make rationale financial decisions based on our background. The challenge is that we all have very different backgrounds, personalities and aspirations. For me, the most important thing is peace. A super aggressive strategy might give me amazing returns but it might cost me my sleep at night. That’s not a cost I'm willing to pay.

Additionally, we often only think about returns that we could have made but we discount the losses we could have incurred. Social media is a highlight reel. Most people share their triumphs but are mute on losses. So I say this to say, don’t cry over spilled milk. Figure out what works for you then get it done. As we say in Nigeria, “paddle your own canoe”.

Disclaimers:

* I don’t offer any financial advice. I’m just a guy with a laptop trying to figure this thing out. Please do your own research.

* My crypto shopping list is a work in progress. It’s subject to change at any time. I’m very much still learning. I’m also not sharing my full list of projects that I’m curious about - that might deserve it’s own edition or two lol.

Please share your ideas with me too!

Crypto shopping list

I already have some of these but I want MORE

* Solana (SOL) - low transaction cost, seen as an ethereum challenger

* Chainlink (LINK) - bringing real-world data on-chain

* Avalanche (AVAX) - fast smart contracts

* Ecomi (OMI) - NFT play; it’s the token for Veve which has major partnerships

* Decentraland (MANA) - leading metaverse project

NFT update📈

Last week, I shared my excitement about the new Ancient Empires NFT collection. The collection celebrates the history of ancient African and Latin American civilizations by creating art NFTs which could appeal to a broader population. Well I did it! I made an impulse buy. (Not sure we should celebrate that but this is where we are…hahaha).

I chose this piece because of the cultural significance of the mask the man is wearing in the picture. Masks are a key part of the cultural heritage of the Yoruba and Benin people. (Context - I’m Yoruba; the Yoruba and Benin empires are in modern-day Nigeria but they have ancient linkages and a tremendous art heritage. Unfortunately, many culturally significant pieces were destroyed when our palaces were raided during wars with the Portuguese and British armies. Many of the surviving pieces were looted and put on display in museums across global art capitals from London to New York and elsewhere.

I named my NFT “Oranmiyan” after a prince of the Yoruba and Benin empires. Over 800 years after his death, his descendants still sit on the throne in Benin. My dude looks like a fierce warrior. Maybe I should hit the gym more so my arms match his…

NEWS 📰

1.Federal Reserve finally published it’s paper on CBDCs 💸

* The US Federal Reserve FINALLY published it’s long waited paper on Central Bank Digital Currencies (CBDCs). The paper lays out pros and cons of CBDCs. It does NOT make a recommendation. Rather, the Fed is seeking input from the public and will only act if Congress tells it to do so.

* I read the paper. I am not convinced 2 of the pros listed by the Fed are real.

* Improve cross-border payments: The average outgoing international payment from the US has a 5% fee. Introducing a CBDC isn’t magically going to solve this. There will need to be conversions among various CBDCs. I am not convinced this system would outperform the existing crypto technology today ex lightning network.

* Improve financial inclusion: 5% of the US is not banked and another 20% are significantly underbanked ex they routinely depend on high cost, inefficient services like pay day loans, etc. People say crypto and CBDCs will improve financial inclusion but they routinely fail to demonstrate how. This frustrates me. Illiteracy, lack of trust, and low income are leading drivers for exclusion. These are not addressed by a CBDC. Furthermore, during the pandemic CBDC advocates pointed out how the government payment of stimulus funds would have been more efficient if we had CBDCs and each US person held an account with the Federal Reserve. Well, the Federal Reserve Act specifically says the central bank can’t bank retail customers. Maybe I’m missing something.

* That said, I definitely agree that it is in the US strategic national interest for the dollar to continue being the world’s reserve currency. Other countries want the influence it provides. The dollar could become vulnerable if other countries (cough China) provides a superior technology. The map below shows 9 countries (including Nigeria) have launched CBDCs with 14 countries (including China) running pilot tests and 16 countries (including Russia) have them in development. The US needs to move here.

2. Twitter verifying NFTs 🪞

* Crypto Twittersphere has been awash with NFTs as profile pictures. Some say it’s the ultimate status symbol to indicate you are part of the community. But what’s stopping posers who don’t actually own NFTs from uploading a picture of someone else’s NFT and using that as their profile picture. Well nothing.

* Until now! Twitter is linking your digital asset wallets to your profile. Thus, you’d only be able to upload NFTs you own as your profile picture. I guess if you do this there’ll be some kind of check mark to indicate it’s been verified.

* This is an important move for 2 reasons. First, Twitter is one of the first social media platforms to integrate NFTs. Others will follow. Secondly, it marks a departure from Jack Dorsey’s Bitcoin-only philosophy as NFTs are primarily on Ethereum, Solana etc. I’m expecting to hear more from Twitter.

3. a16z makes first investment in Africa 🕹

* a16z, the famed crypto, FinTech and consumer tech VC firm has made it’s first investment in an African startup, Carry1st. a16z was an early investor in Facebook, Coinbase and many other household names.

* This investment stands out because it’s a gaming company headquartered in South Africa. Of course, there will be a crypto/web3.0 angle to this. I’ve been vocal about how bullish I am on gaming in Africa. I guess I’m in good company lol.

* Carry1st already accepts various cryptocurrencies as payments. They are looking to expand that. Let’s stay tuned.

That’s all folks! Remember, be a squirrel 🐿

O dabo

Afolabi

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

What’s your favorite animal? For a long time I really didn’t have one. When asked, I’d sometimes pick a random African animal or something philosophical to try and impress whoever I was with. Ugh. Thankfully I’ve passed that stage. Lately, I’ve been watching squirrels. I see them everywhere from our backyard to the parks when I’m out cycling. Beyond their cute fluffy tails, squirrels just always seem happy, energetic and playful. They seemingly bound from tree to tree without losing enthusiasm. Have you ever seen a sad or moody squirrel 🐿 ?

Crypto prices crashed this week. How did you fare? I hope you channeled your inner squirrel. I’ve been zen. My approach is to devise a strategy then automate execution over the long-term. If prices continue to slide then there might be some very attractive opportunities. Are you ready? What projects are on your shopping list? Remember, Uncle Warren Buffett said “be fearful when others are greedy and be greedy when others are fearful”.

Crypto shopping list🛒

One of my goals this year is to significantly expand my crypto portfolio beyond my bitcoin and ethereum base. I missed out on a TON of upside last year by playing it very safe and not executing on recommendations from my friends. If the crypto price slide extends there might be opportunities to pick up some coins at decent entry points.

I recently finished reading “The Psychology of Money” by Morgan Housel. It argues that we all make rationale financial decisions based on our background. The challenge is that we all have very different backgrounds, personalities and aspirations. For me, the most important thing is peace. A super aggressive strategy might give me amazing returns but it might cost me my sleep at night. That’s not a cost I'm willing to pay.

Additionally, we often only think about returns that we could have made but we discount the losses we could have incurred. Social media is a highlight reel. Most people share their triumphs but are mute on losses. So I say this to say, don’t cry over spilled milk. Figure out what works for you then get it done. As we say in Nigeria, “paddle your own canoe”.

Disclaimers:

* I don’t offer any financial advice. I’m just a guy with a laptop trying to figure this thing out. Please do your own research.

* My crypto shopping list is a work in progress. It’s subject to change at any time. I’m very much still learning. I’m also not sharing my full list of projects that I’m curious about - that might deserve it’s own edition or two lol.

Please share your ideas with me too!

Crypto shopping list

I already have some of these but I want MORE

* Solana (SOL) - low transaction cost, seen as an ethereum challenger

* Chainlink (LINK) - bringing real-world data on-chain

* Avalanche (AVAX) - fast smart contracts

* Ecomi (OMI) - NFT play; it’s the token for Veve which has major partnerships

* Decentraland (MANA) - leading metaverse project

NFT update📈

Last week, I shared my excitement about the new Ancient Empires NFT collection. The collection celebrates the history of ancient African and Latin American civilizations by creating art NFTs which could appeal to a broader population. Well I did it! I made an impulse buy. (Not sure we should celebrate that but this is where we are…hahaha).

I chose this piece because of the cultural significance of the mask the man is wearing in the picture. Masks are a key part of the cultural heritage of the Yoruba and Benin people. (Context - I’m Yoruba; the Yoruba and Benin empires are in modern-day Nigeria but they have ancient linkages and a tremendous art heritage. Unfortunately, many culturally significant pieces were destroyed when our palaces were raided during wars with the Portuguese and British armies. Many of the surviving pieces were looted and put on display in museums across global art capitals from London to New York and elsewhere.

I named my NFT “Oranmiyan” after a prince of the Yoruba and Benin empires. Over 800 years after his death, his descendants still sit on the throne in Benin. My dude looks like a fierce warrior. Maybe I should hit the gym more so my arms match his…

NEWS 📰

1.Federal Reserve finally published it’s paper on CBDCs 💸

* The US Federal Reserve FINALLY published it’s long waited paper on Central Bank Digital Currencies (CBDCs). The paper lays out pros and cons of CBDCs. It does NOT make a recommendation. Rather, the Fed is seeking input from the public and will only act if Congress tells it to do so.

* I read the paper. I am not convinced 2 of the pros listed by the Fed are real.

* Improve cross-border payments: The average outgoing international payment from the US has a 5% fee. Introducing a CBDC isn’t magically going to solve this. There will need to be conversions among various CBDCs. I am not convinced this system would outperform the existing crypto technology today ex lightning network.

* Improve financial inclusion: 5% of the US is not banked and another 20% are significantly underbanked ex they routinely depend on high cost, inefficient services like pay day loans, etc. People say crypto and CBDCs will improve financial inclusion but they routinely fail to demonstrate how. This frustrates me. Illiteracy, lack of trust, and low income are leading drivers for exclusion. These are not addressed by a CBDC. Furthermore, during the pandemic CBDC advocates pointed out how the government payment of stimulus funds would have been more efficient if we had CBDCs and each US person held an account with the Federal Reserve. Well, the Federal Reserve Act specifically says the central bank can’t bank retail customers. Maybe I’m missing something.

* That said, I definitely agree that it is in the US strategic national interest for the dollar to continue being the world’s reserve currency. Other countries want the influence it provides. The dollar could become vulnerable if other countries (cough China) provides a superior technology. The map below shows 9 countries (including Nigeria) have launched CBDCs with 14 countries (including China) running pilot tests and 16 countries (including Russia) have them in development. The US needs to move here.

2. Twitter verifying NFTs 🪞

* Crypto Twittersphere has been awash with NFTs as profile pictures. Some say it’s the ultimate status symbol to indicate you are part of the community. But what’s stopping posers who don’t actually own NFTs from uploading a picture of someone else’s NFT and using that as their profile picture. Well nothing.

* Until now! Twitter is linking your digital asset wallets to your profile. Thus, you’d only be able to upload NFTs you own as your profile picture. I guess if you do this there’ll be some kind of check mark to indicate it’s been verified.

* This is an important move for 2 reasons. First, Twitter is one of the first social media platforms to integrate NFTs. Others will follow. Secondly, it marks a departure from Jack Dorsey’s Bitcoin-only philosophy as NFTs are primarily on Ethereum, Solana etc. I’m expecting to hear more from Twitter.

3. a16z makes first investment in Africa 🕹

* a16z, the famed crypto, FinTech and consumer tech VC firm has made it’s first investment in an African startup, Carry1st. a16z was an early investor in Facebook, Coinbase and many other household names.

* This investment stands out because it’s a gaming company headquartered in South Africa. Of course, there will be a crypto/web3.0 angle to this. I’ve been vocal about how bullish I am on gaming in Africa. I guess I’m in good company lol.

* Carry1st already accepts various cryptocurrencies as payments. They are looking to expand that. Let’s stay tuned.

That’s all folks! Remember, be a squirrel 🐿

O dabo

Afolabi

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Happy New Year! E ku odun! Bonne année! Feliz ano nuevo!

I started writing this edition 2 weeks ago but then I became unwell. Thankfully, I am feeling much better now. I hope 2022 brings more joy, growth and good health. Please stay safe out there.

I spy a metaverse🕵️

Steve Jobs unveiled the first iPhone 📱 15 years ago. Back then, Steve Ballmer, CEO of Microsoft famously laughed at the most expensive phone in the world ($500). Ballmer said the iPhone wouldn’t take off with business customers because it didn’t have a keyboard. The Wall Street Journal, Bloomberg, USA Today, The Guardian and even an iPod engineer joined in bashing the iPhone’s prospects. Flash forward today, over 2 billion iPhones have been sold. Recently, Apple became the first company to reach a $3 trillion valuation.

Technology adoption is difficult to predict. Experts are often wrong. We are wired to reach for negative news and naysayers. But then technology takes off much faster than expected in ways that couldn’t have been imagined.

This brings me to the metaverse.

Metaverse - the internet in 3D

The metaverse has featured in sci-fi novels since the 1970s but it surged to the popular lexicon when Facebook rebranded itself Meta. But this is not just a PR stunt. Mark Zuckerberg announced that Meta would be investing billions of dollars and hiring 10,000 people to build Facebook’s metaverse solutions.

Metaverse: dive in!

Yesterday, my wife and I were chatting about the metaverse. She described it as “the internet in 3D”. I don’t know if this is an original thought but I like the sound of it. It’s certainly easier than saying “The metaverse refers to a virtual space that is shared by different worlds, created by the combination of augmented reality, virtually-enhanced physical reality, and the Internet.”

Experience is the best teacher. So I took the plunge and went to 2 New Year Eve parties in Decentraland’s metaverse platform. Here’s a short clip.

Here are my initial thoughts:

Pros

+ Self expression: It was cool designing my own avatar and navigating the virtual world. You could completely reinvent yourself. I can see why fashion brands are heading over to the metaverse. Some people want to dress to impress in real life AND metaverse.

+ Activity 🏁: I toured an NFT museum, drove a car on a race track, climbed to the top of a couple tall buildings to survey the view and danced with a bunch of strangers. There is a ton of potential for activities. It would be cool to go to a theme park in the metaverse. But I’m gonna need to invest in some hardware so I can have an immersive experience.

+ New world: I started seeing the potential for new ways of gathering. My siblings are spread out between San Diego and London. We have monthly marathon Zoom calls to catch up. Perhaps one day we will family have reunions in a virtual replica of my parents house in Lagos, Nigeria.

Cons

+ Over hyped: I felt a bit let down. There’s been so much hype about the metaverse. I wanted to be blown away. I wasn’t. I’m also admittedly new to the scene, so maybe there’s a bit of user error. The the fact that an 8-year old played a masterpiece like Symphony No. 40 poorly does not make Mozart any less of a genius. So, I’m definitely going to spend more time exploring the metaverse. Let me know any tips you might have.

+No connections: How do you make friends in the metaverse? I was strolling around by myself. I danced in groups with strangers but I didn’t make a single connection. Maybe it wasn’t time and place. Or maybe I’m missing something. I also found a tracker to count number of people in Decentraland. There were 2,331 people logged in Decentraland at the time of writing. That’s really not a lot.

+Glitches: The user experience was a bit glitchy. It froze a couple times. I had some challenges toggling between different views. The experience reminded me how early we are. Most metaverse platforms are not even accessible on cellphones yet.

Takeaway: I don’t think we are on the cusp of mass metaverse adoption…that’s gonna take years. I do think the technology is part of our future but the user experience needs to improve, we need mobile phone access, maybe even more hardware ex headsets. I’d love to see the product roadmap. I am going to explore other metaverse platforms. I am also really curious to see what Meta has cooking. Facebook cracked the code on social media, can Meta do the same for the metaverse?

Early = Opportunity?

So what’s a guy to do if you spot an opportunity that isn’t quite ready for primetime? You invest! I’m clearly not alone here. But how should one invest? This really depends on your risk tolerance, conviction and goals. I don’t offer any financial advice, please do your own research. I’m simply sharing my current thoughts. What are yours?

Future fund 📈

My goal is to build an investment position around the metaverse theme. I’m looking to hold for 5+ years during which I hope it offers handsome returns 📈. I will achieve this by dollar cost averaging (small weekly purchases) and making more significant opportunistic investments.

* Equities 🟦

For as much I talk about crypto, stocks are still the foundation of my investment strategy. I primarily buy ETFs (basket of stocks) instead of shares of individual companies. Roundhill Ball launched a metaverse ETF in 2021. It’s made up of established tech companies investing in this space. NVIDIA (gaming chips), Meta (social media), Roblox (gaming), Microsoft (diversified tech), make up 30% of the holdings. Apple, Amazon and Snap are also part of the crew. It feels like like a safe tech bet unlikely to cause heartburn. Just watch the 0.75% fees. I expect more metaverse focused ETFs to be launched this year.

* Crypto 🟧

When Facebook made their fateful announcement, it sent the price of metaverse related cryptos soaring sky high. For reference, decentralized metaverse platforms like Decentraland have their own cryptocurrencies. You need them to buy land, products and services. Decentraland has MANA, Sandbox has the Sand token and Axie Infinity has Axies. I hold some MANA and AXIE.

I see two categories of metaverse cryptos: established vs newbie. The established cryptos include more well known projects like Decentraland, Sandbox, Axie Infinity which have attracted some following. These are less risky with higher chance of moderate returns. The newbie cryptos like Solice are associated with untested projects that were more recently launched. They are more risky with a higher chance of outsize returns. You have to do research to find and vet these projects.

* Land 🟥

Someone spent $450k to buy land next to Snoop Dogg’s virtual house. A part of me is recoiling from sticker shock at some of the prices I’ve seen. Not all land is created equally. I also don’t feel sufficiently knowledgeable to go ahead with this investment yet. In the ideal scenario, I’d like to own land across a couple platforms - this reduces my exposure if I don’t pick a winner. Let’s see.

News🗞

1. Walmart goes crypto, metaverse

The stampede of brick-and-mortar businesses diving into the metaverse just got louder. Walmart, America’s largest retailer, is reportedly launching a cryptocurrency, a collection of NFTs and a metaverse project.

I found a tweet which reportedly shows how Walmart envisions metaverse shopping:

I appreciate that they are aiming to keep up with evolving technology. It reminds me of the early days of the internet when we initially copied and pasted our analog activities onto the web but over time internet native activities and habits emerged. We are still early.

2. Arkansas offering $10k in bitcoin

It looks like the State of Arkansas has been inspired by it’s favorite daughter (Walmart). Arkansas is now offering remote tech workers $10,000 in bitcoin if you relocate there. The Walton family have also invested and elevated the arts and parks near their headquarters. A couple of my friends have vacationed in Arkansas and came back with great tales of fun and adventure across lakes, hikes and parks. So far, over 35,000 people have already applied.

3. Ancient Warriors Empire NFT

Ancient Warriors is a new NFT collection of 4,444 warriors hailing from some of the greatest African and Latin American empires in history. The decentralized empire represents the might of the Aztecs, Zulus, Inkas, and Benin Kingdoms.

The underlying goal of the project is to help onboard people of African and Latin American descent into Web 3.0 by celebrating their cultural history. I am seriously thinking about getting one of these. This project goes live on Monday Jan 17. Each NFT is expected to sell for 0.5 ETH and minting fee is 0.05 ETH.

4. Rio de Janiero goes crypto

Mayor of Rio de Janiero kicked off the year by announcing the Brazilian city would be investing 1% of its treasury in crypto. This move is not in isolation. City government is looking into receiving tax payments in bitcoin and offering discounts to citizens who do so. The mayor wants to position Rio as a leading center for crypto.

5. Banks stablecoin

Last year, the President’s Working Group on Financial Markets issued a report on stablecoins wherein they recommended Congress require stablecoin issuers to be depository insured companies. None of the leading stablecoins might this qualification. Now a consortium of US banks are launching a stablecoin. This stablecoin would be programmed for use in wallets which have been KYC-ed. I think this is an exciting development. However, the FDIC has not yet confirmed whether these bank-issued stablecoins would be insured up to $250k like fiat is. I have been thinking about the DeFi mullet (FinTech on the front and DeFi on the back). This could be a significant enabler. Stay tuned!

That’s all folks! I hope you have a wonderful week.

O dabo

Afolabi

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

My wife and I typically do a quick getaway at the end of the year. It’s nice to ring in the new year in a new city but we also invest time to review our goals and set new ones. We hit all the big ones: relationship, fitness, financial goals and more.

This year, crypto has become a bigger share of our portfolio. We ramped up our investments and fortunately those investments have done well in the crypto bull run. We continue to think through how best to play in the space.

Six months ago, my brother-in-law and I started experimenting with bitcoin mining. I shared about it in April. Today, we will dive into the ROI of our bitcoin mining experiment and then address exciting developments in the cryptoverse.

REVIEW: Bitcoin mining with Compass🚀🚀🚀

TLDR: We earned 60% ROI on bitcoin mining versus 29% if we just bought bitcoin

Background

Compass Mining offers a white glove service for regular folks looking to get into bitcoin mining. We purchased a miner (high powered computer) and had it installed at a facility in Nebraska. It took about a month for the miner to be delivered from China. We chose to host the machine at an industrial site instead of our home because they have access to much lower electricity rates.

We recently sold the miner to upgrade to a more powerful model. Felt like a good time to assess if the ROI of mining bitcoin was better than buying and holding bitcoin.

Numbers

Case A: Bitcoin mining 💻

Costs: The miner cost $9,800 upfront and we paid $150 a month in hosting fees. Overall, it cost us $10,700 over the 6 months the miner was in operation.

Revenue: We sold the miner for $12,469. Yes, you read that right. We sold the miner for more money than we bought it. We benefitted from the tight market for machines. In addition, the miner produced 0.1 bitcoin ($4,697 at today’s price).

ROI: We achieved a 60% return on investment.

Case B: Buy and hold📈

Costs: If we did not buy a miner, we would have invested $9,800 in bitcoin on June 1st. This would have yielded 0.26 Bitcoin (based on $37,340 on June 1).

Revenue: The bitcoin would have earned about $287 interest in a BlockFi account. More importantly, there’s been significant appreciation since June. The initial investment in 0.26 bitcoin would now be valued at $12,327 (based on bitcoin price of $46,970 today).

ROI: We would have achieved a 29% return on investment.

Takeaways📊

Bitcoin mining could outperform buying and holding the bitcoin. However, the economics would look different if we sold the miner for less than we bought it. I imagine the price of miners will drop during the crypto market. Timing is key.

The 60% ROI is good but it pales in comparison to some other opportunities we could have pursued. During that time period, Solana was +460% and Chainlink was +280%. Bitcoin mining could be a part of a comprehensive crypto strategy. But please do your own research. I am not a financial adviser, just sharing my experience.

NEWS 🗞

1. Winter is coming: Are you in it to win it?

* 2021 has been a standout year for crypto. Millions of new investors have dived into the space. Millions of people have found utility and joy through the products and services enabled by blockchain technology. But it is NOT always going to be like this.

* Crypto winter is coming. I don’t know when it will be or how long it will last but history tells us to expect a deep, sustained price crash for a couple years. The good news is that when winter is over, the crypto summer bull market will take us to new heights.

* Crypto OGs like the winter because the fakers get out and the OGs double-down. Coinbase used the last crypto winter to buy up companies that have helped cement their dominant position. As an individual, you should have a strategy for the crypto winter. Remember, Warren Buffett said “be fearful when others are greedy, and greedy when others are fearful.” Are you in it to win it?

2. Crypto for Christmas?

* CashApp and Robinhood have rolled out the capability to send crypto gifts just in time for the holidays.

* I am excited about this because both of these companies have a sizable user base

* This could be a great gift for that person who has everything. We have friends who have been gifting bitcoin to all the children in their life.

3. Metaverse Magna: Play to earn in Africa

* I am very bullish about the potential of play to earn in Africa. This is because 60% of Africans are under 25yo, internet penetration is greater than 60% in key countries, and unemployment has worsened.

* Metaverse Magna was launched this week. It is the first and largest African crypto gaming DAO with a scholarship program. In Asia, gamers have earned up to $1000 a month playing crypto games but the start-up costs can be high ($1200 for Axie Infinity).

* Metaverse Magna has a scholarship program with over 160 gamers using rented out Axies and splitting the earnings. With Africa’s population set to grow to 1.7 billion by 2030 (World Bank), I am excited for play-to-earn games to gain a foothold on the continent.

4. Jack Dorsey names Bitcoin Trust board

* Jack Dorsey and Jay Z previously announced they would donate 500 bitcoin to set up ₿trust, an endowment to fund bitcoin development with a starting focus on teams based in Africa and India.

* This week, they announced 4 board members out of 7,000 applicants. The board will be made up of 1 South African and 3 Nigerians. I’m excited to see Nigeria (over?) represented. More excited to see what the trust will accomplish.

5. Everyone has an NFT, metaverse play

* It feels like everyday another major company announces a play in NFT and/or the metaverse. This brings me back to the point about the fakers getting out of the space during the crypto winter.

* This week, Nike bought a company that makes sneakers for the metaverse

* Companies are opening up virtual offices in the metaverse for employees to return to work. Maybe Bill Gates was up to something, I remain a lil skeptical in the short-term.

* Here’s a roundup of what companies’ said about the metaverse during their earnings call

That’s all folks! I hope you have a merry Christmas!

O dabo

Afo

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Hey,

In recent months, lots of high profile personalities have announced plans to get paid in crypto. The Mayors of New York and Miami joined athletes like Aaron Rodgers and Odell Beckham; and artists like 50 Cent and Mel B to get partially or fully paid in crypto. Coinbase recently partnered with UnitedMasters to let musicians receive their royalties in crypto. But is this just a gimmick for the rich? What are regular Joe and Jane doing? I’m conducting a survey to understand attitudes towards getting paid in crypto. It took me less than 1 minute to it fill out. Please let your voice be heard here! It’s anonymous. I’ll share the results with you.

Besides getting paid in crypto, one could also receive crypto rewards for everyday purchases. I’ve been using the Fold card to earn bitcoin rewards for a couple months. I’ll share some of my thoughts below….and of course I’ll touch on some of the recent news developments in crypto: such as Chainlink, metaverse, Novi and regulations. Let’s go!

Fold review: Bitcoin rewards card 💳

Why Fold?

When we got married, we paid for our honeymoon and flights to Hawaii with credit card loyalty points. We had an amazing time! But it was even sweeter knowing that we did not use cash for our luxury getaway. The Fold card presents the same allure. The opportunity to build a bitcoin stash without changing behavior was too good to pass up.

How did it go?

Fold started out enabling users to earn rewards by buying gift cards. Next, they graduated to offering a debit card with bitcoin buy back on all purchases.

Phase 1: Gift cards

I earned 1% bitcoin rewards when I bought Amazon gift cards using Fold. I started buying $100 gift cards and pre-loading my Amazon account. I would spend cash from the gift card on my protein powder or a gift. I’m not a huge shopper but it felt pretty easy to score some free bitcoin.

Bitcoin rewards: $100 Amazon gift card x 1% = $1 rewards = 0.00002 BTC rewards (assuming 1BTC = $50,000, 1% rewards for using a credit card)

Yeah, the rewards are NOT huge. But I suppose they could add up if you shop a lot. Fold also has gift cards with varying bitcoin rewards from a variety of retailers like Chipotle, Banana Republic and Southwest Airlines. But you have to read the fine print - rewards might be capped at 1% if you are purchasing the gift card with a debit/credit card. Either way, might as well get free from bitcoin while you get your holiday shopping done.

Additionally, Fold has an app where you can spin the wheel and potentially turbocharge your rewards or when 1 whole bitcoin! I haven’t won a bitcoin yet but I’ll continue spinning lol.

Phase 2: Debit card

Earlier this year, Fold launched a debit card. I got the basic one. I figured I could earn more bitcoin from everyday transactions like going to a local coffee shop or my gym membership.

Unfortunately, the card has been a disappointment. Yes, I routinely use it at my local coffee shop and my barber but it’s NOT accepted everywhere. Much to my annoyance, I have been unable to directly pay my gym membership, powerlifting coach or CashApp friends with my Fold card. I have had to develop workaround solutions to pay my coach like PayPal but PayPal charges a ~3% fee on the Fold card which is greater than the bitcoin rewards cash back. I imagine these are growing pains and will eventually be fixed. Right now, it’s incredibly annoying to have a transaction declined or be forced to pay higher fees.

Verdict

I still use my Fold card for a couple transactions every month. So far, I’ve racked up over $40 worth of bitcoin rewards. Nothing to get to terribly excited about. That said, I have seen folks on Twitter who have won 1 bitcoin from spinning the wheel in the Fold app. I’ve also seen people stack serious sats by putting most of their regular expenses like rent, groceries and airline tickets on their Fold card. To be honest, I could ratchet it up a notch or three. Exhibit A:

My biggest recommendation to Fold is to address the pain points around payment acceptance and fees ex PayPal.

What’s been your experience?

NEWS

1. Crypto goes to Congress👩‍⚖️

* CEOs of 6 crypto companies testified in front of the US House Committee on Financial Services and received encouragement from both Democrats and Republican representatives.

* The crypto executives provided some context on the potential and opportunities of cryptocurrencies and blockchain solutions to lower costs and drive greater inclusion. They also pleaded for more well thought out regulation to support the industry’s growth.

* This tone marked a departure from several years ago. Hopefully, there will be more in the future. I would like bipartisan support for crypto.

2. ChainLink: Attracting top talent 📈

* ChainLink connects real world data to on-chain smart contracts. So for example, a farmer in Kansas could get crop insurance with payouts triggered by weather events ex tornado. All of this could be executed with code NOT people enabled by ChainLink

* The 4-year old company has secured partnerships with a number of major players include AWS, Google, Oracle etc. Now, ChainLink Labs is attracting more big name talent: (1) Eric Schmidt, former CEO of Google, joined ChainLink as a strategic advisor (2) Mike Derezin, former VP of LinkedIn, joined ChainLink as COO.

* I think ChainLink is well positioned to help bring the promise of smart contracts alive for everyday use cases. It’s definitely on my radar.

3. WhatsApp testing stablecoin payments in the US 💬⚡️

* This is big. WhatsApp has over 2 billion monthly active users worldwide.

* Most of my family - scattered across Africa, Europe and North America - are daily users of WhatsApp. They may not understand crypto or stablecoins but they will eagerly use WhatsApp Pay. And more. I can see payments to merchants, lending, and so on.

* The question is, can Novi deliver on this promise? Last week, David Marcus, the head of Novi, announced he was leaving. Novi has suffered a string of high profile departures. From the outside looking in, it feels like a shadow of it’s former self.

4. Bill Gates’ bullish on metaverse 🚀

* “People overestimate what can be done in one year, and underestimate what can be done in ten“.

* That said, I think Bill Gates is wrong here. But I also don’t know if he literally meant that MOST office meetings will switch over to the metaverse. I wonder if he was trying to make a clear statement: the metaverse is here to stay and is coming for Main Street USA. Now that’s a message I could get behind.

5. Messari 2022 crypto theses🤯

* Ryan Selkis, the founder of Messari - a leading crypto research firm - has dropped 165-page tome on crypto developments for 2022 for FREE. It covers everything from bitcoin to NFT, metaverse to solana and MORE!

* If you are new to crypto or want to learn more then I highly recommend you download it. I’m gradually consuming the content. Ryan is able to borrow thoughts from across cryptosphere. It’s incredible that he shares it for free.

* Let me know what you agree or disagree with

(Bugs’s Bunny accent) That’s all folks!

I hope you have a terrific week. May the winds ever blow in your favor.

O dabo,

Afo

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Hey friends,

About a year ago, I started publishing this newsletter as a forcing mechanism to document my learning, clarify my thinking and keep up with crypto news. I decided to share in the event that someone else might find it useful. Thank you for coming on this journey with me. #wagmi! (Crypto babble for “We’re all gonna make it!”)

Well fam, I’ve got some exciting news to share: I did it! I took the plunge. This week will be my first working in crypto full-time.

New beginnings 🚀

I came across a conversation between a McKinsey senior partner and executives at Cross River, a technology-forward bank. I was instantly struck by Gilles Gades’ (CEO) and Adam Goller’s (Head of FinTech banking) energy, innovation, and openness to crypto. So I reached out to the team. This led to a series of inspiring conversations and an offer to join the new crypto team!

Cross River is not your typical bank. It is backed by esteemed investors like KKR, Andreessen Horowitz, Battery Ventures, and Ribbit Capital. It provides banking-as-a-service to FinTechs like Stripe, Coinbase, and Affirm. For example, they power payments when you purchase a Peloton and pay for it in installments. Cross River also banks a number of crypto companies.

Many large and small businesses were hurt in the pandemic. Cross River leveraged technology to become the 4th largest processor of the Payment Protection Program (PPP) loans. In so doing, the 13 year old bank with ~600 employees outdid much larger rivals like Wells Fargo.

Now, the company is building a suite of offerings to enable FinTechs and other companies provide crypto payments, lending, and banking to their customers. Our mission is to onboard the next billion people into crypto by bringing crypto to FinTech. I’m really excited to join this talented and passionate team. And we are still hiring. Let’s go!

Ruminations 🧠

1. Meet people where they are

A couple months ago I conducted a survey and learned that consumers would prefer to access digital assets through their existing financial accounts. I can see the logic, why open up a new account with an untrusted brand if you don’t have to?

FinTechs like PayPal (392M users), CashApp (70M users), and Robinhood (23M users) are scratching that itch. These companies already enable customers to buy, sell and hold a limited set of crypto. But there is a LOT more they could be doing.

2. What about banks?

Only a handful of banks have enabled their Main Street customers to engage with digital assets. A year ago, Quontic Bank launched a bitcoin rewards checking account. Then a few months ago, Vast Bank became the first in the US to enable customers to buy, sell and hold crypto.

But for the most part, the initial focus of big banks has been enabling institutional clients and high net worth individuals to custody crypto. BNY Mellon, US Bank, JP Morgan, Morgan Stanley, Goldman Sachs and others have made public moves. There are also banks working privately. Bank of America now holds over 160 patents related to blockchain.

3. Why are banks moving gingerly?

Initially, it was lack of understanding. But today, bank executives are putting in the work to explore crypto. The COO of BoA reportedly pivoted from being a crypto denier to a crypto supporter after investing hours watching lectures, testing out products and talking with experts.

Now, I think the speed bumps are primarily regulatory. Banks are held to higher standards than FinTechs. Measures to safeguard consumers sometimes slow down innovation. Plus, regulations are still evolving and banks will need to build new fraud, AML, risk and compliance muscles to handle this new asset class.

Lastly, some banks legacy technology systems are not well suited to meet the increasing demands of modern consumers. Many of these systems would need to be replaced or may require workarounds to integrate crypto solutions.

As the fog rises, there will be a huge opportunity to partner with banks, FinTechs, and other companies to enable crypto payments, lending and banking services. I’m excited to help make this happen.

News🗞

1. Metaverse continues to be all the rage

* Grayscale published a report stating that the metaverse is a $1 trillion opportunity

* The red hot housing market extends to the metaverse! This week two records were set! A single plot of land in Axie Infinity sold for 550 ETH ($2.5M). Also an estate of 116 parcels of land in Decentraland sold for 618,000 MANA ($3.2M).

* I have been dipping my toes into MANA (Decentraland). Still figuring out how best to gain appropriate metaverse exposure. I recently learned about two funds which kinda operate like ETFs for metaverse cryptos: Makara Metaverse and Index Coop Metaverse. Disclaimer: I have not invested in these. Please do your own research. Let me know your thoughts!

2. Hackers using Google Cloud to mine

* 86% of 50 recently hacked Google Cloud accounts were used for crypto mining

* Crypto mining requires large amounts of computation power to produce yield, leveraging Google’s massive cloud computing eases that burden

* But this is wrong! Unethical moves like this taint the industry and feed the false narrative that crypto belongs to shadowy underworld. Stop it, whoever you are!

3. Davido launches a social token

* Davido is a living Afrobeats legend. His music sets the tone for every occasion. He is by far the most followed African musician on Instagram with over 22 million fans and another 36 million across Facebook and Twitter. I’m one of them. Full disclosure, Davido’s was the last concert I attended pre-pandemic.

* This week, the 29 year-old launched a social token “Echoke” to give power back to the fans…and cut out the middleman.

* The tokens will be airdropped for free to fans for a year beginning Nov 28. Holders of the token will get free access to giveaways, NFTs, backstage passes, jobs, festivals, exclusive merchandise, media, and hospitality benefits. I’m looking forward to checking this out! Stay tuned.

That’s all folks! Thanks for hanging with me. Remember, no matter your circumstance, if you are able to read or listen to this then you have a lot to be thankful for. I hope you have a wonderful week.

Best,

Afo

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Hey friends!

My wife and I recently drove out for a beach weekend to celebrate my birthday. It was great to hear the crashing waves and feel the sand beneath my feet.

I like to watch the sunrise on my birthday. I start the day with gratitude then I reflect on my purpose and aspirations. Recently, more than one friend remarked that crypto felt like a solution looking for a problem. They basically said crypto serves no purpose. I disagreed.

What starts off looking like a toy can become big business (ex cellphones, internet, Facebook). I submit that it’s still early days but crypto is already solving real world problems today. This week, I will highlight a couple of them.

Ruminations

1. Store of value

Problem

During my freshman year at the University of Texas, $1 was equal to N130. My family lived in Nigeria, my parents were exchanging their hard-earned naira for US dollars so I could pursue our dreams.

Since then, it has gotten much worse.

In Jan 2015, $1 was N200 but by Jan 2017, $1 was N500. Within 2 years, the effective cost had increased by 2.5x! A $10,000 tuition bill which was equivalent to N2M in 2015 was suddenly N5M in 2017. No one’s income went up by 2.5x in just 2 years. The devaluation of the naira has wrought untold pain on Nigerian families and businesses.

Solution

Inflation and devaluation are the evil twins robbing hard-working people of their purchasing power. One solution is to save in more stable assets such as US dollars. However, access to US dollars is restricted in some countries. Startups like Xend in Nigeria and Reserve in Latin America enable families to preserve their purchasing power by saving in dollar-backed stablecoins.

One challenge with stablecoin deposits is that unlike banks, deposits are not all insured. Thus if the provider failed, customers could lose their savings. Please do your own research and consider using a portfolio strategy of spreading stablecoin deposits across a range of providers.

2. Instant cross-border payments

Problem

My family is spread across 3 continents: North America, Europe and Africa. I often move funds across the regions for gifts, donations or investments. It’s a pain!

The three biggest pain points are: cost, friction, and speed.

Cost: According to the World Bank, the average fees to send money to Africa is 8.3% (2020) - the highest in the world. I have previously touched on this here. Every dollar that goes to fees, could have gone to more productive uses like the education charity I recently founded.

In 2020, we spent $46B fees on global cross-border payments. What if we could significantly reduce that?

Solution

I have tested out crypto solutions that enable instant, free-to-low cost cross-border payments. I have used the Bitcoin Lightning Network and stablecoins. These technologies clearly outperform some existing solutions like international wires.

Recently, Meta (formerly known as Facebook) launched their Novi wallet. This digital wallet uses stablecoins to enable FREE cross-border payments. In the future, the wallet will be integrated into WhatsApp, Facebook, Instagram reaching Meta’s 2.8 billion monthly active users. The Novi system would dwarf PayPal and CashApp’s reach.

3. Play-to-earn games

Problem

Millions of people in The Philippines lost their jobs as the pandemic slowed down the economy. Unemployment amongst millennials reportedly shot up to 30% in some regions.

Solution

I recently watched the 18-minute documentary about the rise of play-to-earn in The Philippines. Check it out.

In Cabanatuan City, locals started playing Axie Infinity, a video game where players earn rewards that can be exchanged for money. Everyone from 70-year old shopkeepers to out-of-work professionals seemed to be diving in. Locals earn up to $500 a month, about twice the minimum wage in Phillippines.

Axie Infinity is a trading and battling strategy game. Users purchase creatures called Axies, which are digitized NFTs. Players can collect, breed, raise, battle, and trade them. The game allows users to cash out their tokens into local currency.

There are 3 things you need to start playing today: a smart phone, high speed internet, and funds to buy Axies. Over the past year, the cost of acquiring Axies has increased beyond $500, now out of reach of many Filipinos. The gaming community rallied and developed scholarship programs where Axies can be rented out in a revenue-sharing model.

To be clear, I don’t think this game is the one solution to world poverty. But I love how it gives people an opportunity to improve their lives. I love how gaming reaches people who would otherwise not explore crypto. I am now wondering if Nigeria could see a big boom in play-to-earn gaming. Nigeria has over 200 million people but

* 62% are under the age of 25

* 33% are unemployed

* 70% have access to the internet

Feels like a recipe for growth!

News

1. El Salvador to build Bitcoin City

* El Salvador will build a modern carbon neutral city with NO income, property, capital gains or payroll taxes; there will only be 10% sales tax

* The country is issuing a 10-year $1B bond with 6.5% yield. $500M will be used to build volcano geothermal energy, bitcoin mining facilities a infrastructure for the city. The other $500M will be used to buy more bitcoin but it will be locked up for 5-year period

* Bold moves. El Salvador is a poor country aiming to be the Singapore of Latin America. Locals have raised questions about whether the president is over-reaching. I don’t know enough to have an opinion on this but I’m sensitive to dictatorial tendencies given my experience growing up in Nigeria.

2. Advertising making crypto ubiquitous

* Crypto.com recently unveiled a $100M global advertising campaign spearheaded by Matt Damon and featuring one of my favorite quotes “fortune favors the brave”. They also bought 20-year naming rights to the storied Staples Arena where LA Lakers play.

* FTX has been heavily investing in sports advertising. In basketball, they have the naming rights to the Miami Heats. In football, they have taken out ads for the Super Bowl 2022. In baseball, they run a ton of ads during the World Series. In formula 1, they sponsor the Mercedes team.

* All these investments are making crypto ubiquitous. But are they working? I think it’s great for name recognition but I dunno if the uptick in customers will cover the costs. Also, is the stadium sponsor curse dead? Between 2001 and 2003, 11 companies sponsoring sports stadia filed for bankruptcy.

3. CitiBank to hire 100 crypto

* CitiBank plans to hire 100 in their blockchain and digital assets division

* Yet another bank investing in a crypto team. However, a segment of crypto folk are very pro-decentralization and not big fans of banks. We are in a tight labor market and there is a war for crypto talent. Will Citi be able to get the talent they want?

That’s all this week. Thanks for sticking with me. I hope you have a wonderful Thanksgiving.

Best,

Afo

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Hey friends!

I want to invite you on a trip down memory lane. Can you guess which year these events happened?

* President Clinton is engulfed in a sex scandal

* Titanic becomes the first movie to gross over $1B

* The word’s largest company is born when Exxon acquires Mobil for $74Bn

It’s 1998. Gosh, I feel old :-)

Crypto continues to march ahead at a dizzying rate. I took a couple weeks off as I completed a Product Management certification while also working on a couple other things. Stay tuned, more updates to come.

Ruminations

1. Crypto in 2021 = Internet in 1998

* My dad is a tech nerd. In the late 1990s, we lived in a small town in Nigeria. My dad would occasionally go on business trips abroad. He would ALWAYS excitedly return home with a new gadget to play with.

* It must have been around 1998 when he plopped my sister and I down in front of his computer to create our first email accounts. I remember choosing my yahoo domain name. He said we could use our new email accounts to send messages to our friends. Trouble is, most of our friends wouldn’t get online for a couple more years :-) Dad was early but he was right. Thanks Dad!

* Some fresh analysis suggests that crypto adoption today is where internet adoption was in 1998. That’s crazy early! 1998 is more than 5 years before Facebook was established. Uber and Airbnb came along 10 years later. With this in mind, it’s entirely possible that the killer applications of Web 3.0 / crypto have not even be created yet. That’s wild!

* Let’s also remember that back in the late 1990s, many people thought the internet was a fad. Nobel-prize winning economist, Paul Krugman, famously said that by 2005, it would be abundantly clear that the internet’s impact on society would be no greater than the fax machine. Ouch! That did not age well.

2. Crypto crystal ball

* I don’t know if anyone in 1998 accurately predicted how deeply the internet would transform our lives. Today, we find love online. We learn online. We shop online. We work online. It’s difficult to imagine our lives without the internet.

* Web 1.0 was the first wave of the internet. The focus was connecting information. The killer application was search. Suddenly a teenage girl in rural Malawi was no longer limited to the 11 books in her school library. Now she could Google questions and gain insights gleaned from around the world.

* Web 2.0 was the next wave. This connected people. Social media was the big kahuna. It started with MySpace then Facebook, Instagram, Snap and bunch of other platforms. Long lost family members reconnected decades after separation. Corporations built advertising fortunes off our digital footprints.

* Web 3.0 is coming. It will connect information, people, places and devices. It will be decentralized as opposed to the current structure where data ownership is concentrated in large organizations. Users will no longer just be a commodity. Rather, users will be owners. It would also leverage advances in artificial intelligence and machine learning to offer a more intelligent internet experience. The metaverse will be part of Web 3.0. It’s a big enough deal that Facebook went ahead and renamed itself Meta.

* Now, I am still wrapping my head around Web 3.0 and the metaverse. The best way to learn is by exploring. Dive in and tinker away. The metaverse is a virtual environment for play and work. It is enabled by a suite of technologies including virtual and augmented reality, blockchain, cryptocurrency, NFTs and more.

3. Young guys are leading the way

* I love data. There is a ton of data out there but it’s of varying quality. One has to sieve through to separate the facts from the “alternate facts”. The Pew Research Center is a highly respected purveyor of good data.

* A recent Pew study found that 16% of Americans (~51M people) have dabbled in crypto. Unsurprisingly, the proportion decreases with age. Older techies like my dad are few and far between. Interestingly, 43% of young American men (18-29 years old) have invested, traded or used crypto. However, only 19% of women of the same age have. That’s a huge gap.

* I was surprised to see that racial minority groups (Asian, Hispanic, Black) are outpacing the majority in crypto exploration. However, this is not mirrored in the crypto labor force. Rare, do I see leaders in the industry who are from minority groups. These groups are often under-represented among the rank and file of leading crypto firms.

* If crypto is going to be a building block for Web 3.0. Then it’s essential that a broad-section of society is involved in shaping that future. Ideally, the crypto labor force would mirror society. Crypto is a big tent. There is room for you, whoever you are.

News

1. Crypto Capital: New York vs Miami

* Eric Adams, the newly elected Mayor of New York plans to take his first 3 paychecks in Bitcoin. He wants New York City to be the center of crypto

* Mayor Saurez of Miami announced that residents would be eligible to receive bitcoin dividend from the city’s crypto project

* I love this friendly rivalry between these two cities. A lil friendly competition helps drive the industry forward.

2. Presidential advisors say stablecoins could drive efficiencies

* President’s Working Group on Financial Markets released a report finding that stablecoins can drive significant efficiencies

* However, they need more regulations to safeguard consumers. They recommend only FDIC insured institutions issue stablecoins.

* I think this great. Regulation is a marker of growth. Clarity enables even more growth.

3. Robinhood: Crypto results plummet

* Robinhood’s crypto revenue fell 78% from Q2 ($233M) to Q3 ($51M) as the number of monthly active users (MAU) slipped from 21.3M to 18.6M.

* Q2 was exceptional due to dogecoin hysteria and broader crypto bull run. Would love to understand how this performance compares to the likes of Coinbase and Square’s CashApp.

* All is not lost, Robinhood’s Crypto COO recently shared that they have 1.5M people on their waitlist to use their new crypto wallets.

That’s all folks! Thanks for sticking with me. As always, I’d love to hear your thoughts. Have a great week!

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com

Last week, I enjoyed sharing my thoughts on Pay like you email in longer form. Thanks for the feedback. This week, I have been reflecting on toys, Facebook and Kim Kardashian. Read on to learn how these relate to crypto.

1. Toy or the next big thing?

6 hours!

We were all forced to detox from Facebook, Instagram and WhatsApp for 6 hours during the outage this week. It got me thinking about how entrenched Facebook Inc has become in our lives and global business. When I created my Facebook account in college, my goal was to keep up with classmates…. and check out the ladies :-) Side note, my first contact with my wife was through Facebook. Thanks Zuck!

What first started as a toy used by teenagers has become a global phenomenon with 2.9 billion users each month. This “toy” produced $28.5B advertising revenue in Q2 2021. It is deeply woven into the fabric of our lives whether you live in Atlanta or Zanzibar.

A couple years ago, Chris Dixon of Andressen Horowitz, said that the next big thing will look like a toy. He gave the example of how telephones were dismissed in the 1800s because the technology was still clunky. Naysayers did not believe that businesses would ditch telegrams for telephones. They underestimated the rapid evolution of telephone technology. Today, 6.4 billion people have smartphones.

Along those lines, people who dismiss bitcoin ought to take a closer look first. What looks like a toy today could rapidly evolve and catch you unaware. Many folks erroneously focus on the volatile price of bitcoin without recognizing the game changing technology that underpins it. They do not recognize that there are thousands of sharp software engineers working on it. They get caught up in the FUD (fear, uncertainty, and doubt) in the news cycles but never study for themselves. Don’t be like that. Remain open-minded. Study for yourself. Then decide.

Chris Dixon “Why the next big thing in tech will look like a toy”. Listening time is 4 minutes.

2. Kim Kardashian and millennial millionaires

Kim Kardashian hosted SNL this weekend. Did you see it? Her family’s rise from the fringe of Hollywood to cultural icons would not have been possible a generation ago. The rise of new technology and platforms enables savvy people to create wealth in new ways. Today, Kim is worth $1.2 billion.

The portfolios of millennial and Gen Z millionaires increasingly look different from older millionaires. A CNBC survey found that 47% of younger millionaires have at least 25% of their net worth in digital assets like crypto and NFTs. On the other hand, 98% of baby boomer millionaires do not own NFTs and are not considering it.

This reminds me of how Warren Buffett famously missed investing in tech companies like Facebook. Don’t get me wrong, I am still a Buffett fan but I have recognized that it pays to be open-minded to new technology. It’s important to read widely and challenge the recommendations you receive. There may be newer, faster or just different ways to achieve your goal. I can’t wait to see the wave of new careers unleashed by crypto, NFT and Web 3.0. It’s already happening..

3. Number of Gen Z crypto users could 5x by 2025

All this talk about toys and younger millionaires got me thinking about Gen Z crypto adoption. I wanted to understand how many Gen Zers hold crypto today and what that could look like in 2025. So I did some back of envelope calculations then fired up a spreadsheet. Here’s where I landed:

* Gen Z in 2021: 29.4 million users. I estimated the number of Gen Z crypto users in 3 ways ranging from 28.7 to 30.4 million users globally.

* Gen Z in 2025: 147 million users. I developed 3 scenarios to assess what the Gen Z crypto adoption could look like in 4 years. My estimates ranged from 48 to 247 million users globally.

If you are curious or nerdy like me, you can flip through my analysis here.

I hope you have a wonderful week. Let me know your thoughts.

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