Crypto Pirates

The future potential of the metaverse are apparently endless, but is there anything you can accomplish in the metaverse right now? 

The metaverse is often couched in such futuristic terms that it’s difficult to understand how you can get involved in it today. But, in reality, metaverse-like worlds have existed for decades, and you may have previously encountered some of them without even realising it. 

What is the metaverse again? 

The metaverse, based on venture capitalist Matthew Ball's theory, is a permanent online universe that blurs the barriers between reality and virtual reality. The metaverse is a 24/7 online environment populated by economics that reward a new network of artists and infrastructure providers. It is far more than a Call of Duty match. Importantly, this economy is based on interoperable in-game assets. This approach deviates significantly from the "walled gardens" – closed ecosystems – that we're accustomed to; Ball gives the example of a skin for a Counter-Strike pistol that could easily be translated into a decoration for a Fortnite weapon. 

While Mark Zuckerberg's Meta (previously Facebook) has its own ideas for the metaverse, the cryptocurrency industry believes blockchain technology is ideal for this innovative online realm. Crypto games such as The Sandbox and Decentraland provide early glimpses of how a creator-led, crypto- and NFT-powered economy might operate. So, here's what you can do today in the metaverse. 

In virtual worlds, you can create, explore, and play. 

For the greater part of a decade, games like Minecraft and Roblox have been giving metaverse-type experiences; Second Life and Eve Online have been active since 2003, and World of Warcraft debuted in 2004. 

Second Life, with its creator-led economy and enormous sandbox environment, is one of the closest metaverse analogues. In Second Life, you can do whatever you want, and some people have been documented spending their whole lives in the game, living off the virtual land, harvesting the game's in-game currency, Linden dollars, and attending events. 

Crypto games like The Sandbox and Decentraland are turning the videogame economy on its head in the 2020s by introducing digital assets into the mix. You can not only import your own non-fungible tokens (NFT) into the games to purchase virtual land, but you can also utilise the games' fungible governance tokens to change the parameters of the virtual environment you'll inhabit, explore, and develop in. 

Both are powered by cryptocurrencies: The Sandbox employs fungible SAND tokens as in-game currency and NFTs to represent parcels of land and other game-native goods, like as assets that beautify your avatar, whilst Decentraland uses fungible MANA tokens and comparable non-fungibles for virtual assets. 

You only need to connect a crypto wallet, such as MetaMask, to establish accounts. However, with Decentraland, you can play as a guest without connecting a crypto wallet. The Sandbox is technically in alpha (testing), and the first season has ended, therefore you won't be able to play it until Alpha Season 2 is launched, the date of which has yet to be determined. 

Aside from the crypto-economics, these games are just like any other sandbox game. You may walk around the games’ respective virtual worlds, hanging out with the businesses and celebrities that are vying to corner the market. You may roam around virtual locations like retail malls, art galleries, and plazas and talk to others, play games, build houses, and attend events. Decentraland even hosts its own music festivals. Unfortunately, despite advances in computer game visuals, many of the current games seem little better than Second Life did in 2003. But, at least in theory, the magic is in the bonds you can form with your virtual brethren. 

Meet individuals from all across the world for job or enjoyment. 

There are numerous hangout spots in the metaverse. While large open worlds like The Sandbox and Decentraland are great places to congregate, you may also experiment with custom-built rooms on platforms like Spatial. These apps are designed specifically for events, conferences, and meetings. Spatial can be accessed with a Web 2 login, such as Google, or a Web 3 login, such as MetaMask. Spatial's virtual worlds are divided into rooms, which you can visit or construct yourself. NFTs are supported by Spatial's galleries. Spatial's world can be explored via mobile, Steam, a browser, or an Oculus VR headset. 

Virtual reality excels at one of Ball's metaverse criteria: presence. Put on a virtual reality headset, such as an HTC Vive, Valve Index, or Meta (previously Oculus) Quest, and enter cyberspace. Meta (previously Facebook) is developing a social hub for its VR headsets, and Steam's VR software comes with a virtual house preinstalled. Games like VR Chat pre-dated bitcoin, and allow you to visit rooms full of other individuals using VR headsets, dressed in whichever avatar they desire. 

Companies such as MetaHub are establishing virtual hangout areas for conferences and corporate events, and Decentraland will organise its inaugural music festival in 2021 – though musicians have been doing so in Second Life long before it was hip. Hanging out is where the metaverse's boundaries begin to dissolve and the marketing spiel begins to disintegrate. 

Is Zoom a critical component of the metaverse due to its track record of connecting workplaces and driving a work-from-home revolution? Or, as Mark Zuckerberg highlighted in his Meta address, is it an unconvincing alternative to reality that substitutes face-to-face interaction with rows of faces on screens? 

Make a 3D avatar that resembles you... or not. 

Your avatar is an important aspect of your metaverse identity. For some, profile-image NFTs such as CryptoPunks or the Bored Ape Yacht Club are sufficient for Discord and Twitter, which are largely text-based platforms where a 2D photo suffices. For 3D environments, apps like Ready Player Me provide resizable digital identities that, according to the company, can be used in 1,330 apps and games, including Nike's RTFKT, Somnium Space, and VR Chat. You could even buy an NFT sneaker from RTFKT, or an avatar from its planned “Avatar project,” although it’s unclear which games will let you “wear” these. 

In Somnium Space, an Ethereum-based virtual reality open environment comparable to Decentraland, you can import a Ready Player Me avatar made from nothing more than a selfie. According to Ball's paradigm, this satisfies the interoperability criterion - the ability to carry your digital assets with you regardless of which platform or software you are using. 

Invest in virtual real estate, NFTs, or tokens. 

Of course, if you don't want to give up reality just yet, you might always invest in the popular virtual worlds. There are numerous approaches that can be taken. You may invest in NFT avatar drops, like those offered by Nike or Adidas. You may speculate on virtual land or in-game items similar to those available on Axie Infinity, Decentraland, and The Sandbox. 

You might also invest in such games' fungible tokens, which serve as in-game cash. If you're not sure which token to invest in, you could always invest in a metaverse index fund, such as Index Coop's Metaverse Index (MVI). The MVI rebalances its portfolio based on the top metaverse currencies of the day. 

If cryptocurrency isn't your thing, you could consider investing in the stock of virtual reality and metaverse companies. One firm that is betting big on the future of virtual and augmented reality is Meta; one analyst on Seeking Alpha thinks that the corporation will have invested $70 billion on the concept between 2014 and 2023. Stocks in virtual reality and the metaverse, as well as private investments, are also on the table.

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If you've been hurt by the recent volatility in Bitcoin, you're not alone. Tesla, led by the world's richest person, Elon Musk, has also been impacted by the crypto craze.

In its annual filing to the Securities and Exchange Commission, the electric vehicle (EV) manufacturer declared a US$101 million impairment loss due to its investment in Bitcoin.

The loss is mainly an accounting issue, and it has no influence on Tesla's overall financial health.

According to the SEC filing, the corporation still holds around US$2 billion in Bitcoin on its balance sheet.

And Tesla did claim a US$128 million gain on its bitcoin investment following the sale of some of its holdings in March 2021.

Shares of Tesla were up 2 per cent Monday morning.

However, the stock has dropped more than 10% this year as investors shift away from technology and into more value-oriented industries such as oil.

Bitcoin prices surged Monday as well, gaining nearly 4 per cent to roughly US$43,000.

But the price of one bitcoin has plummeted more than 7 per cent so far this year and is down approximately 40 per cent from its all-time high of just under US$69,000 in November.

In early 2021, Tesla invested US$1.5 billion in Bitcoin.

Mr Musk has repeatedly tweeted about his support for the top crypto as well as for other lesser, meme currencies such as Dogecoin.

The company also briefly took Bitcoin as payment for its electric cars last year, but reversed course in May following opposition from critics over Bitcoin mining, which needs enormous energy and is not ideal for the environment.

Nonetheless, Tesla remains positive on Bitcoin and other cryptocurrencies.

"We believe in the long-term potential of digital assets as both an investment and a liquid alternative to cash," Tesla stated in the SEC filing.

"As with any investment, and in accordance with how we manage fiat-based cash and currency equivalent accounts."

"Based on the demands of the business and our assessment of market and environmental conditions, we may grow or decrease our holdings of digital assets at any time."

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Mitsubishi UFJ Trust, situated in Tokyo, seeks to strengthen its financial services by embracing blockchain technology and introducing a stablecoin.

Mitsubishi UFJ Trust, a financial services corporation, seeks to improve its transaction system by incorporating blockchain technology for trading and a cryptocurrency for payments. As a result, according to a new rumour, it will establish a stablecoin pegged to the value of the Japanese yen.

Mitsubishi Stablecoin

According to a recent Nikkei Asia story, Mitsubishi UFJ Trust – a Tokyo-based bank with over $1.5 trillion in assets under management – is looking to enter the realm of crypto by releasing its own digital currency. The financial product will be a form of stablecoin linked to the Japanese yen.

The token will allow the institution to improve its payment process by allowing it to settle securities transactions promptly. In Japan, similar monetary procedures currently take a few days and cost tens of millions of dollars per year. Many people believe that using a stablecoin will eliminate those expenditures.

Furthermore, the programme should encourage the use of blockchain technology in securities trading. In collaboration with Daiwa Securities and SBI, the Japanese Trust Bank has pushed its use.

Digital securities allow customers more flexible investment options. For example, blockchain technology has transformed traditional assets such as real estate or corporate bonds into goods that can be purchased in tiny quantities, making retail investments possible.

Japan, one of the world's most industrialised economies, is a prominent player in the cryptocurrency business. Simultaneously, residents have recently shown an increased interest in the asset class. Digital transactions increased by more than half in 2021 compared to 2020, totalling more than 103 trillion yen ($900 billion).

Stablecoins May Be Subject to Strict Regulation

It is safe to expect that Mitsubishi UFJ Trust's proposal will face regulatory scrutiny before it is launched. Last summer, some Japanese officials expressed concern that stablecoins could disrupt Japan's financial environment and, as a result, should be rigorously regulated.

"With worldwide advancements in digital currencies moving so quickly," one of them observed, "Japan can no longer leave things unchecked."

The Financial Services Agency (FSA) formed a section to oversee cryptocurrency regulation in 2020. Shortly after, the Ministry of Finance considered expanding the number of employees required.

The potential regulation may benefit Japan's central bank, which plans to issue a CBDC. Trials are likely to begin this year, with the product's initial distribution scheduled for 2026, according to Governor Haruhiko Kuroda.

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Despite severe predictions, the bitcoin price has risen by roughly 10% since early January, while the ethereum price has risen even more. However, lesser cryptocurrencies such as Ripple's XRP, the meme-based dogecoin, and its main rival shiba inu have soared, leaving bitcoin and ethereum in the dust.

Now, experts at crypto research firm FSInsight, helmed by JPMorgan's former chief equities strategist Tom Lee, have published a massive 2022 bitcoin and ethereum price prediction, predicting that this year would see another wave of crypto investors.

"This is much different from last year, when tech stocks were still doing well but bitcoin sold off along with the rest of the crypto market cap," FSInsight's Sean Farrell, head of digital asset strategy, wrote in a note first reported by Coindesk, adding that the expected rally will be driven by "legacy market capital entering the fold."

Financial institutions and Wall Street titans have showed a lot of interest in bitcoin and cryptocurrencies in the previous year, with some now offering trading services to clients.

Despite bitcoin's difficult start to the year, Farrell forecasts that the price of bitcoin might reach $200,000 per bitcoin in the second half of 2022. Bitcoin fell over 50% from its all-time highs in the two months leading up to January, plummeting to around $32,000 per bitcoin.

Farrell also projected that the price of ethereum may reach $12,000 per ether due to the expansion of decentralised finance (DeFi), non-fungible tokens (NFTs), and other Web 3 applications, noting that ethereum is undervalued in comparison to cloud platforms.

Bitcoin, ethereum, and most other major cryptocurrencies plummeted substantially in the last months of last year and into 2022 as investors worried about expected interest rate hikes from the Federal Reserve, leading soaring stock markets to stop.

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The king of cryptocurrencies continues to soar, attracting the whole crypto market, which is now valued at more than $2 trillion.

Is this the start of yet another comeback, or just a brief respite before another downfall?

Bitcoin appears to have reached a level of stability. Prices have begun to rise somewhat and are already at their highest in two weeks. On Friday, Feb. 4, the king of cryptocurrencies surpassed the significant threshold of $40,000 per unit for the first time since January 22.

At the time of press, it was worth roughly $41,627. To be sure, we are still a long way from the November 10 record of $69,044.77, but it is a figure that will definitely satisfy cryptocurrency enthusiasts.

Bitcoin is dragging the rest of the cryptocurrency market with it: Ether, the native currency of the Ethereum network, was up 5.9 percent on Saturday to $3,029.42, while its biggest competitors Solana, Avalanche, and Avalanche gained 9.2 percent and 9.5 percent, respectively. Solana, the Visa of Crypto, was victimised this week by the loss of more than $320 million from the decentralised finance (DeFi) project WormHole, which connects the Solana blockchain to other decentralised blockchain networks.

According to CoinGecko, the crypto market worth has increased slightly above $2 trillion. It thus recovered at least $300 billion in a few of days.

These increases, which are as ferocious as the recent declines, serve as further evidence of cryptocurrency volatility.

In terms of fundamentals, nothing truly supports this bounce.

Is This a Bitcoin Short Squeeze?

Normally, the positive January monthly employment report released on Friday would cause bitcoin values to fall. Because, in principle, the data released by the US Labor Department should prompt the Federal Reserve to aggressively boost interest rates in order to avoid overheating the labour market. Bitcoin has historically reacted poorly to tighter monetary policy, which helps less risky financial assets more.

According to the Bureau of Labor Statistics, 467000 new jobs were created last month, with the headline unemployment rate climbing from a post-pandemic low of 4% to 4%. The January tally was well ahead of the Street consensus prediction of 150,000.

At the same time, Marathon Digital Holdings, one of North America's top enterprise Bitcoin self-mining companies, stated on Friday that it had boosted the amount of bitcoins in its hands to 8,595 bitcoins worth $338 million in January.

Marathon demonstrates its long-term commitment to bitcoin by continuing to create it at such a high rate - +816 percent more than in January 2021.

"In January, we boosted our bitcoin holdings to 8,595 BTC and grew our bitcoin production 816 percent year over year," said Fred Thiel, Marathon's CEO, in a press release.

"We have strengthened our technical staff to explore immersion and other options that may allow us to further optimise the efficiency of our mining fleet," he added.

"Bitcoin has shrugged off the payroll dip and is surging on momentum purchasing." "The $40,000 barrier may be tested," stated Edward Moya, senior market analyst at the foreign-exchange firm Oanda, in a note.

It is not ruled out that the recent resurgence is the result of a short squeeze.

A short squeeze occurs when a large number of investors who have bet that a security or stock will fall all try to liquidate their positions at the same time. This race frequently results in a high demand for stocks or financial assets.

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With the Federal Reserve set to begin raising interest rates in a few weeks, I thought it was time to return to a discussion of crypto now that the era of 'easy money' post-COVID is over.

Many people still don't believe the Fed can stop QE, let alone reduce its balance sheet, and as a result, the refrain "You can't taper a Ponzi" can be heard from every corner of financial media.

I tend to agree with that sentiment because, of course, all Ponzi schemes necessitate the constant inflow of new funds in order to maintain the asset values of the previous round of funding. After all, this is exactly what a Ponzi scheme is.

But in a world of Ponzis built on top of Ponzis built on top of Ponzis, the notion that the biggest one, on which all the others are built, can't save itself for a while by popping all of the daughter Ponzis is a little disingenuous, if not outright obtuse.

That isn't because debt-based currency regimes aren't inherently Ponzi schemes. Yes, they do. It's because, once the currency pile is created, it has the ability to move to where it is best treated and away from assets that are most vulnerable to liquidation.

So, in the real world, as it unfolds in real time, the situation is far more complicated than "You can't taper a Ponzi." That is correct in the long run. However, when it comes to deciding where to invest one's money in order to earn a profit, this is simply not the case.

And this has been the most difficult lesson I've attempted to teach my readers and patrons over the years. It's one thing to accurately predict a system's end state. Total and complete collapse is unavoidable in the case of the US dollar reserve system.

It's another thing entirely to predict when this will happen and in what order the system will fail.

This was the main issue I had to deal with in the early stages of my financial writing career. It simply isn't good enough in 2013 to say, "In ten to fifteen years, all of these losing picks in gold or oil will be winners because the dollar is doomed," when publishing a newsletter where you lay out an investment thesis and give people your best ideas.

My approach needed to improve, become more nuanced, and, frankly, become more in tune with market ebbs and flows while still adhering to my Austro-libertarian analytic framework.

I recall a particularly trying period in January 2015, when I finally admitted that, no matter how much I despised the US dollar in relation to a hard asset like gold, my opinion didn't matter and the market was still king.

The Fed and other central banks still had a lot of clout with investors, so they had a lot of ammunition in their monetary arsenal. Yes, they were merely kicking the can down the road, resulting in a bigger problem tomorrow, but that didn't mean there wasn't money to be made today.

That was the point at which I had to decide whether I wanted to get better at this or quit. It meant truly humbling myself in front of the market and accepting that you aren't a 'one-of-a-kind snowflake,' or any other such nonsense. You are following in the footsteps of others, and you will continue to do so.

It meant going all in on what I do now, combining the global macro picture with political and social trends and placing them in a context of seemingly limitless corruption capable of supporting hundreds of Ponzi schemes around the world simply because everyone wanted to believe in them.

Dexter White and I have had a running debate about the liquidity of the cryptocurrency market for years. He consistently emphasises that cryptocurrency liquidity is primarily determined by the flow of capital into and out of bitcoin (BTC).

Everything else is a derivative of that, and if you control the flow into bitcoin, you control what Ponzi schemes can survive in that market. But, in my opinion, that argument was far more valid in 2017-18 than it is now.

Bitcoin and cryptocurrencies have been in an unusual state since the peak in April 2021. Bitcoin is clearly in a counter-trend bear market, while the rotation out of it and into other areas of the cryptocurrency space has seen spectacular booms and equally spectacular busts.

Following that, the sloshing of liquidity through various projects has made and cost a lot of people a lot of money.

With the Fed tightening dollar liquidity beginning in June of last year and the Bank of England getting ahead of the Fed in raising rates in the face of crippling inflation, we're now in a much different environment than we were this time last year when everything crypto was going swimmingly.

However, it was the massive bull market that lasted through the first half of 2021 that saw tremendous liquidity flow into all kinds of new projects, new ideas for generating yield in order to attract capital. It makes no difference whether or not they are Ponzi schemes.

It's difficult not to draw that conclusion from the current DAO-pocalypse in rebasing projects like OlympusDAO. You pay out 7000+ percent for any length of time with no reason to stay in the token other than the 'number go up,' and you are worse than any emerging market subject to 'hot money flows.' You're a ticking time bomb with a short fuse, ready to explode in everyone's face.

I consider this an explosion, especially for a project that is less than a year old, going from $800 to $35 and back to around $60 in two months.

That was without a doubt. Paying a yield to attract capital with no intention of doing anything with that capital other than holding it is playing chicken with investors, waiting for the first guy to cash out and start the avalanche of selling.

It makes no difference whether you're the Bank of Turkey or some random guy with a few servers and a Github repository.

We're seeing a massive acceleration of the lifecycle of these types of projects in crypto. Olympus has already spawned a slew of imitators, owing to its ability to raise nearly $2 billion in capital in a matter of months at its peak.

I'd say it was a combination of stupid greed, the insane amount of price appreciation in crypto, and a genuine desire to build something new.

Projects like that exist only because the current capital formation system is even more corrupt and unequal than a piece of code with minimal controls over money flow.

Unfortunately, this is how innovation takes place: through a lot of painful trial and error, as well as a lot of crippling losses. There is, however, no way out of the current hamster wheel of Central Bank-backed Ponzi schemes without this environment.

To 'grow up,' crypto must build on bitcoin's foundation in a sustainable way, where the replacements for the current upper layers of Exter's Pyramid are self-contained enough that the capital that flows into bitcoin at the bottom is treated well enough that it has no desire to leave and return to the fiat one.

It is unusual for a new technology to work flawlessly the first time it is introduced. So, I don't consider Olympus a failure because it's pointing innovators in new and interesting directions in their quest to solve the Ponzi math and achieve that elusive sustainability that can only be achieved by converting capital into real world assets.

They do so because the goal is admirable: to put an end to the systemic theft of debt-based fiat money. In the case of one new crypto project I've discovered, the time risk of traditional lending is even reversed in such a way that the entrepreneur is free of Wall Street's vultures.

Bitcoin maximalists believe bitcoin has attained this level of perfection, and they have yet to be proven incorrect. They haven't been proven wrong, however. Only time will tell how many imitators come and go. And I'm perfectly content to be both optimistic and pessimistic about the prospect.

However, bitcoin cannot contain all human activity or desired outcomes. This is where we are now, and it is for this reason that things like the spectacular booms and busts of the various DeFi platforms are necessary growing pains.

This is something that humans are prone to. We go through every bad idea and iterate on it until something viable emerges, if at all. Even projects that have had their fundamentals challenged, such as Olympus, and are still learning from their mistakes, have a future in helping us understand what can be done to avoid the Ponzi trap.

One valid criticism levelled at cryptocurrency is, "What's the point if we can't use these tokens, these magical beans that yield yield, to buy real things in the real world?" Isn't that, after all, what money is?

A place to temporarily park your savings while you save up for something you want or need in the future. As the old system teeters and cracks, and those who broke it try to shuck and jive us into throwing good money after bad while their Ponzi schemes fail, it is at this critical juncture in time that new ideas, good and bad, flourish.

Someone will crack that code in order to more efficiently convert math's promise into real-world wealth, just as someone will always try to manipulate it so they don't have to work for their dinner.

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Making informed home decisions with innovative data is transforming the way the real estate market operates. Data Hunters chats with Malcolm Cannon of Quantarium on how AI and computer vision are transforming the real estate industry.

The use of many data points, ranging from historical pricing and trends to property ownership information, is nothing new. However, the data we use to make housing decisions has become more complex. Property values are provided by Quantarium's valuation algorithms, which use a self-learning AI engine. Quantarium's innovations in Computer Vision (CV) technology are allowing AVM to break free from past limits; understanding their path and the influence of AI is crucial for the future of real estate.

Quantarium is a market leader in the production and distribution of value-added data in residential real estate. Their data and analytics scientists and specialists shown remarkable ingenuity in their approach to establishing the industry's premier RE data lake, so receiving this honour is a team-wide confirmation. Cannon explained the possibilities of this space when asked: "Residential real estate in the United States is worth $45 trillion in total. Furthermore, homes are the most important and significant investment/asset for the majority of families. As a result, dependable, intelligent, timely, accurate, and accessible real estate data is critical not only to this sector but to the entire economy. PropTech, as the business has been dubbed, is a thriving industry, and we're excited not only to be a part of it, but also to help other players tell their story."

Quantarium's product and customer journey provide an intriguing glimpse into how artificial intelligence is being used in real estate. They began with an idea and ended up developing the industry's leading Automated Valuation Model, AVM, which continues to break the tape in the AVM race. They used their skills and experience to create a Data and Search platform for real estate that is driven by the industry's most extensive data lake. They may power any industry that uses residential real estate data, from mortgage companies to banks to insurance, by stressing the platform part.

In the data industry, there is a lot of debate over the merits of technology versus people, ranging from the benefits of consistency and efficiency to the decrease of bias in housing pricing and access. When asked about this, Cannon stated that, despite being an AI company, Quantarium has never been exclusively technocratic: "We, like everyone else, would underline the undeniable value of human understanding in all aspects of society, including this critical sector of the economy. The debate is frequently presented in binary terms, which we reject. We see growing confidence in the category of hybrid valuation products as evidence that the industry will benefit from, and work towards, an equipoise in understanding both the methods and instruments through which human wisdom and tasking are best applied and those areas in which machine learning technologies can be most advantageous."

Cannon recognised the significance of applying this knowledge in this specific field of technology, which is why Quantarium's Translucent A.I. is embedded in their Valuation Services Platform (QSVP) as a human-assisted and enhanced technological asset. It was designed in this manner on purpose. Quantarium's translucent A.I.-based solutions enable an auditable line of sight to provide the best platform for expert human input integration, if needed, to achieve the best results possible. In truth, this should be expected; for example, most electronic aeroplanes and spacecraft still have manual controls for takeoff and landing. AVM is now breaking free from past limits in other domains, such as Quantarium's developments in Computer Vision (CV) technology. These AVMs are approaching the point where they are unable to recognise property condition or look inside the structure in order to account for value changes other than assuming a static coefficient of average condition for the year built. Furthermore, the authenticity of Quantarium's CV can detect and delete tenants' images and other symbols that may be humanly perceived to imply racial or ethnic identities, thereby introducing unjustified subjectivity in the valuation or QC process.

Having said that, Cannon felt it was vital to elaborate on the problems of AI in tackling bias. "At the end of the day, understanding the challenge for AI to assist in reducing bias will be required. Certain axioms persist, most notably that every technology is only as good as the data on which it is based. Quantarium is very aware of this. As a result, it recognises that models rely on trailing data, and that data has unavoidably saturated within, whatever earlier human biases contributed to distorted valuations. With this information in mind, Quantarium refrains from making any claims regarding AVMs reducing valuation bias — it is deceptive, and eradicating this will require more than simply technology. Can it be useful in addressing the problem? Yes, and Quantarium is making considerable R&D investments with the goal of supporting the industry in addressing the problem."

There is certainly evidence of racial bias in real estate. However, while technology is frequently regarded as a neutral "tool," the data on which it is based is biassed. As a result, real estate data suppliers will need to undertake a lot more work to uncover and eliminate bias, and AI will play an essential role in this process. Quantarium has already invested in R&D in this area.

Cannon is now looking ahead, pondering his vision for Quantarium in 2022. Quantarium, like all businesses, has had to react to the realities of a Covid economy and the influence it has had on the global business climate. Despite this, they can focus on strong tailwinds like Machine Learning, Computer Vision (CV), and Data Innovation. These tailwinds are in high demand because they will have a greater impact on the future of both commercial marketplaces and the regulatory environment. Furthermore, Quantarium has created a name for itself in various aspects of this market, and as a result, we are lucky to have a network of amazing professionals across the business, especially in the rapidly developing PropTech space. Cannon then explains that their vision is "to provide our rapidly growing customer adoptions with innovation and rapid deployments of proficiency technologies ranging from our new Computer Vision APIs and Valuation services to our Smart Market ExplorerTM within the Quantarium TerraVerseTM to assist our customers in navigating the industry challenges ahead.

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Earlier this year, we witnessed the crypto economic system experience exponential boom as massive sums of money were poured into various cryptocurrencies, decentralised finance (DeFi), nonfungible tokens (NFT), crypto indices, insurance coverage goods, and decentralised options marketplaces.

The total value locked (TVL) in the DeFi industry has increased from $18 billion in January 2021 to $240 billion in January 2022 across all chains. With so much liquidity in the ecosystem, the crypto loan market has increased significantly, from $60 million in January 2021 to more than $400 million by January 2022.

Regardless of the exponential advancement and innovation in DeFi products, the crypto lending market is primarily limited to token-collateralised loans, which need the pledge of one cryptocurrency as collateral to borrow another coin.

There are other platforms that provide NFT-collateralised loans, such as Nexo and Genesis, however the service is mostly for institutional buyers with blue-chip NFTs. There aren't any more than token-collateralised loans available for retail lots.

If the crypto economy is to grow to the size of any real economy, it must reach out to a large number of retail customers and be able to provide them with financing options.

The following are the critical factors that must be developed before crypto banking infrastructure can compete with that of banks.

A diverse range of items and businesses

One of the most frequently asked questions from someone who is new to the crypto economy is, "What can I buy?" Apart from NFTs, DeFi merchandise, staking, and liquidity provision, there isn't much more in the current architecture.

Currency exists in a typical economic system because exchanging items for companies, or vice versa, does not always have a 1:1 ratio, hence currencies serve the purpose of facilitating product and company transactions. Currency exists in the cryptoeconomic system before goods and services are widely available to customers. As a result, judging crypto currencies is difficult and volatile.

An economy must have enough things and businesses to provide enough supply and demand for customers to utilise currencies to exchange for these items and businesses. With solely NFTs and DeFi monetary goods in the current crypto ecosystem, it's very difficult to entice the common Joe or Jane into the financial system because there's just not a lot for them to eat.

A healthy and functional banking system also requires a sufficient supply of liquidity from buyer deposits and a sufficient demand for borrowing from prospects. With more digital objects and services in the metaverse, particularly non-financial ones like artwork, music, real estate, or gaming gear, the banking system will be able to use them as collateral to provide a variety of secured loans. Customers in the crypto world will be able to own these items by paying on a regular basis in the future, just as car loans or mortgages.

A reliable credit-scoring system

In today's crypto lending market, no credit check or credit rating system is required for customers to borrow any crypto currency. It's because the mortgage is over-collateralised, with a closely regulated loan-to-value (LTV) ratio. As soon as the LTV exceeds the liquidation LTV level, the collateral can be sold at a discount in order to pay off the mortgage. The collateral value is rarely fully utilised, and there is always a large buffer available in case of unexpected collateral value degradation.

Prospects in traditional banking are assigned a credit score based on their previous transactional behaviour and financial condition, such as annual earnings, savings, mortgage repayments, and investments. That is nearly impossible in the cryptocurrency loan market because wallets are created anonymously and anyone can create as many wallets as they want. This makes tracing transactional behaviours and constructing a credit score rating very difficult.

Customers must be incentivised to build a good track report of all of the acts inside a pockets and to be loyal to the pockets in order for the current structure to change. There are scores similar to LUNAtic Rankings for Terra to rank order engagements within a given chain, but there does not appear to be any credit-specific scoring to rank order pockets homeowners' financial position.

As more jobs are developed in the crypto space and more people are paid in cryptocurrency, wallets that provide a lengthy healthful track report of behaviours resembling a consistent revenue of money influx, consistent secure stability, or regular repayments to a crypto mortgage should be recognised. The incentive may be access to larger loans with lower interest rates, or access to longer-term loans, or even governance token airdrops.

Both the lender and the borrower would benefit from a strong credit scoring system. By making additional loans to creditworthy debtors, lenders can earn higher interest rates while taking on less risk; debtors can benefit from lower interest rates, longer-term loans, and other potential benefits. Most importantly, a credit rating system can assist in the formation of a more clear and healthy crypto lending market, hence attracting more users to the ecosystem.

A collateral analysis system that is actively monitored

Given the extraordinarily risky nature of cryptocurrencies (at least for the time being), the collateral worth must be reviewed more frequently than in a traditional secured mortgage. Unlike traditional collateral, such as automobiles or houses, whose values are more predictable and do not fluctuate substantially in a short period of time, collateral in the crypto world, such as NFTs or crypto currencies, may experience unexpected drawback actions at any time. As a result, strong collateral analysis tools that can assess the market value of any asset at any moment are critical for lending platforms.

It is not difficult to determine the market value of NFTs or cryptocurrencies on a minute-to-minute basis. However, if more products and services become available in the crypto ecosystem and more types of property become acceptable as collateral, having a high-frequency collateral analysis system may become costly.

Alternatively, lending platforms can develop something akin to the concept of risk-weighted property (RWA) in the banking world to provide extra threat weights (lower liquidation LTV thresholds) to riskier collateral and fewer to safer collateral so they don't essentially require a high-frequency collateral analysis system.

Blue-chip NFTs, such as the Bored Ape Yacht Membership (BAYC), could, for example, be assigned a higher liquidation LTV threshold and examined less frequently. As more historical NFT costs become available, more information points can be gathered and used to derive a more accurate threat weight measure.

As more commodities and services become available in the crypto economy, a reliable credit score scoring system and an actively managed collateral analysis system will enable crypto banking infrastructure to provide more financing choices aside from token-collateralised loans.

The long range outlook of crypto finance is dependent on the kinds of things and providers available to the crypto economic system, and it may merely compete with the size of traditional banks as the crypto economic system expands into a more diverse and appealing market place to extra customers.

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One month into 2022, the cryptocurrency debate is already raging, with requests for regulation producing a schism between governments that are "crypto friendly" and those that aren't. Which of the following will influence the market's future?

Dmitry Chernyshenko, Russia's Deputy Prime Minister, is said to have signed a roadmap to govern crypto activities in Russia. The announcement comes after Russia's central bank issued a consultation paper proposing a total ban on cryptocurrency-related activity in the nation.

According to the research, Cryptocurrencies: Trends, Concerns, and Regulation, "wider adoption of cryptocurrencies raises major risks for the Russian financial industry." It claims that non-state-based currencies endanger citizens' well-being by causing investment losses due to market instability, scams, and cyber assaults.

Jurisdictions have wrestled with the notion that decentralised digital currencies provide an alternative to sovereign money — and hence constitute a challenge to central banks' ability to control monetary policy.

Although Russia has refrained from entirely restricting activities within its borders, the new developments are part of a larger pattern of states trying to embrace bitcoin. The future of the sector will be determined by future bans or regulations.

Is it better to be anti-crypto or pro-crypto?

China has repeatedly prohibited bitcoin trading. An outright ban on crypto mining last year was a huge blow to the business, given the majority of crypto mining took place in China.

Mining is the process of executing software on computer servers in order to solve cryptographic algorithms. This procedure validates transactions and keeps a shared record of them across the blockchain network. Participants, known as "miners," are automatically paid in cryptocurrency.

Mining is a global industry, and significant sums of money are invested on the land, power, and infrastructure required to set up mining warehouses.

The Chinese mining embargo compelled miners to sell or ship their equipment abroad and invest funds in friendlier nations, primarily the United States. As mining operations were diversified, the network was strengthened as a result. As a result, future prohibitions may have less impact on the market.

Currently, the majority of Bitcoin mining takes place in the United States, Kazakhstan, Russia, Canada, Malaysia, and Iran. Some networks are confronted with significant obstacles. For example, in Kazakhstan, power has apparently been rationed away from miners in order to conserve energy during power outages, pushing miners to flee the nation.

According to reports, Kazakhstan's economy will lose US$1.5 billion (or A$2.14 billion) over the next five years, including US$300 million in tax revenue.

Crypto isn't completely 'anonymous.'

Since Bitcoin's anonymous birth in 2009, cryptocurrency has gone a long way. There are currently thousands of cryptocurrencies, with a total market cap of over US$1.66 trillion (almost A$2.36 trillion).

It is frequently argued, especially in a recent report by Russia's central bank, that the anonymity of cryptocurrencies facilitates unlawful behaviour such as money laundering, terrorism financing, and drug trafficking.

This is not totally correct. In truth, the transaction history on public blockchains such as Bitcoin and Ethereum (the two largest by market value) is open to the world.

Many governments, including those in Australia and the United States, work with huge private blockchain analytics corporations to track individuals' crypto wallet addresses and transactions. They do this to reduce the likelihood of money laundering and tax evasion.

Contrary to popular misconception, most cryptocurrencies are pseudonymous rather than anonymous. If a person's identity is linked to their wallet address via a central touch point, such as a cryptocurrency exchange or an email, that wallet can be traced back to that person.

According to research (commissioned by Zcash but conducted by the Rand corporation), there is no widespread criminal use of "privacy coins" that protect users' anonymity.

Future directions will be determined by policy

Cryptocurrency is becoming more popular as a financial asset class, technological infrastructure, and a social experiment in non-state-based infrastructure.

As a result, crypto communities are gaining clout in public policy debates. Last year, for example, crypto proponents were able to stall a significant federal government infrastructure bill in the United States.

Nonetheless, jurisdictions take diverse paths in terms of policy and legislation. Some countries, including China and Russia, see it as a budgetary and ideological challenge to sovereign currencies. Others see it as a chance for economic growth, innovation, and investment.

As new techniques develop, 2022 could be a watershed moment for both the crypto business and those vying to ban or welcome it.

In the past, governments that welcomed crypto networks reaped economic rewards in the form of innovation, investment, jobs, and taxation. Access to new demography and technological efficiencies in treasury management are among the business benefits of embracing cryptocurrency as a digital asset.

At the same time, the industry's response to policy and regulation illustrates that cryptocurrency isn't a wholly decentralised entity that resides just on the blockchain.

The status of Australia

In the race to limit but gain from cryptocurrencies, Australia has emerged as a prospective "crypto-friendly" country. The Senate Select Committee on Australia as a Technology and Financial Centre produced a report in October that is favourable to cryptocurrencies.

It offers market licensing for cryptocurrency exchanges, simplified taxation, and a regulatory structure for "decentralised autonomous organisations," or DAOs. These operate under the same self-governance idea as decentralised cryptocurrency networks, with blockchain technology and cryptocurrency tokens used to manage participation and enforce regulations.

Australia's option is to capitalise on the massive economic potential of decentralised digital assets. It remains to be seen how this will affect the national economy. However, if history is a lesson to be learned, we can expect policy to influence outcomes.

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The multi-month drop in crypto prices is reminding veteran investors of the 2018 crypto winter. Here are five things investors may do to stay afloat during a bad market.

The cryptocurrency market has an unusual tendency of catching even the most seasoned veterans off guard, with each bull and bear market initially resembling prior cycles before veering off in an unexpected path and wiping out the fortunes of freshly minted crypto millionaires.

This was the case with the lacklustre 2021 close, which entirely contradicted the bullish $100,000 BTC price projections that crypto researchers and influencers had been pushing continuously.

Bitcoin is already more than 50% off its all-time high of $69,000, and altcoins have done even worse, with many down more than 60% in the last two months. Traders must regroup and re-evaluate their investment approach in times like these, rather than simply purchasing every price drop.

Here are five tactics traders can employ to avoid a crypto winter and save as much value in their account as possible.

Reduce your exposure to volatile altcoins.

When a broad market slump begins, the first step is to reassess current positions and limit exposure to the most volatile assets.

Because many token holders are new to the community and not long term investors like the user bases for more established projects, they are frequently new projects that have emerged from trendy segments of the crypto market such as meme coins, NFTs, or rebase projects like Wonderland (TIME).

Looking at a project's GitHub account to see the degree of activity and the number of engineers working to developing out the protocol is a good place to start the evaluation process.

If there is little progress despite flashy marketing gimmicks and great promises, the project may be one that an investor should abandon when the market begins to slow.

Traders might then invest these funds in stablecoins, which can be staked to receive yield or purchased when the market falls.

Averaging costs in dollars

Dollar-cost averaging (DCA) is the technique of purchasing an item in instalments over time in order to average out the price paid and account for volatility-induced price variations.

While the DCA technique is a fantastic way to gradually build exposure to fundamentally viable enterprises, it is usually advisable to wait until the dust has settled and a phase of consolidation has begun.

Dollar-cost averaging should be focused on initiatives with active growth, engaged communities, and a roadmap outlining how the project will grow and remain viable in the future.

Staking

Staking is possibly the simplest approach to raise the long-term value of a portfolio, and it relieves the pressure of fretting about daily price swings because the staked asset continues to accrue tokens.

Most layer-one protocols, including Solana, Cardano, Polygon, and Avalanche, allow users to stake their native token on the network to receive a return.

Ether holders can also stake their tokens on the Eth2 beacon chain, but it's crucial to note that staking rewards will not be available until Eth2 is fully deployed.

There are numerous other staking options available, ranging from gaming protocols such as Axie Infinity and Illuvium to NFT marketplaces such as LooksRare, so once a deep dive has been completed and fundamentally sound projects have been selected, staking becomes a matter of setting it and forgetting it.

Find initiatives with expanding ecosystems and benefits.

When the market becomes bearish, projects that let token holders earn through staking, liquid staking, borrowing, and airdrops are also worth considering.

Staking is the most basic form of this as the number of tokens grows over time, but additional options include token launchpads, NFT marketplaces, and protocols recognised for providing airdrops to community members.

The Cosmos (ATOM) network and its developing community of projects connected via the Interblockchain Communication Technology is one example of a protocol that rewards early adopters (IBC).

ATOM holders and those who have participated in the Osmosis (OSMO) decentralised exchange have been rewarded with a slew of airdrops from projects emerging within the ecosystem to help boost activity in their communities.

Make an investment in yourself.

Investing in oneself by learning something new is one of the most personally beneficial things an investor can do during a depressed market.

This will not only help investors resist the temptation to sell and miss out on future gains, but it may also lead to new opportunities for wealth creation.

Despite the market downturn, cryptocurrencies continue to march towards general use, and the number of jobs in the blockchain sector will only grow in the future.

Whether it's learning to programme in Solidity, experimenting with graphic and digital design to create a new line of NFTs, or simply conducting research to obtain a better grasp of the many business sectors.

Finally, the secret to surviving a bear market is to remain optimistic and patient.

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