James Tylee from CyberFM

NFTs in the media: from films to the TV - NFTs are being used in the film and media industry from Hollywood to Bollywood and even television manufacturers are making TVs with the ability to display NFTs. Whilst there are obvious ways to use NFTs to make money to finance film production, NFTs are also offering a way for the media industry at large to enter the metaverse. The metaverse, with the backing of global brands and tech giants such as Facebook (now renamed Meta), is a key new sector we are likely to hear a lot more about in 2022.

Crypto assets: inflation hedge, portfolio diversifier or return enhancer? - Bitcoin may not be a useful inflation hedge, but there are still many reasons to invest and see it (and crypto assets) more broadly as a valuable investment with the potential for out-sized, risk-adjusted returns. We explore having a modest % of a portfolio invested in Bitcoin and examine what would have been the impact on the risk-adjusted returns.

Bitcoin continues to dominate interest - over the last few weeks we have published a range of topics, but it has been those topics on Bitcoin which have garnered the most views. As ever, we are regularly asked, “Is now the time to buy Bitcoin?” Whilst we cannot offer advice, this article looks at how, by saving money regularly into digital assets, one can smooth out the volatility of this asset class by buying less when the prices are high and more digital assets when the prices fall.

A seasoned Investor take on the similarities between crypto and derivatives - shared thoughts of a derivatives veteran of 35 years standing, who sees that the old “greed is good” adage, so prevalent in the heady derivatives trading days of the ‘80s and ‘90s, has been replaced by community sharing and collective goodness in today's crypto chat rooms. This derivatives trader has seen the ‘crypto light’ and how he switched from Fear of Uncertainty and Doubt (FUD) to Hold On for Dear Life (HODL).

Welcome to the first edition of 2022 of Digital Bytes.  Our first week of 2022 features Takatoshi Shibayama from Copper Ltd.

In the last couple of years we have seen a lot of investment in the infrastructure that was needed in order for Blockchain technology and Digital Assets to be embraced by institutions and the wider community as a whole. Many proof of concepts by multiple organisations have demonstrated the benefits of using blockchains and Digital Assets in a wide variety of ways which are now being implemented.

We first started writing Digital Bytes in March 2018 to offer a weekly analysis of how, where and why Blockchain technology and Digital Assets are being used. By having regular guest articles we also gain insight and a different perspective from a variety of businesses. As you will know, Digital Bytes is advertisement-free and by using case studies and hyper-links to a wide range of publications we are able to verify the quotes and statistics we cite, whilst offering additional reading material.

The circulation of Digital Bytes continues to expand, as do the number of organisations that have a license to use the material we publish. The overwhelming feedback we get is that there is still a huge need for education regarding these topics, given the fast pace at which change is happening. The use of real examples from a variety of industries and jurisdictions helps readers to put into context how Blockchain technology and/or Digital Assets are likely to impact them and their businesses.

Please keep sending your feedback and suggestions about future topics you would like us to cover. If you would like further details about having a license to use the content we write, then call or email. Licenses start from as little as £150 per month.

In this week's Digital Bytes we have the following:

1.  Predictions and thoughts for 2022.

2.  Three of the newest words in the Collins Dictionary in 2021, and ‘crypto’ was the most searched word on Reddit.

3.  How Singapore is raising the global standard in crypto asset regulation.

4.  Link to the Digital Bytes show on Cyber.FM.

Finally, on behalf of TeamBlockchain I would like to wish you a very happy 2022 and trust you have lots of laughter along the way.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest replay of: Pierre Bourque of Blockchain Radio.

A review of the predictions we made for 2021:

January - Bitcoin: is it too late to buy?

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Peter Habermacher, CEO, Aaro Capital

Blockchain technology is increasingly impacting on businesses - there has been a growing clamour for businesses to use Blockchain technology and the digital assets that this technology can create. The adoption and different means in which blockchains can be utilised by companies is increasingly expanding across a variety of industries and will undoubtedly have an impact on the way that companies interact with their suppliers, shareholders and customers.

Blockchain technology targets the bank that settles $6trillion a day in FX - HSBC’s Blockchain-powered Foreign Exchange (FX) settlement enables FX trades to be carried out more transparently, with less risk and with lower costs than the current Continuous Linked Settlement (CLS) bank solution. Stronger compliance, less risk and lower costs - surely that will gain the attention of regulators, compliance officers and board directors.

As inflationary pressures rise, where will investors’ capital move to? - inflationary pressures are rising and, due to the recent worries regarding the Omicron variant, interest rates are not being increased whereby adding to additional inflationary concerns. Equity markets have risen now for almost 9.5 years so where will investors go as interest rates are increased, as there is now an even wider range of alternative asset for investors to consider? Do your homework now so, as and when equity and bond prices have a pullback, you will know if you wish to diversify your investments into the plethora of new assets on offer.

Global debt spirals whilst bond markets undergo transformation - according to the IMF, the amount of global debt rose to over $225trillion and this could prove to be problematic as interest rates rise. However, we are seeing real innovation in the way that debt instruments are being created and issued using Blockchain technology, which offers the potential for small and medium sized firms to consider creating their own smaller bond issues thus allowing them access to a new pool of capital to help finance their firms.

Alternative Investments and Tokenisation - investing in alternative assets is usually reserved for high-net-worth individuals and institutional investors. It is also often a slow and paper-intensive process, one that is out of date relative to the new retail investing apps. In this note, we discuss how Blockchain technology can enable a more efficient and accessible process through tokenisation. Tokens are digital representations of assets which are issued and traded within a distributed ledger. They allow for faster and cheaper transactions, greater liquidity and access to a wider base of investors, as well as potentially greater transparency for managers, clients and regulators.

May we take this opportunity to wish you all best wishes for the festive season and hope that you all stay safe and enjoy a break with friends and your families.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Nicholas Fitzpatrick, partner at DLA Piper.

WhatsApp to offer digital payments - so is Facebook to finally get its way? - WhatsApp is to trial offering a cohort of its 2.5 billion users the ability to send, not just messages, but also to make digital payments. This potentially realises an ambition Facebook laid bare when it first revealed its digital currency ambitions three years ago. On closer inspection, if it is safer to create and issue a cash-backed stablecoin (as opposed to depositing cash in a bank) what happens to those banks relying on fractional banking, and who takes on the role of the commercial lender?

Metaverse and self-sovereign identity (SSI): new superpower? - the metaverse is a new buzzword ‘doing the rounds’, but what does it actually mean and how is it going to change everyday life? Besides an exciting aspect of virtual reality (VR) that everybody could at least vaguely relate to there are many other interesting developments, particularly around the digital economy and trusted interactions enabled through digital and self-sovereign identity (SSI). We explore the symbiosis of the two hottest technologies - metaverse and self-sovereign identity - and how they fit within Web 3.0.

Crypto regulation varies in each jurisdiction - the rules and regulations for cryptocurrencies vary depending on the jurisdiction in which they are being promoted. There appears to be a real lack of agreement or coordination between regulators worldwide, apart from a significant number of countries expressing concern that those wishing to use cryptos cannot do so for illegal purposes - hence the need for KYC and AML verification.

NFT in sports: manna from Heaven? - as the sports world has sought to recover from the financial consequences of COVID-19, two themes have emerged. First, the paramount need to secure sources of revenue and second, an urge to accelerate the adoption of technologies which offer new ways of engaging with fans in a way which is, at least partially, insulated from the vagaries of global pandemics. And so, news that the National Basketball Association (NBA- as it so often is) was a successful early adopter of NFT collectibles and is (in partnership with Dapper Labs) generating significant numbers from its early Top Shots drops, has been welcomed like the promise of ‘manna from Heaven’ across the sports industry.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Timo Lehes, co-founder Swarm Markets.

NFTs, The Death of Mortgages - NFTs enable partial purchasing of property equity and the attendant rights. Rights previously bundled, such as boundary, air, view, mineral and water rights can be parcelled off as individual rights and traded as individual titles and used in daily commerce. This allows the most attractive rights to some users to be acquired individually without the need to acquire all the property rights. NFTs open up a new world for rights not previously seen.

Alternative assets are increasingly popular for investors - the amount of capital that is being allocated to alternative investments has been expanding and is predicted to grow further as we see digital assets being created. Traditional assets such as equities, bonds, commodities and even currencies and alternative assets are increasingly being made available via a digital wrapper to be traded on new digital exchanges. This is going to assist in making alternative assets more accessible for a new cohort of investors who have, traditionally, not been able to access them.

How DeFi will enable participants to reimagine financial markets? - In recent years, the emergence of Fintechs has sought to democratise financial services and give some level of control back to the user. Through elements such as self-custody, DeFi will take this one step further. Giving people the power to digitise their assets and move them freely across the DeFi ecosystem (combining them with other assets to form novel trading pairs) will enable a new financial market to be reimagined along customer-centric lines. However, this will only be made possible once we see DeFi become regulated, allowing certain participants and collateral to move into the ecosystem, for the first time.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Mircea Mihaescu, Coinfirm.

Welcome to this week's edition of Digital Bytes where we discuss:

Finally, legal clarification for smart contracts - smart contracts are seen to be a key reason for using Blockchain technology since they enable greater efficiency and automation of processes and transactions. The UK’s Law Commission has confirmed that existing laws in England and Wales are able to accommodate and be applied to smart legal contracts, thus removing the existing legal uncertainty of using these digitally programmable instructions. Will this result in greater adoption of smart contracts and Blockchain technology as a whole?

Blockchain in the property sector - according to Savills, the value of residential real estate s is $258trillion and $32trillion for commercial property, yet still relies on paper- based analogue systems and processes. Blockchain technology offers the promise of radically improving the efficiency of property transactions, but there are challenges to be faced to make Blockchain-powered platforms the dominant way on which to buy and sell real estate.

Metaverses: who will govern the new digital reality? - Since late October, when Facebook announced its change of name to Meta, the term "metaverse" has been increasingly present in our vocabulary. In its current meaning, metaverse generally refers to the concept of a highly immersive virtual world where people gather to socialise, play, and work. Thanks to new technologies, these virtual environments will become increasingly immersive, allowing us to expand our reality. Therefore, it is not difficult to imagine that we will soon be spending long periods of time in these new virtual worlds. It is precisely for this reason that we must spend some time reflecting on the legislation and democracy of these new worlds: who will govern the new digital reality: big corporations, or citizens?

A Five-step Framework for Addressing Gaps and Inconsistencies of Digital Currency Compliance Laws - the global user base of cryptocurrencies increased by nearly 190 percent between 2018 and 2020. The future of digital currencies looks bright with cryptocurrencies and blockchain tech as a whole slowly gaining acceptance in wider financial markets. However, there seems to be few nations with a comprehensive legal basis for the existence of different types of crypto assets. How about we explore the gaps and inconsistencies that we, as a community, need to address and resolve?

Download the Cyber.FM app at https://cyber.fm

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Grant Blaisdell, CEO, Copernic.

We Discuss:

Can the history of money portend as to the future role of Digital Currencies? - central bankers are scrambling to understand the pros and cons of digital currencies as some of their peers launch CBDCs. What lessons can we draw from history? The US$ was once issued by thousands of organisations and we should also not forget the rise and fall of five world reserve currencies since 1450.

SSI: self-sovereign identity explained - self-sovereign identity (SSI) has seen a rapid adoption within finance, interestingly with both Centralised Finance (CeFi) and Decentralised Finance (DeFi). In the context of DeFi, it is often referred to as SSI’s enabler. Beyond finance, SSI’s  application has been growing too - spanning travel, e-commerce, supply chains, crypto, and other sectors. What remains a stumbling block for many is understanding what SSI is. What is so magical about it that it can fill in so many cracks across industries?

Investments into crypto funds accelerates - the amount of capital being invested in funds (which, in turn, are buying cryptocurrencies) is growing as institutions and wealthy sophisticated investors commit increasing sums of capital to this asset class.

For the first time, cryptos will soon let you own assets in space - two markets which stand to be the builders of a new class of wealth are cryptos and space. But it's the collision of the two that stands to have the most significant potential, not only to build new wealth but to significantly improve day-to-day life and activities on earth. This collision is happening now, and for the first time the general market will be able to buy and own pieces of space as space assets. The average person will be able to participate financially and benefit from the growth of the space economy. The time for you to own a piece of space is now, and crypto stands as the foundation for it.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guest: Andrew Delves, Senior Relationship Manager: Fintech, at ClearBank.

We discuss:

DeFi addresses some risks, but potentially creates new ones too - Decentralised Finance is set to disrupt the financial services sector as it ushers-in more transparency - potentially with a return to the spread of both risks and rewards to those involved (in a similar way the mutual insurance firms operated their with ‘profits funds’). Markets will need protection from not just new opportunities, but new risks - both of which invariably come with change.

The infrastructure required by blockchain-powered platforms is unfolding - Infrastructure challenges are being addressed and we are increasingly seeing corporations and governments becoming more engaged with Blockchains and Digital Assets. As they do, we are gaining greater clarity both as to the pros and cons of using this technology and new asset class and the work still required.

Banks and digital assets: from naysayers to pivotal partners - digital assets, Blockchain

technology and cryptocurrency are all moving towards being a part of the mainstream financial system in the UK. With many fintech players introducing the technology into their offerings, it’s clear that digital assets are here to stay. However, to be truly immersed into the mainstream financial system and gain trust and support from consumers, fintech players who are championing digital assets need support from the fundamental gatekeepers of financial infrastructure: traditional banks. Here, Andrew Delves, from ClearBank, explores what this type of collaboration could look like.

Jonny Fry is joined by James Tylee to discuss this weeks Digital Bytes newsletter featuring special guests: Sean Kiernan CEO of Greengage and Big Innovation Centre’s Birgitte Andersen.

We discuss:

Some of the challenges facing NFTs as they grow in popularity - NFTs have captured many an investor’s attention with the volume of NFTs being traded rising exponentially. We look at some of the biggest NFT platforms and a new one focused on social media influencers, bearing in mind that NFTs face a number of potential regulatory challenges as well as the need to ensure that the seller of the NFT is the actual owner.

ETH gas prices climb again - transactions (gas) fees on the Ethereum Blockchain have increased by over 2,300% since June 2020 as the number of decentralised applications (daaps) and people using Ethereum continues to rise. However, as we see increasing calls for stablecoins, NFT exchanges and DeFi platforms to be regulated, what risk warnings or even restrictions will be implemented to draw attention to the wild swings in gas prices, or will the new Ethereum upgrade finally reduce and control the cost of gas?

The challenges of digital rights for digital assets - as our economies become ever more digitised, we face the increasing challenge of protecting our digital assets. Legislation was not built to accommodate the volume of the nature of digital assets - such as NFTs, posts on social media and even our spending habits and preferences, many of which the Silicon Valley giants have capitalised on so effectively. Technology can help but it, too, can have unintended consequences if the wrong information is stored on an immutable Blockchain and then cannot be amended to reflect the actual facts.

How is the UK blockchain landscape faring today in the post-Brexit, post-Covid world? - on the 3rd of November, a group of organisations launched the results of a major new mapping exercise to examine the current state of the industry. Greengage, Deep Knowledge Analytics and the Big Innovation Centre have published a landmark piece of research in partnership with the All-Party Parliamentary Group on Blockchain which gives a comprehensive overview of the state of the UK industry in 2021, including a mind map of the leading companies, investors, influencers, hubs and government agencies.