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Investors committed nearly 20% of all ETH tokens to lock up in staking contracts, according to blockchain data.

Nearly three months since an anonymous TikToker dressed like a ghost enlisted artificial intelligence to create a duet featuring two of the world’s biggest music stars, Drake and The Weeknd, much of the outcry, paranoia and hypothesizing about what it all means has subsided.

But the very real dilemma of how people, from pop stars to your average Joe on the street, will be able to protect their voice and likeness — tangible dimensions of both identity and personal data — isn’t going anywhere. Many in the blockchain community see cryptographic technology as the answer.

“AI makes the internet a less trustworthy place,” said Lasha Antadze, co-founder of Rarify Labs, a company working to strengthen the protection and verification of digital identity. “Its proliferation amplifies the need for reliable sources of authenticity and creates an opportunity for blockchain to become a critical piece of infrastructure.”

Other AI-generated musical experiments have included Rihanna, Kanye West and deceased Beatles legend John Lennon. Record label giant Universal Music Group, which through subsidiaries releases Drake and The Weeknd’s music, condemned the creation of AI-generated music content which borrows from professional musicians without their consent.

In a statement UMG said music “ecosystem” stakeholders would need to decide if they wanted to side with “artists, fans and human creative expression, or … deep fakes, fraud and denying artists their due compensation.”

Music and blockchain

While UMG has engaged with web3 companies in the past, like partnering with LimeWire so its artists could sell NFT versions of “audio recordings, audiovisual content, backstage footage” and artwork, it’s unclear if the music giant would eventually consider using cryptographic technology on the blockchain in order to audit authenticity and track provenance.

Some web3 builders with ties to the world of entertainment believe it’s only a matter of time before the music industry relies on blockchain-based technology to ensure authenticity and protect against copyright infringement.

“A huge pillar of blockchain technology is its ability to track ownership,” said Inder Phull, CEO of Pixelynx, a web3 music and gaming company co-founded by musical artists Deadmau5 and Richie Hawtin. “As AI continues to make its way into the web3 sector, we’ll see more projects begin to implement blockchain … tracking the provenance of the resulting content and mitigating some of the concerns over transparency and digital ownership.” 

Personal data protection

The expanded use of AI may pose a threat to more than just famous musical artists or other recognizable characters like politicians, who could have their image falsified in deep fake videos. Average people’s data and likeness could also be at risk, according to proponents of blockchain-powered data storage solutions.

Some web3 data experts see the decentralized storing of personal information as a safe and efficient way to protect users against having their private data leveraged and monetized by massive tech giants who operate centralized ecosystems like Google and Meta aiming to grow their businesses using artificial intelligence.

“The reason AI has been scrutinized with regard to data privacy is that major platforms with access to millions, sometimes even billions of users’ data, are looking to incorporate AI,” said Gregor Žavcer, executive director at Swarm Foundation, a Swiss non-profit seeking to “empower digital freedom” in part by decentralizing the “storage and exchange” of data.

Žavcer said he expects the billions of people using Meta’s Facebook or Instagram are about to have their personal data aggregated and analyzed en masse. He also believes when these tech corporations begin deploying AI on a significant level, while simultaneously storing large troves of personal data, they’ll be opened up to “the potential for breaches and hacks” which could lead to the leaking of sensitive information.

Blockchain technology and its ability to decentralize data provides solutions, according to Žavcer. “Decentralized storage offers a ready solution to protect user and enterprise data because its decentralized nature makes it extremely difficult to hack or manipulate,” he said.

Additionally, the Swarm Foundation executive said decentralized storage of private data could put both individuals and companies into a position where they decide where their information is kept, who has access and whether or not AI models are allowed to use it.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Coinbase (COIN) and the Securities and Exchange Commission will meet in court this week. The hearing – the questions asked and the answers given – should provide some hints on how the case may go (for now, anyway).

Even though billionaire investor and venture capitalist Tim Draper was clearly wrong when he predicted bitcoin (BTC) would reach $250,000 in June 2023, he said he still believes that it will happen eventually, maybe in 2025.

Aptos is holding a vote on upgrades to its blockchain, its tokenomics and its ability to handle fungible assets.

Episode 64 of Season 5 of The Scoop was recorded with The Block’s Frank Chaparro and Securitize Founder & CEO Carlos Domingo.

Listen below, and subscribe to The Scoop on Youtube, Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Please send feedback and revision requests to podcast@theblock.co.

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Carlos Domingo is the founder and CEO of Securitize, Inc. — a compliance platform for trading security tokens or digital securities on the blockchain used by the likes of KKR and Hamilton Lane.

In this episode, Domingo explains how blockchain technology can be used to unlock broader access to alternative investments and how regulatory clarity in the U.S. could help trillions of dollars of real world assets be tokenized on-chain.

Outline:

1:17 – About Securitize
2:32 – Market Evolution
7:22 – Tokenization
8:07 – Transfer Agent License
9:58 – Broker Dealers
12:00 – Prometheum
13:04 – Special Purpose Broker Dealer
16:38 – Alternative Trading Systems
19:05 – Second Order Effects of Regulation
21:30 – Tokenization of Real World Assets
28:02 – What’s Next for Securitize
31:32 – Closing Thoughts

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Tim Draper, founding partner of Draper Associates, still thinks bitcoin will reach $250,000, even if it takes a little longer.

“Bitcoin is here to stay,” Draper said Tuesday on Bloomberg TV, reaffirming his target, even if pushing back the timeframe until 2025.

“I wasn’t really expecting the U.S. bureaucracy to be this aggressive, and I thought that maybe they would be recognizing that they’ve got to compete with the rest of the world,” he said when asked about the extended timeline. “They’ve got to provide a platform from which entrepreneurs can flourish, and by having this regulation by enforcement that the SEC has been professing and driving, it’s really driving all the great entrepreneurs out, and I think that that has hurt the bitcoin price.”

The American investor said last year that the world’s largest cryptocurrency by market capitalization could reach $250,000 by 2023. In the heights of a fresh crypto winter that had engulfed the industry at the time, he told a crowd to “keep your heads down, keep working.”

Bitcoin’s price has surged this year

Bitcoin has since surged 84% so far this year. It was mostly flat on Tuesday, trading at $30,474, according to CoinGecko. 

“It’s a great system, it’s great currency, it’s a great way to operate,” Draper said today. “I can’t wait until I can raise a fund all in bitcoin, invest it all in bitcoin, have my portfolio companies all pay their employees and suppliers all in bitcoin. And have taxes all paid in bitcoin, and have the waterfall all fall into people’s bitcoin wallets. Because then there’s no accounting, there’s no auditing, there’s no book keeping, it’s all done on the blockchain. It’s all honest and it’s all straight.”

 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

“Publicly available blockchains are probably the worst possible way of keeping one’s private information private,” said Arkham CEO Miguel Morel.

Fir Tree Capital Management and crypto asset management firm Grayscale Investments have reached an agreement to resolve a lawsuit the hedge fund filed against the firm last year, Bloomberg News reported.

Fir Tree Capital Management sued Grayscale for information in December to investigate potential mismanagement and conflicts of interest, according to Delaware court documents. As per the agreement announced Tuesday, Grayscale will provide documentation around the firm’s flagship product GBTC.

The product, which is meant to offer exposure to bitcoin in the form of a security, often trades at a premium or discount to net-asset-value. Fir Tree’s original complaint alleged that Grayscale investors have been harmed by “shareholder-unfriendly actions.” It also called on the firm to allow for redemptions of GBTC.

In a statement shared with Bloomberg on Tuesday, the firm said that Grayscale should conduct a tender offer for shares in GBTC. Grayscale would need approval from shareholders to allow for such an offering.

Long-term product structure

A Grayscale spokeswoman said the firm is “pleased to resolve Fir Tree Partners’ meritless lawsuit.”

“It’s widely understood that the conversion of GBTC to an ETF is the best long-term product structure for all investors. At Grayscale, we are 100% committed to that endeavor, and look forward to the Court’s decision on the matter by the Fall of 2023,” the spokeswoman said in an emailed statement. 

Grayscale is also suing the U.S. Securities and Exchange Commission to pave the way for the agency to greenlight its proposal to upgrade GBTC to an exchange-traded fund.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Miguel Morel, CEO of the blockchain data firm Arkham Intelligence, discussed the launch of its Intel Exchange data platform in a Tuesday Twitter Spaces event where he faced some pushback amid a raging debate between crypto anonymity and identity.

When asked whether Arkham Intel Exchange incentivizes users to “dox,” or reveal personally identifying information about, certain crypto wallets, Morel not only agreed but said that’s the whole point of the platform.

“There’s an incentive from the community that’s actually getting exploited to put in real work to figure out who is behind the fraud so that they could be reported to the authorities, or for the community to know,” Morel said. “This could have prevented very large frauds and crises within crypto, such as the FTX and Alameda collapse.”

Arkham plans for the exchange to benefit the crypto community by identifying wallet addresses belonging to hedge funds or finding out who might be behind a celebrity impersonation account. To curb abuse of the platform, however, Morel said that Arkham must approve bounties and submissions for the program, and that users must show they obtained their information through public sources.

“If there are people who have information about somebody who has conducted a hack or other info that’s extremely valuable to the community, that is the kind of thing that will be accepted onto the Intel Exchange, and which will receive a lot of volume from the market,” he said. “It will not be small individual private wallets, because that’s not the goal of the Arkham Intel Exchange. No one cares for those and is going to pay money for them.” 

Dox pushback

Some participants in the Twitter Spaces event pushed back over fears that Intel Exchange could be used to dox private individuals. Others worried the information could be incorrect and said that many could be forced to get private security if their holdings are revealed. 

Crypto trader Ran Neuer worried that those who have access to crypto wallet know-your-customer information, such as people working for centralized exchanges, may feel compelled to dox their user base for a reward. 

“My issue is not with the [Arkham Intel Exchange] system,” Neuer says. “My issue is your company managing the data.”

The comments came just one day after the company faced widespread criticism after it appeared to have made some customer emails publicly available through decodable referral links that were shared by users in the runup to a token airdrop. 

Whitepaper vision

Identity, meanwhile, is key to Arkham’s vision. The firm stated in its whitepaper that it plans to help usher in a web3 future that links personal identity to blockchain interactions.

“Deanonymization is destiny,” the firm wrote, “In the early days of the internet everyone was pseudonymous. Now, people use their real identity online. MySpace to Facebook was a microcosm of this transition.”

“The same process is happening with blockchain identities — consider the rise of ENS and of NFT profile pictures,” it continued. “Eventually, everyone’s blockchain identity will be linked to their real-world identity.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.