The founder of Wall Street Bets is creating a blockchain app to ‘fight corruption’ in financial markets

WallStreetBets founder Jaime Rogozinski
WallStreetBets founder Jaime Rogozinski.

  • The founder of Wall Streets Bets is launching a blockchain app and exchange-traded portfolios in an effort to empower retail investors to “fight back against corrupt institutions.”
  • “The amalgamation of blockchain technology with financial markets is the next logical step for finance,” said Wall Street Bets founder Jaime Rogozinski.
  • Retail investors would use a token to vote on issues related to the Wall Street Bets exchange-traded portfolios.
  • . See more stories on Insider’s business page.

The founder of Reddit’s Wall Street Bets forum, Jaime Rogozinski, is planning to launch a blockchain app and exchange-traded portfolios in an effort toward “rooting out corruption” in the world of finance.

Rogozinski has been working on a decentralized application and collaborating with blockchain and financial technology experts to create exchange-traded portfolios, or ETPs, that will give retail investors exposure to a variety of assets, as well as a say in how the portfolios are run, according to a statement released on Wednesday.

“The amalgamation of blockchain technology with financial markets is the next logical step for finance — and not just for Wall Street but everywhere,” said Rogozinski in a statement that calls him a strategic partner in the Wall Street Bets Decentralized Application, or DApp, project. “It will result in stronger, more democratized markets and will empower individuals around the world.”

Blockchain-based finance would give retail investors the opportunity “to fight back against corrupt institutions and to end dependence on them altogether,” the statement said.

The profile of the Wall Street Bets forum on Reddit was elevated this year after investors on the message board sparked a rally in shares of video game retailer GameStop that resulted in losses for short sellers.

The ETPs would be run under a decentralized autonomous organization, or DAO, that would allow community members to vote on issues related to the portfolios using a $WSB governance token. In a given example, token holders who believe electric vehicle maker Tesla should comprise 90% of a particular ETP instead of 10% can vote on it by signing a transaction using their $WSB tokens during voting cycles.

Wall Street Bets, formed in 2012 in the wake of the global financial crisis, calls itself a movement centered on empowering “little guy” investors against “unaccountable” financial institutions. Wall Street Bets ETPs are being pitched as an “alternative to the kind of market manipulation perpetuated by opaque and politically connected” banks and hedge funds.

“For WallStreetbets, the forthcoming release of our $WSB token is a shift in strategy,” said BTCVIX, CEO of the Wall Street Bets DApp.

“We tried to fight back through protest after the global financial crash back in 2008-2009. We then tried to beat Wall Street insiders at their own game by short squeezing them to near bankruptcy. And now, with our soon-to-be-launched ETPs, we aim to simply exit the existing system for one that is fair and relies on community,” said BTCVIX whose Twitter bio says “Banned from r/WSB for talking crypto in 2015.”

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A new green cryptocurrency called Chia uses a less energy-intensive method of minting new coins. Here are 6 things to know about the digital asset before it starts trading on Monday.

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Cryptocurrency Mining.

  • A new green cryptocurrency called Chia (XCH) is set to start trading on Monday, May 3.
  • Chia uses “proof of space” and “proof of time” instead of bitcoin’s “proof of work” to mint new coins.
  • The rise of Chia is already causing shortages and price increases at hard drive and SSD manufacturers.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A new “green” cryptocurrency called Chia is set to start trading next week. It was created by Bram Cohen, the inventor of BitTorrent, and uses what’s called “proofs of space and time” to “farm” rather than “mine” new coins.

The model is a less energy-intensive method of producing digital assets compared to bitcoin’s “proof of work” concept, which has led that currency to be criticized for using as much energy as some entire nations.

Chia and the company behind it, Chia Network, have already attracted significant attention from investors.

Chia Network boasts big-name backing from the likes of Andreessen Horowitz, Naval Ravikant, and Cypherpunk Holdings, according to data from Crunchbase.

The company also has attracted publicly traded crypto mining companies like iMD Companies.

“We’re going all-in on Chia,” Rick Wilson, iMD CEO, said in a recent press release. “With our extensive research, we believe that Chia is here to stay and will be utilized on a global financial level. We believe our early decision to farm Chia will result in increased revenues for iMD.”

Chia Network released a Business Whitepaper describing its new cryptocurrency (XCH) on February 9 and launched “farming rewards” on March 19.

Chia will begin transactions and trading on May 3.

Here are six things to know about the new cryptocurrency before it starts trading.

The ‘proofs of space and time’ model

The “proofs of space and time” model is central to Chia’s value proposition. The idea is that users, called “farmers,” will “seed” their hard drives or solid-state drives (SSDs) with software that puts cryptographic numbers into specific “plots.”

These “plots” are then awarded with blocks from the blockchain based on the percentage of total space a farmer has compared to the entire network. Then a VDF server, known as a “Timelord,” verifies that block, allowing the chain to move forward and awarding XCH to the farmer.

Chia Network says the system will provide better security than Ethereum and reduce the energy expenditure costs required by bitcoin’s “proof of work” model.

Read more: A 29-year-old self-made billionaire breaks down how he achieved daily returns of 10% on million-dollar crypto trades, and shares how to find the best opportunities

Hard drive and SSD shortages and price increases

Chia’s “proofs of space and time” model may be an energy saver, but the method is already creating issues for hard drive and SSD suppliers.

A recent report from DigiTimes revealed the Taiwanese memory and storage manufacturer Adata has seen a 500% increase in SSD orders since the start of April.

The South China Morning Post also reported that Chinese e-commerce platforms, including Alibaba’s Taobao and JD.com, have seen multiple models of enterprise-grade hard drives with large capacities selling out.

“Many people have inquired about large hard drives for Chia mining in the past few days,” one customer service agent at a Taobao online told the South China Morning Post.

The rise in hard drive and SSD sales is a result of the new requirements for storage to “farm” Chia.

If the cryptocurrency ends up being anywhere near as popular as other altcoins, the business model could put real pressure on memory and storage manufacturers’ supplies and pricing moving forward.

A new transaction programming language

Chialisp is Chia Network’s new smart transaction programming language.

The company says its language combines the best aspects of bitcoin’s “UTXO model” and Ethereum’s “Solidity model” to allow for more secure, less energy-intensive functionality.

To learn more about Chialisp, check out Chia Network’s introduction to the language posted by Bram Cohen back in 2019.

No hard cap, and a strategic reserve to reduce volatility

Chia Network doesn’t have a hard cap on the total number Chia coins on its blockchain like bitcoin does. Instead, the company prefers a predictable, continuous form of inflation.

“Being able to directly calculate a shared expectation of the total supply at any given time gives much the same financial and peace of mind benefit,” the company’s white paper notes.

Chia Network also holds a strategic reserve of 21 million XCH, in a nod to bitcoin, that it will use to reduce the volatility of its coin and mitigate any potential crashes.

Read more: A crypto technical analyst breaks down why ethereum is set to rise to $3,000 and is a better investment than bitcoin right now – and explains how he analyzes when to buy a cryptocurrency

Going public and embracing regulation

Unlike many other cryptocurrency offerings, Chia has a formal company behind it, and they intend to go public.

“We hope to file and list our equity in the next six to 12 months,” Gene Hoffman, the CEO and President of Chia Network told Decrypt.

Not only that, but Chia Network has also said it will embrace regulation because management has seen “scams and farces” in the space hurt investors.

“It should not be controversial that investors deserve protection through public disclosure and certainly the public shouldn’t be sold investments without that legally required transparency,” the company’s whitepaper states.

An at-home farming push

Bitcoin mining has become increasingly difficult for at-home miners due to the expansion of publicly-traded mining companies like Riot Blockchain and Marathon Digital Holdings. These companies use ASIC miners that have greater computing power than the average at-home miner could afford.

This has made it so the rewards for mining bitcoin at home no longer make financial sense for many miners, especially when energy costs are considered.

With Chia, that could change. At-home users will have the capability to compete to earn XCH by “seeding” their SSDs or hard drives and, at least for now, the lack of competition should allow for a more profitable experience.

Chia is also a very accessible cryptocurrency. Gene Hoffman, the CEO and President of Chia Network, says it was designed that way on purpose.

“It is super simple. Just download the Mac or Windows version and double click,” Hoffman told CoinDesk. “I’m pretty sure this will be the easiest cryptocurrency to validate for normal people ever.”

New cryptocurrencies are a dime a dozen, but it’s rare to see big-name investors in the crypto space come together with top developers to address a common criticism of crypto, rising energy consumption.

While no one can say whether or not Chia will be a success, it’s clear the cryptocurrency is offering something that most new altcoins don’t with its “proofs of space and time” model.

To learn more about Chia, check out the company’s business white paper zoom meeting from February 11.

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JPMorgan teams with Singapore’s DBS and Temasek to form a blockchain payment platform

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In this Aug. 16, 2019 photo, the logo for JPMorgan Chase & Co. appears above a trading post on the floor of the New York Stock Exchange in New York.

  • JPMorgan Chase announced it is teaming up with Singapore’s DBS Group and Temasek to form a blockchain payments platform.
  • The platform aims to ease frictions for cross-border payments, trade, and currency settlements.
  • The new company, dubbed Partior, will leverage blockchain technology and digitize M1 commercial money.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

JPMorgan Chase announced it is teaming up with Singapore’s DBS Group Holdings and Temasek Holdings to form a blockchain payments platform in a bid to ease cross-border payments, trade, and currency settlements.

The newly-established technology company, Partior, will leverage blockchain technology and digitize M1 commercial money, according to a statement Wednesday.

The platform will develop wholesale payment rails based on digitized commercial bank money to enable “atomic” or instantaneous settlement for various kinds of financial transactions, according to a statement.

“We are thrilled by the launch of Partior as it marks yet another milestone for JPMorgan and the industry – blockchain-based wholesale payments infrastructure where information and value can change hands around the world in a 24/7, frictionless way,” Takis Georgakopoulos, global head of wholesale payments at JPMorgan, said in a statement.

Partior will be designed to complement ongoing central bank digital currencies initiatives and use cases.

In the beginning, Partior will focus on facilitating flows primarily between Singapore-based banks in both US and Singapore dollars but will expand its service offerings to other markets and currencies.

Headquartered and listed in Singapore, DBS is a financial services group in Asia active in 18 markets.

Temasek, also based in Singapore with 11 global offices, is an investment company with a portfolio of $214 billion as of March 2020.

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How NFTs could change global business models beyond the art industry

Grimes NFT
Grimes’ Battle of the WarNymphs NFT on Nifty Gateway.

  • NFTs are tokenized versions of unique assets like works of art that can be traded on a blockchain.
  • They create opportunities for business models that didn’t exist before, like artist stipulations.
  • Future NFT developments could transform markets like property, vehicles, and land ownership.
  • See more stories on Insider’s business page.

Sotheby’s has become the latest establishment name in art to dive into NFTs (non-fungible tokens) through its collaboration with anonymous digital artist Pak and NFT marketplace Nifty Gateway.

The auction house sold The Fungible Collection, a “novel collection of digital art redefining our understanding of value,” for more than $17 million (£12 million).

Some pieces, such as “The Switch,” a monochrome 3D construction that is going to be changed by the artist at some unspecified moment in the future, received bids well in excess of $1 million.

Read more: A digital artist who made $700,000 off one NFT drop explains how to stand out as a creator and thrive at selling virtual art

For the uninitiated, NFTs are tokenized versions of assets that can be traded on a blockchain, the digital ledger technology behind cryptocurrencies like bitcoin and ethereum. Whereas one bitcoin is directly interchangeable with another, meaning they are fungible, NFTs are the opposite because the underlying assets are unique in some way and can’t be exchanged like for like.

This uniqueness enabled Christie’s to sell digital artist Beeple’s “Everydays” NFT in March for an eye-watering $68 million. For those who don’t have that sort of money, NFTs are also being used for trading collectibles like baseball cards and computer gaming items like swords and avatar skins.

Bubble trouble?

The excitement around NFTs feeds a similar narrative to other recent price surges such as GameStop and dogecoin, in that these are speculative bubbles brought about by stimulus checks in the US, lockdown boredom, and low interest rates.

Look no further than celebrities like music star Grimes and YouTuber Logan Paul releasing their own flagship NFTs to ride the wave. Even Vignesh Sundaresan, the entrepreneur who bought Beeple’s record-breaking artwork, sees investing in NFTs as a “huge risk” and “even crazier than investing in crypto.”

But history also tells us to be careful about dismissing NFTs as a passing fad, since the importance of technological innovations often becomes clearer once the hype dies down. Many commentators dismissed the influx of tech companies around the dotcom bubble of the late 1990s, and the first wave of mass cryptocurrency enthusiasm in 2017, only to be proven hopelessly wrong when Amazon and bitcoin re-emerged.

NFTs themselves are actually well down from their highs, with a 70% drop in average price since February. Perhaps this is less the bursting of a bubble than a “weeding out” of gimmicky tokens now that the initial hype has begun to die down.

This phenomenon is captured well in US consultancy Gartner’s hype cycle, which illustrates the typical progression of a new technology. With NFTs, we are probably emerging from the “peak of inflated expectations” on a journey towards the same “plateau of productivity” that Amazon reached a long time ago.

This ties in with what Austrian economist Joseph Schumpeter said about why capitalism works. Schumpeter viewed capitalism as a relentless churn of old into new, as the latest and most innovative enterprises replace those that came before – he called this “creative destruction“.

In this light, NFTs are the newcomers challenging how we perceive and register ownership of assets. And the tension between innovation and incumbency also contributes to the skepticism that always surrounds such new technologies.

What happens next

NFTs create opportunities for new business models that didn’t exist before. Artists can attach stipulations to an NFT that ensures they get some of the proceeds every time it gets resold, meaning they benefit if their work increases in value. Admittedly football teams have been using similar contractual clauses when selling on players for a while, but NFTs remove the need to track an asset’s progress and enforce such entitlements on each sale.

New art platforms, such as Niio Art, are able to demonstrate in a really simple way that they own digital works. When customers borrow or buy art from the platform, they can display it on a screen in the knowledge that there is no issue with copyright or originality because the NFT and blockchain ensures that ownership is authentic.

NFTs give musicians the potential to provide enhanced media and special perks to their fans. And with sports memorabilia, between 50% and 80% of items are thought to be fake. Putting these items into NFTs with a clear transaction history back to the creator could overcome this counterfeiting problem.

But beyond these fields, the potential of NFTs goes much further because they completely change the rules of ownership. Transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts and ensure that money changes hands.

None of this will be necessary in future. Transactions recorded on blockchains are reliable because the information cannot be changed. Smart contracts can be used in place of lawyers and escrow accounts to automatically ensure that money and assets change hands and both parties honour their agreements. NFTs convert assets into tokens so that they can move around within this system.

This has the potential to completely transform markets like property and vehicles, for instance. NFTs could also be part of the solution in resolving issues with land ownership. Only 30% of the global population has legally registered rights to their land and property. Those without clearly defined rights find it much harder to access finance and credit. Also, if more of our lives are spent in virtual worlds in future, the things that we buy there will probably be bought and sold as NFTs too.

There will be many other developments in this decentralized economy that have yet to be imagined. What we can say is that it will be a much more transparent and direct type of market than what we are used to. Those who think they are seeing a flash in the pan are unlikely to be prepared when it arrives.

James Bowden, lecturer in financial technology, University of Strathclyde and Edward Thomas Jones, lecturer in economics, Bangor University

The Conversation
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Bitcoin’s path to $100,000 is less important than its potential impact on the corporate world over the next decade, Wedbush says

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  • Dan Ives of Wedbush said bitcoin’s effect on the corporate world is more important than its price.
  • The analyst argued moves into blockchain tech and cryptocurrencies may surge over the coming years.
  • “Bitcoin mania is not a fad…but rather the start of a new age on the digital currency front.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin’s path to $100,000 per coin is less important than its potential impact on the corporate world over the next decade, according to Wedbush.

In a note to clients on Thursday, Wedbush’s Dan Ives said that the story around bitcoin is much larger than its “potential path/timeline to $100,000.”

The analyst argued the important theme when it comes to cryptocurrencies is “the potential ramifications that crypto, blockchain, and Bitcoin could have across the technology and corporate world for the next decade.”

Ives said moves into blockchain technology and cryptocurrencies could surge over the coming years after companies like Tesla, IBM, Visa, Square, Mastercard, and more entered the fray recently.

There’s a “growing shift for companies to accept this digital currency as a form of payment,” according to the analyst.

Ives added that he still believes “less than 5% of public companies” will invest in bitcoin over the next 12-18 months but said that number could move “markedly higher” as more regulation and acceptance of the currency takes hold.

“Bitcoin mania is not a fad in our opinion, but rather the start of a new age on the digital currency front,” Ives wrote.

Although Ives was one of the first to the party, his comments about cryptocurrencies and their regulation are becoming more in sync with other Street commentators and even CEOs as cryptocurrencies and blockchain technologies continue to develop.

David Solomon, the CEO of Goldman Sachs, said his bank is looking into ways to support clients’ desire to own cryptocurrencies and other digital assets in a CNBC “Squawk Box” interview on Tuesday.

The CEO added that he believes there will be a “big evolution” in the way the US government regulates digital assets in the coming years.

Ives and his team also highlighted the potential of using blockchain technology for decentralized storage in their note to clients on Thursday.

The analyst said blockchain technology can help increase the overall speed and lower the price of digital storage moving forward. He noted, “there are a number of business models attacking this new market opportunity with privately-held Filecoin one of the more impressive strategies we have seen in the market.”

As far as Wedbush is concerned, Bitcoin isn’t going away anytime soon, rather it’s set to become “mainstream” and the effects on Wall Street and the corporate world will be huge.

Coinbase’s 840% revenue jump in the first quarter may be the perfect example of what Ives is talking about.

Coinbase posted $1.8 billion in revenue in its first-quarter report. That means the crypto exchange pulled in over $120 million more than Intercontinental Exchange, the company that owns the New York Stock Exchange, did in its most recent earnings report.

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3 crypto-market trends to look out for this year, according to PwC

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Bitcoin’s meteoric rise has boosted crypto hedge funds

  • Cryptocurrency M&A is expected to have a stellar 2021, according to PwC, after the value of M&A deals in the space doubled year over year in 2020.
  • The firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million in 2020.
  • PwC outlined the three trends to expect in the crypto space in 2021.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

Mergers and acquisitions will be a big theme in the cryptocurrency space, according to PwC, after the value of M&A deals in the sector doubled year over year in 2020.

In a report published on Monday, the Big Four accounting firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million, with four deals valued at more than $100 million in 2020. The firm also revealed that transactions are shifting away from the Americas, with 60% occurring in Asia and Europe compared to 2019.

Transactions, according to PwC, are also more spread out across categories.

“With increasing interest in crypto from retail and institutional investors following the positive market momentum, it is not surprising to see increase M&A in the broader train sector,” the report said.

The report comes amid a rapid rise of interest in the cryptocurrency space, with bitcoin, the most popular digital asset, rising 600% in the past year alone. While many bitcoin bears continue to criticize cryptocurrencies, many advocates are expecting the boom to continue amid rising interest from both retail buyers and institutions.

The UK-based firm, in the report, then outlined the three trends to expect in the M&A activity in the crypto space across the globe after a record-breaking 2020.

Crypto M&A will be be driven by large players

PwC said it expects to see further consolidation in the industry with larger, well-funded, and profitable firms seeking to continue their M&A activities. “We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering,” the report said, referring to crypto media, data, and compliance research.

Institutionalization of the crypto industry will continue

The firm said it predicts a steady continuation of institutionalization of cryptocurrencies, driven by the rally in the price of the digital tokens as well as heightened media attention on central bank digital currency (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs). PwC said all these will serve as catalysts to more institutions wanting to enter the space through investing or acquiring.

M&A, as well as fundraising, will increase

Based on the bull market in the first quarter of 2021, PwC said it expects the number and value of M&A deals to increase this year. It also said it sees more activity comeing from Asia-Pacific and EMEA reagions.

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Twitter CEO Jack Dorsey’s first tweet sold for $2.9 million on Sunday. The buyer said it’s the Mona Lisa of tweets.

Twitter CEO Jack Dorsey.JPG
Twitter and Square CEO Jack Dorsey.

  • An NFT version of Twitter CEO Jack Dorsey’s first tweet sold at auction for $2.9 million.
  • The tweet was as valuable as fine art, like the Mona Lisa, said the buyer.
  • Observers said NFT buyers may be speculating, buying pieces they expect to resell in the future.
  • See more stories on Insider’s business page.

The buyer who paid $2.9 million for an NFT version of Twitter CEO Jack Dorsey’s first tweet said he’s valuing it like fine art – specifically the Mona Lisa.

On Sunday, Hakan Estavi, chief executive at at Bridge Oracle, had the highest bid in an online auction for the piece. Insider has reached out to Estavi for comment.

“This is not just a tweet!,” Estavi said on Twitter. “I think years later people will realize the true value of this tweet, like the Mona Lisa painting.”

Dorsey’s message – “just setting up my twttr” – clocked in at 24 characters, including spaces, placing its value at more than $100,000 per character.

What made a tweet from 2006 so valuable? Even in the form of a non-fungible token, or NFT, with a digital signature from Dorsey, it was still just a few lines of code.

“An NFTs value is largely derived as a function of scarcity and speculation,” said Tom C.W. Lin, a professor at Temple University’s Beasley School of Law.

The value of high-priced NFTs – like, say, the $69 million NFT sold this month – comes from the combination of high demand and rarity, as with any piece of art. An NFT version of Dorsey’s tweet is a digital object that can’t be duplicated, making it scarce.

Lin added: “An NFT itself does not have much intrinsic value beyond those factors.”

Demand for Dorsey’s tweet started slowly. According to Valuables by Cent, where the auction was hosted, the chief executive created the auction for his own tweet.

The first offer was made on December 15, coming in at one dollar. Within a few weeks, the top offer was $3,500. But that offer was canceled by the bidder, sending the price back to zero.

After Dorsey tweeted a link to the auction in early March, bidders quickly entered nearly 30 offers, sending the price to $2.5 million. As of midday Sunday, that was still the highest bid.

Dorsey said he would convert the proceeds from Sunday’s sale into bitcoin, then donate it to charity. He sent a tweet confirming his donation on Monday.

Skeptics and NFT novices may question whether a public tweet can truly qualify as scarce, commanding such a high price. After all, Dorsey’s Twitter post had been live for all the world to see since March 2006. And it will continue to be live on Twitter even after Sunday’s sale, so anyone can read it for free anytime they want.

It’s right here:

So what exactly did the buyer get with an NFT version? That version would add a digital signature, making it a one-of-a-kind moment, akin to a work of signed art, according to the Valuables FAQ.

Dominik Schiener, cofounder and chairman of the IOTA Foundation, said anyone who buys an NFT version of a tweet is basically getting the “essence” of the tweet’s value.

It’s important that the buyer trusts both the auction website and the seller. Otherwise, they could just post a new NFT version someplace else, he said.

Twitter HQ in San Francisco
Twitter’s San Francisco headquarters.

“In order for the tweet-NFT to be valuable, there has to be consensus that the platform and technology is a de-facto representation of scarcity,” Schiener said via email. “If the world comes to an agreement that the NFT version of an asset on blockchain is ‘real’, then it means you are acquiring the ‘essence’ of that thing’s value.”

Dorsey’s tweet might also be worth $2.9 million for collectors simply because they could resell in the future for an even higher price, said David McCarville, a director at Fennemore Craig.

He said the rise of the NFT market is being driven by early adopters who’ve made money from cryptocurrency. They may be seeing similar opportunities in the NFT market.

McCarville said: “These early adopters believe that they are in a position to be the first movers in a market that is still very new and therefore should enjoy significant appreciation in value.”

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Twitter CEO Jack Dorsey’s first-ever tweet sold for $2.9 million as an NFT

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Twitter CEO Jack Dorsey has sold his first-ever tweet for $2.9 million dollars as an non-fungible token, or NFT, on Monday.

The tweet, published on March 21, 2006, simply said: “just setting up my twttr.” The first offer was made on December 15 and the bidding ended on March 21.

Dorsey first tweeted a link listing his tweet as an auction on March 5. On March 9, the executive said in a tweet that he will “immediately convert proceeds to bitcoin” and donate to nonprofit GiveDirectly’s Africa response. Hours after the news broke, the executive posted a screenshot of his donation, thanking the buyer.

An NFT is a unique digital asset secured on a blockchain that has gained traction this year, in step with the rapidly rising popularity of cryptocurrencies. Each NFT has its own signature, which can be verified in the public ledger and cannot be duplicated.

When a person buys an NFT, they gain the rights to the unique token on the blockchain. For instance, if a person buys an image, a meme, or in this case, a tweet, they are not buying the content per se. In fact, they have no ownership of the artwork itself and have no control over the rights to distribution. Instead, they are buying the rights to the unique token that connects their name to the artwork.

“An NFTs value is largely derived as a function of scarcity and speculation,” said Tom C.W. Lin, a professor at Temple University’s Beasley School of Law told Insider. ” An NFT itself does not have much intrinsic value beyond those factors.”

Dorsey’s tweet was auctioned on Valuables, a platform by Cent, a social media network built on blockchain. Tesla’s Elon Musk has also listed a tweet on the same platform but has yet to sell it.

For Dorsey’s tweet, it was bought using Ether for 1630.5825601 ETH, which was worth around $2,915,835 at the time it sold, Cent CEO and co-founder Cameron Hejazi confirmed to Reuters. Dorsey will receive 95% of the proceeds, while the remaining amount will go to Cent.

The buyer is Sina Estavi. Based on Estavi’s Twitter biography, he is the CEO of blockchain company Bridge Oracle and is based in Malaysia.

Crypto art has been around for over half a decade but became mainstream only recently, with an auction by Christie’s of a digital work for almost $70 million in February representing a watershed moment.

In the past month, over $1 billion has been spent on digital assets, according to data from CryptoSlam.

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Twitter CEO Jack Dorsey’s first tweet is expected to sell for $2.5 million on Sunday. Here’s why the NFT is so valuable.

Twitter CEO Jack Dorsey.JPG
Twitter and Square CEO Jack Dorsey.

  • An NFT version of Twitter CEO Jack Dorsey’s first tweet is expected to sell for $2.5 million.
  • Bidding on the tweet ends on Sunday, Dorsey said.
  • Observers said NFT buyers may be speculating, buying pieces they expect to resell in the future.
  • See more stories on Insider’s business page.

When the auction for an NFT version of Twitter CEO Jack Dorsey’s first tweet ends on Sunday, a buyer is expected to pay at least $2.5 million for it.

The message – “just setting up my twttr” – clocks in at 24 characters, including spaces, placing its value at more than $100,000 per character.

What makes a tweet from 2006 so valuable? Even in the form of a non-fungible token, or NFT, with a digital signature from Dorsey, it’s still just a few lines of code.

“An NFTs value is largely derived as a function of scarcity and speculation,” said Tom C.W. Lin, a professor at Temple University’s Beasley School of Law.

The value of high-priced NFTs – like, say, the $69 million NFT sold this month – comes from the combination of high demand and rarity, as with any piece of art. An NFT version of Dorsey’s tweet is a digital object that can’t be duplicated, making it scarce.

Lin added: “An NFT itself does not have much intrinsic value beyond those factors.”

Demand for Dorsey’s tweet started slowly. According to Valuables by Cent, where the auction is hosted, the chief executive created the auction for his own tweet.

The first offer was made on December 15. The bidder offered one dollar. Within a few weeks, the top offer was $3,500. But that offer was canceled by the bidder, sending the bidding back to zero.

When Dorsey tweeted a link to the auction on March 6, there was another one dollar offer. Users entered nearly 30 offers on the day of Dorsey’s tweet, sending the price to $2.5 million. As of midday Sunday, that was still the highest bid.

Dorsey said he would convert the proceeds from Sunday’s sale into bitcoin, then donate it to charity.

Skeptics and NFT novices may question whether a public tweet can truly qualify as scarce, commanding such a high price. After all, Dorsey’s Twitter post has been live for all the world to see since March 2006. And it will continue to be live on Twitter even after Sunday’s sale, so anyone can read it for free anytime they want. It’s right here:

So what exactly will the buyer be getting with the NFT version? That version will add a digital signature, making it a one-of-a-kind moment, akin to a work of signed art, according to the Valuables FAQ.

Dominik Schiener, cofounder and chairman of the IOTA Foundation, said anyone who buys an NFT version of a tweet is basically getting the “essence” of the tweet’s value.

It’s important that the buyer trusts both the auction website and the seller. Otherwise, they could just post a new NFT version someplace else, he said.

Twitter HQ in San Francisco
Twitter’s San Francisco headquarters.

“In order for the tweet-NFT to be valuable, there has to be consensus that the platform and technology is a de-facto representation of scarcity,” Schiener said via email. “If the world comes to an agreement that the NFT version of an asset on blockchain is ‘real’, then it means you are acquiring the ‘essence’ of that thing’s value.”

Dorsey’s tweet might be worth $2.5 million for collectors simply because they could resell in the future for an even higher price, said David McCarville, a director at Fennemore Craig.

He said the rise of the NFT market is being driven by early adopters who’ve made money from cryptocurrency. They may be seeing similar opportunities in the NFT market.

McCarville said: “These early adopters believe that they are in a position to be the first movers in a market that is still very new and therefore should enjoy significant appreciation in value.”

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‘Big Short’ investor Michael Burry slams NFTs with a quote warning ‘crypto grifters’ are selling them as ‘magic beans’

Michael Burry big short
Michael Burry.

  • Michael Burry subtly criticized non-fungible tokens (NFTs) this week.
  • “The Big Short” investor shared a quote comparing NFTs to “magic beans.”
  • Burry has blasted Tesla, bitcoin, Dogecoin, GameStop, and other popular bets this year.
  • See more stories on Insider’s business page.

Michael Burry isn’t a fan of non-fungible tokens (NFTs), if his Twitter profile is any indication.

The investor has changed his header image to a screenshot of this quote: “NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money, and pretend they’re not selling magic beans.”

The quote is from “NFTs: crypto grifters try to scam artists, again,” an article posted by David Gerard on his “Attack of the 50 Foot Blockchain” blog last week. Gerard is the author of a book with the same name as his blog, which tackles bitcoin, smart contracts, and other cryptocurrency topics.

NFTs serve as virtual certificates of ownership and authenticity for digital items, and are stored securely on a blockchain. They’re getting lots of attention after a digital art NFT was sold for $69 million at a Christie’s auction last week.

Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, “Shark Tank” star Mark Cuban, and other high-profile figures have also discussed and dabbled with the technology in recent days. However, critics question the value of NFTs given it’s virtually impossible to stop others copying, downloading, and sharing digital images and videos.

Moreover, Gerard argues on his blog that NFT proponents are using artists as “aspiring suckers” to pump cryptocurrencies, and handing them “crumbs” for their efforts.

Burry is best known for his billion-dollar bet against the US housing bubble in the mid-2000s, which was chronicled in the book and the movie, “The Big Short.” He’s slammed popular investments including Tesla, GameStop, bitcoin, and Dogecoin this year, and warned investors against buying into speculative bubbles.

The Scion Asset Management boss recently signaled he was taking a break from tweeting. However, the latest change to his Twitter profile suggests he still wants to have his say.

Read the original article on Business Insider