#4 Owning Your Identity
Digital Wallets, Solana, and NFT Mania
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HAX Weekly is written to help young investors approach investing by providing access to where the world is heading - with an unashamed focus on crypto. We simplify cutting-edge trends & technologies, share what’s top of mind, and discuss news & events through our “1-2-3” format:
1 investing/crypto concept explained in a way a 5 year old can understand
2 themes that we can’t stop thinking about
3 things (articles/tweets/memes/podcasts) that really hit the spot
🔥, right?! Ok here we go!
1 Concept 💡
You’ve probably have heard of a digital wallet, but you may be wondering what that is?
A digital wallet allows you to securely store any digital assets you own, including cryptocurrencies such as Bitcoin or Ethereum and NFTs.
Similar to a physical wallet or a Venmo account, it has individual private ownership: only you are allowed to spend from it.
But digital wallets have a special quality with HUGE implications: public access. Anyone can view the contents of your wallet. Wait, what about my privacy?!?! We’ll get into that in a second, but let’s explore why public access is a game-changer.
Who are you?
Raise your hand if you have a million and one log-ins? Ok, trick question - we all do. Everyone reading this has different passwords to Amazon, Facebook, Netflix, Gmail, bank accounts, the list of websites goes on...
Why? Because there is no single agreed-upon authority for your digital identity.
So every website had two options:
Create their own log-in - which puts the onus on you the user to share your e-mail & remember log-ins to multiple identities that aren’t linked to one another
Rely on “sign in with gmail/twitter/facebook” - which puts the onus on the website to depend on Google/Facebook/Twitter (the closest thing we have to a digital identity) to understand who their users are.
In either scenario, the fundamental issue still remains: identity is not owned by the end user - as a result, it’s duplicated and can’t be universally acknowledged. The guys over at Bankless agree - it’s terrible!
Enter Digital wallets
Think about it: your digital wallet is a perfect way to represent your digital identity. It’s unique, it’s something you own and is accessible publicly by any website. And even better? You can pay for stuff directly from your wallet!
This week, I discovered this site called The Pixel Portraits (which allows you to commission a pixel portrait of yourself or anyone (there’s fun ones of Kanye West, Wonder Woman, Deep Fuckin Value - and me soon since I commissioned myself 🤪). The real story though: the identity + payments flow of the website blew me away & showed me a glimpse of what the future looks like:
One click log-in via your digital wallet. No email signup, no passwords, no future promotional spam.
One click instant pay via your digital wallet. No credit card, no billing address.
Sounds amazing, right? Digital wallets were initially invented as a way to store digital assets, but will morph into something far more important as Brantly describes below: offer “single sign on” + "instant transaction” for the Internet.
Who you are?
There isn’t a good way to represent who you are on the Internet. Sure, you have pictures on IG, list of hobbies/where you went to school on your social media profile -but the same fundamental problems exists: the information is scattered, it’s superficial and it’s not yours (you don’t own it, it lives on some company’s database somewhere).
Digital wallets change all that. In the future, every activity, picture, concert, sporting event, achievement, diploma, etc will be represented as a “digital memory” via NFTs and exist in your wallet. Same with digital art you own or the gaming avatars you play with. You’ll own it and it’ll be up-to-date. In the future, we’ll all have pages to share our digital self similar to Mark Cuban’s NFT gallery.
As digital and physical words inevitably merge, your wallet will be the digital gateway to your soul so ppl can get to know the real you. The future can’t get here soon enough.
Oh yeah, what about privacy?
Two quick thoughts (we’ll cover this in more depth in a future edition):
The biggest privacy concern is people being able to tell how much money you have. Think of your primary digital wallet more like your physical wallet - you only have your “carrying around” money in there. You’ll likely store your savings and other assets in different wallets that offer more privacy.
In many ways, digital wallets offer even more privacy because you aren’t sharing emails or passwords with companies - just your wallet identifier.
2 Themes On Our Mind 🤔
To build wealth, you need to own assets. I think of ownership as a drug - it can’t be talked about, it has to be experienced. Once it’s experienced, there’s no going back. A huge part of the recent hype IMO around NFTs is people experiencing digital ownership for the first time - and being hooked.
Now, one of the challenges with democratizing ownership is that many people don’t have the $$$ to own, and as a result, can’t experience the “ownership high”. Fractionalized ownership certainly helps, but digital wallets represent a unique way to promote this:
It’s officially Solana Summer. Packy McCormick wrote a legendary 10,000 word piece on it, and the price of Solana’s token has been straight moonin’ (at time of writing, it’s $124 representing a 50+% gain in the past week alone!).
Enter Solana. The Achilles Heel of Bitcoin and Ethereum has been a) its transaction speed - it’s slow, and b) it’s cost - it’s expensive!! This has been viewed as a required trade-off of the decentralization it brings, but results in the technology being impractical to use for applications that require near real-time speed (online payments, financial trading, video game play, etc). Enter Solana.
Solana promises to offer all the goodness of blockchains but with 1000X faster speed and 10-100X less expensive. If you want to check it out for yourself, download the Phantom wallet and send some $SOL (Solana’s token) there. It’s FAST and CHEAP! Time will tell how this plays out, but I used Solana for the first time this week and I feel like I saw the future:
Using ETH feels like using dial-up in the 90s. Using Solana feels like wifi. I'm just sayingggg
Tushar Jain @TusharJain_
All the work on EIP 1559 should have been put towards scaling. So much time & energy was spent on 1559 and it doesn’t improve Ethereum’s competitive position at all. Mainstream users don’t care about ultrasound money. Users care about low fees and fast transactions.
3 Things To Check Out 🔍
Add another log to the raging bonfire that is NFT mania! This piece shares the story of how a 12 year old has made $400,000 selling Weird Whales NFTs in the past 3 months. To top that, Kevin Rose sold one of Tyler Hobbs’s Fidenza pieces for $2.5 million after buying it for just over $3K two months ago. Both Weird Whales and Fidenzas are what’s known as generative art, which is a fascinating world that we plan to cover in next week’s edition.
My investment take on NFTs: the technology is 100% here to stay but its generally risky to buy when there’s a full-fledge mania around something. I recommend using time now to play around in the space, learn the basics, know the players, only buy art pieces that complete you 💞 vs. ones to speculate on, and when no one is talking about NFTs - be ready to pounce!
But man, NFTs are so fun tho…
In non-crypto news, one of the recent phenomena in the e-commerce world has been “buy now, pay later” (e.g. Affirm, Klarna, etc), which allows buyers to buy now and then pay later in installments (sometimes at 0% interest). I enjoyed this piece which details the good, bad and ugly with this trend.
Until next week - always be learning,
Karthik
Sol-pilled. Great read!
Sol-pilled