On Wednesday, US Federal Reserve Chairman Jerome Powell told the House's Financial Services Committee that Facebook's financial efforts were "of great concern." In addition to concerns about privacy, money laundering and consumer protection, Libra represents a serious risk to financial stability the enormity of the Facebook user base, Powell said. "The process of resolving these issues must be patient and cautious, not a sprint," he said, adding that the Fed was collaborating with other federal agencies and central banks abroad .
Powell's concerns follow similar comments from leading regulators in Europe and Asia. Benoît Cœuré, executive at the European Central Bank, announced Sunday describes the Libra with regard to the "wake-up call" of the regulators, stating that it could not operate in a "void" outside the typical structure of central banks. A problem for regulators is that the Facebook project lacks an obvious precedent. The company's projects involve a Swiss-based association that would run the Libra blockchain platform, as well as the funds used to back up the value of its chips. Companies, including Facebook, could create portfolios and other applications, allowing Libra to operate a global financial network outside the usual framework of central banks like the Fed.
Powell's comments Wednesday came in response to questions from Representative Maxine Waters (California), who was among the most savage critics of Libra. His call for a moratorium on the development of Libra was joined last week by fellow Democrats from the House Financial Services Committee. Facebook has refused to respond to these requests, although David Marcus, head of Facebook's Calibra division, who will oversee the company's financial services products, will appear in consecutive hearings in the House and Senate next week. .
A Facebook spokesperson led WIRED to a letter Sent by Marcus on Monday in response to Senators' questions, the company subscribed to Powell's call for a "patient and cautious" approach to problems.
At Wednesday's hearing, Mr. Waters raised the possibility that Libra could enforce Facebook under the Dodd-Frank Financial Reform Act as a "financial institution" too big for going bankrupt". These institutions, which require special regulatory oversight, are usually large banks, such as JP Morgan and Wells Fargo. Powell said it was too early to say whether Facebook would be eligible, but a working group within the Financial Stability Board, a regulator created under Dodd-Frank, was examining the issue "so serious ".
Powell also confirmed that he had met with Facebook representatives in the months leading up to Libra's announcement, as part of the company's global tour of technology with financial authorities. Apparently, many regulators have left these meetings unsatisfied. Beyond the EU, regulators the United Kingdom, Japanand Singapore have called for a closer examination of Libra in recent weeks.
Concerns have spread to places where Facebook does not plan to use Calibra. In China, for example, where Facebook does not carry out any activity, central bankers published Monday a list of their concerns about global systemic risks and the potential impact of Libra, according to Bloomberg. One of the concerns was that Libra could increase instability in developing economies if people flocked to the local currency. Some countries, such as South Africa, have strict currency controls in place to prevent this instability. The People's Bank of China, which is working on its own digital currency, reportedly accelerated these plans after Facebook's announcement.
. (tagsToTranslate) Facebook (t) Cryptocurrency (t) Regulations Federal Reserve (t)</pre></pre>
Thursday, Gelernter posted a post on Medium declaring his grievances against our favorite suzerain of social media, Facebook. He directs his anger into a new society called Populi Revolution, a social network that focuses on individual ownership of data and democratic rule by its users. Hence the patriotic timing. "For me, it's an opportunity to act on a public topic that I consider really important," he said. "Who Owns the Cyber Landscape? Are We All Owners, or Do We Have Five Incredibly Rich People in California?" Gelernter's message to those living under the imperial rule of Facebook is "Join or Die."
For the moment, Revolution Populi is composed of four men, co-founder of the title, a former vice president of Goldman Sachs, a medical entrepreneur, a director of public relations and a rather stormy journalist. The technical details are … rare. It is so difficult that after long reflections, it is difficult to reconstruct exactly what Gelernter, holder of the title of "chief visionary leader" proposes. Other than saying yes, it will be "on the blockchain".
Gelernter has built an avant-garde reputation on the technological curve, starting with his work on parallel computing and data mining, and then as a pioneer of the social Web . In a profile in 1997 in WIREDI have described a vision of twenty-first century computer science centered on human interaction. According to Gelernter, this would also depend on design and social sciences as any technical improvement.
His project at the time (with doctoral student Eric Freeman) was a social network called Lifestream. It took the form of a digital chronology of the totality of life – a perpetual flow of documents and messages that can be organized, sorted and shared with others. According to Gelernter, Lifestream was popular among colleagues in his Yale department, but he was trying to commercialize the pulverized technology. A godfather of modern social networks was watching by far the amounts of Silicon Valley turning into giants. "I've been on the sidelines ever since," he says.
"Who Owns the Cyber Landscape? Are We All Owners or Are We Incredibly Rich in California?"
Well, not completely out of the way. Many of Lifestream's ideas were embedded in patents owned by Gelernter, Mirror worlds, named after his 1991 book that describes our coming home in virtual reality. The company then sued Facebook, Microsoft, and Apple for violating its patents with their various stream-based products, such as Apple's Timeline and Time Machine and Spotlight. (An Apple lawsuit resulted in a $ 625 million jury award for Mirror Worlds, which was subsequently overturned by a judge.) Mirror Worlds has settled other lawsuits against Apple and Microsoft.)
With his new company, Genernter wants to challenge these companies again. The idea, he says, is to build a social media application over a new blockchain ecosystem. I have described the proposed network as a "public place" (term coined in Mirror worldshe notes) in which everyone has their data and can access it for cryptocurrency. The rules governing this platform will be based on the US Constitution and can only be changed by a user vote. It will also support an open ecosystem of applications.
The Gelernter team will start with its own app, which will begin as a music streaming platform where users pay artists directly. (Rob Rosenthal, CEO of Revolution Populi, launched in 2016 a music app called MyFyx, now gone.) But their ambitions go far beyond: becoming a centralized center for music, television, movies, social media and even web search. vein of the original Lifestream.
As for the blockchain, a technology that has existed for 10 years, Gelernter describes himself as an "informed observer". The type of data ownership system you describe has long been a dream for those who use the blockchain, who see the accumulation of personal data. by the giants of technology as problematic. Many others work there. Ethereum, of course, is designed to enable the development of decentralized applications, including social media applications and user-managed personal data markets. There is also Solid, a platform built by World Wide Web inventor Tim Berners-Lee, that targets data ownership and interoperability without using the blockchain.
The problem is that all this is extremely difficult, especially with the blockchain in the mix. There is the problem of scaling up: the technology is notoriously slow and unsuitable for the management of a large number of users. Not to mention the many usability issues (raise your hand if you lost the key to your bitcoin!) And have trouble getting people to actually adopt your clumsy platform likely. Social networks also present the problem of digital identity: of course, the data stored in the block can be secure, but how do you make sure that they are not fraudulent? And while it's nice to talk about democracy on the blockchain – to "decentralize" power, as they say, let citizens directly pull the levers of power and the disputes between trade and governance on platforms like Ethereum have showed that it was more difficult than it seemed. And then, look what our real-world democratic system has brought us: the oligarchs of the technological industry!
Gelernter recognizes that everything will be difficult. "Maybe we're going to be wrong, maybe 16 old guys from Pittsburgh will take care of everything," he says. "But we will know that we will have invited the public to be part of the system." He also has ideas on how to technically execute his plan, he assures me. It will not be a question of "doing something strange or delicate", but of "direct application of existing algorithms known to the general public". The white paper offers some ideas. There is the Interplanetary File System, or IPFS, a type of decentralized storage originally built for Ethereum, as well as a reference to Merkle Trees, the basic concept of blockchain technology. They will use facial recognition and other "biometric verification protocols" to link your digital identity to your reality, to be stored in your own "ultra-secure" blockchain.
The co-founders hope to finance their project without venture capital, but a token will come out. (This is also how they plan to make money by selling the token to users via a crypto-currency exchange.) So when ICO, my brother? Most cryptographic companies that have chosen to sell tokens via "initial coin offers" are still waiting for Purgatory, waiting for the Securities and Exchange Commission to decide how to deal with digital tokens under US law. . How will he distribute the chips? This must also be discussed, says Gelernter.
It's a pile of questions, but Gelernter is not discouraged. He will want blockchain technology to improve and technical barriers to be reduced, and democracy to be easier within the confines of a virtual world. In addition, people are ready to abandon platforms like Facebook. "In five years, there will be well established competitors on Facebook, like those who do not exist now, they need to exist, they will exist," he says. "It's the right problem at the right time." Maybe Gelernter himself will not have to solve it, he adds. But he would like to try.
. (tagsToTranslate) Blockchain (t) Facebook (t) social networks</pre></pre>
The concerns span the gamut, suggesting that Facebook will face regulatory challenges when it will attempt to execute its Libra vision. Regulators in Europe are worried that Libya could become a systemic risk for the global financial system and rival central banks; a member of the US Congress called for Facebook to stop development until it answers questions about privacy; officials have elsewhere expressed fears that any cryptocurrency can help users escape global sanctions or launder money.
In Libra, regulators are struggling with a kind of regulatory octopus, a unique protocol with many tentacles. There is the Geneva based Association Balance, of which Facebook is only one of the members, alongside companies such as Uber, Spotify, PayPal and Visa. The association will oversee the balance currency, backed by real money, as well as the blockchain platform that allows Libra to be sent around the world. In theory, members will then build their own Libra products. Each of them will have to comply with the local rules in force. For Facebook, this is back to its new subsidiary, Calibra, a portfolio that will be integrated with all its platforms, starting with Messenger and WhatsApp.
"The network will be available worldwide as soon as it is ready, and then it will be up to the individual portfolios to decide whether to globalize or focus on specific countries," said David Marcus, director of Calibra, at WIRED. last week. Facebook is now "getting the proper licenses … to work in as many regions as possible".
This will not include India. The biggest Facebook market by users is reported Last December, it would probably be a pilot location for Libra, with its large cross-border fund business and enthusiasm for mobile payments. But India 's attitude towards cryptocurrency has deteriorated considerably in recent months. a bill would send those who hold or exchange cryptocurrency in prison for 10 years. Like TechCrunch reported earlier, Facebook does not plan to introduce Calibra in countries hostile to cryptocurrency.
On Tuesday, the backlash of Libya broke out in Europe, where regulators fear the system, if it is widely adopted, could shake the global economy and rival national banks. According to Financial TimesFrench Finance Minister Bruno Le Maire sent a letter to officials of the G7 and the International Monetary Fund to ask a group to examine the impact of Libya on the global financial system. The Mayor said that Libya should not become a "sovereign currency", while a German politician stressed the potential of Facebook to become a "parallel bank" for the global financial system.
The Mayor also asked how the Libra association was going to handle the abuses of the platform, especially the money laundering. Libra's security protocols are designed to look like Bitcoin, which means that everyone can use the system in a pseudonymous way, but can be unmasked if necessary. (The DOJ and the FBI often contract with companies like Chainalysis to track down Bitcoin-based fraudsters.) Facebook said the organization would likely set aside part of its operating funds to develop tools to detect fraud or money laundering. But unlike Bitcoin, which does not have the central power to demand accountability, the association's responsibility for abuse and misuse is unclear.
When US lawmakers became aware of this announcement, the list quickly spread to Congress. Representative Patrick McHenry (R-North Carolina), Republican High Representative for the House's Financial Services Committee, called for a hearing with Facebook executives. In a letter To chair Representative Maxine Waters (California), McHenry took a positive attitude, praising Libya's promise to expand financial inclusion, but said: "It is incumbent upon us as policymakers to understand the Balance project. " moratorium on the development of Libra by Facebook, while the company was answering questions about privacy and security.
Some US officials had already expressed concerns about Facebook projects. At the beginning of May, as details on the Libra progressively disclosed, Senators Sherrod Brown (D-Ohio) and Mike Crapo (R-Idaho), prominent members of the Banking Committee, sent a letter to Facebook to ask for clarification on the intentions of the company. Senators asked for details on privacy protection, discussions with regulators and whether Facebook intended to use its data to market other financial products, such as credit. and insurance. By Wednesday, these questions remained unanswered. Facebook says that he's working on an answer. Brown said Tuesday on Twitter Facebook was "too big and too powerful" and asked the federal regulators to look closely at the project.
However, as Waters pointed out, it's hard to know who the regulators will be because the United States does not have a regulatory framework for cryptocurrency. "Regulators should see this as an awakening," she said. Crapo, for whom the banking committee would have the opportunity to call Facebook to testify in the Senate, did not respond to a request for comment.
"We look forward to answering legislators' questions as this process progresses," said a Facebook spokesman.
There were some positives for Facebook. Darren Soto's representative (D-Florida) said in a statement that "Facebook's new Libra blockchain project could be a big step forward towards a more global and more financial infrastructure," while acknowledging that it is not Was not clear how the system would be regulated. Soto is a member of the Congressional Blockchain Caucus, which has campaigned for crypto-friendly regulation with little weight so far.
. (tagsToTranslate) Facebook (t) Congress Blockchain (t) cryptocurrency (t)
The transformation of Wyoming into a blockchain booster is somewhat legendary in cryptocurrency circles. Until recently, strict laws on issuers of funds prevented even residents from using a Coinbase account. But in the past two years, Wyoming has passed 13 blockchain laws, with many other proposals in the works. The question is what is the least populated state in the country, far from the technological poles and associated for a long time with an unhealthy dependence on the extraction of resources, wanting to the blockchain?
"The blockchain and Wyoming philosophies are very similar," says Caitlin Long, co-founder of the Wyoming Blockchain Coalition, a lobby group lobbying for crypto-friendly bills, many of which are libertarian.
The Wyoming push is a reflection of the mosaic of state laws of the nation, created in the absence of clear federal rules. Some, like New York, please stringent regulations. From the state Bitlicense regime, which began in 2015, involves a strict audit process for companies wishing to deal with New York residents, which causes complaints that it discourages innovation. Legislators in Wyoming, as well as neighboring Colorado and Montana, see it as open.
"It is good for Wyoming that the federal government proves that it is incompetent," says Tyler Lindholm, a state representative who, at 6 am, is doing a lot to increase the visibility of cowboy hats. -boy.
Lindholm and Long joined the blockchain legislation for the first time two years ago. Long, a former Morgan Stanley executive, became interested when she discovered that regulation prevented her from donating bitcoins to her alma mater, the University of Wyoming. Lindholm, a long-time cryptocurrency enthusiast, had already tried to solve this problem. But fellow lawmakers have mainly associated cryptocurrency with the sale of drugs and scams. "It was their first contact with crypto even hearing about it," says Lindholm. "I hurt my ass."
Their fortunes have improved by using cryptocurrency as a way to replace the earnings of the disappearing coal industry, says Long. Work with lawyers from Consensys, a company that builds and promotes Ethereum applications, has drafted bills that exempt certain digital tokens from the state's securities rules and exempts cryptocurrency from state property taxes. These laws were adopted and became, in the following year, the basis of what has long been called upon to complete the legal framework for the owners of digital assets and the companies that manage them.
The effect of these laws, however, seems somewhat mitigated, said Benjamin Sauter, lawyer Kobre & Kim, who works a lot with companies in the block chain. The problem is that the blockchain, by nature, is not easily confused with a single jurisdiction. It's pretty easy to isolate New Yorkers, but it's harder for a company to take advantage of more permissive laws in a small state. And on issues such as securities laws, companies still have to comply with federal rules. Without developing formal guidelines, the Securities and Exchange Commission Last year, it was suggested that all the chips involved in the initial coin offerings were securities and were therefore subject to federal oversight. This decision largely nullified Wyoming's plans to attract international trade companies (ICOs) into the state, added Long.
Nevertheless, the new laws have brought something to Wyoming: limited liability companies, or limited liability companies, dozens of them with "Blockchain" or "Crypto" in their names. "It's been a long time since I've been in startups and I never remember interacting with a Wyoming-based technology startup," says Stephen McKeon, professor of economics at the University of Wyoming. # 39; Oregon. "But in the last two years, just in the encryption, I've seen it many times." But I noticed that these companies, although legally based in Wyoming, have rarely established a physical presence there.
Lindholm, who co-founded his own start-up blockchain last year, BeefChain, which verifies the provenance of high-end cattle in Wyoming, says the state is on the road to attracting business. offering a deposit of over $ 100 and a post office box in Cheyenne. In other words, companies that create jobs and innovation hubs that benefit Wyomingites. He cites two bills passed in February as a first step, establishing a new type of crypto-user banking license, as well as rules allowing banks to hold digital assets. Banks licensed under the license would not be guaranteed by the FDIC and could not lend, with the obligation to retain more than 100% of their liabilities in reserve. And they should set up a physical office in the state.
In other words, when it comes to banking, it's not really a lucrative business. But it's an intriguing carrot for cryptocurrency companies, who claim that traditional banks, under pressure from the FDIC, often refuse to keep their assets or suddenly cut their services. This makes it impossible to manage a business because they need an account to pay employees and pay taxes to the IRS. This has led to creative and, in some cases, destructive workarounds. After Wells Fargo ceased its services, Bitfinex, the company behind the "stable" cryptocurrency attached, turned to Crypto Capital, headquartered in Panama, whose assets were later confiscated by foreign governments. That left Bitfinex some $ 850 million short
At least one company, FreeRange, based in New Mexico, has announced its intention to apply for the state's banking charter when applications are opened at the end of the year. Others say that they are interested. Jesse Powell, CEO of the Kraken cryptocurrency center, said his company, which had been abandoned by US banks in the past, could use such a banking license to hold cryptographic assets. I noted that due to state charters generally recognized in other states, Kraken could potentially offer services nationally. Neither FreeRange nor Kraken, which has about 50 employees in San Francisco, plan to transfer a large number of employees to Wyoming.
With a legal framework in place, Wyoming blockchain enthusiasts now have more unusual ideas about how blockchains could enter government services. Last monthThe Wyoming Blockchain Taskforce heard the results of an experiment to place land titles on a blockchain system in Teton County and a speech by Bermuda officials to collaborate on a form of digital identity. He also announced that Wyoming would be a "safe haven" for developers who fear being sued for their Internet activities. "Decentralized" applications They develop but say that they do not control.
But Powell, who attended the meeting, said he was more excited about a less appealing proposal: a form of automated LLC based on a chain of blocks that he said could help Kraken's customers bypass tedious regulations in the future. 39, other states. In this way, if a person in New York wanted to use Kraken, the company could set up an LLC in Wyoming on their behalf. "If we can get everyone in Wyoming, that would be great," Powell said, noting that even with low registration fees, his millions of users would be a "cash cow" for the state.
Long says the task force is still working on the details of the latest proposals, with plans to develop laws in July. Some initiatives, such as automated registration of LLCs, are more likely to take one form or another, while others, such as the digital identity application, are more difficult. "The technology is just not up to date," says Long.
A problem for Wyoming: the state may have fewer opportunities to distinguish itself if federal policy becomes clearer and preempts state rules. "I am skeptical that many of these ideas will gain ground at the federal level," Sauter said. "I do not see the political will to do it." A federal bill, entitled Law on Taxonomy of Tokens, would you like to try to tie the hands of the SEC and exempt some tokens from securities regulation, but Long and Lindholm argue that it goes too far in lasso states too. But for now, they can be safe. There is little indication that Congress has any interest in tackling the blockchain problem.
. (tagsToTranslate) cryptocurrency (t) Blockchain (t) wyoming (t) SEC</pre></pre>
Not so fast, county officials said. They named a different culprit: a gigantic coal-fired power plant located halfway through the state. If the dam's energy was used for mining at Bitcoin, they said, the county as a whole would end up using more coal. In Aprilthe leaders asked all future mines to build their own renewable energy.
Missoula County was on the right track, said Christian Stoll, an energy researcher at the Technical University of Munich. In one paper published Wednesday in the newspaper Joule, his team takes a closer look at the energy of mining in bitcoins, depending on the location of the miners and the types of machines that they use. "Coal feeds Bitcoin," he says. "The question is how to avoid it, and it belongs to the local regulators."
The mining of bitcoins, a process called "proof of work", involves a global network of concurrent machines to solve complex mathematical problems. In return for securing the network, the solver receives bitcoins. When it comes to measuring energy consumption, the overall nature of this activity makes studies difficult. It is unclear what types of machines are operating, where they are located and which fuel has been used to power the electricity.
These unknowns have led to extremely variable estimates. A study says that the growth of bitcoin extraction alone could lead to an increase of 2 degrees Celsius in global temperatures. But others say that such estimates are exaggerated as miners flock more and more to cheap sources of renewable energy, such as hydroelectricity.
The Stoll team was able to take on a more granular appearance thanks to a time lapse. Last year, three Chinese mining equipment manufacturers, responsible for the production of almost all the machines in the world, filed their first public offer. During the process, they unveiled a wealth of technical details and market share data that are generally kept secret. By browsing through these documents, researchers could learn about the type of equipment used and its location.
Another benefit: Bitcoin is not as decentralized as it seems. The era of anonymous extraction of bitcoin on your personal computer is over. Today, the network is dominated by a handful of "pools" that coordinate their efforts. By identifying the IP addresses of the pools' servers and devices, the team discovered that it could develop a rough geographic footprint of bitcoin mining.
Taking into account factors such as the size of the mining facilities (the larger ones can be further cooled) and the average emissions in popular areas for the mining industry, the Stoll team estimated the Bitcoin CO2 emissions of about 22 megatonnes a year. This places it somewhere between the annual emissions of Jordan and Sri Lanka. Or, to put it another way, it's basically the carbon footprint of Kansas City Metropolitan Area. (Yes, that should tell you that we use a lot of energy in this country.) It's on the conservative side of other, more alarming estimates. If we take into account other cryptographic pieces that use similar work proof algorithms (Ethereum, Monero, zCash, etc.), the emissions figure could almost double, Stoll explains.
Not everyone agrees with this conclusion. In separate the report Published this week, Christopher Bendiksen of CoinShares, a blockchain industry research group, says that most estimates tend to underestimate the role of renewable energy in the exploitation of bitcoin . It has to do with centralization, he says. Like data centers run by large, high-tech companies, bitcoin miners have the means to choose where to build the best energy, which is often renewable. Miners have flocked to be near dams in places like the Pacific Northwest and the upstate of New York State, as well as hydrothermal power plants in Iceland. CoinShares estimates that about 74% of bitcoin mining is generated by renewable energies.
The main source of disagreement? "China is the key here," said Stoll. The Chinese dilemma is a bit like Missoula, but on a much more massive scale. While China is responsible for the majority of mining activities, it is divided into two different worlds, energy. In southern China, particularly in the mountains of Sichuan Province, miners exploit cheap and abundant hydropower. The other Mecca of the Chinese mining industry is Inner Mongolia, which runs on coal. CoinShares estimates that 80 percent of China's mining activity takes place in the wider Sichuan region. But based on interviews with miners and IP data from the largest Chinese mining pool, Stoll came in at a lower figure – about 58%.
There is also a question of greenness of Sichuan itself. The economist Alex de Vries, who follows the energy of Bitcoin on his blog, Digiconomiste, underlines the unpredictability of hydroelectric power in Sichuan, which relies on seasonal rains. When the price of bitcoin is high enough, the farm remains profitable even during the dry season. It means more CO2De Vries says that because Sichuan no longer has hydropower, it uses more dirty fuels, such as coal.
Whatever the exact numbers, Stoll notes that even his estimate does not suggest that Bitcoin burns the planet for the moment. But he says that emissions need to be kept in mind when people are considering adopting the blockchain – and its energy-inefficient security processes – more broadly. This is particularly true for local regulators in key mining areas, he says, who need to consider the local dynamics of their electricity market when new mines move on-site, such as in Missoula, for example. .
However, many people want to think about Bitcoin. Outside of Missoula, a few places are trying. Other popular local for miners such as Oregon and upstate New York have attempted to solve the problem by raising electricity rates for the operations of cryptocurrency. In April, China itself proposed to ban the mining of bitcoins. Why The country had judged that it was useless.
. (tagsToTranslate) bitcoin (t) cryptocurrency (t) Blockchain (t) climate change (t) global warming</pre></pre>
For developers, the technology behind Catoshi is an intriguing element of the game economy. Virtual goods are already a Annual market of more than 50 billion dollarsare the biggest part of the gaming industry's revenue, as players pay to buy more sophisticated virtual swords and new outfits for the characters. But unlike CryptoKitty, players do not really own the virtual items they pay for: in the end, they are pixels that disappear when you remove the game. Companies such as Forte, supported by Andreessen Horowitz, and Animoca, Hong Kong, which invested in CryptoKitties last year, wants to use blockchain technology to turn these ephemeral objects into assets.
Kevin Chou, CEO of Forte, had previously founded Kabam, the pioneering mobile gaming company of the so-called freemium model: free downloadable games that do not require a stylish console, but generate revenue by selling virtual products. According to Chou, people live more and more online and value their virtual experience. "Imagine someone spending three or four hours a day playing a game and being connected to the community, talking about what's going on in their life with their friends," he says. This makes people more likely to pay for virtual items, whether to unlock new types of games or simply because they are pretty. Kabam sold for nearly $ 1 billion in 2017, mainly to Netmarble, South Korea.
But Chou says the game savings have become so complicated that developers have trouble keeping an eye on them. As a result, they set limits. Game developers usually sell products directly to players and maintain firm control over the levers of supply and demand. Players have no mechanism to sell virtual items to each other because they do not own the items. "At the moment, it's all about command-and-control economies," says Brett Seyler, platform manager at Forte.
Some players find loopholes to buy and sell their loot in the game. Counter Attack: Global Offensive, a popular multiplayer shooter, has become known for supporting billions of dollars in dollars that used decorative virtual weapons, called "skins", as gambling chips to bet on matches. Valve, the game's publisher, has never explicitly allowed this practice, but third-party trading sites could let players trade by connecting to the game's API.
Chou think that blockchain tools could make gambling savings a little more laissez-faire. He credits the concept to CryptoKitties, who arrived in 2017. "All of these light bulbs have spread in the industry," he says. With a blockchain system, players could safely trade virtual goods, without the developers having to manage the trade; They could even organize a cut of each craft. But the initial success of CryptoKitties – one of the cats was auctioned for $ 170,000 in 2018 – was a red clutter, Chou said. The hype finally fizzled, leaving a bunch of deflated cats stuck in the blockchain. There was not much to do with them, apart from creating more cats.
Forte first seeks to develop trading platforms within established games in which virtual products are already used. In February, the company announced the creation of a $ 100 million fund with Ripple, a payment company that would encourage game developers to use their tools. These technologies combine Ethereum and Ripple technologies to manage transactions and help developers visualize what's happening on the market. The first round grants will be announced later this month, Chou said, with the aim of involving "hundreds of thousands of players" by the end of the year.
The question is whether the traditional gaming industry will adopt a business model allowing players to trade – and the emerging technology behind this model. Serkan Toto, an analyst at Kantan Games, sees blockchain trading as an inevitable extension of the markets created by the freemium model. Currently, when players pay for a new sword or a new outfit, they simply pay for the pixels to appear on their screen. they have not really invested in a virtual asset. "With Blockchain, you actually own these objects, and in this respect, they are really different from what we have today," he says. "It's a major restructuring potential for the industry."
It could also be dangerous for game makers, notes Toto. Regulators are just catching up with the freemium model with a crackdown on spending in the game, particularly so-called booty chests, where players pay for a variety of mystery objects in the hope of receiving an object in particular. In Europe, certain countries have banned the practice, the caller a form of play; this week, US Senator Josh Hawley (R-Missouri) introduced a bill this would require developers to block the loot chests of young players. But the concerns have gone largely to spending in the game, especially with children.
"The defense that a company has against regulation is that these virtual objects have no value," says Michael Pachter, video game analyst at Wedbush Securities. Trading, he adds, modifies this calculation, and he is skeptical that big publishers are taking the risk. He adds that there are other obstacles, for example, if the players themselves could rebel against new trading features that change the way existing games are played.
Others adopt different approaches to blockchain games. Toto refers to Animoca, which focuses on licensing popular brands, such as Formula 1, to create games with exchangeable race cars. The company also invested last year in Dapper Labs, the maker of CryptoKitties, whose CEO, Roham Gharegozlou, is dedicated to creating new experiences for your cat, such as racing games, directly on Ethereum. But until now, these decentralized applications, or APPs, have little success. Limited storage and speed means that Ethereum is very suitable for hosting a deck of cards or collectibles, but it's not good for high-quality gaming right now. Not to mention what happens if you lose your cryptographic keys. (Your cat is stuck forever.) But the company hopes to be there when the technology evolves. "It's purring," he says.
Toto compares the blockchain's current efforts to micropayments ten years ago, before they became the ubiquitous way to buy items in freemium games. In other words, it's the beginning, but gaming companies have too much to gain for gaming companies to ignore. "We need a game that popularizes the concept," he said. Nevertheless, this could take some time, with only the gleams of interest of the major publishers so far. Ubisoft is experiment with blockchain technology, but has not announced a game yet, while Fortnite Epic Creator recently to get some distance rumors that he was looking for blockchain partners.
It is also difficult to know if the blockchain will be suitable for developers. Until now, blockchain technology has had a hard time finding practical use, not only because of technical problems, but also to design economic incentives and integrate them into the real world. A classic example is to use blockchain technology to trace food supply chains and track down the source, for example, of a E. coli epidemic; it's great, as long as you can believe that the lettuce head you eat is the one that has been followed.
But Seyler says the virtual world of gaming, with tech-savvy attendees and lack of concrete considerations, will be the place where blockchain technology can be tested and improved, much like driving in simulation. before navigating the streets of the real world. "The games will probably be the place where many of these technology and design issues will be solved first," said Seyler. "It's a great little sandbox."
Updated on 5-10-19 at 9:50 am: This story has been updated to correct the title of Brett Seyler in Forte.
. (tagsToTranslate) Blockchain (t) Games (t) mobile games