Blockchains are not immutable

When you have to perform the same stupid tedious complicated task every day, eventually you don't even notice how stupid, tedious, or complicated it really is.Online #security is seriously hampered by the fact that a lot of the requirements put on users seem stupid, tedious, and initially also complicated.In this article, Luis Lubeck and I look at ways in which security for users can be made more bearable, or even ... fun, dare I say.

☢️ 🦴 🎯 You should seriously consider if you want to be a successful #startup #founder! Going into business is not for the faint of heart, and being prepared is important. So is critically analyzing any and all advice you read or are given. Reminder: just because someone has tens of thousands of followers and lots of positive comments doesn't mean they are automatically right or an expert. And yes, that applies to me too. Think before you act.

Well, that didn't take long. A day after my previous video there was a Sybil attack on the XEN cryptocurrency. Except, the attack was really on an exchange - FTX, which offers free crypto withdrawals, and didn't check the maximum gas it allocates to this. As a result someone found an arbitrage opportunity. Use smart contracts to spawn off lots of Ethereum addresses, deposit small amounts of ETH in the exchange, then withdraw and in the same transaction claim XEN crypto, with FTX paying for it. A day later, mint the XEN and immediately sell on a DEX.  More on that in this episode.

The last week has seen the XEN ERC20 token taking up the largest share of Ethereum transactions. So why should a humble token with no defined utility or extra whistles and bells be achieving that? The answer is that: 🆓 the token is free to mint (except for gas) 💰 there's no pre-mint, 📉 for an added dash of FOMO, the first people claiming it get the most, 🏦 it has staking (🚩), with a lot of provisos and some untested tokenomics behind it. In this video, I go through what XEN is, why it's different most of of the tokens out there, who is behind it, and how it implements a novel distribution mechanism. I only spent a morning investigating the contract, looking into the main founder, and playing with some of the tests to see if I could engineer any attacks on the contract (I couldn't). It's not a thorough audit, but it's more than most of the reporters out there commenting on this token will have done. In summary, I'm cautiously optimistic about the safety of this token (but use a new address if you interact with it, just to be sure). And as for whether it has legs? No idea. I only give technical and sometimes sociological explanations, not financial advice.

Investors bring in money for P2E projects, but they expect to take out more in the long run. That includes most players, who typically expect to invest time to extract money. So how is a P2E game supposed to build a proper revenue stream and become sustainable? The P2E angle may be great initially for raising capital and attracting a particular type of user base, but in the long run you need more. The obvious answer is to look at traditional game revenue strategies, of which there are three main ones: 1. charge per copy (or subscription) 2. in-game items 3. advertising or brand promotions More on that in the episode.

What's the most important rule for play to earn games?  In the previous episode I talked about what could be called "the first law of P2E games", or perhaps "The fundamental theorem of P2E economics", but Mark Skinner pointed out to me that there is a more important one:  The zeroth law of P2E games. And it doesn't just apply to P2E.  What that is, is revealed in the episode. It's so obvious a lot of people forget about it.

The problem with most P2E games is that they are not sustainable. Why would that be? It turns out that the answer is very simple: the amount of value being put in by players over time is less than the amount the players want to take out. More on that in the episode.

There are a number of myths about blockchains that keep getting repeated. For example, that proof-of-work is a "cryptographic puzzle", that blockchains "build trust", and the most insidious of all: that blockchains "are immutable". In this episode, I explain why blockchains are not immutable. With the aid of not one, not two, but three examples.

Staking cryptocurrency assets can serve a purpose for projects - for example, raising liquidity for a decentralized exchange. And I approve of that kind of use, because it serves a purpose. Unfortunately the use of staking in many projects amounts to nothing more than a complicated Ponzi scheme (and I don't use that phrase lightly). I suspect that it is a decision that is often just not thought through - the project founders are enthusiastically deciding, "Hey, let's implement a DAO! And let's provide staking!" without considering the ramifications. More on this in the episode.

This is the sound track to a video in which I define what a metaverse is through the use of a banana. The banana is not a simile or a metaphor, it is an actually metaverse.  It won't make much sense in just audio, just as the metaverse is apparently going to be about more than sound. If you are fortunate enough to have vision, you can watch the video at https://youtu.be/PE5uE-gfxRQ