WRITE FOR THE WEB3

Why web3’s messaging is lost and how crypto winter is growing growth seeds

People interested in crypto, blockchain, and web3 typically read Bitcoin and Ethereum's white papers. It's a good idea. Documents produced for developers and academia aren't always the ideal resource for beginners.

Given the surge of extremely technical material and the number of fly-by-nights, rug pulls, and other scams, it's little wonder mainstream audiences regard the blockchain sector as an expensive sideshow act.

What's the solution?

Web3 needs more than just builders.

After joining TikTok, I followed Amy Suto of SutoScience. Amy switched from TV scriptwriting to IT copywriting years ago. She concentrates on web3 now. Decentralized autonomous organizations (DAOs) are seeking skilled copywriters for web3.

Amy has found that web3's basics are easy to grasp; you don't need technical knowledge. There's a paradigm shift in knowing the basics; be persistent and patient.

Apple is positioning itself as a data privacy advocate, leveraging web3's zero-trust ethos on data ownership.

Finn Lobsien, who writes about web3 copywriting for the Mirror and Twitter, agrees: acronyms and abstractions won't do.

Web3 preached to the choir. Curious newcomers have only found whitepapers and scams when trying to learn why the community loves it. No wonder people resist education and buy-in.

Due to the gender gap in crypto (Crypto Bro is not just a stereotype), it attracts people singing to the choir or trying to cash in on the next big thing.

Last year, the industry was booming, so writing wasn't necessary. Now that the bear market has returned (for everyone, but especially web3), holding readers' attention is a valuable skill.

White papers and the Web3

Why does web3 rely so much on non-growth content?

Businesses must polish and improve their messaging moving into the 2022 recession. The 2021 tech boom provided such a sense of affluence and (unsustainable) growth that no one needed great marketing material. The market found them.

This was especially true for web3 and the first-time crypto believers. Obviously. If they knew which was good.

White papers help. White papers are highly technical texts that walk a reader through a product's details. How Does a White Paper Help Your Business and That White Paper Guy discuss them.

They're meant for knowledgeable readers. Investors and the technical (academic/developer) community read web3 white papers. White papers are used when a product is extremely technical or difficult to assist an informed reader to a conclusion. Web3 uses them most often for ICOs (initial coin offerings).

White papers for web3 education help newcomers learn about the web3 industry's components. It's like sending a first-grader to the Annotated Oxford English Dictionary to learn to read. It's a reference, not a learning tool, for words.

Newcomers can use platforms that teach the basics. These included Coinbase's Crypto Basics tutorials or Cryptochicks Academy, founded by the mother of Ethereum's inventor to get more women utilizing and working in crypto.

Discord and Web3 communities

Discord communities are web3's opposite. Discord communities involve personal communications and group involvement.

Online audience growth begins with community building. User personas prefer 1000 dedicated admirers over 1 million lukewarm followers, and the language is much more easygoing. Discord groups are renowned for phishing scams, compromised wallets, and incorrect information, especially since the crypto crisis.

White papers and Discord increase industry insularity. White papers are complicated, and Discord has a high risk threshold.

Web3 and writing ads

Copywriting is emotional, but white papers are logical. It uses the brain's quick-decision centers. It's meant to make the reader invest immediately.

Not bad. People think sales are sleazy, but they can spot the poor things.

Ethical copywriting helps you reach the correct audience. People who gain a following on Medium are likely to have copywriting training and a readership (or three) in mind when they publish. Tim Denning and Sinem Günel know how to identify a target audience and make them want to learn more.

In a fast-moving market, copywriting is less about long-form content like sales pages or blogs, but many organizations do. Instead, the copy is concise, individualized, and high-value. Tweets, email marketing, and IM apps (Discord, Telegram, Slack to a lesser extent) keep engagement high.

What does web3's messaging lack? As DAOs add stricter copyrighting, narrative and connecting tales seem to be missing.

Web3 is passionate about constructing the next internet. Now, they can connect their passion to a specific audience so newcomers understand why.

Sam Bankman Fried (SDBF) is a legendary con man. But the NYT might not tell you that...

Since SBF's empire was revealed to be a lie, mainstream news organizations and commentators have failed to give readers a straightforward assessment. The New York Times and Wall Street Journal have uncovered many key facts about the scandal, but they have also soft-peddled Bankman-Fried's intent and culpability.

It's clear that the FTX crypto exchange and Alameda Research committed fraud to steal money from users and investors. That’s why a recent New York Times interview was widely derided for seeming to frame FTX’s collapse as the result of mismanagement rather than malfeasance. A Wall Street Journal article lamented FTX's loss of charitable donations, bolstering Bankman's philanthropic pose. Matthew Yglesias, court chronicler of the neoliberal status quo, seemed to whitewash his own entanglements by crediting SBF's money with helping Democrats in 2020 – sidestepping the likelihood that the money was embezzled.

Many outlets have called what happened to FTX a "bank run" or a "run on deposits," but Bankman-Fried insists the company was overleveraged and disorganized. Both attempts to frame the fallout obscure the core issue: customer funds misused.

Because banks lend customer funds to generate returns, they can experience "bank runs." If everyone withdraws at once, they can experience a short-term cash crunch but there won't be a long-term problem.

Crypto exchanges like FTX aren't banks. They don't do bank-style lending, so a withdrawal surge shouldn't strain liquidity. FTX promised customers it wouldn't lend or use their crypto.

Alameda's balance sheet blurs SBF's crypto empire.

The funds were sent to Alameda Research, where they were apparently gambled away. This is massive theft. According to a bankruptcy document, up to 1 million customers could be affected.

In less than a month, reporting and the bankruptcy process have uncovered a laundry list of decisions and practices that would constitute financial fraud if FTX had been a U.S.-regulated entity, even without crypto-specific rules. These ploys may be litigated in U.S. courts if they enabled the theft of American property.

The list is very, very long.

The many crimes of Sam Bankman-Fried and FTX

At the heart of SBF's fraud are the deep and (literally) intimate ties between FTX and Alameda Research, a hedge fund he co-founded. An exchange makes money from transaction fees on user assets, but Alameda trades and invests its own funds.

Bankman-Fried called FTX and Alameda "wholly separate" and resigned as Alameda's CEO in 2019. The two operations were closely linked. Bankman-Fried and Alameda CEO Caroline Ellison were romantically linked.

These circumstances enabled SBF's sin.  Within days of FTX's first signs of weakness, it was clear the exchange was funneling customer assets to Alameda for trading, lending, and investing. Reuters reported on Nov. 12 that FTX sent $10 billion to Alameda. As much as $2 billion was believed to have disappeared after being sent to Alameda. Now the losses look worse.

It's unclear why those funds were sent to Alameda or when Bankman-Fried betrayed his depositors. On-chain analysis shows most FTX to Alameda transfers occurred in late 2021, and bankruptcy filings show both lost $3.7 billion in 2021.

SBF's companies lost millions before the 2022 crypto bear market. They may have stolen funds before Terra and Three Arrows Capital, which killed many leveraged crypto players.

FTT loans and prints

CoinDesk's report on Alameda's FTT holdings ignited FTX and Alameda Research. FTX created this instrument, but only a small portion was traded publicly; FTX and Alameda held the rest. These holdings were illiquid, meaning they couldn't be sold at market price. Bankman-Fried valued its stock at the fictitious price.

FTT tokens were reportedly used as collateral for loans, including FTX loans to Alameda. Close ties between FTX and Alameda made the FTT token harder or more expensive to use as collateral, reducing the risk to customer funds.

This use of an internal asset as collateral for loans between clandestinely related entities is similar to Enron's 1990s accounting fraud. These executives served 12 years in prison.

Alameda's margin liquidation exemption

Alameda Research had a "secret exemption" from FTX's liquidation and margin trading rules, according to legal filings by FTX's new CEO.

FTX, like other crypto platforms and some equity or commodity services, offered "margin" or loans for trades. These loans are usually collateralized, meaning borrowers put up other funds or assets. If a margin trade loses enough money, the exchange will sell the user's collateral to pay off the initial loan.

Keeping asset markets solvent requires liquidating bad margin positions. Exempting Alameda would give it huge advantages while exposing other FTX users to hidden risks. Alameda could have kept losing positions open while closing out competitors. Alameda could lose more on FTX than it could pay back, leaving a hole in customer funds.

The exemption is criminal in multiple ways. FTX was fraudulently marketed overall. Instead of a level playing field, there were many customers.

Above them all, with shotgun poised, was Alameda Research.

Alameda front-running FTX listings

Argus says there's circumstantial evidence that Alameda Research had insider knowledge of FTX's token listing plans. Alameda was able to buy large amounts of tokens before the listing and sell them after the price bump.

If true, these claims would be the most brazenly illegal of Alameda and FTX's alleged shenanigans. Even if the tokens aren't formally classified as securities, insider trading laws may apply.

In a similar case this year, an OpenSea employee was charged with wire fraud for allegedly insider trading. This employee faces 20 years in prison for front-running monkey JPEGs.

Huge loans to executives

Alameda Research reportedly lent FTX executives $4.1 billion, including massive personal loans. Bankman-Fried received $1 billion in personal loans and $2.3 billion for an entity he controlled, Paper Bird. Nishad Singh, director of engineering, was given $543 million, and FTX Digital Markets co-CEO Ryan Salame received $55 million.

FTX has more smoking guns than a Texas shooting range, but this one is the smoking bazooka – a sign of criminal intent. It's unclear how most of the personal loans were used, but liquidators will have to recoup the money.

The loans to Paper Bird were even more worrisome because they created another related third party to shuffle assets. Forbes speculates that some Paper Bird funds went to buy Binance's FTX stake, and Paper Bird committed hundreds of millions to outside investments.

FTX Inner Circle: Who's Who

That included many FTX-backed VC funds. Time will tell if this financial incest was criminal fraud. It fits Bankman-pattern Fried's of using secret flows, leverage, and funny money to inflate asset prices.

FTT or loan 'bailouts'

Also. As the crypto bear market continued in 2022, Bankman-Fried proposed bailouts for bankrupt crypto lenders BlockFi and Voyager Digital. CoinDesk was among those deceived, welcoming SBF as a J.P. Morgan-style sector backstop.

In a now-infamous interview with CNBC's "Squawk Box," Bankman-Fried referred to these decisions as bets that may or may not pay off.

But maybe not. Bloomberg's Matt Levine speculated that FTX backed BlockFi with FTT money. This Monopoly bailout may have been intended to hide FTX and Alameda liabilities that would have been exposed if BlockFi went bankrupt sooner. This ploy has no name, but it echoes other corporate frauds.

Secret bank purchase

Alameda Research invested $11.5 million in the tiny Farmington State Bank, doubling its net worth. As a non-U.S. entity and an investment firm, Alameda should have cleared regulatory hurdles before acquiring a U.S. bank.

In the context of FTX, the bank's stake becomes "ominous." Alameda and FTX could have done more shenanigans with bank control. Compare this to the Bank for Credit and Commerce International's failed attempts to buy U.S. banks. BCCI was even nefarious than FTX and wanted to buy U.S. banks to expand its money-laundering empire.

The mainstream's mistakes

These are complex and nuanced forms of fraud that echo traditional finance models. This obscurity helped Bankman-Fried masquerade as an honest player and likely kept coverage soft after the collapse.

Bankman-Fried had a scruffy, nerdy image, like Mark Zuckerberg and Adam Neumann. In interviews, he spoke nonsense about an industry full of jargon and complicated tech. Strategic donations and insincere ideological statements helped him gain political and social influence.

SBF' s'Effective' Altruism Blew Up FTX

Bankman-Fried has continued to muddy the waters with disingenuous letters, statements, interviews, and tweets since his con collapsed. He's tried to portray himself as a well-intentioned but naive kid who made some mistakes. This is a softer, more pernicious version of what Trump learned from mob lawyer Roy Cohn. Bankman-Fried doesn't "deny, deny, deny" but "confuse, evade, distort."

It's mostly worked. Kevin O'Leary, who plays an investor on "Shark Tank," repeats Bankman-SBF's counterfactuals.  O'Leary called Bankman-Fried a "savant" and "probably one of the most accomplished crypto traders in the world" in a Nov. 27 interview with Business Insider, despite recent data indicating immense trading losses even when times were good.

O'Leary's status as an FTX investor and former paid spokesperson explains his continued affection for Bankman-Fried despite contradictory evidence. He's not the only one promoting Bankman-Fried. The disgraced son of two Stanford law professors will defend himself at Wednesday's DealBook Summit.

SBF's fraud and theft rival those of Bernie Madoff and Jho Low. Whether intentionally or through malign ineptitude, the fraud echoes Worldcom and Enron.

The Perverse Impacts of Anti-Money-Laundering

The principals in all of those scandals wound up either sentenced to prison or on the run from the law. Sam Bankman-Fried clearly deserves to share their fate.

Read the full article here.

Japan's startup challenge: 7 reasons

Every day, another Silicon Valley business is bought for a billion dollars, making its founders rich while growing the economy and improving consumers' lives.

Google, Amazon, Twitter, and Medium dominate our daily lives. Tesla automobiles and Moderna Covid vaccinations.

The startup movement started in Silicon Valley, California, but the rest of the world is catching up. Global startup buzz is rising. Except Japan.

644 of CB Insights' 1170 unicorns—successful firms valued at over $1 billion—are US-based. China follows with 302 and India third with 108.

Japan? 6!

1% of US startups succeed. The third-largest economy is tied with small Switzerland for startup success.

Mexico (8), Indonesia (12), and Brazil (12) have more successful startups than Japan (16). South Korea has 16. Yikes! Problem?

Why Don't Startups Exist in Japan More?

Not about money. Japanese firms invest in startups. To invest in startups, big Japanese firms create Silicon Valley offices instead of Tokyo.

Startups aren't the issue either. Local governments are competing to be Japan's Shirikon Tani, providing entrepreneurs financing, office space, and founder visas.

Startup accelerators like Plug and Play in Tokyo, Osaka, and Kyoto, the Startup Hub in Kobe, and Google for Startups are many.

Most of the companies I've encountered in Japan are either local offices of foreign firms aiming to expand into the Japanese market or small businesses offering local services rather than disrupting a staid industry with new ideas.

There must be a reason Japan can develop world-beating giant corporations like Toyota, Nintendo, Shiseido, and Suntory but not inventive startups.

Culture, obviously. Japanese culture excels in teamwork, craftsmanship, and quality, but it hates moving fast, making mistakes, and breaking things.

If you have a brilliant idea in Silicon Valley, quit your job, get money from friends and family, and build a prototype. To fund the business, you approach angel investors and VCs.

Most non-startup folks don't aware that venture capitalists don't want good, profitable enterprises. That's wonderful if you're developing a solid small business to consult, open shops, or make a specialty product. However, you must pay for it or borrow money. Venture capitalists want moon rockets. Silicon Valley is big or bust. Almost 90% will explode and crash. The few successes are remarkable enough to make up for the failures.

Silicon Valley's high-risk, high-reward attitude contrasts with Japan's incrementalism. Japan makes the best automobiles and cleanrooms, but it fails to produce new items that grow the economy.

Changeable? Absolutely. But, what makes huge manufacturing enterprises successful and what makes Japan a safe and comfortable place to live are inextricably connected with the lack of startups.

Barriers to Startup Development in Japan

These are the 7 biggest obstacles to Japanese startup success.

1. Unresponsive Employment Market

While the lifelong employment system in Japan is evolving, the average employee stays at their firm for 12 years (15 years for men at large organizations) compared to 4.3 years in the US. Seniority, not experience or aptitude, determines career routes, making it tough to quit a job to join a startup and then return to corporate work if it fails.

1. Conservative Buyers

Even if your product is buggy and undocumented, US customers will migrate to a cheaper, superior one. Japanese corporations demand perfection from their trusted suppliers and keep with them forever. Startups need income fast, yet product evaluation takes forever.

1. Failure intolerance

Japanese business failures harm lives. Failed forever. It hinders risk-taking. Silicon Valley embraces failure. Build another startup if your first fails. Build a third if that fails. Every setback is viewed as a learning opportunity for success.

4. No Corporate Purchases

Silicon Valley industrial giants will buy fast-growing startups for a lot of money. Many huge firms have stopped developing new goods and instead buy startups after the product is validated.

Japanese companies prefer in-house product development over startup acquisitions. No acquisitions mean no startup investment and no investor reward.

Startup investments can also be monetized through stock market listings. Public stock listings in Japan are risky because the Nikkei was stagnant for 35 years while the S&P rose 14x.

5. Social Unity Above Wealth

In Silicon Valley, everyone wants to be rich. That creates a competitive environment where everyone wants to succeed, but it also promotes fraud and societal problems.

Japan values communal harmony above individual success. Wealthy folks and overachievers are avoided. In Japan, renegades are nearly impossible.

6. Rote Learning Education System

Japanese high school graduates outperform most Americans. Nonetheless, Japanese education is known for its rote memorization. The American system, which fails too many kids, emphasizes creativity to create new products.

1. Immigration.

Immigrants start 55% of successful Silicon Valley firms. Some come for university, some to escape poverty and war, and some are recruited by Silicon Valley startups and stay to start their own.

Japan is difficult for immigrants to start a business due to language barriers, visa restrictions, and social isolation.

How Japan Can Promote Innovation

Patchwork solutions to deep-rooted cultural issues will not work. If customers don't buy things, immigration visas won't aid startups. Startups must have a chance of being acquired for a huge sum to attract investors. If risky startups fail, employees won't join.

Will Japan never have a startup culture?

Once a consensus is reached, Japan changes rapidly. A dwindling population and standard of living may lead to such consensus.

Toyota and Sony were firms with renowned founders who used technology to transform the world. Repeatable.

Silicon Valley is flawed too. Many people struggle due to wealth disparities, job churn and layoffs, and the tremendous ups and downs of the economy caused by stock market fluctuations.

The founders of the 10% successful startups are heroes. The 90% that fail and return to good-paying jobs with benefits are never mentioned.

Silicon Valley startup culture and Japanese corporate culture are opposites. Each have pros and cons. Big Japanese corporations make the most reliable, dependable, high-quality products yet move too slowly. That's good for creating cars, not social networking apps.

Can innovation and success be encouraged without eroding social cohesion? That can motivate software firms to move fast and break things while recognizing the beauty and precision of expert craftsmen? A hybrid culture where Japan can make the world's best and most original items. Hopefully.

Perovskite solar cells will revolutionize everything.

Humanity is in a climatic Armageddon. Our widespread ecological crimes of the previous century are catching up with us, and planet-scale karma threatens everyone. We must adjust to new technologies and lifestyles to avoid this fate. Even solar power, a renewable energy source, has climate problems. A recent discovery could boost solar power's eco-friendliness and affordability. Perovskite solar cells are amazing.

Perovskite is a silicon-like semiconductor. Semiconductors are used to make computer chips, LEDs, camera sensors, and solar cells. Silicon makes sturdy and long-lasting solar cells, thus it's used in most modern solar panels.

Perovskite solar cells are far better. First, they're easy to make at room temperature, unlike silicon cells, which require long, intricate baking processes. This makes perovskite cells cheaper to make and reduces their carbon footprint. Perovskite cells are efficient. Most silicon panel solar farms are 18% efficient, meaning 18% of solar radiation energy is transformed into electricity. Perovskite cells are 25% efficient, making them 38% more efficient than silicon.

However, perovskite cells are nowhere near as durable. A normal silicon panel will lose efficiency after 20 years. The first perovskite cells were ineffective since they lasted barely minutes.

Recent research from Princeton shows that perovskite cells can endure 30 years. The cells kept their efficiency, therefore no sacrifices were made.

No electrical or chemical engineer here, thus I can't explain how they did it. But strangely, the team said longevity isn't the big deal. In the next years, perovskite panels will become longer-lasting. How do you test a panel if you only have a month or two? This breakthrough technique needs a uniform method to estimate perovskite life expectancy fast. The study's key milestone was establishing a standard procedure.

Lab-based advanced aging tests are their solution. Perovskite cells decay faster at higher temperatures, so scientists can extrapolate from that. The test heated the panel to 110 degrees and waited for its output to reduce by 20%. Their panel lasted 2,100 hours (87.5 days) before a 20% decline.

They did some math to extrapolate this data and figure out how long the panel would have lasted in different climates, and were shocked to find it would last 30 years in Princeton. This made perovskite panels as durable as silicon panels. This panel could theoretically be sold today.

This technology will soon allow these brilliant panels to be released into the wild. This technology could be commercially viable in ten, maybe five years.

Solar power will be the best once it does. Solar power is cheap and low-carbon. Perovskite is the cheapest renewable energy source if we switch to it. Solar panel manufacturing's carbon footprint will also drop.

Perovskites' impact goes beyond cost and carbon. Silicon panels require harmful mining and contain toxic elements (cadmium). Perovskite panels don't require intense mining or horrible materials, making their production and expiration more eco-friendly.

Solar power destroys habitat. Massive solar farms could reduce biodiversity and disrupt local ecology by destroying vital habitats. Perovskite cells are more efficient, so they can shrink a solar farm while maintaining energy output. This reduces land requirements, making perovskite solar power cheaper, and could reduce solar's environmental impact.

Perovskite solar power is scalable and environmentally friendly. Princeton scientists will speed up the development and rollout of this energy.

Why bother with fusion, fast reactors, SMRs, or traditional nuclear power? We're close to developing a nearly perfect environmentally friendly power source, and we have the tools and systems to do so quickly. It's also affordable, so we can adopt it quickly and let the developing world use it to grow. Even I struggle to justify spending billions on fusion when a great, cheap technology outperforms it. Perovskite's eco-credentials and cost advantages could save the world and power humanity's future.

Adopt Elon Musk's learning strategy to succeed.

Medium writers rank first and second when you Google “Elon Musk's learning approach”.

My article idea seems unoriginal. Lol

Musk is brilliant.

No doubt here.

His name connotes success and intelligence.

He knows rocket science, engineering, AI, and solar power.

Musk is a Unicorn, but his skills aren't special.

How does he manage it?

Elon Musk has two learning rules that anyone may use.

You can apply these rules and become anyone you want.

You can become a rocket scientist or a surgeon. If you want, of course.

The learning process is key.

Make sure you are creating a Tree of Knowledge according to Rule #1.

Musk told Reddit how he learns:

“It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.”

Musk understands the essential ideas and mental models of each of his business sectors.

He starts with the tree's trunk, making sure he learns the basics before going on to branches and leaves.

We often act otherwise. We memorize small details without understanding how they relate to the whole. Our minds are stuffed with useless data.

Cramming isn't learning.

Start with the basics to learn faster. Before diving into minutiae, grasp the big picture.

Rule #2: You can't connect what you can't remember.

Elon Musk transformed industries this way. As his expertise grew, he connected branches and leaves from different trees.

Musk read two books a day as a child. He didn't specialize like most people. He gained from his multidisciplinary education. It helped him stand out and develop billion-dollar firms.

He gained skills in several domains and began connecting them. World-class performances resulted.

Most of us never learn the basics and only collect knowledge. We never really comprehend information, thus it's hard to apply it.

Learn the basics initially to maximize your chances of success. Then start learning.

Learn across fields and connect them.

This method enabled Elon Musk to enter and revolutionize a century-old industry.