There’s no escape from the blockchain buzz. The debates happening online are hot: will consumers favor decentralized services? Or will blockchains remain reserved for cryptocurrencies?
Unsure which side to take?
This post will help you develop a better understanding of the blockchain technology and the value it may bring for your business.
What is Blockchain Technology
The blockchain can be compared to an endless ledger containing thousands of transactions, duplicated and stored across a network of computers. Essentially, blockchain is a type of distributed database that maintains records in a secure and decentralized manner. No one in particular owns or controls this ledger. It is powered by the community choosing to interact with it.
A blockchain protocol is a set of standards that govern the operation of blockchains, adapting basic blockchain principles for different applications, such as private and consortium networks like Quorum. These protocols enhance security and efficiency, making blockchain a valuable tool for various industries, including transparent voting systems.
Blockchain is an open-source technology. Anyone with enough skills can use this technology to code a distributed ledger and invite others to participate. You can include specific rules and permissions for using your ledger for different groups of users. All the records on the blockchain can be made public or stored privately with a permissioned access. You can also indicate who can add and validate new entries (blocks) on the blockchain and propose rules for deciding on their validity. No matter which setup you chose, the information on the blockchain will remain easy-to-aduit.
Let’s illustrate this with an example. Your friend Dave wants to purchase a used car. He wants to avoid buying a stolen vehicle or a car that got in too many accidents. If the car’s history was recorded on the blockchain, Dave would be able to review the string of ownership back to the moment when that car was brought in from the dealership; check out accident records and get to know if the past owners “forgot” to pay some fines.
The best part is that no one can tamper the records in any way once they are validated on the blockchain. If the previous vehicle owner was in a major accident, he wouldn’t be able to “erase” that fact from the ledger.
So the blockchain is a tamper-proof, distributed digital ledger of transactions. It can be programmed to record, store and exchange any types value exchanges. All the records are stored in a distributed manner, meaning there’s no single point of failure a hacker could exploit.
All the transactions are also protected by the state-of-art cryptography – a mechanism more secure than the standard “username/password” systems we use to safeguard our data and assets online.
How Does Blockchain Work
The blockchain networks are built from three major components:
A cryptographic keypair (public + private key, stored in a blockchain wallet) enables a secure digital identity reference. The keypair helps ensure that Jane is exchanging data with Joanna, not John, without exposing Jane’s private details. By signing your transaction with your private key you also place an “ownership stamp” on it, meaning the transaction can be traced back to you if needed. Blockchain platforms like Ethereum and Hyperledger Fabric support blockchain technology and its applications, enabling features like smart contracts and providing tailored solutions for different industries.
A decentralized, P2P network. Instead of a central authority, a community of blockchain users decides whether your transaction is valid and can be added to the blockchain. Blockchain users can maintain anonymity while transactions remain transparent through the public ledger. The community uses mathematical verification to evaluate the history of the individual blocks that are proposed to be added and the “sender” signature validity. Once enough users verify that your transaction is valid, it is processed and recorded on the blockchain.
The network servicing protocol. The block, packed with transactional data, digital signatures and a timestamp, is broadcasted to the network’s participants. The block verification process requires tremendous computing power. Public blockchains encourage the community to service the network by offering a reward for their effort – cryptocurrencies such as Bitcoin or Ether. Recording transactions in this manner establishes secure, immutable records across decentralized networks, enhancing data integrity and reducing the risks of fraud.
The original vision of the Bitcoin blockchain was to “create a system for electronic transactions without relying on trust”. Bitcoin programming language still remains limited to handling financial transactions, mainly cryptocurrency exchanges. Digital currency, such as Bitcoin, relies on blockchain technology to facilitate secure and peer-to-peer transactions, although they are distinct entities.
The majority of business blockchain applications are now powered by Ethereum, or custom forks of the platform’s original blockchain. Unlike Bitcoin, Ethereum blockchain is more versatile and can be used to code different types of blockchain apps – document exchange networks, blockchain voting systems or even a car-sharing app. We’ll get to more examples in the next section.
Ethereum founders have introduced Turing-complete Virtual Machines (VMs). These Ethereum Virtual Machines enable blockchain developers to deploy code on the Ethereum blockchain without the need to allocate additional resources such as computing power or maintain network bandwidth. EVMs are fully programmable and function just like your laptop.
The EVM’s programming language, Solidity, allows developers to code any types of smart contracts – autonomous applications, automatically executing pre-coded agreements whenever the indicated condition is met. For example, Dave and John can create the next agreement on the Ethereum blockchain:
When Dave’s account has a positive balance of $10,000;
And if the car’s title and registration papers have been signed and forwarded to him;
Than $10,000 should be sent to John’s account.
If either of those conditions is not met, the deal does not take place.
Smart contracts eliminate the need for a “middleman” to broker the sale or overview a non-financial agreement that two parties have made. The blockchain represents a “shift from trusting people to trusting math” when conducting any exchanges – a more secure way of collaboration between the two parties, who don’t trust each other.
Smart contracts have propelled the creation of Dapps – decentralized applications that are built on the Ethereum blockchain or another platform that allows coding smart contracts e.g. Qtum or NEO-One. Smart contracts are an open-source technology – the agreement information thus remains public. Thus, some businesses may choose to keep certain parts of the application in a centralized environment or choose to create a private fork of the blockchain to limit external access to the information recorded on the ledger.
Types of Blockchain Networks and Private Blockchain Networks
The blockchain can be coded with different permission structures to match your business needs.
Public blockchain allows anyone to propose new transactions and have those recorded on the blockchain as long as they are valid. Any user can participate in the consensus process and help validating new blocks. Public blockchains are fully decentralized, as there’s no single “authority” overviewing the consensus process. The two well-known examples are Ethereum and Bitcoin blockchains.
Pros
Zero infrastructure costs – the blockchain is supported by the community.
Reduced costs for deploying and running a decentralized application.
Completely eliminates the need for any intermediary to deliver your service e.g. a server or cloud services provider.
Consortium blockchain limits the number of users who can participate in the consensus process (and add new blocks to the blockchain) to a selected few. This type of blockchain can be compared to a company board – each member (node) has one vote. To add a new block, at least 8 out of 15 members should vote to “sign it”. Consortium blockchains can have a public or a restricted right to be read. Examples: Energy Web Foundation, Corda and Azure Multi-Member blockchain.
Pros
Lowers transaction costs and data redundancies.
An effective replacement for an outdated legacy system e.g. to improve document processing and eliminate manual compliance mechanisms.
The private blockchain is fully centralized. A private blockchain network operates on a closed network tailored for specific use cases, primarily focusing on business and organizational needs, with centralized management for enhanced security and control. Permission to write new transactions is limited to one node. The recorded information can be either public or have permissioned access. Private blockchains do not use the same secure consensus mechanisms (proof-of-stake/proof-of-work) to validate transactions. Instead, the process is done by someone internally. Some argue that a centralized consensus mechanism, in turn, may make the network less immutable and transparent.
Private blockchain networks are closed systems managed by a single organization that allows customization of access and security settings. The controlled nature of these networks means that authority dictates membership and privileges, leading to a partially decentralized framework.
In a recent post, Paul Frazee proposed an interesting solution that may eliminate the need for a decentralized consensus without compromising blockchain immutability. His idea is to replace miners with a single host, which would maintain a secure ledger. This secure ledger will include information about the host state and its activity log, including all requests and their results.
The host is designed to follow a predetermined set of business rules – stored as code on the ledger or outside of it. This ledger is public to read: all users can monitor all the activities and compare the inputs against the published code. Whenever any deviation occurs, the users are instantly notified and can take respective action.
A blockchain network, thus, can be made accountable by a very hard-to-forge public log. For example, such system can be used to help regulators monitor compliance and conduct company audits only when some unusual activity is registered without involving a large pull of external validators.
Private blockchains are primarily designed to facilitate B2B operations and are making their way into supply chain management, government management, healthcare and the financial industry. Examples: IBM Hyperledger and Multichain.
Pros:
A higher level of data privacy, essential for certain industries.
Transaction validation costs are lower and processing time is faster as each transaction needs to be validated by one node, rather than thousands as it is on public blockchains.
Business Use Cases of The Blockchain Technology and Smart Contracts
Global blockchain technologies market has reached $339.5 million in 2017. By 2021, it is predicted to hit $2.3 billion.
So what exactly the blockchain pioneers are up to?
Blockchain smart contracts hold a strong potential in the nearest future. Any industry still stuck with paper contracts and guilty of accumulating piles of reporting documentation can greatly benefit from this technology.
Distributed ledger technology (DLT) enhances security, authenticity, and efficiency in various industries by providing a decentralized database system that prevents data tampering and ensures all parties have synchronized access to transaction records.
CB Insights further indicates around 36 big industries that can be disrupted by blockchain – advertising, messenger apps, education, hedge funds, cloud computing and more. For the sake of this article, we’ll focus on just a few curious business use cases.
Blockchain in Supply Chain Management
There’s this one industry where 80% of documentation is still in paper form – the shipping industry. This over-reliance on paper often results in operational delays, and what’s even worse – fraud. Forged cargo documentation and bills of lading is a multi-million problem.
Blockchain-based smart contracts can have the next advantages for the shipping industry and supply chain management in general:
Quick-processing time – document exchanges can take place in a matter of minutes, not days. A smart contract will also ensure that all the necessary documents are in place before the cargo is shipped.
Transparency – all the parties can review the added information and audit if necessary. Each participant can be aware of the transactions performed by other and can’t state that he “didn’t receive” or “haven’t seen” a certain document.
If paired with IoT Sensors, smart contracts can detect cargo damage in real-time; inform the other party, initiate an insurance claim and issue a refund to the affected party – all without human intervention.
Each new block in the blockchain strengthens the integrity and verification of the previous block, ensuring the overall security and preventing tampering.
Blockchain in Healthcare
The healthcare industry operates gigabytes of data on a daily basis – private patient records; payment and insurance data; clinical trial results etc. The wrinkle? These data exchanges are often ineffective and still happen manually as different providers use different legacy systems, incapable to “communicate” well with one another.
Those outdated legacy systems are also a huge security vulnerability. While the government actively campaigns for the adoption of electronic healthcare systems, most providers struggle to comply with basic HIPAA requirements for data security and privacy. Blockchain users, leveraging cryptography, can maintain secure digital identities, ensuring that data exchanges are both secure and transparent.
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One compromised patient record costs $380 for the provider, not to mention the additional fines and audit costs incurred by the institution once that breach “surfaces”.
Here’s how blockchain works towards fixing those issues:
The blockchain eliminates the interoperability problem and can become the “industry standard” for seamless and secure data exchanges. In fact, 70% of hospital managers strongly believe that blockchain can become a game-changing solution to this problem. The technology can also help ensure better connectivity for IoT medical gadgets.
Smart contracts can reduce the costs of compliance and regulation. Medical systems can be coded to comply with the set rules automatically.
Service providers can cut down on the reconciliation costs and hire more medical staff instead. Less administrators + more doctors = better healthcare.
Patient data storage can be distributed among several entities. Healthcare providers will no longer be a “single point of failure” if any breach takes place.
Patients will also get more visibility and control over their health data as the blockchain enables them to see how and when their information is being used.
Blockchain as a Service (BaaS)
Not every business may be ready to invest in a blockchain infrastructure built from scratch. And they no longer should.
To match the growing interest, popular cloud service providers like IBM, SAP, Oracle and Microsoft have rolled out attractive BaaS options. Azure, for instance, now supports distributed ledgers such as Ethereum, Hyperledger Fabric, R3 Corda, Quorum, Chain Core and BlockApps.
BaaS platforms can be used to develop private or consortium blockchains or develop blockchain-based add-ons for existing applications. These platforms support blockchain protocol standards, facilitating blockchain development by providing a set of standards that govern the operation of blockchains. Building atop a BaaS platform is a cost-efficient alternative to extended development timelines and the need to assemble a dedicated in-house team of developers.
Back in the day cloud computing have disrupted the way we exchange data and deliver services. Blockchain may soon become the next technology of choice for better collaboration. Interested in how your business can gain a competitive edge with the blockchain technology? Contact our team for a consulting session.
The results of last week’s poll: What do you think has been CryptoPunks’ most significant impact?
Last week’s poll offers insights into how the Lazy community perceives CryptoPunks’ impact on the NFT space. The results highlight the project’s multifaceted influence, with “Inspiring the PFP movement” emerging as the top choice at 36%. This underscores CryptoPunks’ role in popularizing profile picture NFTs. “Changing perceptions of digital art” follows at 27%, indicating the project’s contribution to legitimizing digital art as a collectible medium. Interestingly, “Sparking debates on art and value” and “Inspiring artists to make NFTs” tie at 18% each, suggesting that CryptoPunks has equally influenced discourse around art valuation and motivated creative participation in the NFT space. These results emphasize the acceptance of CryptoPunks’ as a pivotal force in shaping the cultural and artistic landscape of the NFT ecosystem.
The Relationship Between the Art World and NFTs Continues to Change and Mature
As a believer in NFTs and their potential, it’s crucial to view the current market situation as an opportunity for growth and refinement rather than a setback. The insights from Christie’s Art and Tech Summit, as reported by Axios, highlight the evolving relationship between traditional art institutions and NFT technology, offering valuable lessons for adaptation and future success.
Marc Glimcher, CEO of Pace Gallery, provided a particularly insightful perspective on the potential of NFTs in the art world. He noted, “We know that there is a provenance verification opportunity here. We all know it and we all know that the art world is resisting it because it suggests transparency, which we say we want but we don’t really want.” This observation highlights a key area where NFTs could add significant value, addressing longstanding issues of provenance and authenticity in the art market.
Glimcher further emphasized this point with a striking comparison: “It’s absurd that a $30,000 car has a title and registration, but that a $170 million Modigliani does not.” This statement underscores the clear need for better documentation and verification systems in high-value art transactions, a gap that NFT technology is well-positioned to fill.
Christie’s Dirk Boll offered a more cautious view, noting that while NFTs represent an interesting application of technology, art buyers didn’t seem overly concerned with blockchain-based verification. He stated, “People still seem to think that the Christie’s invoice as a PDF, or printed, is good enough to prove the transaction.” This highlights the need for better education and more compelling use cases to demonstrate the advantages of blockchain-based provenance over traditional methods.
These perspectives from industry leaders suggest that while there’s still resistance to change, there’s also recognition of NFTs’ potential to solve real problems in the art world. The focus now should be on developing practical, value-adding applications of NFT technology that address these needs. By aligning NFT capabilities with the art world’s established practices and addressing its pain points, we can pave the way for wider adoption and long-term success in this space.
The KnownOrigin Shutdown: A Wake-Up Call for NFT Permanence and True Digital Ownership
The recent shutdown of KnownOrigin, a pioneering NFT marketplace acquired by eBay in 2022, has ignited crucial discussions about the long-term viability of digital art in the NFT space. This closure highlights a fundamental issue: most NFTs contain metadata that points to off-chain files, often stored on platforms like IPFS, rather than the artwork itself being stored entirely on the blockchain. This reality challenges the common perception of NFT ownership and raises concerns about the potential loss of access to digital artworks if hosting platforms cease operations.
This situation prompts a deeper examination of what it truly means to “own” digital art in the form of an NFT. When collectors purchase an NFT, they are often acquiring a token that points to a URL or an IPFS hash, rather than the artwork itself. The fragility of this system becomes apparent when considering scenarios where hosting services or IPFS nodes are no longer maintained, potentially rendering NFTs worthless if the associated artworks become inaccessible.
The challenges highlighted by KnownOrigin’s closure present an opportunity for growth and innovation in the NFT space. They push the community to develop more robust, decentralized solutions that can ensure the permanence and integrity of digital artworks. This may involve exploring fully on-chain storage options, despite their current cost and scalability challenges, or developing new permanent storage solutions. As the NFT ecosystem evolves to address these fundamental concerns, we hope to see the emergence of permanent models for creating, owning, and preserving digital art that redefine our relationship with digital assets.
This week’s poll: Following the KnownOrigin shutdown, what should be the NFT community’s top priority to ensure digital art permanence?
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NFTPicsis an artist who has been a photographer since 2008 and an NFT creator since 2021. Their Lazy collection features many of their beautiful photos.Check it out at lazy.com/nftpics
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The results of last week’s poll: Do you think NFTs will significantly change how fans engage with sports in the next 5 years?
Last week’s poll explores the potential impact of NFTs on sports fan engagement over the next 5 years. Among respondents, opinions are divided, with a slight lean towards believing NFTs will bring significant changes. Half of those surveyed (50%) believe that NFTs will indeed substantially alter how fans interact with sports in the near future. However, there’s also considerable skepticism, with 30% of respondents disagreeing with this notion. The remaining 20% are uncertain about NFTs’ future influence on sports engagement. For NFT collectors, this poll suggests a mixed landscape of opportunity and uncertainty in the sports sector, with a notable portion of people anticipating NFTs to play an increasingly important role in fan experiences and interactions within the sporting world.
New Film Explores The Surprising Journey of CryptoPunks
Looking for something to watch? Check out “What the Punk!“—a newly released documentary that offers viewers a nuanced exploration of the CryptoPunks phenomenon, tracing its journey from a modest experiment by two Canadian programmers to a revolutionary force in digital art.
While the documentary highlights the project’s historical significance in inspiring the ERC-721 standard and sparking the profile picture (PFP) movement in NFTs, it also presents a balanced view of its impact. The film features insights from prominent figures in the crypto art world, providing diverse perspectives on CryptoPunks’ cultural and financial influence. Notably, the directors have taken care to make the subject accessible to a broader audience, avoiding technical jargon in favor of focusing on the human stories and artistic journey.
However, the documentary doesn’t shy away from controversies, addressing critiques of the speculative nature of NFTs and exploring artistic responses like Robness’s provocative burning of a CryptoPunk.
As a timely snapshot of a pivotal moment in the intersection of art, technology, and finance, “What the Punk!” may offer valuable context for understanding the ongoing evolution of digital ownership and creativity. While the long-term significance of CryptoPunks remains to be seen, this film provides an intriguing look at a project that has undeniably shaped conversations around digital art and collectibles in recent years.
We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com
Majestic_Eggo is an NFT Artist who wants a greener and peaceful planet. They created a beautiful collection of NFT butterflies.Check it out at lazy.com/majestic_eggo
Lazy.com is the easiest way to create a gallery of your NFT collection. Show some love for NFTs by sharing this newsletter with your friends!
The results of last week’s poll: Have you ever lost an NFT because of a hack?
The alarming results of last week’s poll have shed light on a critical issue plaguing the NFT community. A staggering 42% of our respondents reported falling victim to hackers, resulting in the loss of their prized digital assets. This statistic not only underscores the prevalence of security threats in the NFT space but also serves as a wake-up call for collectors who may have been complacent about their digital security measures. Moreover, it highlights the importance of ongoing education within the NFT community, as the technological landscape and tactics employed by hackers evolve rapidly. As we navigate this digital frontier, remember that the responsibility of protecting your valuable NFTs ultimately rests in your hands – stay informed and stay cautious.
Beyond the Hype: Decoding the DNA of NFT Ecosystems
An interview this week’s Harvard Business Review Podcast offers valuable insights for NFT collectors by exploring the broader implications of NFTs. Scott Duke Kominers and Steve Kaczynski, co-authors of “The Everything Token,” explain that NFTs are not just about owning digital images but represent a new form of digital ownership with real-world utility. They emphasize that the value of NFTs like BAYC goes beyond the artwork itself, encompassing community membership, exclusive experiences, networking opportunities, and even potential business ventures. This perspective helps collectors understand the multifaceted nature of NFT value beyond mere speculation.
The discussion delves into the business model behind successful NFT projects, highlighting how scarcity, community engagement, and brand building contribute to their success. Collectors can gain insights into how NFT projects might evolve and expand their reach while maintaining value for early adopters. The interview also touches on the challenges of balancing exclusivity with growth, which is crucial for collectors to consider when evaluating the long-term potential of their NFT investments.
The interview is worth listening to because it provides a broader context for understanding the NFT space beyond just digital art. The insights shared can help collectors make more informed decisions by considering factors such as community strength, utility, and brand potential when evaluating NFT projects. Moreover, the discussion on the future of Web3 and how established brands might incorporate NFTs offers a glimpse into potential future developments in the space, which could influence collecting strategies and investment decisions.
Game, Set, NFT: How Digital Tokens Are Serving Up a New Era in Sports Collecting
In a thought-provoking article for CoinDesk’s Consensus Magazine, Matt Novogratz argues that the intersection of NFTs and sports could potentially reshape how fans engage with their favorite athletes and teams. While the long-term impact remains to be seen, Novogratz suggests this trend may be more than just another tech fad, potentially reimagining sports fandom and athlete empowerment.
The article explores several intriguing developments in the NFT space. For instance, Novogratz points to AC Milan’s tokenized stadium experience and the Australian Open’s Art Balls collection as examples of how NFTs might enhance fan engagement. These initiatives, he contends, could offer new ways for fans to connect with their sports heroes, though their lasting appeal and value remain to be determined.
One of the more compelling arguments Novogratz makes is about the potential for NFTs to transform how athletes capitalize on their achievements. He suggests that by minting NFTs, athletes might create revenue streams extending beyond their active careers. This could be particularly significant for athletes in less-publicized sports, who have historically struggled to monetize their talents effectively. However, the real-world efficacy of this approach is yet to be proven at scale.
For collectors and investors, Novogratz posits that sports-related NFTs could represent more than just digital novelties. As the lines between collecting, gaming, and investing blur, he argues that understanding this new landscape could be crucial for those looking to capitalize on these emerging opportunities.
Ultimately, Novogratz presents a vision of NFTs and blockchain technology not just changing how we consume sports, but potentially altering the nature of fandom and athlete-fan relationships. His enthusiasm is evident. As with any emerging technology, time will tell whether NFTs in sports will live up to their proposed potential.
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The results of last week’s poll: What’s the strongest sign NFTs aren’t dead?
Last week’s poll on the vitality of NFTs reveals compelling insights into community perceptions. The majority of respondents (50%) believe that expanding use cases are the strongest indicator that NFTs are still thriving, suggesting a growing recognition of their potential beyond digital art and collectibles. This is closely followed by 38% who point to persistent market activity and sales as key evidence of NFT resilience. Interestingly, 13% see adoption by traditional sectors as the most convincing sign, indicating an awareness of how established industries are integrating NFT technology.
The poll results paint a picture of a maturing NFT ecosystem, where focus has shifted from speculative hype to practical applications and real-world adoption. Overall, these findings underscore the community’s belief in the long-term potential of NFT technology, despite market fluctuations, and highlight a transition towards more diverse applications of NFTs.
Three Types of Hacks: How to Protect your NFTs
Once you’ve curated your collection of NFTs, it is crucial to keep them safe. Clearly no one wants to get hacked. So how can you prevent it? This week we’re revisiting a topic we first covered in Lazy Newsletter #47—three common hacks and how to avoid them.
1) Discord Hijack
In a Discord hijack, a hacked admin posts a link to a fake mint.
Imagine you’re hanging out in the Discord of a new and exciting NFT project when you see an urgent post from an admin announcing a surprise mint. Wow, right!? You rush to send your hard earned eth only to discover that the admin’s account had been hacked and the mint was fake. Welcome to the new wave of Discord hijacks.
This kind of attack is becoming more common. Protecting yourself from Discord hijacks can be difficult because the hackers will often move quickly and ban other admins who could alert the community to the fraud. The best defense is to be skeptical of any previously unannounced surprise mints.
2) Phishing Websites
The phishing site will ask for approval to transfer (ie, steal) your NFTs.
This time you’re hanging out on X, proudly displaying your Bored Ape Yacht Club NFT, when you receive a message promising to animate your NFT. Very cool! When you visit the site, it prompts you to connect your wallet and submit a transaction. You accept and your BAYCs disappear forever. This happened to a Bored Ape Yacht Club member who fell for this scam and lost 3 apes ($900K at that time).
To guard against this type of hack it is important to remember that any transaction you sign or submit on a website could potentially interact with your NFT’s smart contract. That’s because smart contracts live on the blockchain and any website can interact with the contracts. So the best protection is to be wary of completing transactions on websites that you don’t 100% trust.
Oh, and by the way, if someone is offering to create an animated version of your BAYC then they don’t need you to submit a transaction on the blockchain. That’s why there is some truth to the old “right click, save as” meme.
3) MetaMask Compromise
The third kind of attack is more sophisticated than the other two and it has been proven to work against technically savvy crypto users. In fact, a prominent crypto VC fell victim and lost over a $1.7m worth of NFTs.
The hack begins with a phishing email or message pointing to what looks like a very interesting shared Google Doc. When the user clicks on the link, their computer is unwittingly infected with malware that compromises their MetaMask. Once the user’s MetaMask has been replaced with a malicious version, the hacker gains access to their wallet seed phrase and can also spoof transactions.
To protect against this attack, aside from not clicking on links, it is important to periodically check that your MetaMask has not been replaced with a malicious version. To do this, in Chrome, click Window -> Extensions and make sure that “Developer Mode” is ticked OFF.
This week’s poll: Have you ever lost an NFT because of a hack?
Thank you for reading Lazy.com’s Newsletter. Was this post helpful? Show some love by sharing.
We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com
AtomicMouse’smotto is “keeper of key, sweeper of floors and winner of bread.” They have a large and diverse NFT collection. Check it out at lazy.com/atomicmouse
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The results of last week’s poll: When was the last time you purchased an NFT?
The recent poll on NFT purchasing activity offers a nuanced view of current market engagement. On the one hand, 47% of respondents reported buying an NFT within the last 30 days, suggesting active participation. On the other, 33% of respondents last purchased over a year ago, indicating a significant portion of surveyed individuals who have stepped back from active buying. The even distribution of 7% for purchases made 1-3, 4-6, and 7-12 months ago presents an interesting pattern, reflecting steady but subdued activity over the past year.
Exploring new frameworks for NFT royalties
This week a16zcrypto released a comprehensive analysis exploring the challenges and potential solutions surrounding NFT royalties, a key value proposition for creators in the digital art space. The article delves into the current limitations of enforcing royalties on-chain, primarily due to the difficulty in distinguishing between sales and other types of transfers. It then examines existing solutions like blocklists and allowlists, highlighting their pros and cons in balancing royalty enforcement with NFT composability – the ability for NFTs to interact with various applications and smart contracts.
The piece introduces two novel approaches to NFT royalties that aim to improve upon current models. The first proposes combining an allowlist with a staking mechanism, allowing applications to permissionlessly join the allowlist by staking resources as a commitment to enforce royalties. The second, called “right of reclaim,” introduces a dual ownership model that incentivizes royalty payments without restricting composability. These innovative frameworks aim to address the fundamental tension between strict royalty enforcement and open composability in the NFT ecosystem.
Throughout the discussion, the article emphasizes the importance of finding solutions that preserve composability, maintain digital property rights, and ensure fair compensation for creators. It acknowledges that there is no one-size-fits-all solution and encourages builders and creators to understand the various royalty designs and their tradeoffs to choose the best fit for their unique goals. For a deeper understanding of these complex issues and potential solutions in the evolving NFT landscape, readers are strongly encouraged to explore the full report, which offers valuable insights for creators, collectors, and developers in the NFT space.
7 Reasons Why NFTs Are Not Dead
Market Maturation: The NFT market isn’t dying; it’s maturing. This phase focuses on sustainability and real-world utility, moving beyond the initial hype to more stable, long-term applications.
Evolving Use Cases: NFTs are expanding beyond digital collectibles. They’re finding new applications in various industries, including the creator economy, real estate, and financial markets, demonstrating their versatility and ongoing relevance.
Technological Advancement: The NFT industry has developed revolutionary global property rights systems. This infrastructure enables unique digital ownership and authenticity verification at a fraction of traditional costs, positioning NFTs as a transformative technology.
Ongoing Innovation: Despite market corrections, innovation in the NFT space continues. New platforms in SocialFi and GameFi are emerging, and there’s growing interest from institutional investors as NFTs become more purpose-driven.
Persistent Market Activity: While volumes may be down from peak levels, significant activity remains in the NFT market. For example, Bitcoin-based NFTs have recorded substantial sales volumes, indicating continued interest and engagement.
Industry Transformation: NFTs are reshaping various sectors by providing new ways to represent and trade assets. From digital art to stocks, bonds, and carbon credits, NFTs are creating unprecedented possibilities for ownership and value transfer.
Long-term Potential: Experts view the current state as part of a cycle rather than an endpoint. The foundational technology of NFTs holds immense potential for future applications and broader adoption, suggesting a promising future beyond current market conditions.
While the NFT landscape has evolved from its initial boom, it’s far from obsolete. Instead, NFTs are entering a new phase of development focused on practical applications and sustainable growth, positioning them for long-term relevance in the digital economy.
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Lawris a collector of Ethereum NFTs with a focus on profile pictures. A few different styles and some surprises. Check out their collection at lazy.com/lawr
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The results of last week’s poll: Should governments regulate the NFT market?
The poll on NFT market regulation reveals a stark divide in opinion, with half of respondents opposing government oversight while the other half is split between support and uncertainty. This fragmentation reflects the broader debate in the crypto and NFT communities about the role of traditional regulatory bodies in decentralized markets. The strong preference for an unregulated environment suggests many view government intervention as a potential threat to the innovative nature of the NFT space.
The Stormtrooper Scandal: A Cautionary Tale for NFT Collectors
“The Stormtrooper Scandal,” a newly released documentary, offers a fascinating glimpse into the wild west of early NFT projects, serving as both a cautionary tale and a testament to the disruptive potential of blockchain technology in the art world.
For NFT enthusiasts, the film provides valuable insights into the complexities and pitfalls of large-scale NFT drops, especially when traditional art and intellectual property rights collide with the decentralized ethos of crypto. Ben Moore’s journey from charity art curator to overnight crypto millionaire highlights the immense opportunities NFTs present for reimagining art ownership and distribution. The lightning-fast sellout of the Art Wars collection demonstrates the fervent demand for NFTs tied to recognizable IP and established artists.
However, the subsequent unraveling of the project due to copyright issues and lack of artist consent serves as a crucial lesson for collectors and creators alike. It underscores the importance of due diligence, clear provenance, and respect for intellectual property rights in the NFT space. While the film may paint a somewhat negative picture of NFTs, savvy collectors will recognize that it primarily exposes the pitfalls of rushing into projects without proper groundwork.
Ultimately, “The Stormtrooper Scandal” is a must-watch for NFT collectors. It provides valuable context for the evolution of the NFT market and serves as a reminder of the transformative potential of NFTs when executed responsibly. As the space continues to mature, learning from early missteps like those depicted in this film will be crucial for collectors navigating this exciting new frontier.
Watch on the BBC’s iPlayer. (UK only, unfortunately).
The Art of NFT Navigation: Insights from Tyler Warner
In a recent interview, Tyler Warner, known as Tyler Did It on social media, offered a candid account of riding the NFT wave to a portfolio peak of 1,000 ETH (~$3 million), only to see much of it evaporate in the subsequent bear market. The interview encapsulates the exhilarating highs and sobering lows familiar to many in the space.
Warner’s enduring optimism for digital sports collectibles, particularly NBA Top Shot, reflects a nuanced understanding of how blockchain technology is reshaping traditional markets. His experience with Pudgy Penguins – from early adoption to strategic exit and re-entry – offers a masterclass in navigating project lifecycles and the critical importance of leadership in determining long-term value.
For NFT collectors and crypto enthusiasts alike, Warner’s insights serve as both a beacon and a warning, highlighting the need for strategic acumen, continuous learning, and resilience in the face of market volatility. His journey underscores that in the world of digital assets, success is not just about riding waves, but about understanding the tides that create them.
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The results of last week’s poll: What do you think will happen with prices at Sotheby’s upcoming auction of rare Bored Ape NFTs?
We were surprised by last week’s poll which revealed mixed expectations for the upcoming Sotheby’s auction of rare Bored Ape NFTs, with a strong 42% of people anticipating disappointing results. While 37% believe prices will be solid but not reach new highs, a notable 21% still see potential for record-breaking sales. This divergence suggests an underlying tension between market skepticism and persistent optimism, with the auction serving as a key barometer of sentiment. The auction’s outcome will undoubtedly offer valuable clues about the near-term direction of the NFT space.
South Korea Issues Guidelines to Regulate Certain NFTs as Cryptocurrencies
South Korea’s Financial Services Commission (FSC) has released guidelines to clarify the regulatory status of NFTs. The guidelines aim to differentiate between NFTs with unique qualities and those that may be classified as cryptocurrencies or securities. NFTs that are mass-produced, exchangeable, fractionalized, or used for payments may be regulated as cryptocurrencies, while non-transferable tokens with little to no economic value would be considered regular NFTs. The distinction will be made on a case-by-case basis, without a single absolute standard for interpretation.
These guidelines precede South Korea’s first crypto-focused regulatory framework, the Virtual Asset User Protection Act, which will be fully effective from July 19. The law aims to combat illicit market activities and requires cryptocurrency service providers to safeguard deposits and enroll in insurance programs to protect user funds.
For NFT collectors, understanding the regulatory landscape in different jurisdictions is crucial. As governments worldwide grapple with regulating the evolving NFT and cryptocurrency markets, collectors should stay informed about the potential implications of these regulations on their holdings. The South Korean government’s efforts to provide clarity and protect investors may serve as a model for other countries, but the case-by-case approach to classifying NFTs may lead to even more uncertainty.
Dapper Labs’ Settlement Offers Guidance for NFT Issuers to Avoid Securities Liability
Dapper Labs, the creator of NBA Top Shot Moments and CryptoKitties, has agreed to settle a putative class action suit alleging that its NBA-endorsed NFTs were offered and sold as unregistered investment contract securities. The settlement, subject to court approval, provides valuable guidance for NFT issuers seeking to avoid securities liability. As part of the settlement, Dapper has agreed to decentralize the Flow blockchain, allow Moments to be sold on other marketplaces, improve withdrawal processes, relinquish control of reserve Flow tokens, and train personnel on compliant marketing. Although not setting a legal precedent, this settlement, along with two SEC settlements (Impact Theory and Stoner Cats), highlights key factors NFT issuers should be cautious about, including control over the native blockchain, exclusive marketplaces, using revenues to develop products, and marketing suggesting investment value.
For NFT collectors, understanding the structure, technology, and marketing of NFT projects is crucial in assessing the risk of an NFT being considered a security. The Dapper Labs settlement provides a helpful framework for navigating the complex intersection of NFTs and securities law.
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The results of last week’s poll: What’s your reaction to the NFT market downturn as seen in the falling indexes?
Last week’s poll results on the NFT market downturn reveals a community largely skeptical about a near-term recovery, with nearly half believing NFTs need fundamental reinvention to rebound. While some see a buying opportunity amidst the falling indexes, overall confidence remains low. NFT collectors should proceed cautiously, monitoring the space for innovative approaches that could breathe new life into the market. If this poll is to be believed, savvy collectors may find attractive deals, but should remain highly selective and take a long-term view.
Sotheby’s ‘Gold Fur’ Bored Ape NFT Auction Will Retest Art World Demand
Sotheby’s, the famous auction house, is gearing up to sell a curated batch of Bored Ape Yacht Club related Ethereum NFTs on June 18. The highlight of the auction is a gold-furred Bored Ape, accompanied by other rare NFTs from the Mutant Ape Yacht Club and Bored Ape Kennel Club collections.
The gold-furred Ape #8552, formerly owned by the now-bankrupt crypto hedge fund Three Arrows Capital (3AC), is expected to draw significant attention from collectors. Gold fur is a highly sought-after trait, with only 46 out of 10,000 Apes featuring this characteristic. The last gold-furred Ape sold for $933,000 (247 ETH) in March, and Sotheby’s has previously facilitated a record-setting $3.4 million sale of a similar Ape in 2021.
The auction comes at a time when the prices of more common Bored Apes have dipped dramatically from their peak in April 2022. The floor price for a Bored Ape has dropped from nearly $430,000 to $47,500 (12.6 ETH) over the past year, despite Ethereum’s upward climb.
For NFT collectors, this auction presents an opportunity to gauge the staying power of Ape-themed assets in the fine art community. The provenance of the NFTs, particularly their association with 3AC, may also influence their value and desirability.
As the NFT market continues to evolve, high-profile auctions like this one at Sotheby’s serve as a barometer for the demand and perceived value of rare and sought-after digital assets. Collectors should keep a close eye on the results of this auction, as it may provide insights into the future direction of the NFT art market and the potential for further mainstream adoption.
U.S. Charges Three Individuals in Connection with Evolved Apes NFT Rug Pull
The U.S. has brought charges against three individuals in connection with the Evolved Apes NFT scam from 2021. The defendants are facing charges of wire fraud and money laundering.
Evolved Apes was an NFT project that promised investors a unique collection of 10,000 NFTs and the development of a video game. However, a week after the project’s launch, the anonymous developer known as “Evil Ape” disappeared with 798 ether (approximately $3 million at today’s price) from the project’s funds, leaving the promised video game undelivered.
U.S. Attorney Damian Williams stated, “The defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal.”
This type of scam, known as a “rug pull” in the crypto world, is an exit scam where developers raise funds from investors through the sale of tokens or NFTs and then abruptly shut down the project and disappear with the money. According to De.Fi’s Rekt database, over $14.5 billion has been lost to rug pulls since 2011, with the largest being South African digital assets investment fund Africrypt, which absconded with 69,000 bitcoins (nearly $4.8 billion) in 2021.
For NFT collectors, this case serves as a stark reminder of the risks associated with investing in NFT projects, particularly those that make grandiose promises without a proven track record. It is crucial for collectors to conduct thorough research and due diligence before investing in any NFT project, and to be wary of projects that seem too good to be true.
This week’s poll: What do you think will happen with prices at Sotheby’s upcoming auction of rare Bored Ape NFTs?
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The results of last week’s poll: Will the U.S. crypto regulation bill impact the global NFT market if passed?
Last week’s poll results show that a staggering 60% of respondents believe the U.S. crypto regulation bill will massively impact the global NFT market if passed. Only 20% believe it will have minimal or no impact.
This overwhelming expectation of a substantial global impact suggests that NFT collectors and enthusiasts are closely monitoring the regulatory developments in the U.S., recognizing that the country’s stance on crypto and digital assets could set a precedent for other nations to follow. The high percentage predicting a “huge impact” implies that the bill’s passage could potentially reshape the NFT landscape, influencing factors such as investor confidence, project attraction, and the focus on decentralization.
As the bill progresses through the legislative process, NFT collectors worldwide will need to stay informed about its implications and adapt their strategies accordingly, while also keeping an eye on regulatory developments in their own regions.
Ethereum ETF Approval is on the Horizon in US
Attention, NFT collectors! In a turn of events that just a few weeks ago seemed practically impossible, spot Ethereum ETFs are one step closer to reality in the U.S.
According to a report in The Block, the U.S. Securities and Exchange Commission has asked prospective issuers to submit their amended S-1 forms by Friday, according to two sources familiar with the situation. This move comes after the SEC approved the 19b-4 forms on May 23, leaving only the S-1 forms to become effective before trading can commence. VanEck and BlackRock have already submitted their amended S-1 forms, with the latter detailing a $10 million seed investment for its ETF. However, the process may take a few weeks or even months, as the forms are expected to go through at least two more rounds of draft filings before they are ready.
What does this mean for NFTs? Well, for one thing it shows that crypto is becoming fully entrenched in the financial system. The introduction of spot Ethereum ETFs could potentially bring more mainstream attention and liquidity to the market, which may have a ripple effect on NFT valuations and adoption. As Ethereum becomes more accessible to institutional investors and the general public through these ETFs, it could drive up demand for the cryptocurrency, leading to increased activity on the Ethereum blockchain. This, in turn, may attract more users to the NFT space, as many popular NFT marketplaces and projects are built on the Ethereum network.
Furthermore, and this is a long shot, the approval of spot Ethereum ETFs could pave the way for other crypto-related investment vehicles, such as NFT-focused ETFs or funds. This would provide NFT collectors and creators with more opportunities to diversify their portfolios and gain exposure to the growing NFT market.
However, it’s important to note that the impact of spot Ethereum ETFs on the NFT space is not guaranteed and may take time to materialize. As with any investment, there are risks involved, and the crypto market is known for its volatility. NFT collectors should continue to do their own research, stay informed about market developments, and make decisions based on their individual goals and risk tolerance.
NFT Indexes Fall to Record Lows
Despite optimism over the ETH ETF, the NFT market continues to face challenges, with indexes designed by crypto analytics platforms Nansen and CryptoSlam falling to their lowest levels since launch.
Nansen’s flagship NFT-500 index, which tracks 500 selected Ethereum-based collections, dropped to 213 points on May 26, suggesting that a $1,000 investment at the beginning of 2022 would now be worth just $213. Other indexes representing various NFT categories, such as Blue-Chip 10, Metaverse, Social-100, Art-20, and Game-50, are also either at or near their record lows.
Metaverse NFTs have been hit the hardest, with their index falling by 92% to a record low of 80 in mid-April 2024, before recovering slightly to 91 points. Meanwhile, CryptoSlam’s Composite NFT-500 Index, which tracks 500 collections across 11 non-Bitcoin chains, touched its lowest level on May 19, representing a staggering 95% decline from its launch.
The NFT market has been in a prolonged slump since the hype of 2021, with recent recovery attempts mainly driven by Bitcoin NFTs built on the Ordinals protocol, which are not tracked by these indexes.
Despite the current downturn, the long-term potential of NFTs remains promising, with the technology finding applications in various industries, from art and gaming to real estate and beyond. As the market matures and adoption grows, we may see a resurgence in NFT activity, but for now, collectors should exercise caution and make informed decisions.
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