I‘ve dabbled in crypto for some time. I became aware of drink payments as a fun novelty in 2015, which produced some very serious thought experiments.
Soon enough, my team at Kaala began building databasing structures geared towards Japan’s underground cultural ecosystems. Naturally, we also started experimenting with data governance models, including discussions of blockchain application.
Then I moved to Seattle and worked on interoperability projects at New Alchemy during the ICO boom. Whoa. What a wild ride that was, both very glad for the experience and glad to be out of it – talk about volatile work environments. Less volatile and far less profitable but much more rewarding was the research I did with PNW Blockchain. I also conducted independent crypto advisory with a number of local music venues and NPOs.
Back to Japan, where I used Zaiko‘s streaming platform to produce concerts and watched (but not yet participated in!) their NFT music platform grow. Relatedly, I also started experimenting with OpenSea with my own NFT audio projects. I’m studying Blockchain Economics at The Wharton School, and I consult with clients on various activities within the larger metaverse landscape.
Most of this is fun, exciting, invigorating. But a lot of it rubs me the wrong way, too. Here are some examples.
The Metaverse
Thus far, this is a very early product. Be it The Sandbox, Decentraland, or Somnium Space, there is extremely little to be excited by from a practicality POV. In principal, these are web2 roaming platforms on which developers deploy virtual experiences with blockchain tie-ins.
There are virtual plots sold for large sums, which is hard for many to understand. My explanation is, this is the purchase of permission to run script at predefined coordinates within a contained 3D operating system.
Analogously, on a traditional desktop, you use a mouse to guide a cursor on a screen, position it on a specific point on an X-Y axis, and double click an icon to run an application. Imagine that not only do you dictate the movement of the cursor, you also *are* the cursor inside the screen. You maneuver yourself to these virtual plots which are the web3 equivalent of an icon. Likewise, the metaverse you’re interacting with is equivalent to whichever operating system you would be running.
And that’s actually pretty cool IMO. It reminds me very much of William Gibson‘s original conceptualization of cyberspace in his Sprawl Trilogy Also sorta reminds me of Flatland. The metaverse is actually quite amenable to literary references.
But your average end user basically gets nothing out of it. That’s if they can log in, or understand the concept enough in the first place to be interested in exploring! Despite this, there is much hype, with celebrities investing millions, news publications frequently covering it vaguely, and countless companies popping up in nebulous pursuit of it.
That is almost the exact pattern that happened with ICOs. The tech is good, but the hype machine drives it to strange, and frequently bad, places. Don’t let it win.
Regulation in Crypto
Understandably, this doesn’t have an easy fix. Nevertheless, I still see major potential for educational activities being missed.
KYC is a core activity in crypto. It can be annoying for many reasons, but I’m supportive of it in principal. That being said, like most things in crypto, regulation remains fragmented, making it easy for normies to consider entry perilous. That doesn’t help adoption.
Now, I’m no expert on any of this, so I won’t pretend to have solutions to the regulatory issues being negotiated today. But I am a US citizen interested in crypto living in Japan, which can present some very high hurdles to easy access. As such, I’ve navigated a lot of wonky crypto spaces here looking for available resources and, to be honest, its a mixed bag.
Accounting Services
okyo’s Argentum Wealth takes a stab at summing up some of the issues to address regarding crypto in Japan. Kimura CPA says they’re one of Japan’s “…first accounting firms to offer cryptocurrency related services.” Wakaba Tax Offices holds crypto assets themselves, apparently giving them an edge over the competition. Here’s an entire Reddit thread on the matter.
Point is, there are a lot of services out there. But many aren’t promoted well, and you must vet the ones you’re interested in. That’s a hassle, understood. But also, at this point relatively late in the game (“early days” is such a bullshit comment), I’m looking for less timid individuals to open up about their experiences for the betterment of the community. Myself included.
Crypto Exchanges
urchasing and trading crypto in Japan can also be exceedingly frustrating, especially for US citizens. This is in large part due to the above tax & regulatory issues. Interestingly, GaijinPot has a decent roundup of trading resources for US citizens in Japan. This can be a minefield, and really just requires extreme patience. You’ll run into bottlenecks all over the place before you find the platform that onboards you. The most reliable ones for US citizens based in Japan are said to be:
- Binance is a pain in the ass, but sometimes works.
- BitFlyer is kind of wonky and rigid, but sometimes works.
- Coincheck has nice UI but got hacked, and sometimes works.
- Kraken is named after a sea monster, is tangentially related to Mt. Gox, and sometimes works.
- Liquid just doesn’t work.
Much like crypto accounting, even getting your hands on crypto can be a hit and miss activity. Double that for US citizens in Japan. And while that’s problematic, that’s not *the* problem to me. More on that later, but moving on to
NFTs
his screams ICO to me. So much is familiar – the barrels of cash, the flashiness, the celebrity, the suspicious lack of detail, the nebulous technical inaccessibility, the uselessness.
Which is endlessly frustrating because I like NFTs. Their ability to log and store information critical for interpretation is endlessly fascinating to me. This also brings conversations I have had about content & identification verification in music scenes full circle.
As a store of value, crypto’s alright. Sorta depends on what coins or tokens yr considering. But as a store of information, blockchain is so much more promising than the financial tools it produces. NFTs – officially known as ERC-721 tokens – themselves represent a step forward as they lock in specific information regarding a document into uniquely identified, permanent records synchronously updated and accessible across the entire network.
What Should NFTs Do?
his is a kinda grandiose example, but much like the one I gave above for the metaverse being like an OS you’re operating from within, ERC-721 and similar tokens represent, to me, the promise of… never repeating the Library at Alexandria. To whit: there was much knowledge contained within that library, which burned, and destroying all those learnings.
ERC-721 and subsequent protocols (ex. ERC-1155) could – if all goes well with the token dev itself and then also implementation – preclude that kind of tragedy from ever happening again…
But right now? We’ve got Bored Apes. I don’t even want to link to that, but I will for SEO.
To be clear, I don’t have anything against the trading of absurdist trinkets for absurd sums. I would be happy to see that continue, provided that other, more interesting, practical uses are also explored. But the wya things are progressing, no feels like it could devolve into a vicious cycle. Not just in NFTs themselves, but the general progression of the blockchain ecosystem. I’m very keen on breaking that trend.
And this isn’t just a trend in crypto – its in business in general – and that bugs the fuck out of me. What is “it,” you ask? Hype or, as I like to call it, false/misplaced hope.
So do something about it and start exploring. This hype-y shit’s gotta end, but it only will if enough of us get smart.
Matthew Ketchum
Matt Ketchum