2021/02/20

Why Brave might be the future of online advertising

This is a quote from a leading manager at Brave: 

"Brave is a free, privacy-focused browser that blocks all the creepy stuff on the Internet. Users retain guardianship of their data and have a faster, cheaper, and safer browsing experience.

Integrated into the browser is a token called the Basic Attention Token ("BAT"). In a token sale that raised $36 million in 24 seconds, Brave created BAT as a means of accounting for user attention online. Users earn BAT while browsing, and pay BAT to publishers to access and support digital content and services.

On top of the browser and integrated token, Brave has built a blockchain-based, private ad platform. Users, should they choose to opt-in to (and get paid for) seeing ads, are served high quality and relevant ads without leakage of their data, as all ad-matching will be done by local (on-device) machine learning. Having launched >2.5k campaigns for >400 advertisers to date, Brave continues to deliver a >9% CTR."

--> I will come back later with an analysis of their UVP 

What the heck is a crypto token?

I found a variety of definitions and perspectives 

Coingecko: "Tokens and coins are often erroneously regarded as interchangeable terms. However, while both tokens and coins share technical similarity, tokens are usually built on top of a smart contract platform and are issued en-masse during its inception. Tokens grant its holders the right to take part in the issuing parties' network or product."

or short version: "Blockchain based unit of value issued by an organization, which grants token holders a right to participate in a network."

Coinmarketcap: "A digital unit designed with utility in mind, providing access and use of a larger crypto economic system. It does not have a store of value on its own, but is made so that software can be developed around it."

Coinbase gives a more practical definition: "The other increasingly common meaning for "token" has an even more specific connotation, which is to describe cryptoassets that run on top of another cryptocurrency's blockchain. You'll encounter this usage if you become interested in decentralized finance (or DeFi). While a cryptocurrency like Bitcoin has its own dedicated blockchain, DeFi tokens like Chainlink and Aave run on top of, or leverage, an existing blockchain, most commonly Ethereum's. 

Tokens in this second category help decentralized applications to do everything from automate interest rates to sell virtual real estate. But they can also be held or traded like any other cryptocurrency."

Cryptocompare gives a great example of the BAT token: "BAT token is primarily used to pay, or reward, content creators for their work. This type of incentivization scheme is fundamentally different from the traditional web monetization model that relies heavily on generating revenue from intrusive advertisements, in order to compensate content producers and pay for other management costs associated with operating an internet-based information resource."

2021/02/17

Cross-Chain Interoperability

Cross-Chain Interoperability will be a major point of discussion of the crypto economy and industry from 2021 onwards. Two contrary positions. First, the side in favor of cross-chain interoperability: 

Many blockchains will cease operations because they lack critical mass. Bear in mind, the just like any other information service, the crypto economy is a network economy in which Metcalfe's law holds true. Thus, in order to survive, smaller blockchains must build their own or build on bridges with other leading blockchains. In case of successful bridging, indirect network effects will kick in. The more chains successfully interlink with other networks, the more others will follow. 

Further, crypto governance is inherently interoperable. There is no single entity like Facebook or Google which aims at dominating a proprietary network or walled garden. Monopolists or oligopolists aim at lock-in effects through the nurturing of centrally managed indirect networks, which business eco-systems of the WEB 2.0 era eventually are. Crypto economies founded on two adjacent concepts: decentralization and interoperability allowing for a co-existence and yet competition of networks. 

The position against cross-chain interoperability: 
It is way too much work for developers to develop and operate a decentralized app ("dapp") on multiple blockchains. Second, the use cases or demand by users might be questionable. Do users really ask for cross-chain interoperability of an NFT token for instance ? Maybe at least not in the early days. They might in future to increase their value of their NFT tokens. However, for now, since it is early days, users rather prefer single blockchains which associate with great names such as NBA top shot

2021/02/14

How to calculate a simple Bayesian posterior probability tree

We use the example of successful startups that were founded by female founders.*

First start with a tree from both sides of the prior probabilities. P(FE), P(S) is the prior probability of event FE and S to occur. 

Equate both conditional probabilities P(FE|S) and P(S|FE) because P(S∩FE) = P(FE∩S)

P(FE|S) is the likelihood, or the probability of a female start-up founder given a successful start-up

Ultimately, we derive P(S|FE) which is the posterior probability or the probability of a startup success to occur given it was found by a female founder 



Solution: P(S|FE), the probability of a start-up success given that it was founded by a female founder is 0,25%. 

Hint: It is best to memorize the following formula 




* This is by no means an anti-feministic post  



2021/02/11

Crypto smart-contracts and the crypto economy

A quick recap of important concepts in the crypto-economy. 

Smart contracts: 
These are automatized contracts between two parties without the need of a human notary or certifier. They follow a predefined set of rules and protocols. If condition C happens, it triggers a legally binding event E. And since this is happening on the or a particular blockchain, it is infeasible (not impossible) to hack this contract. 

2021/02/08

The worlds most precious asset

Time to re-focus on our most fundamental asset class. Some stats to set this into perspective (Gensler, 2018 and roughly adjusted for growth)
- Global Equities 100 Trillion US$
- Global Debt 300 Trillion US$
- Global Gold holdings 10 Trillion US$
- Crypto-Economy: 1.15 Trillion US$ (as per Feb 4th, 2021)

Amazonas Rainforest valued at 330 US$ Billion (Sinn, 2020) which is 0,08% of the above. Btw: the Amazonas shrunk by 1.2 of the size of the Island of Cyprus fro 2019-20 (Guardian, 2020).  


Edit: Feb 12th, Companies in the S&P 500 Index are sitting on more than $1.3 trillion in cash, according to recent reporting from the Financial Times

Why Crypto-Currency is real money

Money is a social construct. For any crypto-currency this is true as well since it basically has to fulfill three criteria: 

- Store of value 
- medium of exchange 
- unit of accounts 

the basic value of crypto is: 
- Trust 
- Transparency 
- Reliability 

medium of exchange 
- Transferability 
- Fungibility 
- Scarcity 

unit of accounts 
- Generalizability 
- Traceability 
- Quantifiability