Major moves from the likes of Nike, Clinique, Sotheby’s, & even Behr (yes, the paint company) — have made it abundantly clear that Web3 is more than a buzz term devouring your LinkedIn feed as neophytes try to establish themselves as “experts” & “consultants”.

Sure, those of us working & building in the space full-time may feel like NFTs & blockchain powered apps are everywhere, but truth is — most people still don’t understand any of it. Education is improving, but we’ve got a long way to go — from the billion dollar conglomerates down to the end user.

With such a chasm in comprehension & a trough of talent — launching a successful NFT or Web3 initiative can be a challenge with significant risk — but fret not!

This article outlines the major risks of adopting an NFT or web3 strategy, along with several solutions for mitigating those potential risks.To be clear, these observations come from spending hundreds of hours consulting with some of the largest brands, companies, artists & agencies in the world about their Web3 strategies.

For that reason, this list is mainly intended for well funded organizations with a global audience committed to moving forward — not for anyone looking for convincing. Nevertheless, many of these suggestions will apply to smaller businesses & entrepreneurs as well.

Let’s get into it.

1. BAD PR

In general, there’s a persistent negative sentiment surrounding NFTs, Web3 + the broader digital asset industry. Often the issue relates to unfounded narratives about environmental damage or scams. Either way, your brand’s public reputation may find itself sullied by association.

Solution: First, its key to recognize that being early to anything carries the burden of misunderstanding & skepticism- this is especially true of technology. The path forward is education & communication, within the organization first, & then to the outside world.

• Acknowledge raised concerns

• Identify the most pressing ones (if any)

• Investigate their validity

• Assess viable solutions

• Present your findings & communicate why you feel comfortable moving forward & steps being taken to mitigate or eliminate core concerns.

For instance, if there’s concern about environmental impact — choosing to mint on an alternative like the Palm network makes more sense than ETH main net.

If there’s confusion or doubt around the motivation of the collection or activation — transparent comms about the intent & vision can go a long way.

2. Its A Cash Grab

Well intentioned as your initiative may be, somebody’s going to view it as another quick cash grab powered by the latest market trend. With so many rushed, ill conceived projects out there, can you blame them for being weary?

Solution: Don’t think about the money. At least not out the gate. Instead of constricting your creativity through the tunnel vision of cost, revenues & margins — think about the reason an NFT is needed at all, its unique advantages and how it’ll provide more value over time than the cost of admission. If you use the early excitement & energy to ideate & dream free from worries about the accounting, you’re much more likely to discover an angle that is both invigorating, innovative, & genuinely suited for the NFT or Web3 form factor. Once you’ve landed on your best ideas, it becomes much easier to strategize & develop the rollout in a way that doesn’t lead to over OR under committing.

3. It’s Too Exclusive

Given the technical hurdles typically associated with NFT projects & the border Web3 ecosystem, some users may feel alienated by the vary premise of your project. If you then build in features or benefits that can only be accessed by “Holders” of your NFT — even more people may start to feel a bit marginalized.

The Solution: You can all but eliminate the technical complexity with the right tools and partners. For instance, you can launch your collection through a dedicated site that removes the need for using self-custody wallets like MetaMask or even the need for using crypto for payments. A great example of this is the Batman “Cowl” collection PNFTS built out in collaboration with DC. Users were able to create an account using their email address & could purchase their Cowls with fiat via credit cards.

Regarding “members only” perks & benefits — just look at it as a modern iteration of a subscription. Sure, if you’ve never offered a subscription tier to your audience, some may not love it. But alas, it seems to be the way most business models are heading — that’s not an NFT or Web3 specific problem. So long as you aren’t barring access to core features or utility behind an egregious price tag — this shouldn’t be an issue.

4. It’s Too Expensive

This is pretty straight forward — so lets jump straight to the solution

Solution: When it comes to pricing NFTs, it’s important that you approach this with an open mind, well informed perspective & managed expectations. For many the idea of spending money on a digital item that’s not a commonly used software or app is a bit foreign. As such, it is crucial that you consider the value on offer relative to price.

For instance, let’s say NETFLIX decided to issue 2M NFTs to serve as lifetime subscriptions to the service. Well, what should they charge? If we assume its normally $10 a month — that’s $120/year. Let’s guess that the average person sticks around for 6 years — that’s $660 over that timeframe. With those numbers in mind — it stands to reason that charging $600 for the NFT would be a solid deal deal & $500 would be even better. With those figures — they’d net between $1B & $1.2B in cash. For perspective — they’ve got around 220M active subscribers, so this assumes they only reach ~1% of their customers. Oh, this also doesn’t factor in any secondary sales royalties.

Only you know what your customers & clients are used to paying — thus — you should be able to gauge their price sensitivity. As an exercise, you could comb through sales data and determine the average order or spend per transaction for your average customer. If you plan to target specific cohorts within that audience, then do the same thing, but filter the data to assess that same cohort.

If you’re still unable to arrive at a confident pricing strategy — let the collectors decide. There are a number of tools that allow you to have dynamic pricing that reacts to demand to determine optimal pricing in real time, like Dutch Auctions or other price decay models. Bear in mind this is likely to cause more confusion than setting a fixed price.

Lastly — I’d suggest you price things in fiat, NOT in crypto. This tweak alone at least ensures the cost doesn’t fluctuate with the market volatility.

5. Internal Conflict & Opposition

Don’t be surprised if you find push back & resistance arise from inside the ranks. Given the nascency of the sector, many people hold deep ideological opposition to NFTs, crypto & Web3. The extent of aversion will certainly depend on your industry (For instance, the gaming industry seems particularly anti-NFTs, while the fashion & luxury sectors seem increasingly supportive). So how do you handle this?

Solution: For starters, be sure to double down, hell, quadruple down on education. Videos & content like this are great sources of theoretical education, but be sure to incorporate practical & experiential learning too. Has your team ever purchased an NFT? Self custody in their own wallet? Ever use an NFT for its utility? It’s pretty strange to be a critic of something you’ve never participated in.

Aside from education, encourage & facilitate a forum for discussion to Address feelings with facts. Mind you — this is not an exercise to convince anybody, but rather one to gauge your team’s own sentiment & comprehension. This will reveal existing biases, knowledge gaps, capability gaps, as well as who shouldn’t work on the initiative. Ultimately, it is the responsibility of leadership to move the project forward.

6. Lack of expertise, skill, knowledge, or ability to execute

You’ve decided to move in this direction & want to make a meaningful splash — but do know how to do it? If you know you should be thinking about your Web3 strategy, but are lost about how to do it — You’re not alone. Here’s what you can do about it.

Solution: There’re are two main fixes here. The fastest path forward is to hire experts & consultants to get a better understanding of the landscape. To make the most of this, consider what you’re hoping to achieve & work backwards to identify current gaps — these could be knowledge gaps, a lack of context about the broader web3 & NFT market, or more technical considerations related to how you want to execute & deliver your initiative. Just remember like with most things, you’ll want to be specific about who you hire & realistic about what they can offer. If you’re looking to learn, that can likely be achieved by hiring 1 or 2 consultants to educate your team. If you’re looking for someone to provide a full creative proposal & roadmap, expect a larger team & higher costs. If you want a platform to be built out, even more so.

The other option you have is to spin up a fresh innovation unit dedicated to the segment. This route can still benefit from hiring outside support & collaborators, but positions your organization to flourish in the long run. As team members develop deeper expertise, they’ll also establish enduring processes to support a growing commitment & investment into the org’s web3 & NFTs vertical.

Since you read all the way to the end, let’s throw in a 7th tip as a bonus!

7. Web3 IS NOT web2.

Obvious as this may seem, you’d be amazed and how many people don’t seem to grasp this. This single misunderstanding is the likely culprit for any failed web3 initiative led by a web2 company. Instead of assuming that all the tried & true practices of web2 naturally translate over to web3 — spend some time unlearning those reflexes & spend even more time learning, using, & contributing to the web3 ecosystem. When you do, I promise you’ll begin to understand why the single most powerful element of this entire sector, the single biggest indication of whether your initiative will thrive or perish — is COMMUNITY.

"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run." - Roy Amara

The Lindy Effect posits that the longer something has been around, the longer it is likely to stay around. Bitcoin could have failed already, yet it hasn’t. For each day Bitcoin remains standing, it’s chances for long-term survival increases. Bitcoin will see greater regulation which will bring greater innovation which will bring in greater adoption. From where things stand, Bitcoin is an “All or Nothing” technology leaning closer to “All” than “Nothing”. To be clear — Bitcoin will prosper.

Public Policy: Playing By The Rules

Regulatory oversight will undoubtedly create winners and losers as governments decide how they want to steer the crypto industry. Whether it leans more laissez faire or favors the more controlled, dominating side, we will have to see. In either case, two things are certain. First, greater guidance clears the way for greater competition + thus better choices for Bitcoin ETFs, ETPs, 401K s, etc. once policymakers provide informed Bitcoin + crypto guidelines. Second, should a major nation like the US or Russia cosign Bitcoin in any meaningful way (even if its a preemptive economic warfare tactic), expect more countries to enter the BTC “Sats race”. Just know, if “hyper Bitcoinization” is the future, crypto regulation comes in tow.

Financial Applications: Bitcoin as Money

El Salvador’s move to officially recognize Bitcoin as a national currency has been divisive to say the least. No matter how the experiment goes, tremendous ramifications will be playing out over the coming years. On one hand, the decision raises the viability of mass adoption as countries seeking greater autonomy legitimize the assets’ use as a unit of account + store of value. Perhaps even more attractive to these pioneering countries is the profit potential of large scale BTC accumulation.

On the other hand, the likes of the IMF + World Bank hate to see ascending nations reclaim their economic sovereignty. Finding states on the verge of total financial ruin before swooping in with a predatory loan that assures allegiance is their preferred modus operandi. Such methodology explains why the BIS rejected El Salvador’s request for help in implementing the Bitcoin standard yet champions CBDCs. What a coincidence that the price of BTC collapsed by ~20% on Bitcoin’s inaugural day as a national currency.

Social Drivers: Community + Tech

Large scale social behaviors will determine Bitcoin’s fate. With “free” nations like Canada invoking emergency powers to coordinate broad strokes financial censorship of their “dissidents”, more are realizing the importance of decentralized money. As the halving cycle drives price while incentivizing network security, status games coupled with a desire for acceptance will push Bitcoin operations + crypto businesses to go carbon-negative, ultimately accelerating green energy use. More interest in crypto means more investments toward educating consumers about the technology + its possibilities. Such knowledge may drive BTC adoption when compared against CBDCs.

Institutions such as Argo Blockchain, organizations like Michael Saylor + Elon Musk’s Bitcoin Mining Council, & events like the “The ‘B’ Word” conference hosted by Jack Dorsey + Cathy Wood in July 2021 clearly communicate Bitcoin’s need for an elegant solution to its energy consumption issues. Though a phenomenal hedge against fiat + endless quantitative easing, institutions will remain on the sideline until they feel confident Bitcoin fits into an energy compliance framework that satisfies their green mandates. Otherwise, firms risk political + PR blowback. The entire crypto market will need to align with the green politics of the times before major public entities join en masse.

“Bitcoin is great as a form of digital money, but it’s scripting language is too weak for any kind of serious advanced applications to be built on top…” - Vitalik Buterin

How Ethereum Works

Bitcoin set the stage by heralding a new era of computing, cryptography, & digitally native systems. Nevertheless, Bitcoin’s core design objective, cryptographically securing the economic value of the world’s first mathematically verifiable scarce asset in a natively digital format, means it’s not easily programmable. Technically, you can build smart contracts applications on top of the Bitcoin blockchain — multi-signature key management is an example of this — but it’s not nearly as effective, efficient, or expressive as is building atop the Ethereum blockchain with the Solidity language or even via the Ethereum Virtual Machine (EVM) emulator. That being said, let’s take a moment to assess the merits of Ethereum’s technology.

Proof of Stake: Efficient Incentives

Instead of using computational miners ala Proof-of-Work (PoW), Ethereum2.0 relies upon a Proof-of-Stake (PoS) mechanism stipulating validators must stake 32+ ETH in escrow-esque fashion to secure the network via block proposal & attestation. Along with reduced energy demands, PoS better incentivizes good actors, reduces hardware requirements & helps support sharding, a key component of ETH2.0’s scaling solution.

Though viewed by some as a pivot, PoS is effectively a requirement for ETH2.0 & was conceived of early on as a necessary adjustment to allow Ethereum to scale to the throughput required for long-term viability as a smart contract platform processing thousands of transactions a second. Much of Ethereum’s problems stem from the low transaction throughput of Ethereum’s PoW model. When switched to PoS, ETH2.0’s sharding framework enables far better throughput & scaling.

Alignment of incentives also happens to improve with the PoS approach. If ETH2.0 validators try to behave maliciously, proposing or attesting for malicious or incorrect blocks, they will get “slashed” & lose a portion of their staked ETH — a costly penalty. The more a validator stakes, the more they have at risk. In many ways, PoS is a far better way to incentivize cooperation across the network compared to PoW.

The Merits Of Ethereum’s Technology

Programmable + Turing Complete From a high level, broad strokes perspective, all “Turing Complete” means is that Ethereum’s coding language has more expressivity & logic. This expressivity is what allows people to create such nuanced & specific programs, dApps & smart contracts using Ethereum.

Composable + Interoperable

Smart contracts are often called “money Legos” because of how easily they allow financial applications to be built. One person could build a smart contract that functions as a savings wallet that dictates “If you deposit ‘X’ amount of ‘Y’ asset, you receive ‘Z’ yield. Somebody else takes that base layer component & integrates it into a wallet application. Now, that wallet has the same savings & yield functionality as the separate smart contract because they were able to integrate it into their new program just like an API. This “Lego” nature allows things to be built & iterated upon far more quickly than would otherwise be the case.

Ecosystem Development

Ethereum is responsible for kicking off the smart contract & dApp segment inside the digital asset sector in much the same way that Bitcoin is responsible for putting blockchain at the top of everybody’s mind. Anytime you hear about an “altcoin” or an application built on top of a distributed blockchain ledger, there’s an extraordinarily high chance it’s built on Ethereum. Of course, other blockchain’s exist & have similar features to what Ethereum offers, but until a competing blockchain like Polkadot, Solana or Cardano can convincingly entice developers & retain users, Ethereum will remain the segment’s clear leader.

Energy Friendly Consensus

It’s no secret — PoW uses a lot of energy. However, the impact of energy used is significantly blown out of proportion as a tool to steer the broader markets in a direction most advantageous & profitable for larger participants (i.e. “smart money”). If you were to really assess the energy impact of, let’s say, the traditional banking system, tech companies mining for rare Earth metals, or even the energy consumed by the Netflix-dominated film industry, PoW mining is far less of an issue. Still, PoS is a more efficient consensus mechanism.

The Downfalls Of Ethereum’s Technology

The expansive ecosystem into existence by Ethereum bears with it a two-sided blade. Frankly, a lot of projects just aren’t good, having poor code bases & poor security.

Substantial Update Roadmap

Citing Bitcoin’s fundamental code base as complete, critics express concerns about Ethereum’s seemingly perpetual beta state. For the most part, that’s a fair & valid critique. As I see it, occasionally things are so ambitious, be it in scale, scope or simply at a technical level, that the only viable way for it to come to fruition is by breaking it down into smaller pieces, releasing chunks at a time while steadily developing & tweaking things on the back end until final form is achieved.

Look at Tesla’s “autopilot” feature. No doubt, it has been integral to the company’s early EV market advantage & a key selling point for would-be Model “X” owners despite its live software being in ongoing beta development for years. Granted, flaws in Tesla’s software have resulted in the loss of human life on more than a handful of occasions, while the worst thing to happen to Ethereum was a hack that was ultimately undone via controversial chain-state rollback (we’ll discuss in more detail later). I digress…

As of press time, Ethereum is technically in beta. Though the stakes aren’t life & death with Ethereum, it is still livelihood & security for those choosing to entrust their capital with the protocol & any products, services, or tokens running on top of it. Things have gone relatively smoothly for many years, most recently with the implementation of EIP-1559 during the London upgrade. Still, every time there’s a major update there’s also an opportunity for a major flaw, exploit or hiccup that could spell disaster for the protocol & the wider ecosystem intertwined with it.

Smart Contract Vulnerability

Since anybody can create a smart contract, often regardless of their programming prowess, many low-quality contracts & dApps make it to market. The reality is that many of these lower tier offerings have never endured a proper code audit prior to going live & as such, can be particularly vulnerable to exploitation by savvy developers & hackers.

Low Quality, Low Security Projects

The expansive ecosystem spawned into existence by Ethereum bears with it a two-sided blade. Frankly, a lot of projects just aren’t good, having poor code bases & poor security. A common phenomenon that strikes me as quite telling is the propensity for developers within the Ethereum community to build & contribute code anonymously, a trend I rarely see inside of the Bitcoin development scene. Of course, anonymity is a basic right & is sometimes done for good reason. Be it self-preservation, altruism, or a pure aversion to notoriety or scrutiny, I can understand why someone may not want to be publicly involved with a project. Regardless, it must be acknowledged that anonymity brings a bevy of malicious actors building projects up only to “rug pool’’ or otherwise “exit scam”, hurting many unassuming users in the process.

Strengths Of Ethereum’s Team

Whereas Bitcoin mainly exists to preserve & store value, Ethereum is the go-to choice for powering blockchain native applications, services & products.

Strong Organization & Leadership

Imagine if Satoshi Nakamoto was around to guide Bitcoin daily, actively shaping the protocol’s future. Well, Ethereum has that in Vitalik Buterin, the project’s polyglot brainiac co-founder. Though no longer directly involved with the protocol, note that Polkadot’s Dr. Gavin Wood & Cardano’s Dr. Charles Hoskinson co-founded Ethereum alongside Vitalik, the former inventing the Solidity contract language & penning the project’s “Yellow Paper”, the later pivoting to build atop the Haskell environment.

Aside from Vitalik, there’s also the Ethereum Foundation, a non-profit dedicated to supporting Ethereum and related technologies, the Ethereum Enterprise Alliance (EEA), a member-led industry collective aiming to empower organizations to adopt + use Ethereum technology in their day-to-day business operations, as well as Consensys, the dedicated Ethereum software development firm behind products like MetaMask, Quorum & Infura. On the grassroots development side of things, you’ll find numerous hackathons & coding summits geared to attract talent into the space. Everywhere you look, there are dozens upon dozens of unique entities that have emerged intent on driving the Ethereum ecosystem forward.

Blockchain’s Largest Development Community

Due to the composability inherent within Ethereum’s coding language & the limited programmability of Bitcoin, most of the development throughout the blockchain & digital asset sector involves Ethereum. No doubt, it should be expected that Bitcoin will see more & more development over time. Whereas Bitcoin mainly exists to preserve & store value, Ethereum is the go-to choice for powering blockchain native applications, services & products.

An Ambitious Nature

Since inception the Ethereum protocol & its community have been quite audacious, proclaiming massive goals that may seem like a lot to bite off, perhaps even too much so. Perhaps the most striking example of such ambition is the planned merger of the current Ethereum blockchain with the ETH2.0 beacon chain. The London upgrade posed a similar challenge & yet, was executed relatively smoothly. Only time will tell how things will play out down the road as matters become more technically complex.

A Collaborative Spirit

Whether Satoshi Nakamoto was a single entity or thousands of individuals, there’s been very little in the way of substantial development, changes, or additions to the Bitcoin protocol since it was initially deployed to the mainnet. In all fairness, upgradability was never the real goal for Bitcoin, launching with most of its pure intent already fully realized, technologically speaking. For Ethereum, things have basically been the exact opposite, where the goal has been to continue pushing forward & building. Thus far the principles have been quite clear: so long as the application being designed, developed or built truly benefits from native blockchain integration — there always seems to be a member within the community ready to pitch in & help bring the idea to fruition.

Talent Specialization

The blockchain & digital asset industry is rife with sub-sectors, each sub-sector housing various niches. Inside the DeFi scene alone you have self-custody wallets, payment apps, high yield saving protocols, staking protocols, prediction markets, data aggregators — the list goes on & on. It can’t be overstated how many distinct niches already exist with more emerging all the time. Such growth inside of this tech-centric field encourages high specialization amongst participants hoping to make a name for themselves. Similarly, if you hope to maximize your ROI in the space, I’d recommend you also develop an investment “specialty”. Some people are drawn towards DeFi opportunities, others are drawn to NFTs, some focus on gaming. The choice is yours.

Weaknesses Of Ethereum’s Team

With that “trustless” principle in mind, the idea of having a leader is off-putting to many as it directly opposes their underlying value of decentralization.

Move Fast & Break Things

A commonly, perhaps overly used, axiom inside the tech & investing world is “Move fast. Break things.” This mindset has certainly been infused into the DNA of the Ethereum development community. The result? Sometimes things actually break. The good news? It’s not often the Ethereum network itself or the underlying Ethereum code breaks. It’s typically an issue with a smart contract’s composition or execution or some other piece of infrastructure supporting the protocol that experiences problems.

Prominent Leader

There’s a sizable cohort within the blockchain + cryptocurrency space who are committed to the sector for more than the technology. For many it’s the ethos, the spirit, the philosophy of trustlessness + confirmed verifiability that tempts them in. With that “trustless” principle in mind, the idea of having a leader is off-putting to many as it directly opposes their underlying value of decentralization. On one hand, prominent leaders like Vitalik can be pivotal in keeping a distributed project like Ethereum focused & mindful of the road ahead. If that leadership is used maliciously or otherwise diverts the project away from its intentions & stated goals though, it can become a problem.

Diffused Efforts

A key benefit of a project like Bitcoin is that developers are usually working on the same thing to solve a clear issue. This is possible because of Bitcoin’s focused mission. With so many subcategories + niches emerging from Ethereum over the years, developers are spread out across the various projects nested within the network’s ecosystem. Instead of everybody rallying to coordinate + laser focus their energy on a specific aspect of the greater protocol, a ton of talent gets diffused + distributed.

The Bullish Case For Ethereum

“…you have capital assets, consumable assets, & store of value assets…Ethereum serves as all three…that is quite rare for any asset, digital or otherwise.

Staked Tokens Exiting Circulation

When investors stake their coins, whether directly on the network with a minimum of 32+ ETH or contributing to a larger pool — coins are removed from circulation. As more coins are removed from circulation there tends to be a positive upward effect on the price of Ethereum. This bullish impact stems from basic supply/demand economics. As supply decreases scarcity increases. As scarcity increases the demand of the coin increases. As demand increases, the perceived value follows suit.

Gas Powered dApps

Though most blockchains use their native coins to pay for fees, Ethereum is unrivaled when it comes to the volume of transactions on its network. The prevalence of smart contracts underpinning DEXs, liquidity pools, yield farms, NFTs, & other dApps gives ETH substantial real-world utility. Regardless of one’s preference for ETH as an investment, many will still find themselves purchasing ETH because they have to, thus reinforcing the demand side pressure for the asset & positively impacting its price.

EIP-1559’s Burn Mechanism

Though the London Upgrade contained additional improvements, EIP-1559’s restructuring of fee auctions is likely to have a positive effect on the price of Ethereum. The new change means gas spent during transactions is burned, effectively removing ETH from the circulating supply. Supply + demand economics strikes again!

Triple Point Asset

Assets come in various forms. In short, you have capital assets, consumable assets, & store of value assets. Suffice it to say, Ethereum serves as all three classes, something that is quite rare for any asset, digital or otherwise. While more & more smart contract platforms are positioning themselves to claim “Triple Point” status, Ethereum is the current leader by far, having done the most to prove itself viable of all three categories. We shall explore this “Triple Point” concept in more depth later.

The Bearish Case For Ethereum

…unlike Bitcoin…ETH’s tokenomics can be altered at any moment. In the case of EIP-1559, the alteration may benefit the asset’s price. Nevertheless, it must be understood that not every change to the protocol will prove favorable.

Mutable Monetary Policy

Historically, Ethereum has been ever changing in its pursuit of creating the “open internet”. Embedded in its ethos & plainly stated in the white paper is a philosophical commitment to be agile + nimble. This means the core dev team will alter or otherwise change plans so long as it moves the protocol towards realizing its greater ambitions. This mutability makes some a bit wary though.

The most pressing concern is typically the realization that unlike Bitcoin, the design + functionality of ETH’s tokenomics can be altered at any moment. In the case of EIP-1559, the alteration may benefit the asset’s price. Nevertheless, it must be understood that not every change to the protocol will prove favorable. Point in case being the major consensus bug that affected over half of all nodes running Geth, the most widely used Ethereum node software client, resulting in a chain split. The issue stemmed from a vulnerability within Geth that was quickly patched. Nevertheless, given the event happened within weeks of the London upgrade, I would wager that Ethereum’s “nimble” nature may be at fault.

Unlimited Supply

Even though EIP-1559 introduced some additional positive price pressure by removing ETH from circulation, there’s still an unlimited supply with no fixed cap on new issuance. Compared against Bitcoin’s 21M hard ca, ETH’s appreciation potential is constrained by its free-flowing supply policy.

Ethereum’s Ambitious Intentions

Ethereum has been a complex + ambitious project since day 1. Where Bitcoin laid out a concise and singular purpose, Ethereum cast a vision of an entire ecosystem that could emerge from its Turing-complete code base. While Bitcoin launched in near “final form”, Ethereum debuted pursuing a new frontier of internet-enabled computing and applications.

Extrapolating upon the promise of smart contracts + dApps, possibilities detailed at inception included tokenization systems, financial derivatives, stable currency pegs, DAOs, prediction markets + more. Though it has endured technical hurdles & many remain to be cleared, Ethereum has already realized many of its intentions. Housing more development + evolution than any other blockchain project in history, it appears ETH2.0 will continue pressing forward towards the horizon to chart new territories. Ethereum is the internet’s future.

“The real problem with conventional currency is all the trust that’s required to make it work. The history of fiat currencies is full of breaches of that trust.” -Satoshi Nakamoto

How Bitcoin Works

Bitcoin is powered and created through a process known as “Mining”. Miners contribute computational resources to the network in effort to confirm pending transactions by adding them to the Bitcoin ledger. Using Proof of Work (PoW) consensus, every 10 minutes miners must “work” to solve a complex SHA-256 hash equation that confirms the contents of the block to be valid before new BTC is minted + given to the miner in the form of a block reward.

Distributed: Power To The People

Even as concentrated pools dominate the industry, mining can be done by anyone — assuming you have the right hardware. In the early days mining could be done on a consumer grade computer. Now, dedicated machines known as ASICs (application specific integrated circuits) + access to relatively cheap energy are requisite to be a profitable miner. Still, anyone dedicated enough can join in.

Proof Of Work: Will Work For BTC

Since inception Bitcoin has used a proof of work consensus mechanism. Though critics have cited Bitcoin as an environmental threat due to massive energy requirements, the large power draw gives the network it’s tremendous security, its proponents tending to appreciate the physical commitment requisite to secure the network. Some have even described Bitcoin + PoW as “…the ability to convert energy — both technological + physical — into a scarce monetary good that cannot be censored, confiscated or copied…” How poetic.

Block Rewards: Ingenious Incentives

Issued every ~10 minutes, the block reward mints a fixed number of BTC that eventually enter circulation when miners sell the “virgin” coins. The reward is programmatically reduced by 50% every 4 years until 21M BTC have been minted. This supply schedule drives price action + encourages miners to add hash power, boosting network security in a virtuous cycle.

In theory, mining can be done by anybody, but the reality is quite different. Given the moat-like economies of scale that now surround the industry, it is far more difficult for any solo entity to profitably mine BTC. It can be done, but it’s almost certainly going to be a money-losing endeavor unless millions are invested into the operation. For most who remain adamant on mining, it would be advised to begin by joining a larger pool to keep startup costs to a minimum.

Nodes: Smooth Operator

Imagine if you could whip up a node that gave you access to the entire transaction history of JP Morgan or BlackRock. Pretty powerful, indeed.

What’s more feasible than mining is for somebody to run a node. Instead of mining + minting new BTC, ardent Bitcoin believers can run their own node, a continuously updating record of all transactions on the Bitcoin blockchain — independently owned + operated by whoever so desires to spin one up. Nodes aren’t responsible for solving any of the SHA-256 equations required to mint new BTC, but rather, they host + transmit an additional copy of the greater Bitcoin blockchain ledger. This allows node operators to have direct access to the global Bitcoin ledger. Yet another expression of commitment to the “Don’t trust, verify” nature of crypto. Imagine if you could whip up a node that gave you access to the entire transaction history of JP Morgan or BlackRock. Pretty powerful, indeed.

The proof of work consensus mechanism makes it difficult to attack or unilaterally control the mining network. Due to high energy demands, attackers would have to allocate a substantial amount of resources + energy to have a shot at launching a successful 51% attack on the Bitcoin network. Similarly attack resistant, though for different reasons, proof of stake consensus requires a sizable amount of capital to attack the network.

The key distinction to note is that it’s easier for somebody to begin mining in a PoS system as they could allocate the needed funds as a direct investment into the ecosystem, pool their funds together with other motivated investors, or they could join a larger pool established by a CEX or other large entity to contribute a fraction of the network’s requirement for solo staking.

Block Rewards: A Grand Prize

The cyclical issuance reduction puts significant pressure on Bitcoin’s supply…often having a notable impact on the price of BTC…as new waves of adopters learn about the asset’s programmatic scarcity for the first time.

Bitcoin’s block reward mechanism is directly associated with the famed four year “halving” cycle, which historically, has driven the entire crypto market in terms of bullish appreciation phases & bearish markdown phases. Every four years (approximately), the block reward issuance rate gets cut in half. This four-year halving schedule reduces the velocity of new Bitcoin issuance until it reaches the 21 million BTC target.

When Bitcoin debuted 50 BTC were minted every 10 minutes as a subsidy to reward miners for securing the network, a subsidy known as the block reward. In 2012 the block reward was reduced by 50%, with only 25 new BTC minted every 10 minutes. 2016 saw the reward drop to 12.5 BTC & 2020 halved the issuance down to 6.25 BTC. In 2024, the block reward will decrease by another 50% with the halving cycle continuing until all 21 million BTC are minted.

The cyclical issuance reduction puts significant pressure on Bitcoin’s supply, the resulting supply shock often having a notable impact on the price of BTC due to the ensuing demand shock as new waves of adopters learn about the asset’s programmatic scarcity for the first time. Or perhaps as they appreciate the asset’s programmatic scarcity for the first time.

Newly minted “virgin” Bitcoin comes onto the free market as miners sell their awarded allotment to cover operating expenses. Of course, some of these miners are holding on to their BTC as a long-term investment, but there remains a certain amount of turnover necessary for these miners to remain operationally solvent, let alone profitable.

Any BTC used, custodied, or otherwise interacted with after miners sell them to the open market can no longer be deemed “virgin” coins. Some exchanges & custodians have even gone as far as to ban or reject “tainted” BTC, coins that have been involved in illicit transactions according to interpretations of on-chain data. I add this simply to acknowledge that the argument of BTC being perfectly fungible isn’t entirely correct based on the policies of certain entities within the digital asset space. While most users will never be burdened by tainted coins, there are several ways to “clean” them should you need to. (Hint: It rhymes with “mixer”)

In other words, great day, great afternoon & great evening depending on where in this beautiful world you presently find yourself enjoying life. I intuit you are well, blessed & balanced. I am humbled & grateful to play my role in supporting your pursuit towards blockchain literacy.

Welcome To The Tribe.

First off, congratulations for being here & for doing the work. At some point along your journey you realized the importance of consciously engaging with digital assets & the fundamental base layers of blockchain technologies underpinning + driving the revolution.

Extraordinarily powerful in their capacity to foster change on a scale unheard of since the dawn of computing itself, a new era of economic, creative, social & political freedom is more possible than ever. At the same time, should the collective fail to learn from history’s litany of lessons, these very tools of empowerment could quickly devolve into chains of tyranny + oppression. Thus, it is of utmost importance to approach digital assets, cryptocurrencies, NFTs, Web3+ the broader field of blockchain technologies with intention, respect, & a sense of responsibility.

Who Am I + What Is Native Assets?

In this dawning digital asset era, the blockchain literate will thrive, will the blockchain illiterate struggle. Native Assets is here to help you come out on top.

My name is Sae’Von & I’m the founder + CEO of Native Assets. I also happen to be a pursuer of wholeness, balance, & harmony.

Native Assets is a blockchain firm dedicated to helping onboard the next 100M users to the web3 + blockchain sector through high quality, actionable education. Are approach is optimal for clients who are intrigued by the possibilities of blockchain & recognize its staying power, yet don’t know where to begin to best benefit from the tech’s vast possibilities. We empower our clients with all the knowledge & tools required to secure their digital assets, preserve their purchasing power & compound their wealth via thoughtful implementation of blockchain products & strategic leveraging web3 technologies + the broader digital asset market trends. In this dawning digital asset era, the blockchain literate will thrive, will the blockchain illiterate struggle. Native Assets is here to help you come out on top.

Peaks + Valleys

Money is optionality. Money is energy. Money is magnetic. Blockchain technology is fundamentally changing the nature of money.

For context, it’s important to communicate that my successes we’re not an overnight occurrence but a result of many years of focus, consistency, & dedication. Suffice it to say, I’ve been to the top of the mountain & to the depths of the valley. I’ve experienced great victories by doing things the right way, & some significant failures by doing things the wrong way. For the sake of rapport — I’ll give you the abbreviated version.

Hustle after hustle, business after business, I was draining myself in pursuit of building wealth. I don’t mean getting “rich” but creating true generation sustaining financial abundance & freedom. After losing six figures on a deal gone bad, I wasn’t just broke, but broken — financially, mentally & emotionally. The devastating failure triggered a depressive state that lasted for months as I lost my confidence, my drive & even my girlfriend of over three years. At this point, I recognized something had to change.

Once I climbed out of that abyss of darkness, I resolved to take back control of my life to rebuild something better — something more enduring. Never again would I exhaust myself chasing wealth. What changed? I began spending all my free time researching & studying the history of money, markets & wealth. From Rai Stones to fiat, from the Medici’s to the East India Company, from Mansa Musa to the Rothschilds & beyond I searched for the keys to everlasting financial freedom. What did I discover?

Well, one day after months of study & weeks of deep introspection — it all clicked. Money is optionality. Money is energy. Money is magnetic. Money is attracted to people & processes that nurture it, repelling all that squanders or waste it. What else did I learn? Blockchain technology is fundamentally changing the nature of money.

Was it really so simple?

Perhaps. Regardless, I happened to pay a high price learning how blockchain technology & digital assets factor into the bigger picture of generational wealth creation. Fortunately for you, I’m here to help you to skip the suffering & fast track your way towards success in this rapidly evolving, digitally native society.

Own the future, today.

Talk to you soon, tribe.

Peace + blessings. ✌🏾🙏🏾

Ready to grow?

You’ve got options.

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