Brave New Web
0b0000 “ Sunday. The market never sleeps”
Hi. My name is Sergey Sandwichev. I am a 3D artist and a part time private car driver from the year 2040. This is my blog where I share how web3 has transformed my life.
It is Sunday morning and I wake up to check the current prices for the cryptocurrencies I keep to make a living. Prices for the coin #3dMOON, which my favorite 3D modeling tool accepts for license fees, have dropped by 5%. Of course I am delighted with this as it means I can afford to buy more now to pay for another couple of months’ subscription later. Not surprisingly, the price has been going up for the last year, as happens with any popular tool. More and more people are deciding to become 3D artists and chase the success stories of quick and easy profits popping up every month. Well, I am no different to any of them, and can you blame me?
It’s the weekend, and I want to take a break from my work, meaning I won’t be tinkering with my new avatar model. But, as with most artists, my income is not very predictable and so, to make up the shortfall, I drive around with a decentralized ride hailing app. At the end of the day, I still need to pay my rent and for my coffee, and deal with those old-schoolers, who don’t even use Central Bank Digital Currencies (CBDCs).
As driverless vehicles, self-driving taxis require specially designed infrastructure on the roadside and so are allowed only within city centers where the technology has been installed. What I drive, however, is an old style human operated vehicle, which, without the required accessibility and safety modifications, can only be operated in the suburbs. The only nice thing is that I don’t need to own my car; I can just take one from the car sharing pool and, to make things even easier, they offer discounts for casual taxi drivers like me. So, there aren’t any parking fees and I don’t have to take care of maintenance, only gas and rental (which I hope will be covered by my customers!). It usually takes me just 2–3 hours of driving passengers around to cover my costs for the day, and everything I make during the rest of the shift, I can keep.
Unfortunately, the last ride of today’s shift brings me to a place where all the gas stations support a competing ride hailing project and none of them accept the coins I earn as payment. As I’ve been driving for more than four hours, I am too tired to look for the best conversion rates, so I use the Decentralized Finance (DeFi) app built into my wallet to quickly apply for a loan in the token I need to pay for the fuel. Of course, the app automatically locks almost all the coins I’ve earned already in the shift as collateral to cover the risk. The interest rates are okay because it is still the weekend and the demand isn’t so high. Yes, it’s a bit of a headache when I run low on the protocol currency I need to pay commissions for all these transactions, but I don’t mind too much — I can usually get a quick loan approved in under ten seconds.
Like every evening, I need to go through the usual checklist to make sure I have sorted out all the loose ends that may keep draining my money. First, I need to find a good exchange rate to pay back the loan in the DeFi app, using the coin I borrowed. They charge me a per-hour rate which is not very competitive. After that, all I have to do is convert coins from the ride hailing app to CBDC — the end of the current tax period is near and so I have to keep one eye on exchange rates and hope I don’t lose too much if there is a change in the market. I’m a bit risk averse and I don’t want to expose myself to losses, so I never buy options on fiat through the various DeFi contracts that are pitched on every turn.
0b0001 “Monday. My NFTs. And DAOs.”
Just like every other 3D artist nowadays, I create 3D models for the Metaverse and then sell them on decentralized marketplaces as Non-Fungible Tokens (NFTs). Overnight I’ve got a couple of purchase offers, and one of them is quite reasonable. The bid is in a good coin, one that has gotten popular in recent months and that marketplace currently has a temporarily reduced commission on it in order to attract more users. There are rumors that the marketplace is somehow affiliated with the coin issuers, but I don’t care much as long as I can flip it quickly into the coins that I need to pay my bills.
I accept the offer and instantly get the coins (minus the marketplace levy and some other deductions), and I quickly go and change the coins for #3dMOON. It turns out that the exchanges which I usually use have competing coin projects with other decentralized marketplaces and want to charge me extra for depositing the coin I have got for my NFT. I have to do some more research to find an exchange that won’t charge me a fortune. After spending more time looking around than I’d really prefer to, I manage to make a deposit with a fee closer to protocol fees. That change goes smoothly so now I finally have something to pay for my 3D tool and create more NFTs!
After checking the exchange rates for the day (as I never seem to stop doing), I am finally ready to go to work. Luckily enough I have some background in arts, so I have a good sense of proportion and can create more sophisticated (and more expensive) models and avatars. My models have to look expressive so I like to add more details to their shape, and I like to add my own animation. To make proper models I need to get help from a skin designer. I usually work with my friend from the arts Decentralized Autonomous Organization (DAO) project I am a member of to make sure we have our financial incentives aligned. The NFT that I sold yesterday automatically paid a cut to my co-author and to the DAO, so I don’t need to spend any time dealing with that.
However, I have noticed a worrying trend that has started to develop along with the growth of our DAO. Some of the more streetwise artists have started focusing more on the profits they can make from the DAO commissions than on selling the art they create. Since they hold quite a lot of coins, they come together from time to time, out-vote the rest of us, and raise the rates. So far they haven’t done this too often — I’m sure they won’t overdo it in future.
Competition is intense among sellers like me and I need to attract the attention of potential buyers. The problem is that my target audience most likely pay for all their social media services and don’t get AI-tailored ads. To spread the word about my NFTs I use ad agencies that have pool of influencers for different target audiences in different decentralized social network apps. Some of them are members of our DAO and get paid from NFT sale commissions, but after a while the quality of their service degrades as they tend to find a stable revenue stream from the large number of DAO artists. So, in some cases, when I feel I have created a really great model, I reach out to a high-profile agency which is outside my DAO but which has strong influencers. To pay them I have to actually mint the NFT through them too, instead of through my own DAO, and I have to agree to their Terms & Conditions. I hope that someday I will get my own community of fans, although 3D modeling and animation takes a lot of my time and I am a bit slow on that side. Well, at least most of them are organized as DAOs, so no large corporations control the market, as I hear they did 20 years ago.
0b0010 “Tuesday. Payday.”
One of my old NFTs has been re-sold and I’ve got a commission! Yay! The price for the token isn’t that high though, and come to think of it I am not even sure it’s as high as what I initially sold it for. But getting commission is nice anyway — even if it’s only the price of a cup of coffee. I’ll treat myself to a nice XXL latte!
Something else happens today — I get my tax bill, wrapped in an NFT on the CBDC chain of the country I live in. As a responsible taxpayer, I fulfill my responsibility to share all the public addresses of my active wallets with the government tax agency, who then automatically calculate taxes for all the income transactions they find on public blockchain ledgers. Basically, they consider all the coins I get from the sales of NFTs I mint to be, commissions I get, payments from the ride hailing app, capital gains, and interests on my investments to be “tax-bearing” and part of my taxable income. Their list of “tax-bearing” coins contains the coins that are accepted by businesses operating in their jurisdiction and contains almost all major coin types. The taxes themselves are calculated in government-issued CBDC on the day of each transaction, so I have to exchange any coins I have to the CBDC and make a payment. If I don’t do that on time, the government will blacklist me on the global blockchain network, so that every exchange and wallet API provider will block all operations from my address, except the operations to exchange to their CBDC. In this situation they require miners to do the same as well. With significant amounts of economic activities happening on-chain, miners are now considered as “essential for national security” in every country in the world. They are under close scrutiny and constantly at risk of being quickly “nationalized” if they don’t comply. They are legal businesses, and that means they also have to pay taxes and register their wallets, just like everyone else.
There is, however, a way around all this. I can still go to the Darknet and find miners operating in the dark recesses of the Internet who will handle my transaction. But even after my transaction goes through, and because all transactions involving my compromised addresses are public, they too will be under scrutiny by the government. That means that the coins that have my address in their history will be considered “suspicious” and no legitimate businesses will want to deal with them. I will be restricted to using them only on the Darknet, and, needless to say, I will have to pay higher commissions for that risk. There’s no way I can use those coins to pay the subscription for my 3D tool, or even to pay transaction fees to legal miners.
Well, I guess I’ll just have to go ahead and buy my tax NFT for 2039, like everyone else has to.
0b0011 “Wednesday. The digital oil.”
I use a less popular decentralized messaging service and pay for stuff with a coin that is not in high demand, and this makes prices a bit more reasonable. But the market is against me today as the price has jumped by 200% with rumors that someone from the Musk family has been using the service recently. It is so cool that Musks are now part of our community and that I have the privilege of joining their paid chat rooms without having to pay an exchange commission for another coin! When I’m at work though, I’ll just be a bit more frugal with the number of messages I send until the price drops. It’s great that there aren’t any more AI algorithms reading my messages and trying to highlight to me stuff I never knew existed. Instead, all the commercial content I get is comfortingly familiar; all directly related to the messaging channels I am part of and people I am directly connected with.
Speaking of privacy, I actually use different identities — not only because of the constant blockchain protocol wars (everyone wants to have their own protocol to collect transaction fees), but also as a precaution. It works like this: all services, whether operated by DAOs or not, use my wallet address to authorize me during on-boarding, and then immediately pull down all my transaction history from the public ledgers. For example, DeFi lending apps calculate my credit rating based on the other types of coins and tokens I hold, as well as how often I receive them to my wallet addresses. They call external APIs to perform this analysis, so the logic used is not part of their smart contracts’ publicly available source code. Luckily, as a result of all this, they can’t see beyond the protocol of the address I gave them. Thank God for protocol wars!
In fact, things have been getting more interesting for the last 5 years. Since I make most of my money “on-chain”, the services can now see not only what I’m worth at any given moment, but can also calculate (with surprising accuracy) my income and “spending capacity”. They can then “tailor” their pricing based on how much they reckon I have and even on how much I can borrow. And, obviously, they use not just the wallet address provided by me on registration, they go down through the history of my transactions and identify, with the same surprising accuracy, the other addresses I might also own. Because of such “personalized pricing” the “buy now — pay later” scheme is now pretty much unavoidable as a way to purchase things for most low- and medium-income people. These days fewer and fewer services allow registration using new addresses — they want to see transactions for at least a couple of months to “make sure it is a live account and not a bot”.
But hey! At least they don’t collect my search requests to show me those annoying personalized ads.
0b0100 “Thursday. Deus ex blockchain.”
Today the DAO behind the #3dMOON tool decided to raise the price as a reaction to the recent drop in exchange rates. They achieve this through decentralized voting on their smart contract on public blockchain. Every user is allowed to vote too as they also hold the #3dMOON coins to pay in per-hour fee microtransactions when they use the tool. The thing is, the real users (the 3d artists, modelers, and animators) have to spend their coins while using the tool, so they always have less than those who just hold the coins for profit. Duh… Seems like it’s time for me to start looking for additional sources of income.
On the positive side, it is very easy to be an investor nowadays and I am the proud owner of some independent coins. Somehow, however, if measured against fiat currencies, many of my coins still have a strong correlation with the major coin of their underlying core protocol. And yes, of course, the token I bought 2 months ago, when I was a bit drunk and suffering from FOMO, turned out to be another scam. Yeah, I could’ve bought it on an official ICO on a proper exchange that carries out background checks, but everyone is saying that if you want to get real profits, you need to get involved at an early stage. And the guys I bought from promised a new revolution in the way people work. Instead of working with a laptop at home or in your office in the physical world, they promised a fully decentralized 3D environment, fully accessible through VR headsets and gloves. No keyboard or monitor required, just “plug-and-play”. As a user, you rent a “room” with the coins they sell you with a free client app on your blockchain-enabled RaspberryPi version 19.0. This enables you, so they promised, to join other people’s rooms on a paid or free basis, or even to rent a designer-created room to get “into the right mood”. The demo featured “rooms” on a beach, at 5-star hotels, and even at replicas of garages where Apple or Google first started.
It turns out that those guys had never managed to create the actual software that runs on RPi 19; instead all they did was just rent some less known spaces on Metaverse to create the promo videos — and that was it. Poor me! How could I have known! I just hope my luck will be a bit better next time.
Anyway, the rest of my tokens are doing fine, relatively speaking. I generally prefer DeFi investment products that automatically rebalance my portfolio. I trust them, but have to keep an eye on their commissions because sometimes they rebalance at the exact moment when protocol fees increase (or go through the roof) following demand, and I end up paying more than expected. According to the community, they are trustworthy. They are also decentralized, and, as some of them are designed to earn the #3dMOON coin I need, I hold on to them. Later however, in an unexpected turn of events, it turns out that they invest in the DAOs of 3D artists who have adopted the #3dMOON coin as their main currency, and, because the actual tools’ license prices rises, the income of those DAOs drops, as does the value of my investments.
The good thing is that the apps I use are on blockchain and, therefore, are decentralized.
0b0101. “Friday. Community is the key.”
I have grown tired of working from my “token home” (a small studio, with just about enough room for a single person) and have decided to move to a co-working space of my DAO, where I can meet with some community members, get a free cup of coffee, and live more freely. Surprisingly, when I arrive at the place and am verified by the DAO NFT I hold, it turns out that the space is already fully booked. I go to another co-working place, but have to buy a single-day NFT ticket in order to get in. The NFT is on a protocol that I don’t use often and so I have to pay a bridge fee for the transaction, in addition to the applicable protocol fees. Those fees are quite annoying, but there is no way around them, so I resign myself to the fact that I just have to get used to them — there is no way around using them.
Despite all this, it’s a productive day! I manage to finish off a model for an avatar, wrap it in an NFT, and list it for sale. This is actually the most exciting moment in my work — even more satisfying than the actual sale. You see, after the sale is settled, all mystery is gone because you already know the price and the amount of coins you are getting from it. There’s no joy in that. But, just at that moment when I actually list the fresh NFT, anything is possible — anything at all. I can dream that someone special will finally notice it, make me an offer, and that will be my ticket to a completely different league.
In the evening, I decide to go for a drink with some friends of mine from the same social NFT community. I have known them since about a year ago, when I was lucky enough to buy into a popular NFT. As part of the deal, I was accepted into a vibrant community where I enjoyed welcome drinks and access to closed events with nice people — it was a special moment for me. Being part of groups like this is also important even if you are already a part of a DAO, because in DAOs everyone has at least one thing in common: they are motivated largely by the commission they receive as an incentive for holding a membership. This contrasts with the situation in ordinary communities where the setup is the other way around: there, you receive commission when you bring new members who bought NFTs at your recommendation, but the most important thing is the people you can meet. The community leaders (we call them “influencers”) help to set values and give everyone the comfortable feeling of really being part of something.
But recently, out of the blue, something changed in my community. The influencers started promoting some community members to the position of influencer. Having done this, they then lost interest in our group and switched their attention to a new community, where I hear they issued a totally new NFT.
Since they left, our community has soldiered on, but the new influencers have not been anything like as good as the old ones and the group has started dying. Many friends of mine have moved on and bought some other community NFTs. I wanted to do the same, but was priced out of the market since membership of any of the good ones is more than I can afford. I guess I’ll just have to save a bit more and watch the prices for a bit longer.
0b0110. “Saturday. The swan.”
Fantastic news! I have got an offer for my model from Zuck Jr.! The price offered is not as high as some news agencies have already reported (there is a whole industry now following the contents of celebrity wallets), but who cares! This will have a profound effect on prices for all my NFTs from now on! Looks like I’m finally going to be rich and famous! I go ahead and accept the offer, and start waiting for the settlement. I don’t not receive confirmation immediately, but I’m not worried — this is Zuck Jr. we are talking about! There is nothing but optimism in my heart and I spend all day planning my bright new future! The transaction didn’t go through.
All the messaging apps are full of discussions about recent research which recommended that all wallets on almost all public blockchain networks be updated. The article says that something called the ECDSA is now about 50 years old and experience strongly suggests that it is time to increase the key length. In fact, this change is probably long overdue; previously, with something called RSA, the length was increased every 20 years or so. Now, with this sudden change and the rush to get up to date, all the blockchain networks get overloaded when about 3 billion users with multiple wallets each start transferring coins and tokens from their short key addresses to their new addresses with long keys. As expected, all the protocol fees have skyrocketed.
To make matters far worse, it is becoming apparent that a mysterious group (presumably made up of small-time but clever dark miners) found a way to silently crack the old short ECDSA keys with specialized hardware developed about a year ago. They had been waiting for exactly this moment to “cash-out” billions of dollars’ worth of assets on “abandoned” wallets. They had pre-generated millions of private keys which corresponded to public keys shared on public ledgers, and simply moved all those assets to their own new long key addresses. After running out of abandoned addresses, they started to front-run the owners of real addresses with large balances, transfer coins to their own wallets and quickly bridge them over to their accounts on CBDC networks to get a strong fiat. I can’t believe this is really happening. It feels like an Armageddon.
Soon (but not soon enough for millions of us) all operations in government-managed CBDC chains were frozen. At least that’s what happened in countries that managed to launch their own CBDCs and start the whole thing again from the ashes of the old system…
Everyone is now required to go to their banks and convert their CBDCs to fiat with proper KYC. People who held all their wealth in crypto are now trying to sell their NFTs, but, to their horror, they are realizing they can’t just simply print them and sell them for fiat. Sure, the NFT token is still theirs, but they are not allowed to reproduce the content refereed by the link within the token for a profit (the law is very clear on that point — any attempt to do that would be considered an illegal sale of copyrighted material). Some of the dispossessed are now turning to the arts community to artistically re-paint the NFT visuals and officially make it a derived work. Maybe this will enable them to avoid those copyright issues.
In a more positive development, today I received some paper bank notes from my grandma. She sends me these notes every Christmas… I hope I haven’t turned them into CBDCs yet. Something tells me I better go and pick them up right away.
Fin.
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