Market talk, Instagram NFTs and more - The Daily Gwei Refuel #360 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily great review where he kept the latest news in the ethereum ecosystem i'm your host andy designer and today's the 9th of may 2022 all right everyone let's get into it so just before we get into it actually just wanted to give a quick reminder here that the daily gray merch drop is still ongoing uh with meta factory here you can get your hands on a t-shirt or hoodie it is a limited time drop i'm pretty sure it only runs for two weeks so definitely get your hands on it sooner rather than later uh and once again thanks to uh cryptowife for designing everything and thanks to coffee and the discord channel for also organizing this uh you can go to shop.manufacture.arai and you can find them on this just wanted to give a quick shout out there

all right guys let's address the elephant in the room right now since friday the crypto markets have just gotten even more bearish sitting at 2 400 at time of recording the uh ust stablecoin seems to be imploding uh things are just blowing up everywhere obviously prices of other assets are going down even faster than eighth and uh stock the stock market's not doing too well and yeah everyone's like super bearish right now right i've i mean if you don't hear me ramble on about the markets like probably 10 minutes here you can skip ahead there's timestamps in the youtube description but because of the market volatility over the weekend there actually wasn't many project updates so i wanted to focus on the market so i think it's

topical it's important but generally what i want to say is that i think you have to put in the context where we are right now in the world not just within crypto but in the world more generally the macro environment which you've probably been hearing a lot about uh lately is pretty bad and it's bad because of inflation now p you know people used to kind of be like oh inflation's going to be high means everyone's going to flood you know they're going to go out of um out of dollars and they're going to go to crypto and it's like well i mean it that happened in the short term right like there was all this money printing and then and then all the money went to went to various different kind of like places and a lot of people got free money with stimulus checks and stuff

like that and a lot of that found its way into the market but that was on borrowed time right that wasn't going to last forever and it didn't right the money printing stopped uh the fed got hawkish and the fed you know has recently um uh done a rate rise and that was kind of like priced in for a while there and the party kind of like ended late last year with with all that sort of stuff there now i think what i want to get through to people with inflation is that the reason why you don't want high inflation at least one of the reasons you don't want high inflation is because you think about it like this if people's salaries haven't gone up right in the last say two years and probably longer than that for a lot of people but if they haven't gone up and

then everything around them is getting more expensive because of inflation utility bills go up groceries go up all that sort of stuff right all the stuff that they actually need to buy then they're squeezed for cash right so so what cash are they going to be putting into the markets like where's the money going to come from like if i am you know working a regular job on a salary my salary hasn't gone off i've gone up but my cost of living has gone up like 10 15 well where's that money coming from it's coming from my savings right it's coming from the money that i would be putting away each week every time i got paid um maybe i was investing that money into the market but instead of being able to invest it into the market now i have to actually take that and pay for the

things i need to live so that's just one major factor that i think a lot of people didn't consider about inflation is that like if salaries aren't going up with inflation which they rarely do then the people getting hit the hardest are the middle class working class people right and and and they don't you know and they won't be they're not going to be buying assets especially not crypto has sets if they need that money to to buy kind of like food and pay for utilities and that sort of stuff so that's that's a major thing that we're seeing play out now and the inflation that we have right now is not normal it's the highest it's been in the u.s since the 80s i believe um and you know no one knows where where it's going to go from here there are kind of like people right now calling

for the fact that the inflation is already topped and by the next time they report it it's actually going to either be um more of the same or coming lower i can i can see that uh personally because the markets so the way markets work generally is that they're forward-looking and the markets in a lot of different sectors are already pricing this stuff in like a lot of you may be aware of the used car market for example that got extremely overheated not just because of inflation but also because of supply chain issues so okay not just because of the money printing i should say but also because of supply chain issues there's actually two key parts to inflation there's the money printing and there's the supply chain issues because obviously if the supply chain issues uh then there's less goods available for people to buy and then you know

things become scarcer obviously price goes up in that scenario but we got here with the double whammy over the covered period right we had the supply chain issues and we had the the mass money printing which led to both monetary inflation and or currency inflation and supply chain kind of like related inflation there but that's kind of like not coming to an end but slowly kind of like rectifying at least somewhat like i i did kind of like uh i i i haven't mentioned yet the stuff going on in china they're still pursuing a covered zero policy which means that there's a lot of supply chain disruptions happening there and obviously china is a big part of the global economy so we don't know what's going to happen there we don't know if if it's going to if if inflation is going to come in lower the next time

they report on it and people seem to be thinking that the fed's going to raise rates a few more times before kind of like tapering off on that and being like okay well inflation's under control so what happens when inflation does get under control what happens when it starts dropping well that's usually in the longer term like short term it's kind of like impossible to tell but in the longer term that's usually good for uh assets right because people get back back to being risk on things normalize again the world adjusts and that sort of stuff but these are all the unknowns these are all the headwinds that all the markets are facing right now especially crypto and if you go look at the equity equities like stocks and things like that they're performing so badly i mean i was looking just randomly at shopify

uh the other day and it's down like 80 percent since this all-time high 80 guys like this is a real company with real revenues with you know a really good business model and lots of customers uh for those of you don't know who shopify is they're about they're a massive ecommerce company that basically makes it easy for anyone to create their own e-commerce websites um it's super easy i mean i've used that uh in the past a while ago but that's just one example right amazon is down 40 in this all-time high uh i you know i don't know i'm off top of my head but a lot of them are down like a lot right more than eight like generally if you kind of look look at crypto a lot of assets are down 70 80 90 already but just like looking at comparing it to eighth

heath is faring extremely well right now now is that going to change in the future or not i don't know maybe it does maybe it doesn't it's kind of like hard to tell there but all this stuff is kind of just like coming together and that's why i kind of put out this tweet today where i said now it's starting to feel like 2018 again because in 2018 especially within crypto but what i i guess like what i was saying about the macro environment that's distinctly different to 2018 the macro environment in 2018 was not like it is today so it's kind of like very hard to compare things but in 2018 the the way it kind of like worked when when eighth was going down in price and it doesn't just go down like you know in one straight line right it goes down

goes up a bit goes down and it just keeps kind of like um cascading down from there and it's kind of like when you throw a pebble on a lake right and you kind of like have a big puddle and then a smaller one a smaller one smaller and that's kind of like how it is with uh with bear markets so in 2018 i remember sitting there and thinking oh this is it right we've bottomed here and i thought that a lot of times i didn't start buying until there was a low 200s in 2018 but i was still thinking you know okay with bottom tier it's fine you know that that's it that's that's that we're 50 down that's got to be it right and then we kept going down more and more and more and more it didn't stop until we were 94

down it was pretty scary at the time like uh especially um because i wasn't as experienced back then i hadn't taken any profits at all like i literally had made zero dollars from crypto uh until 20 what 20 in d5 summer when i started selling some things um i had made zero dollars from my crypto investments um so so yeah in 2018 i was like holy like wow okay it's been two years like almost two years that i've been in crypto and i've made nothing from it like what am i even doing but you know i didn't i i thought that at times when the market was kind of like really bearish but at the same time like i knew what i was doing back then i was doing what you got like you know you guys know my story i was trying to like make a

name for myself trying to get more involved with ethereum all that sort of stuff but i'm starting to feel like it's 2018 again because i mean if you look at the chart right now if you look at what it's just been doing since even may of last year i mean i know we hit a new all-time high in november of last year but a lot of people are calling that like a dead cat bounce where we did go to a new all-time high but we just failed to keep that and we came back down pretty quickly so if you go look at may of last year as kind of like that thing we're almost a year i think may 12th was the top last year so like in three days but it's going to be a year since that that top where we came down really fast i think we went

down 60 in a week back then as well um but it's gonna be almost a year since then and i think that we're just having like a longer drawn out kind of like bearish period and with the macro stuff happening it's even crazier but you know i think when you kind of like bring it all into context you you get to a conclusion there that uh no one knows in the short term medium term where this stuff's going to go at this point in time i can't tell you i obviously remain extremely bullish on ethereum and eth i'm still buying eighth when i can but i think that uh not even eighth as bullish as it is the amount of bullish catalyst that has coming ahead of it right with the merge and everything not even that can fight a poor macro environment because at the end of the

day for east to go up in price it needs demand right it needs people buying it it needs more people buying in uh and needs kind of like um i mean even with things like one five five nine it needs the gas prices to be higher to burn more eath right and stuff like that uh and if and if there's no disposable income people don't have savings if they're just worried about kind of like putting food on the table and paying their bills well they're not gonna be buying something like eighth right at the end of the day uh but i think that what i wanted to say as well just before i finish up here with the market talk what's distinctly different between now and 2018 is that no one is questioning ethereum's existence in 2018 pretty much everyone was questioning ethereum's existence they were like what is

ethereum good for now that icos are over what is eth good for uh because there wasn't really any d5 back then i mean there were the kind of like beginnings of it but like no one was really paying attention to it right so they you know today in 2022 no one is saying this anymore ethereum has so many things coming for it like the obviously the merge all the other layer one upgrades the layer two stuff going on it has all the stuff happening in d5 still nfts all that i mean there's so many things happening on ethereum it's kind of like impossible to keep up with even as someone who does a daily show on ethereum but uh that and that that is what is extremely different to 2018 so four years later and ethereum no one's doubting ethereum's kind of like use cases anymore no one's doubting

ethereum's existence anymore everyone knows that ethereum is going to be around for a long time from from here um and i think that that is something that we should all focus on i think that's something that you should keep in mind i think that the my my number one rule for markets in general is just don't blow yourself up because at the end of the day blowing yourself up is the worst thing that can happen because you won't have a position then and sadly a lot of people kind of blow themselves up towards the end of bear markets when it's the worst time to do it because you don't even have enough time to build up your position again before the market gets ahead of you so you know stay if you're if you're long and you don't don't plan on saying just stay long

don't get on leverage don't do any of that sort of stuff like i'm not trying to get investment advice here but i think not getting on leverage especially in times like this is probably the the uh the the advice that i will give because uh i don't think anyone should be kind of playing with leverage even the most experienced people can blow themselves up pretty easily especially in in in very very choppy and and down wood markets like like this but love to see how it all plays out i think i think maybe not next inflation report but the one after it i personally am placing a bet that on the not the next one the one after inflation will actually start coming down i think the next one's going to be more of the same but i'm not a macro expert i've just been learning as i've been going and i'm

just placing my own bets but i'm not doing any trades around it it's kind of just like an intellectual bet for me to see it because from what i've seen across you know as i'm saying like a used car market the prices are coming down uh coming down there um and also across like other kind of like things obviously stocks and equities have come down a lot cryptos come down a lot it seems like the markets being as forward-looking as they are have priced in a lot of the you know inflation-related stuff the the fed uh fed raising rates and all that sort of stuff there but love to see we'll have to see how it all shakes out but i'm going to leave it there for the market talk for today is a bunch of other things to get through so moving on so bankless actually had a bit of a

rough weekend there our youtube account got banned with uh no warning no notification no justification just completely uh banned and wiped all their videos were gone now it has since been restored so you can go to their channel it's all there i think most of their all of their videos are back as well but i mean really guys this just speaks to the fact that like at any time because youtube is obviously completely centralized at any time they can just remove you from their platform and you have zero recourse you can't do anything about it like and they can remove you for whatever reason their terms of use is pretty extensive from what i've seen and i you know obviously they have a team of law a team of lawyers on retainer that go over that and make sure that it's kind of like foolproof

and there's no holes in it and stuff like that but yeah this is this is kind of scary i know it's kind of like ironic because you're watching this on youtube or most you are some of you listening to the podcast but you know i use youtube but i think that it's kind of like a necessity because i mean what's good about youtube is that it obviously has the user base it has the reach but the reason why youtube is such a monopoly and you don't really see any other major video shooting platforms on the internet is because hosting video content is really really expensive right and not only does youtube host i mean enormous amounts of video content in in not just like standard definition but in all you know an ultra hd they let you upload for free that's the thing doesn't

matter who you are doesn't matter if you're monetizing or not i haven't given youtube like anything i haven't monetized anything for youtube or anything like that but they let me upload everything for free right how do you compete with that the only reason youtube is able to do it is because they have google bank rolling the whole thing they obviously have ads now but like early on in their life i mean have had ads for a while but like early on in their lifetime they was able to survive and thrive and run at a loss for a very long time and not even turn a profit for a very long time because google was bankrolling it um microsoft tried with uh i think bing video didn't really take off and then there was vimeo as well which is still out there but kind of like fell into a niche kind of

like area so yeah those are the two major things that youtube has going for it the the obvious massive user base to reach and the fact that they can afford to host all this content for free when it's just super expensive to do that so that's why when people kind of like talk about web 3 alternatives to video streaming and you know decentralized kind of like youtube i don't think they realize how freaking hard that would be to do and i'm not saying that it's impossible i'm not saying that we shouldn't strive towards it but could you imagine trying to store what youtube stores on kind of like a distributed set of computers and incentivizing those computers to be online because this goes back to the data availability problem this isn't just data availability isn't just a layer 2 thing it's just a general kind of thing have you ever been

downloading a torrent and there's no kind of like seeders for you to download it from so the torrent just stops downloading well that is in part a data availability problem because that means that there's no one seating that file to you so you've got nowhere to download it from so you could imagine in a say decentralized youtube world you would have your content on on a bunch of different kind of like pcs or a bunch of different computers and on on that network right but what happens if that that network was to go offline while your video is gone like unless that network was to come back online your video is kind of like gone you can't get that from there it's kind of the same thing as the as the torrent example that i used so i think that for you know it's all well and good to call

for decentralized social media platforms this i mean especially decentralized video streaming platforms but there's still a lot of things to figure out and a lot of kind of like um fundamental things to figure out not just the small things and i think it's gonna be a long time before we have like a very popular decentralized you know streaming or video kind of like content platform just for those reasons i outline but good to see bank list back on youtube of course they were banned for i guess like no reason really i mean this happened sometimes for crypto accounts they weren't the only one that was banned there was a couple of others as well i believe um you know and i'm just waiting for the day that the daily way gets banned which is just stupid because like as far as i know you know some of the biggest

basically scam youtube accounts the ones that just show you all the coins have never been banned um when i like to in my eyes they're just breaking the youtube's rules and and obviously youtube keeps them on the platform because they're making the money but from what i can tell they haven't really been banned and then honest shows like more honest kind of like channels like bank let's get banned maybe the daily way gets banned one day who knows right so obviously we do need alternatives to youtube i just don't know if it's going to come in the form of like a web3 platform it might come in the form of just another company doing it and finding out a sustainable business model but it's hard guys this isn't easy stuff here for the reasons i outline but still something to keep in mind something to think about uh but

yeah i guess like uh good to see bankless back on the platform uh so quickly as well so uh instagram has announced that they're going to be supporting nfts from ethereum polygon solana and flow so obviously this is i guess like facebook or meta continuing their push into all the metaverse related stuff that they're trying to do i don't know guys like i don't know about this sort of stuff like it's funny whenever i see anyone posting about nfts on instagram the comments are full of like a lot of hate i i don't know i feel like that that community just doesn't really like nfts and i also feel like instagram i mean it's all well i mean depending on how they do it like if they were to do a thing where you could meet your picture as an nft and sell it to your audience

that could work stuff like that but like i'm i don't know i don't know how that's gonna go like i think so far these kind of like web 2 companies so to speak that have gotten into nfts hasn't really made a splash i mean coinbase's nft platform is kind of like not really doing much right now a lot of people have a lot of issues with it um i think ftx had a platform too for nfts didn't really do much it's kind of like these web three native platforms or these kind of like crypto native platforms like open c and looks rare that have been doing well in the nft front so we'll have to see what how the integration goes with instagram but obviously they have a large user base so this is just on boarding more people into uh kind of like on chain crypto

products which is always a pretty cool thing to see all right so superfiz has basically put out a tweet uh i think this was yesterday or today earlier today uh where he said what are bellatrix and ttd so balatrix is a fork to the beacon chain that prepares it for the merge after that fork the merge can move forward the merge will happen at a proof of work block identified by accumulated difficulty called total terminal difficulty or terminal total difficulty so uh i guess like in plain english there are going to be two things you hear about when it comes to the merge so balatrix as superfiz outlines is uh the fork that's going to be happening on the beacon chain so separate two to kind of like the merge itself that will prepare it for

the merge because essentially obviously what we have right now are two separate chains and the beacon chain needs to know that it's going to be getting merged into right so balatrix prepares that for that and then after that fork the merch can obviously move forward but that moving forward time is not dictated by a block number on the proof of work chain like every other heartfelt that we have but it's dictated by something called a terminal total difficulty which takes from my understanding the difficulty of the mining difficulty and uh kind of like calculate some way to kind of like or some point in time to where the merge actually happens now the reason why it was done like this not at a block number was to prevent gaming of this system especially from miners who obviously we

you know we don't really want to tell them in advance when they're all getting fired right because then they might do some some some stuff around that or or try some funky stuff around that i mean the chance of that would be low but obviously we don't want to take any chances when it comes to the merge so just an interesting tweet from super fears that i wanted to highlight for you guys and just something to keep in mind because you'll be hearing more about these two terms battle tricks and ttd as we get closer to the merge all right so a couple of blog posts to highlight here first one is from data always who spoke about me who titled the blog post manipulating the velocity of money in proof-of-stake so this is quite interesting it's quite a short read i highly recommend giving it a read but

it's very uh topical with regards to inflation and what i was just talking about before and how this how this kind of like plays into proof of work and proof of stake blockchains and the velocity of money in general so highly recommend giving this a read it was very interesting and as i said only a short read here and the second blog post is from alex beckett who works at celestia i'm talking about the economics of roll-up fees now i've talked a bit about uh kind of like this sort of stuff before and how rollups will be able to i guess like uh uh bring costs down and and how rob's kind of like invert the fee um the fee kind of like paradigm that we're used to in so instead of like fees getting higher with more usage of these um of these kind of like platforms on layer

two uh at least to a certain extent the uh the fees get lower with more usage because it's kind of gets amortized across the whole network there so very very cool little concept there and another short read here only three minutes so i highly recommend giving this a read to learn more about this all right so we have a tweet from zk sync talking about uh coordinating trust where they said coordinating trust by amount of wealth equals relying on the majority of validated stake where it happens all side chains all bridges all over a thousand tps are ones where it's not the case decentralized first l1 such as bitcoin and ethereum zk proofs and data availability sampling eg dank sharding um and then zk sync says we must honestly admit zk porter 2 relies

on the majority trust assumption for a censorship resistance but not security thus it's a huge step forward compared to side chains bridges or earth killers but it's a supplementary solution only eighth future is with dank sharding um and then i will quote tweeting paulina who said coordinating trust by amount of wealth is dystopian uh and then we're going to write a post on that i think or no plans to write a writer kind of like post here so again in plain english this is basically saying that i mean plutocratic systems is not a you know a good system to have especially not within crypto where if it just relies on the amount of wealth you have um for the kind of like network to function and to be healthy to be decentralized then we've already lost basically the game's lost let's just pack up and go home

and that's why platforms like bitcoin and ethereum take their decentralization at the base layer so seriously because think about it you know we can all run nodes for bitcoin and ethereum on or full nodes on consumer hardware right it's uh it's not like we're pushing hardware to the limit and can only and only a small small group of people can run validators can run nodes all that sort of stuff we're trying to keep it as decentralized as possible because we don't want it to be dictated by wealth we want people that kind of like maybe it's kind of like impossible to do it at any kind of like any level of wealth but you would want as many people to kind of like do it as possible so you got to bring those costs down and then zk proofs or using kind of like a fraud proofs with within the

optimistic rollup case for scaling at layer twos is obviously critically important for decentralization and for uh being only having to rely on uh one kind of honest operator the sequencer at layer two because you're inheriting layer one security and then data availability sampling with dank sharding to scale layer one really seems to be the only way to scale layer one in in a truly decentralized way and to scale it to obviously like millions of transactions per second as well so just an interesting technical tweak from zk sync and a bunch of good replies as well uh that you can go through and a bit of discussion here too so definitely check that out i'll link it in the youtube description all right so final thing to talk about is just some of my most popular un sorry

my most unpopular opinions and i put out just a small list on uh on uh on twitter the other day and this might not be news to any of you i've spoken about these before but there's four points here the first point is that i believe bitcoin will eventually move to proof of stake now the reason i believe this is because bitcoin security is fundamentally flawed because of that declining block subsidy or declining block award aka the harvening that happens every four years some people think this is going to take till 2140 to play out i think it's going to play out in the next 10 years so we're going to have to see how that happens and i think the solution to that is moving to proof of stake doing perpetual issuance which means getting rid of the 21 million cap and having uh

great security but but even then i think that uh because of the fact that bitcoin itself doesn't have much utility the fee revenue is still going to be lower it's not going to be a beautiful system like what we have in ethereum second unpopular opinion which may be popular with you guys but i'm popular maybe with the communities solana avalanche et cetera will become ethereum layer 2s or be destroyed by them this is one of the most obvious bets for me ever like i have zero doubt about this i i mean in terms of kind of being destroyed by air twos i would say that it it like salon and avalanche probably would never become an ethereum layer two they'll just go down with the ship but they're going to get destroyed by them third ripple will win their case against the sec i actually want them to because

the scc in my eyes is probably done more damage than ripple has at this point ripple's a scam don't get me wrong but i think the sec has done more damage and i think the ssc is more useless funny enough like they just haven't i mean maybe not more useless like ripple's pretty freaking useless but they just haven't really done much right and they've been very toxic towards the crypto ecosystem and it's just been like just been a show for a very long time now and if ripple was to win their case against the scc and what their case is that the sec is obviously claiming xrp is a security and trying to classify it as that ripple's saying it's not but if ripple was to win that case against the sec good luck to the sec classifying anything in crypto as a security i mean

if they can't classify xrp the most obvious security in existence then there's no way in how they're going to be able to do it for anything else or at least 99.9 of things in the ecosystem so that's why i want them to win and you know what it actually looks like they probably will because they have so much money to throw out lawyers uh they basically have unlimited money to throw out lawyers and the sec doesn't really have many friends left anymore not even in government um and then the fourth kind of point here is that i said play to earn gaming is not real gaming it's a job now that's not meant to be a slight against play to earn gaming i think there's there's you know there's a decent amount of people that are earning a living off playing these games especially in kind of like axi infinity

and stuff like that and that's fine i have nothing against that but it's not real gaming guys like i wouldn't even like i'm actually like i used to be a really big gamer i would say that all of the mobile apps on or at least most of the mobile apps on on ios and android that have in-app purchases in them and the ones that gate you behind content by requiring you to spend more money or time gate you uh they're not real games either they're just kind of like they're basically i would say casino games with kind of like a video game flavor to them like it's the same thing right it's gambling it's not real games and play-to-own gaming is just kind of like it's i mean it's just kind of like a farm and dump right just farm the tokens dump make money whatever blah blah and

it's just a job because you have to you're not even really having fun doing it so that's why i kind of like have that opinion there so i don't know if these are unpopular i think that they're unpopular depending on the community obviously my first point about bitcoin moving to private stake is extremely unpopular with bitcoiners uh but you know and then the rest of them are probably unpopular with um with other kind of like other people maybe i made a few friends in the ripple community by saying that i think they're going to win their case against the sec but yeah just something that i wanted to discuss there a little bit further um but i think that's going to be it for today yeah hopefully there's more updates or more kind of like actual project updates during the week this week but there wasn't much over the

weekend and i think that's because most people have been distracted by the markets right now not that no one's been building but it's kind of like you know you don't really want to announce major things when everyone's just talking about the markets it's kind of like it's just gets drowned out it's not great for anyone so so yeah anyway i think we're going to look at that for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone