US Senate Talks Crypto 🧨️

good morning friends!

Welcome to the 24 new subscribers who have joined us last week—you're in the right place! Join 1,017 of our friends curious about Web3 by subscribing here:

Monday was another monumental day for us. Lauren Huttner, aka the "Queen of Community", published her first piece in collaboration with Coinvise called "Living It Up: Your Guide to Social DAOs". The piece discusses a new type of social organization, one where community members contain active ownership over a club's mission.

The piece is already a banger, with a 50% open rate in 24 hours (rare). It was also featured in Layer3's very own newsletter as part of their "Web3 101" section. You can check that out here:

Let's teach you something new about crypto, shall we? As always, no jargon, just plain English.

The US Senate Talks Crypto 🧨️

Analogies are king with it comes to Web3 education. Entertain the following one: 

Government = Parents

Crypto = Teenagers

When children are born, they rely on their parents to take care of them, watch over them, and help them thrive. When children develop into teenagers, however, this relationship evolves. Teenagers begin to take care of themselves by buying their own food, scheduling events, and, occasionally, engaging in nefarious activities.

Parents have less control, which naturally makes them uncomfortable. 

You might see where I'm going here. Web3 is a rebellious yet promising teenager. An emerging industry that promises technological tools to spread financial freedom and opportunity throughout the world, an impossible task to be achieved by a baby (i.e. financial institutions lol). 

Alas, the government is worried, and they have a right to be. For one thing, crypto is confusing AF. Unless Bernie Sanders is reading this newsletter, he probably has no idea what a DAO even is, for instance. How do you regulate or even approach an industry that doesn't make sense?

Secondly, and more importantly, crypto threatens traditional political governance. Among other things, crypto presents an alternative set of currencies which are free from human fallibility and whose popularity jeopardizes the US Dollar.

credit: coinmarketcap

2022 is a critical year for crypto. How the government approaches this "new internet", and how this "new internet" responds to Washington, will have ripple effects for decades to come.

I made a joke before about Bernie Sanders, yet it was perhaps unwarranted: our politicians aren't entirely technologically illiterate. Last week the U.S. Senate GOP published a paper called "Cryptocurrency Goes Mainstream". To my surprise, it contained quite a balanced approach towards crypto.

Here's what it discussed:

Cryptocurrencies are growing:

- Cryptocurrencies have increased in market cap from $19 billion in 2017 to $2.2 trillion in 2022.

- 20% of American adults are crypto users; this figure is even higher among Black Americans (40%).

- In March, Biden issued an executive order to outline policy objectives for digital assets including protecting consumers, investors, and preserving financial stability.

Crypto has benefits:

- Crypto can reduce transaction costs and increase transaction efficiency. Ukraine was able to receive over $100 million in cryptocurrencies without the involvement of bureaucratic intermediaries. 

- The blockchain increases security and privacy in financial transactions through private keys (personal passwords) and anonymity.

- Cryptocurrencies can enhance financial freedom in countries where people distrust their governments.

Crypto has negatives:

- Cryptocurrencies have contributed to a rise in ransomware attacks over the past few years. 

- Cryptocurrencies, specifically those that contain "mining"—a way to confirm transactions—require  a large amount of energy and may be harmful towards the environment.

Conclusion

Like any new technology, crypto has its pros and cons. I, for one, believe that the pros outweigh the cons. However, that doesn't mean that the cons should be neglected. I'm hopeful that the government can work with the crypto industry to protect, enhance, and ensure financial security throughout the world in the years to come.

To read the full report, visit:

Projects We're Keeping An Eye On 👀

→ Hivemapper Raises $18M: We've talked about Hivemapper before. Its like Google Maps but for Web3: riders share footage of them driving in exchange for HONEY tokens.

→ Energy-Efficient Mining?: Blockstream and Jack Dorsey's Block are teaming up with Tesla to build a solar-powered bitcoin mine in Texas. The facility intends to be a 100% renewable bitcoin mining operation. 

→ Shopify Adapts Bitcoin: Shopify is leveraging payment application Strike to allow merchants to accept Bitcoin for payments. 

web3 content we’re munching on 🍿

1. Decentralization for Web3 Builders: Principles, Models, How by Miles Jennings — ultimate guide to building in web3.

2. How Hackers Target Bridges Between Blockchains for Crypto Heists by David Uberti — how crypto is vulnerable to hacks.

3. Ethereum's Coming 'Merge' Could Make or Break Crypto by Olga Kharif — why ETH's transition to proof of stake matters and what it means for the crypto industry as a whole.

Sincerely,

Noah "Crypto-Reasonable" Edelman