What is a 'digital asset' to the government anyway?

Gary Gensler's wild west of crypto, generative art, and next-gen social communities

The newly crowned SEC commissioner Gary Gensler detailed out his plans for cryptocurrency regulations in what he’s calling The Crypto ‘Wild West’. His plans were to tackle fraud and misconduct within the chaos. However, worlds collided when some of this regulatory language showed up in the Infrastructure Bill (a Bill to improve roads, bridges, ports and other infrastructure in the US) at the eleventh hour. The $1.2 trillion dollar Infrastructure Bill had yet to be paid for and “bipartisan” officials had essentially declared “with crypto regulation comes taxation”.

The community was shook.

Nestled deeply within the 2,700-page Infrastructure Bill is a provision that seeks to raise $28 billion over a decade through tougher tax enforcement on a broad definition of cryptocurrency transactions and brokers.

“The provision further makes clear that broker-to-broker reporting applies to all transfers of covered securities within the meaning of section 6045(g)(3), including digital assets.”

This language requires brokers of any digital assets to report on gains earned on trading. The Bill is meant to be bipartisan - however (as it stands), it is so vague and broad that it would apply to miners, validators, software builders, stakers and other individuals in the crypto economy - even those who don’t have customers. This also applies to those working in the community space, such as utility token holders, membership token holders, and NFT marketplaces. As long as the individual holds representation of value on a ledger, they would be hit with this regulation. That means that new and decentralized social networks, games, art & e-commerce applications would be effected.

In response, the crypto community pushed back hard - not only because this would stall progress in a nascent technology space, but also because government officials don’t seem to understand how the technology works or the benefit of enabling innovation for the US.

There is no clear resolution yet for the crypto community - although US officials are advertising that they have “reached a compromise”. You can vote here against the amendment, supported by Coinbase.

a16z shared their open letter where they voiced these concerns and the negative impact it could have on the US economy.

And in Colorado, governor Jared Polis simplifies what’s going on by making the picture a bit bigger for everyone to understand.

In Web 2.0

Font Awesome switched to Figma for Icons - finally. Why? A few reasons: compound shapes, the power of frames, and component variable controls. Need I say more?

MIT is researching the next big things in tech using AI. In a new study, the team quantitatively assessed the future potential of 97% of the US patent system. The fastest-improving domains were predominantly software-related. They then converted their findings into an online system in which users can enter keywords to find improvement forecasts for specific technologies.

Another interesting part of the 2,700-page Infrastructure Bill is a provision that mandates all cars manufactured in 2027 and on must be equipped with a drunk driver monitoring system. If passed with this provision, the bill would give a firm release date to a research program the federal government and an automotive industry group have collaborated on for more than a decade.

Art and Crypto

A “manga” version of a commemorative NFT created by pplpleasr for the NFT Virtual Summit, hosted by Andreessen Horowitz and the Stanford Center for Blockchain Research.

NFT artist pplpleasr: How crypto changed my life. pplpleasr (a.k.a. Emily Yang) says, “crypto changed my life not only because of the money and investing opportunities it exposed me to, but also because of a welcoming community of passionate people who aren’t afraid to challenge the status quo.8”

Cooper Turley continues to share some really exciting projects and is thinking about how they fit together and support one another.

SALT, a collection curated by @______jpg______, is spreading awareness for generative art. Artists @0xmons and @figure31_ worked together to develop a base of 180 photographs that cycle a new name and image each day in an endless, asynchronous loop. As mentioned on the Opensea release, ‘No owner possesses a specific image, all are collectively shared.’

Domenico Quaranta wrote a blog on Code as Law. Contempory Art & NFTs, focused on the crypto space and its promises for art in terms of authorship, ownership, provenance and artist's rights.

Crypto Social Communities and the ‘Popularity Contest’ Problem

Social communities are on the rise - one applications in particular leading the charge is Mirror.xyz. Released as a gated voting-based writing platform, Mirror has stumbled into an unforeseen issue: the importance of building reputation systems with intentionality. In this particular instance, Mirror designed a system that provides a multiplier on votes to writers who make it into the platform by being in top 10 each week. Where this could have been an interesting way to distribute votes more democratically, instead, there has been a surge of votes given to “power groups” within certain companies or select communities. Franzi shared her perspective:

Twitter avatar for @_franziheifranzi 🦈 @_franzihei
After checking out
mirror.xyz I have to say it gives me seriously cringey Clubhouse vibes. Popular kids vote on other popular kids to join. Why restrict access like that...? Feels like yet another ego game and doesn't match the open ethos of our ecosystem imo.MirrorWriting as usual. Publishing like never before.mirror.xyz

It has been a relevant topic of conversation at 2C as we are thinking about how to build the IndieDAO, and deeper value someone is providing beyond their follower count.

Mirror Writer Andrew Hong presents some thoughts on a better algorithm for growing out the community, where he talks about the "betweenness" factor. He mentions, “The base idea here is that the higher the "betweenness" factor a person has, the more likely they will lead to creating connections and branches that build up a more diverse community.”

In the professional identity realm, RabbitHole is working on the “on-chain resume for the future of work”, but gamifying projects as quests where you can achieve goals, earn XP, and win NFTs as prizes for completing good works.

Meme of the week

That’s it for this week! Thanks for being on the ride with us!