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3 Crypto Moonshots to Get Ahead of the 'Next Big Thing' – InvestorPlace

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Tokenization might shape the future, and these blockchains will be critical
This article is excerpted from Tom Yeung’s Moonshot Investor newsletter. To make sure you don’t miss any of Tom’s potential 100x picks, subscribe to his mailing list here.
Electric vehicles… 5G… Quantum computing… 3D printing…
You’ve heard all these buzzwords before. And you’re probably bored of them by now. Tesla (NASDAQ:TSLA) has been around since 2003 and 5G technology was invented almost a decade ago. Meanwhile, quantum computing has been the “next big thing” ever since I can remember.
But there’s one Moonshot I bet you’re still wondering about:
Tokenization.
That simple concept of turning tradable goods into digital tokens seems to need an explanation every time it’s mentioned. Google search “NFT,” and two-thirds of the results are descriptions of “what are NFTs.”
Imagine how annoying that would get with the word “toaster.”
But tokenization remains one of the most promising technologies of our time. It’s more than just cryptos and NFTs — it’s a path to trading goods and securing data. Carbon credits… private data logs… pictures of bored apes… tokenization allows users to transfer these assets securely and instantaneously between parties.
Today, we’ll take a look at some of the most promising technologies in the tokenization space. And we ‘ll answer once and for all: “what are NFTs?”
Just kidding. I’d rather give you three good investment picks than regurgitate a Google search.
To crypto enthusiasts, Bitcoin (CCC:BTC-USD) might have been both the best and worst thing to ever happen to tokenization.
On the one hand, the world’s first cryptocurrency jumpstarted a trillion-dollar blockchain economy. 46 million Americans — 22% of the country’s adult population — now own Bitcoin, according to the editors at Exploding Topics. And it’s hard to go a day without hearing news about how rich you could have been… if you bought $100 of Bitcoin… back in 2010.
On the other hand, Bitcoin has also sucked most of the oxygen out of the collective crypto room. The world’s “digital gold” accounts for 45% of total cryptocurrency market capitalization and over 90% of the world’s crypto hash rate. Ask any precocious ten-year-old to explain the concept of “blockchain” and most would respond with some version of a digital currency.
But the blockchain is more than just cryptocurrencies. It’s an ingenious way to encode data in a secure and public manner. I could publish my social security number or anniversary date (both of which I often forget) on an SHA-256 encoded blockchain, and it would take a supercomputer several centuries to retrieve either number (You’ll find me in the marital doghouse until then). And if anyone were to tamper with the data during those years, everyone would know because the public ledger would have changed.
It’s much like speaking in ancient Egyptian. An observer can hear the words being spoken, but can’t comprehend the encoded meaning — unless they have a copy of the Rosetta Stone handy. It’s a way to keep sensitive data secured in plain sight.
Crypto enthusiasts have used these features to create an entire industry of NFTs, or non-fungible tokens. The most common of these, Ethereum’s (CCC:ETH-USD) ERC-721 token standard, has helped millions of investors keep track of ownership in digital assets.
These tokens are relatively simple, all things considered. The ERC-721 standard, for instance, only has ten key functions (name, symbol, approve, takeOwnership, etc), and two events (Transfer and Approval). It’s a system that’s only designed to encode the ownership of the piece, not the work itself. It’s the difference between a house deed (represented by a piece of paper) versus the bricks and mortar of the house itself.
Tokenization has since moved onto more complex problems. Internet Computer (CCC:ICP-USD), a much-lauded project by Andreessen Horowitz-backed DFINITY, promises to bring data computation to the blockchain (in other words, it’s digitizing the house as well). In theory, that could create a decentralized cloud service to rival Google (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN).
Meanwhile, some applications are tackling more modest issues. Moss Token (CCC:MCO2-USD) aims to make carbon credits tradable among firms. VEChain (CCC:VET-USD) is tackling supply chain issues by creating a public record of Radio Frequency Identification (RFID) tags.
The issue of course, is that no token is guaranteed to succeed… until it does. The EU Commission could easily crown MCO2’s rival Universal Carbon (CCC:UPCO2-USD) as its official carbon credit and send MCO2 prices down the drain. And as ICP’s DFINITY has discovered, digitizing the entire house isn’t as easy as it sounds.
But several clear winners are already emerging in the race to tokenize the world. Not only do these players have superior technology; they also have a head start in adoption.
Perhaps the most underrated cryptocurrency in the world is Hedera (CCC:HBAR-USD), a project adopted by no fewer than 23 major organizations including Google, IBM (NYSE:IBM), and Tata Communications.
Hedera offers two distinct services.
Essentially, Hedera is creating a platform for enterprises to deploy blockchain applications.
Let’s take an example.
If law firm DLA Piper wanted to track every time anyone edited a sensitive legal document, they might start with a “track changes” function in Microsoft Word and use an honor system to enforce the rules. More enterprising IT managers (and alarmed compliance officers) might eventually contract a third-party firm like IBM to manage security.
But both of these systems are susceptible to fraud. With enough time and skill, an outside player could break in and change a document without anyone ever knowing.
That’s where tokenization comes in. By encoding these logs on a public ledger, Hedera removes the ability for secret changes. Any alterations would get caught by the blockchain’s consensus function.
HBAR is currently available for less than 40 cents. With tokenization surging, don’t be surprised if this cryptocurrency reaches $5 in the future.
It’s hard to mention “tokenization” without a nod to NFTs. And in that realm, Ethereum has become the undisputed king.
Since the beginning of the yera, Ethereum’s market share of NFT sales has risen from 50% to 97%, according to data collected by CoinTelegraph. Its only major competitor — NBA-backed Flow Blockchain (CCC:FLOW-USD) — has long receded into distance.
The reason is obvious, as I mentioned in my article “If You Only Buy One Cryptocurrency…”
“Any new NFT coin looking to replace Ethereum will theoretically need to create new tokens for every asset that ETH-USD now secures… ETH’s dominant position in NFTs and smart contracts make it one of the safer bets in the crypto world.”
Put another way, it’s good to be first in creating a new standard. Upstarts from Polkadot (CCC:DOT-USD) to Cardando (CCC:ADA-USD) have poured millions of dollars into their business development projects, sapping funds that could otherwise be used to hire star coders.
Meanwhile, Ethereum has used its head start to innovate. On Wednesday, the ETH community launched the Altair upgrade, paving the way for an energy-efficient Proof of Stake (PoS) protocol.
These gains haven’t gone unnoticed. Since January, Ethereum has outperformed Bitcoin by a 4-to-1 margin, turning $100,000 investments into $450,000. And as tokenization continues to take hold, investors can expect Ethereum to keep notching more gains.
Finally, there’s one coin that’s recently made the Moonshot cut: Chainlink (CCC:LINK-USD).
LINK is what’s known as a “blockchain oracle,” a trusted data feed that helps smart contracts make decisions. If a programmer wans an Aave (CCC:AAVE-USD) DeFi contract to pay out a certain USD value of Bitcoin, they’ll need to Chainlink or some other blockchain oracle to provide accurate pricing data. And if a contract needs a trigger, they can rely on Chainlink to provide a decentralized fuse.
There’s a good reason why programmers will use Chainlink — the penalties for mistakes are disastrous. Spoofed data can cause an avalanche of smart contracts getting executed at the wrong prices. And incorrectly-timed triggers can initiate transactions that were never meant to happen.
That’s why Chainlink and other oracles will play such a key role in tokenization. No matter how thick a bank’s safe walls are, it’s only as secure as the guard watching the front door. And in the world of smart contracts, Chainlink plays a critical role in managing the data that determines how tokenized assets move.
Avid Moonshot readers may wonder: where are the stocks in all this? Surely, there must be some companies that are also pushing the envelope in tokenization.
And in fact, there are. Startups from Arweave to Handshake are already tokenizing everything from disk space to internet domains. The most promising of these upstarts have already raised billions of investor cash.
The problem is that most of these companies are tucked away in venture capital funds. And much like tech startups in the mid-2010s, those that are publicly traded, like Circle (NYSE:CND) and Coinbase (NASDAQ:COIN), trade at a significant premium.
That means the best way to find Moonshots remains in the tokens themselves. And as Wall Street wakes up to the fact, you can be sure that these promising cryptocurrencies will be part of the next Moonshot industry.
P.S. Do you want to hear more about cryptocurrencies? Penny stocks? Options? Leave me a note at moonshots@investorplace.com or connect with me on LinkedIn and let me know what you’d like to see.
Thomas Yeung is an expert when it comes to finding fast-paced growth opportunities on Reddit. He recommended Dogecoin before it skyrocketed over 8,000%, Ripple before it flew up more than 480% and Cardano before it soared 460%. Now, in a new report, he’s naming 17 of his favorite Reddit penny stocks. Claim your FREE COPY here!
On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tom Yeung, CFA, is a registered investment advisor on a mission to bring simplicity to the world  of investing.
Article printed from InvestorPlace Media, https://investorplace.com/2021/10/3-crypto-moonshots-to-get-ahead-of-the-next-big-thing/.
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Starbucks details its blockchain-based loyalty platform and NFT community, Starbucks Odyssey – TechCrunch

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Starbucks is today officially introducing Starbucks Odyssey, launching later this year — the coffee chain’s first foray into building with web3 technology. The new experience combines the company’s successful Starbucks Rewards loyalty program with an NFT platform, allowing its customers to both earn and purchase digital assets that unlock exclusive experiences and rewards.
The company had earlier teased its web3 plans to investors, saying it believed this new experience would build on the current Starbucks Rewards model where customers today earn “stars” which can be exchanged for perks, like free drinks. It envisions Starbucks Odyssey as a way for its most loyal customers to earn a broader set of rewards while also building community.
To develop the project, Starbucks brought in Adam Brotman, the architect of its Mobile Order & Pay system and the Starbucks app, to help serve as a special advisor. Now the co-founder of Forum3, a web3 loyalty startup, Brotman’s team worked on Starbucks Odyssey alongside the Seattle coffee chain’s own marketing, loyalty and technology teams.
While Starbucks had been investigating blockchain technologies for a couple of years, it has only been involved in this particular project for around six months, Starbucks CMO Brady Brewer told TechCrunch. He says the company wanted to invest in this area, but not as a “stunt” side project, as many companies are doing. Rather, it wanted to find a way to use the technology to enhance its business and expand its existing loyalty program.
It opted to make NFTs the passes that allow access to this digital community, but it’s intentionally obscuring the nature of the technology underpinning the experience in order to bring in more consumers — including non-technical people — to the web3 platform.
“It happens to be built on blockchain and web3 technologies, but the customer — to be honest — may very well not even know that what they’re doing is interacting with blockchain technology. It’s just the enabler,” Brewer explains.
To engage with the Starbucks Odyssey experience, Starbucks Rewards members will log in to the web app using their existing loyalty program credentials.
Once there, they’ll be able to engage with various activities, which Starbucks called “journeys” — like playing interactive games or taking on challenges designed to deepen their knowledge of the Starbucks brand or coffee in general. As they complete these journeys, members can collect early digital collectibles in the form of NFTs (non-fungible tokens). Starbucks Odyssey, however, does away with the tech lingo and calls these NFT collectibles “journey stamps” instead.
Additionally, a set of limited-edition NFTs will be available to purchase in the Starbucks Odyessy web app, which also works on mobile devices. Though hosted on the Polygon blockchain, these NFTs will be bought using a credit or debit card — a crypto wallet is not required. The company believes this will make it easier for consumers to engage with the web3 experience by lowering the barrier to entry. It also won’t complicate consumers’ transactions with things like “gas fees,” preferring to offer a bundled price.
The company is not yet ready to share what its NFTs will cost or how many will be available at launch, saying these are decisions that are still being ironed out.
However, the various “stamps” (NFTs) will include a point value based on their rarity and can be bought or sold among Starbucks Odyessy members in the marketplace, with the ownership secured on the blockchain. The artwork on the NFTs is being co-created by Starbucks and outside artists, and a portion of the proceeds from the sale of the limited-edition collectibles will be donated to support causes chosen by Starbucks employees and customers.
By collecting the stamps, members will gain points that can unlock exclusive benefits.
These perks go beyond those you can earn with a traditional Starbucks Rewards account and its “stars.” While today, members can earn things like free coffee, free food or select merchandise, the points earned in Starbucks Odyessy will translate into experiences and other benefits.

Starbucks Hacienda Alsacia. Image Credits: Starbucks(opens in a new window)
On the lower end, that could be a virtual espresso martini-making class or access to unique merchandise and artist collaborations. As you gain more points, you may earn invites to special events hosted at Starbucks Reserve Roasteries, or even earn a trip to the Starbucks Hacienda Alsacia coffee farm in Costa Rica. It’s expected the very largest perks will be reserved for those who purchase NFTs, though lesser versions may be offered to those who earn their way up.
For instance, a paid NFT could offer the full travel package and farm tour, while an earned NFT could offer the tour alone with flights and hotels left up to the user. Starbucks hasn’t made any formal decisions on this front, however.
But what the company can say is that it wants to deeply integrate the program with its existing loyalty rewards, beyond simply using the same user account credentials for both programs.
Brewer says Starbucks is already imagining how some of the activities that earn NFTs will be connected to real-world Starbucks purchases, for instance.
In Odyssey, users earn NFTs by doing challenges, which might also include a real-world activity like “try three things on the espresso menu.” This would require the user to show their barcode at checkout — as they would if earning stars — to have their transaction counted toward the Starbuck Odyssey challenge. The company is still determining what mix of games, challenges and quests it will include at launch.
“But we’ll have experiences that do link directly to customers’ behavior in our stores,” Brewer stresses. Most importantly, the company wants to make gaining NFTs something anyone can do — not just those with money to blow on digital collectibles, as is often the case with current NFT communities, which price out the average user.
“There will be a lot of ways for people to earn [rewards] without having to spend a lot of money,” says Brewer. “We want to make this super easy and accessible. There will be plenty of everyday experiences customers can earn like virtual classes or access to limited edition merchandise, for instance. “The range of experiences will be quite vast and very accessible,” he adds.
Starbucks says it explored all the different blockchains for the project but landed on the “proof-of-stake” blockchain technology built by Polygon for this effort because it uses less energy than first-generation “proof-of-work” blockchains, which is more in line with its conversation goals.

Image Credits: Starbucks (opens in a new window)
The idea to enter into the world of web3 makes sense for a company known for taking advantage of emerging technologies and making them more approachable and easy for consumers to access. In years past, Starbucks introduced Wi-Fi in its stores to encourage customers to spend more time during visits. It also pushed the idea of mobile wallets long before Apple Pay became ubiquitous. And it made mobile ordering the norm well ahead of the COVID pandemic, when other restaurant chains picked it up.
But one criticism leveraged against many traditional businesses when they enter the web3 market is that they’re approaching it as a marketing stunt, not a real endeavor. Starbucks, of course, argues that’s not the case here — but only time will tell how serious its interest may be.
“We’re bullish on the future of these technologies enabling experiences that were not possible before,” Brewer claims. The intention is to be flexible and move with the customers as the web3 market changes, he explains. “It’s really important that we’re looking at it for the long-term,” he continues. “But, given that we’re plugging it into our industry-leading, massive scale rewards program — we’re committed,” he says.
The company says its web3 platform will open its waitlist (waitlist.starbucks.com) on September 12 and will launch later in the year. It will remove the waitlist and open the platform more broadly sometime next year.

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Tyler Hobbs' Fidenza NFT Project Gets $1M Pump Over 48 hours – CoinDesk

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DOJ Asks Congress for Tools to Limit NFT Money-Laundering Risk – PYMNTS.com

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Down at the very bottom of the crypto crime report the Justice Department issued last week was a request that could make it a lot harder to buy and sell NFTs.
Citing examples of criminals using the sale of the popular nonfungible tokens that hold art, video, music and collectibles to launder funds, the Justice Department asked Congress to define some of all NFTs as “value that substitutes for currency” under the Bank Secrecy Act (BSA).
Doing so, it said in “The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,” would “make clear that its key [anti-money-laundering (AML) and countering the financing of terror (CFT)] provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
See also: DOJ Seeks to Double Jail Time for Money Transmission Crimes
The impetus, the department said, is the “explosive growth in the demand and corresponding markets for NFTs, perhaps most notably in the area of digital art.”
Substantial Risk
This “presents substantial money-laundering risks,” it said, citing a February Treasury Department study on money laundering in the broader art market.
“NFTs can be used to conduct self-laundering, a sequence in which criminals purchase an NFT with illicit funds and then resell to a purchaser who pays for it with clean funds unconnected to a prior crime,” that report noted.
It also found that in most cases, “digital assets that are unique, rather than interchangeable, and that are used in practice as collectibles rather than as payment or investment instruments … are generally not considered to be virtual assets under [international regulations].”
The “nonfungible” part of NFT means that each is unique and cannot substitute for any other, as opposed to cryptocurrencies like bitcoin which all have the same uses and value.
NFT marketplaces “may take the view that this definition [of a ‘value that substitutes for currency’] does not apply to their activities — and that they are thus not subject to the BSA’s anti money-laundering and anti-terrorism laws, the department said.
Justice is asking Congress to amend the BSA “to make clear that its key AML/CFT provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
Already There
Redefining NFTs as “value that substitutes for currency” would allow the Treasury Department’s Financial Crimes Enforcement Unit (FinCEN) to “potentially seek to regulate such activity under its money transmission regime,” a trio of lawyers at Skadden, Arps, Slate, Meagher & Flom wrote in an April blog post.
That, according to Jamie Boucher, Eytan Fisch and Javier Urbina, would require NFT marketplaces to register as money services businesses (MSB) with FinCEN.
Some types of NFTs — notably those used to fractionalize tangible assets like physical artworks and real estate, but also other valuable art or collectible tokens — are likely securities, the Securities and Exchange Commission (SEC) has said.
See more: How Did NFTs Become SEC’s Newest Crypto Target?
In FinCEN’s view, the trio noted, those can be repurposed to fit the definition of “value that substitutes for currency” and thus may already require MSB licenses.
 
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