It was my first year attending Davos. I had no idea what to expect. Of course, the reason Davos is an event at all is because of the World Economic Forum, which hosts the world's leaders. But an entire conference has sprung up around WEF, taking over the mountain town of Davos. It's big enough that, if it weren't for the streams of heavily armed patrols in the town, you'd not even notice WEF is happening at all.

In years past, the satellite events have been put on by traditional finance, management consultancies, media publications and nation houses. But 2022 was different. This year, the Davos high street was dominated by web3. The presence was visible everywhere you looked - shop facades transformed beyond recognition. But web3 also dominated the panels, interviews and presentations on stage. It's the secteur du jour and despite the recent market tumble, there was an optimistic sentiment that ran through all conversations: Now, it's time to build.

Here are a few random observations and highlights from the week, some but not all related to web3.

Russian War Crimes House

A confronting and disturbing exposé of the atrocities inflicted in the invasion of Ukraine.

Large screens laid bare with raw, graphic images from the war.

A much needed level set amidst the glamour of the Swiss Alps.

Stablecoins in the limelight, Regulation Expected

Stablecoins are an asset class that have been gaining steam in the DeFi world. The market cap of stablecoins has grown to around $170 billion, with some clear industry leaders in space. Stablecoins are useful, because cryptocurrencies are subject to great volatility. Meaning that if you want to purchase items, or transact based on services delivered like we do IRL, then paying with crypto isn't a great solution. By the time your transaction has been made, the relative price could have swung significantly one way or another.

Stablecoins are designed to minimize volatility, but how they are collateralized varies a lot.

A few weeks ago, one stablecoin, Terra, made headlines. Terra is an algorithmic stablecoin - not backed by any real world or fiat assets. Much has been written on the collapse of Terra / Luna, it being dubbed as DeFi's biggest disaster - a disaster that kicked off the crypto market tumble. With a large number of retail investors losing their life savings and in some cases taking their lives, the news was top of mind and on the lips of many at Davos. 

The renegade, selfish nature of how these protocols have been built is starting to come into sharp focus. Some, such as Sam Bankman-Fried are calling strongly for the space to be regulated, which is a seismic turn of sentiment from the libertarian roots of crypto:

In Davos, it appeared that not only is the introduction of regulation expected, but more broadly welcomed than in the past. The sentiment being that, if we're to create a world where digital currency is adopted at a truly mainstream level and used for everyday transactions, real protections need to be in place to protect people, just like we have with fiat money today.

As a panel discussion at the Global Blockchain Business Council described:

Regulation breeds predictability. Predictability allows trust. Trust provides usability. Usability leads to adoption.

The CEO of Mastercard even went as far as to claim that SWIFT wouldn’t exist in 5 years time.

Watch this space, because what we are working on at Millicent is exactly what's needed right now to ramp mass adoption of digital cash.

Quantum computing is coming

I had the opportunity to handle one of the first quantum processing chips. Encased in a 3D printed gold, two-piece case, the prototype chip could have far reaching consequences. Most people (myself included) don't grasp the true nature of quantum computing. Why? The problem is that we don’t observe quantum. But the processing power of quantum computing is set to revolutionize many, if not all, industries. In terms of timelines, it could be up to 10 years before quantum processing is really solved. But one issue that was raised was the intersection of quantum and blockchain. Today, there are bad actors who are pooling data that’s visible on the blockchain but cryptographically secured. Once quantum processing is unlocked, the security of the blockchain will be compromised and these bad actors will have access to all of that data - a huge security risk. Transaction details, account details, identity and more.

Cybersecurity & Ethics in the Metaverse

Identity theft and duplication. Harassment and bullying. Policing power in decentralized, online jurisdictions.

Building at the ferocious face in which developers are building the metaverse could have lasting and significant consequences on how we and future generations behave in web3. We’ve seen the unintended consequences of social media business models play out. What could be the unintended consequences of the system design we are building in web3 today be?

Regulators aren't as behind as they have been in the past, but still, it's impossible to keep up. Does ethical design come into play here at all? Not today, yet it should be deeply entrenched in how we build web3. Because a small trajectory shift today could lead us in a direction we're not equipped to deal with.

What a Trip

An unexpected arrival at Davos this year was The Medical Psychedelic House of Davos. The venue had a deep scientific focus, designed to influence wider perception and policy makers. Panels ranged from discussions about mental health to cancer treatment. This was not a recreational zone.

Yet, a side project that one speaker, Marik Hazan, created seemed a little more... experimental. The 'Altered States of Consciousness' NFT collection is a series of digital artworks created by AI, representing Hazan's mind when in different brain states. Using various psychedelics but also in more mundane settings. For the first NFT (eating a dinner with his father), Hazan was hooked up to an EEG to track his brainwaves. He has it listed on Rarible for a mere 873 ETH ($1,590,012 USD at time of writing, excluding gas fees)… he must be tripping).

Hazan will be launching additional NFTs all of his brain waves in various and altered states of consciousness. At least it's a more interesting NFT collection than https://goblintown.wtf/