Hi Everyone 👋,
Welcome to the +2198 subscribers who have joined this week. If you’re reading this but haven’t subscribed, join our community of +45k smart, fun & edgy investors 👇
I’ll be LIVE on set with Charles Payne on FOX Business TUESDAY at 2pm ET to talk Bitcoin, Tesla, GameStop, Millennials, Gen Z, Boomers, and more!
*This is sponsored advertising content.
If you think about the major themes over the last couple of years, what comes to mind are Cryptocurrencies, NFTs, and Web 3.0.
At the center of all three of these ideas is the core concept of decentralization.
Rather than having one body of absolute power and authority, all three of these trends are giving power back to the people.
Last week, we talked about how the current internet behemoths are focused on aggregating and monetizing users. The concept of Web 3.0 and decentralization is the exact opposite. It’s all about taking control back of your own data and identity while being able to create really cool products along the way.
It’s time to rage against the (“Big Internet”) machine.
This week, in <5 minutes, we’ll cover Web 3.0:
Why now? 👉 Privacy Concerns & Sharing Unit Economics
What is it? 👉 Attributes of Web 3.0
Who is Working on it? 👉 Interesting projects and companies in the space.
Let’s get started!
1. Why now? 👉 Privacy Concerns & Sharing Unit Economics
There are more and more headlines each day that outline data breaches that have occurred. But the scariest version of data violation doesn’t involve hacking at all.
It involves lengthy and complicated Terms of Service (TOS) that we mindlessly opt into any time we use a service. No one flips through and reads the lengthy document when they create an account, we just scroll through, check the box and move on.
We prefer ease of use and accessibility instead of caring how much information is being gathered on us. The large companies doing this will tell you that your profiles are protected because they are being anonymized. But anonymized can still mean monetized, as unique ID tags are formed so advertisers can still directly target you.
We saw a lot of those Netflix shows and documentaries on just how harmful this constant dopamine hit can be. Since time and attention are finite resources of an individual user, the product is gamified to perfection to get you to come back. The more time and interaction the user has with the product, the more “dots” you can draw when you form a social profile.
The more accurate the picture, the higher you can charge advertisers.
But there was a significant real development within this ecosystem that happened relatively recently and we’re seeing it hurt some internet companies in this most recent reporting cycle.
The Identifier for Advertisers (IDFA) is an advertising tools that marketing campaigns used to measure the efficacy of their ads. The harmful part of this was that it continuously tracked you, not only in one app environment but between apps and essentially followed you around across all your behavior.
Apple recently killed this tool and created an opt-in feature rather than having an opt-out feature. This is valuable because of what I mentioned above. People are lazy, and prefer ease of use. By making the default disclosure much less invasive, advertisers would have a much more muddied view of the individual once they leave a native ecosystem.
But IDFA is simply a step in the right direction, and not enough. Sure it helped a lot of users’ privacy concerns but it did not meaningfully return unit economics to the individual users. It also still keeps the information that a user will have and how they interact natively with that app.
In a more open and distributed system, with true data ownership at the consumer level, the consumer starts to reclaim a large part of their identity. If they are then allowed to choose the level of disclosure they wish to provide, it puts them back in the driver seat.
This also drastically shifts the revenue model. What used to be, “if the product is free, you are the product” now starts to look like a revenue model where you have selective disclosure that the consumer can monetize themselves.
Under the Radar
BUILDING THE NEXT TECH GIANTS: The tech giants of the next decade are being incubated as we speak (or in this case, read & write). This obviously means +25x growth opportunities for investors, but with so many companies out there in so many nuanced segments, it also means these opportunities are risky and difficult to find. So how can you bet on tomorrow’s giants today? How do you even identify them? Enter: Victory Square. Think of them as human growth hormone (HGH), but for disruptive tech startups. They have had incredible success with giving out 2 dividends in 2021 with another planned before year end, and Victory Square has recorded 6th consecutive quarter with positive net income*!
TRANSFORMING HEALTHCARE DELIVERY THROUGH A WHOLE-PERSON, PATIENT FOCUSED APPROACH: Healthcare costs are 2x higher in the U.S. than in other countries. There’s also a shortage of doctors and roughly 25% of Americans are uninsured. That’s because traditional healthcare systems are broken, plagued by rising costs, inefficiencies, shortages, and inaccessibility. But not for long! By leveraging proprietary technology, CloudMD is transforming healthcare delivery with its patient-centric approach and connected, comprehensive healthcare platform that addresses all points of an individual’s care, resulting in improved outcomes and better access to care. In 6 months, over a quarter million individuals have been onboarded on its integrated platform, receiving personalized care with a net promoter satisfaction score of 78%. The company is well positioned to be a leader in the healthcare sector, with a revenue run rate of $140 million and $50 million cash to execute on their growth strategy*.
TARGET: ENGAGED. What if you could get in on the next Barstool or theScore before they got acquired for billions? Rivalry is a fully licensed sportsbook based in Ontario which is on the cusp of legalization. With a 21% MoM growth rate in 2021, this is a prime acquisition target for legacy players*!
INVEST IN THE FUTURE OF FOOD: CULT Food Science is an innovative platform that provides investors with first of its kind exposure to the most innovative start-ups in cellular agriculture BEFORE you hear about them on the news! CULT Food Science is exclusively focused on clean, lab-grown foods and associated technologies with the goal of providing a sustainable, environmental, and ethical solution to the global factory farming and aquaculture crises*.
COMPLIANCE FIRST CRYPTO: What’s one of the biggest risk factors for investors considering cryptocurrencies? REGULATION! BIGG Digital is doing something about that: they’re a software company that owns, operates, and invests in crypto businesses that support and enhance a compliant and regulated ecosystem! Not to mention, subsidiary, Netcoins, has received regulatory approval in the crypto space*.
PLAYING THE MACRO TRENDS: Sustainable real estate development and renewable energy are secular trends you wouldn’t want to bet against. Greenbriar Capital leads the market in both, with a 995-unit housing project in California, and 2 solar projects totaling over 500MW*!
CHANGING THE WORLD ONE BITE AT A TIME: Very Good Food is eco-conscious, socially aware, and purpose-led. They’ve also got the secret sauce in their innovative R&D pipeline that is delivering delicious new plant-based products like the Butcher’s Select Spicy Meatballs and The Very Good Steak! It’s no wonder revenue grew 280% YTD in Q2 vs last year*.
*This is sponsored advertising content.
2. What is it? 👉 Attributes of Web 3.0
So we have to take back control. But what does that look like?
Chris Dixon is a great writer when it comes to trying to grasp the concept. His twitter is this week’s must follow account.
OK, a little mysterious and a bit too short, so let’s build it out a bit more…
“I think of an NFT as – it’s as general a concept as the webpage.
When it first comes out, people are like, “Oh it’s a website” and they try to map it to the offline world.
But it’s a core new concept, the idea of owning something on the internet.” – @cdixon https://t.co/zk2VWKgeSJ
— Dickie Bush 🚢 (@dickiebush)
Oct 30, 2021
This is a powerful statement because it focuses on properties with the creator aggregating the power instead of the platform.
The following are the core to the tenants of Web 3.0:
Decentralization = no gatekeepers
Value goes to those who are creating = A developer/creator-first mindset.
Community governance = By the people for the people
So what are the technology products that embody these principals? According to a16z:
Digital assets
Decentralized finance
Blockchains
Tokens
DAOs (decentralized autonomous organization)
These technologies are all actors in the system that is Web 3.0. When it comes to digital assets, we know these as NFTs. Unique digital properties that artists are creating and directly monetizing.
Where “digital assets” get even more interesting is something that provides utility outside the concept of simply being “unique or collectible”. Such as an advantage on a character in the metaverse that allows you to advance further on a “game-within-a-game.” Sort of like a mythical sword that allows you to progress through a game that has real monetized prizes at the end.
Another hot topic that fits inside Web 3.0 is DeFi. In order to transact within this new system, you will not be using traditional big banks. Solutions will look more like those currently aimed at the un-banked and underbanked, meaning digital first and extremely frictionless. If everyone has a unique wallet backed by a blockchain, this provides a system where toll keepers can’t get a larger piece of the pie.
And what is this form of payment? Here is where the cryptos/tokens fit in. By utilization an array of currencies, crypto is the financial language that everyone will be speaking.
If you’re deep into the ethereum space, you’ll be aware of DAOs. The backbone of a DAO is its smart contract. The contract defines the rules of the organization and holds the group's treasury. Once the contract is live on Ethereum, no one can change the rules except by a vote. What this creates is a community-regulated form of governance.
This all sounds to be honest… incredible. But also complicated. Here at GRIT we know there are always two sides to every story, so I hav a couple bones to pick.
The first major hurdle that I think about is computing power. A distributed network sounds great in theory but who is doing all the heavy lifting? For example, Facebook alone will spend $32 billion dollars on capex next year. Where does this money go towards?
The anticipated bump is “driven by our investments in data centers, servers, network infrastructure and office facilities,” – Chief Financial Officer David Wehner
Who is spending this $32 billion collectively just to invest into the infrastructure ? Little johnny mining bitcoin in his garage? unlikely. The answer that Web 3.0 proponents will give you is that the infrastructure is also decentralized, but quite frankly thats not enough for me. Need MOAR on this.
The other potential downfall to me too is trying to wrap my head around platforms. We have platforms like YouTube, Twitch, and Instagram that really do focus around the creator. These creators are able to monetize due to the aggregated audience, but when pushed out to the edges, does this become much more fragmented, making it hard to drive local page views? Probably. How does discovery work? I don’t know yet, but it will be fascinating to find out.
But first, let’s check in with our Outrageous Chartered FinMEME Analyst Dr. Patel!
3. Who is Working on it? 👉 Interesting projects and companies in the space.
The most relevant projects in the space are:
Bitcoin: Everyones tried and trusted store of value
Ethereum: smart contracts powering the revolution
Solana: Potential long-term rival for ethereum? Worth going deep.
Polkadot: Crypto just getting started.
OpenSea: NFT marketplace
Coinbase: #1 Transaction centre for all things crypto
Axie Infinity: Gaming project with real underlying economics using crypto
Many, many, many more startups, some you can find here
But in this section, I also wanted to flag a couple of really cool ideas in the space that are all in the Twitter thread below.
0/
recently, i’ve been imagining how web3 could transform everyday institutions:
— homes
— bars
— galleries
— sports
— college
— book club
— venture
— credit cards
— discord
— quora
— onlyfans
— disneybut each reveals a fundamental principle of what web3 means.
— david phelps 🐮🏰🃏🐘 (@divine_economy)
Oct 29, 2021
These examples may seem far fetched in terms of execution but they all capture the ethos of Web 3.0.
Wrapping Up…
This industry is coming at us fast. And just as Marc Andreesen (a16z), the pioneer of Web 1.0 shifted, to Web 2.0, his firm is now lazer focused on Web 3.0. So you better start to understand it. I think the best way to sum up Web 3.0 is this tweet:
Until next time. Always Yours. Incessantly Chasing ROI,
-Genevieve Roch-Decter, CFA
P.S Both the mayor of Miami and the mayor-elect in NYC are taking their next pay checks in Bitcoin. What a time to be alive!
What else we Grittin’ On?
ZERO. Biden begs OPEC to pump more oil while he tells the rest of the world America will be next zero by 2050. Biden should buy some carbon credits!
INFLATION. Global food prices hit 10-year high. Probably nothing.
HIGH. Crypto market hits another all-time high of +$2.75 trillion as Ethereum and its sexy cousin Solana surge. Math-based money is so beautiful ; )
Sources:
DISCLAIMER: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
Grit Capital Corporation is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.