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Who Cares About….Web 3.0?? by Andrew Spencer

WHAT’S THE STORY?

Who Cares About….Web 3.0??

You might be like me. You will no doubt have read about Mark Zuckerberg’s vision for a metaverse by now, including his vision for ‘Web 3.0’ and wondered “what’s wrong with the trusty ol’ Web 2.0?” or “is there going to be a new version of the web anytime soon?”.  

The answer is yes – and the biggest shake-up of the internet since its creation could be just around the corner!

What is Web 3.0?

Web 3.0, or ‘Web3’, is the name for a potential new version of the internet which is decentralised and built on public blockchains – the innovative technology that makes cryptocurrency transactions possible. 

Unlike the current ‘Web 2.0’, users will not need to access the internet through services provided by tech giants such as Alphabet or Meta, but rather, the users themselves can own and control their online experience. In theory, this promises enhanced security, privacy and greater power to the user. 

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WHY IS WEB 3.0 IMPORTANT?

The last time the internet evolved, from ‘Web 1.0’ to ‘Web 2.0’, there were huge commercial ramifications. Web 2.0 focused on interactive websites, which relied on users sharing information, interacting and collaborating online. This allowed companies such as Amazon, Facebook and Google to harvest, exploit and sell vast amounts of customer data under the guise of being ‘consumer-centric’.

In contrast, Web3 shifts this power and control back to users, who would be directly rewarded for sharing their information, viewing adverts, or consuming content – as and when they please. In other words, just “two more minutes” of late-night scrolling could become “just two more pounds” of late-night earning through selling their browsing habits. 

Yet, the pandemic has arguably accelerated the need for Web3’s most effective use, a metaverse where users can work, socialise and play in virtual reality. Decentraland and Axie Infinity are two companies that have gained a modest 50,000 users through creating basic virtual worlds running Web3. These worlds allow

users to create and trade digital assets such as land, clothing or artwork, or even proudly display any NFTs that they own. Whilst the number of current users isn’t exactly jaw-dropping, Bloomberg recently reported that the market for a larger Metaverse, likely to be running Web3, may reach £600 billion in value in the next three years. Indeed, tech-savvy creators such as Bored Ape, a self-described “Web3 streetwear brand”, previously sold an NFT for whopping $3.4 million!

Unsurprisingly, companies and venture capital firms are trying to ride the Web3 wave. Microsoft, Meta, and even Bumble are exploring integrating Web3 and a metaverse into their platforms. Yet, a metaverse using Web3 technology would run on a network of computers worldwide, rather than being controlled by a handful of technology companies. This would ensure a user-empowered ecosystem where the masses control its direction and policies. Meta CEO Mark Zuckerberg himself stated he hopes the metaverse won’t be created by one company, so that it may be less constrained by today’s platforms and regulations. Although, given how hard Facebook/Meta have fought to maintain internet dominance so far, it’s hard to imagine Meta as anything other than a powerful institution that will define what a Metaverse and Web3 mean for society. 

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SO WHAT?

The whole concept of the metaverse – and anything related to it – is going through a rough patch currently and even Mark Zuckerberg is now mentioning AI more than he is the metaverse! As things stand, Web3 has been superseded in the public imagination by the rapid growth of AI, but it seems likely that once the dust settles, Web3 is something that will come to the fore once more as the great enabler of new technologies and our springboard into the future.

Written by Andrew Spencer, a future trainee solicitor with a particular interest in tech and life sciences. Andrew is an avid Rugby League fan who is happy to explain why it’s the greatest sport on the planet (without any success so far)…

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Who Cares About….CBDCs?? by Haamsaaveni (Hamsi) Kumar

WHAT’S THE STORY?

Who Cares About….CBDCs??

I was surprised to learn that the central bank of my country, Malaysia (:v::skin-tone-4: :flag-my:),  was joining forces with its peers in Australia, Singapore and South Africa to conduct a cross-border payments trial using different central bank digital currencies (CBDCs).
Almost 90% of the central banks have initiated a digital currency project according to the Bank for International Settlements, with the Sand Dollar of Bahamas being the first one that has been officially up and running!

WHAT ARE CBDCs?
CBDCs are simply a digital form of your notes/coins issued by the central bank. While CBDCs can be designed for limited use between financial intermediaries (wholesale CBDCs), this article will focus on retail CBDCs made for public use.

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WHY ARE CBDCs IMPORTANT?

CBDCs and cryptocurrencies
As CBDCs become common, cryptocurrencies could potentially be phased out. The inflated nature of Bitcoin has already attracted the wrath of regulators, as seen last year when a Spanish market regulator warned about influencers’ responsibility to remind their followers about the risks of cryptocurrencies after Andres Iniesta promoted crypto-exchange Binance on Twitter (and don’t get me started on Tom Brady and Gisele Bundchen promoting FTX! – PW 😡).
Governments could regulate privately-issued cryptocurrencies used in crimes. The hackers in the Colonial Pipeline attack demanded payment via Bitcoin and new forms of “altcoins” such as Monero are becoming popular in the dark web as it obscures information about the receiver and sender.
Despite some voicing concerns about a central authority having unparalleled access to the data of financial transactions, this has also led central banks to test out pro-privacy designs to ensure that CBDCs’ remain popular among the masses and reduce the need for privately-issued coins.

CBDCs vs Stablecoins 
Many organisations are trialling/ using Stablecoins as an alternative. Stablecoins do not suffer high price volatility as they are pegged to major currencies or commodities like gold.

However, these coins don’t seem to be flying well with central banks either. An increased use of stablecoins could mean less money in retail banks and this affects the ability of the central bank to set interest rates to manage inflation.
Currently, the nominal value of stablecoins has risen from $30bn to $140bn due to their growing popularity in being used for cheap transfers. CBDCs would bring the benefits of stablecoins while allowing authorities to control the flow of money via a digitalised quantitative easing.

CBDCs and geopolitical tensions
China had instructed companies, including McDonald’s, to expand their digital Yuan payment systems across in Chinese stores, prior to the Beijing Winter Olympics. For many, this highlighted the security implications of the digital Yuan, such as Beijing being given access to transaction data of American companies based in China. Its surveillance capacity could grow as China plans to make Digital Yuan accessible to non-Chinese citizens to beat the domination of the US Dollar in world trade and finance.
On top of current anxiety around China’s expansion of its nuclear prowess and the expansion of its soft power through the Belt and Road Initiative, one could also argue that the CBDCs will be the next frontier in determining global dominance of nations and exacerbate the ongoing tensions between the US and China.

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SO WHAT?

Regardless of the debate that is occurring among experts on the design and manner of the rollout of CBDCs, it is undeniable that CBDCs will become a pertinent part of our lives in the immediate future.

This was written by Haamsaaveni (Hamsi) Kumar: an amateur iPhone photographer :selfie::skin-tone-5:/Optimistic Man United fan :smiling_imp:/avocado sushi lover :avocado:. 

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Meme Stock Disaster – Why Bed Bath & Beyond Went Wrong by Agne Vaitkeviciute

WHAT’S THE STORY?

Meme Stock Disaster – Why Bed Bath & Beyond Went Wrong…

You may have noticed the appearance of US home goods retailer Bed Bath & Beyond in Watson’s Daily recently. Talk about drama!

  • On August 17th, the share price of Bed Bath & Beyond (BBBY) suddenly fell by more than 50% after a short period of intense rallying.
  • The crash has largely been attributed to the company’s status as a meme stock. The term first appeared back in January 2021 to describe groups of retail investors congregating online and collectively buying stocks of down-trodden companies being ‘shorted’ by institutional hedge fund investors.
  • BBBY’s experience exemplifies just how volatile and financially dangerous meme stocks can be. Temporarily inflating a company’s stock price obscures its weak fundamentals. With little prospect of generating long-term returns, these stocks will ultimately come crashing down, taking the funds of amateur investors with them.

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WHY IS IT INTERESTING?

  • The rapid rise and fall of the stock coincided with financial influencer Ryan Cohen’s complete sale of his 11.8% share in BBBY on the day of the crash. As a prominent meme stock figure, many inexperienced investors take his tweets as gospel for their own investment strategies (he was famous for founding Chewy and being its CEO until 2018 and later, being the chairman of GameStop). However, this remains a very speculative way of deciding where to invest one’s money as it doesn’t consider the inherent value of the stock at all.
  • Also, Cohen’s sale shows how the meme stock general culture of HODL’ing – ‘holding on for dear life’ to a stock and not selling – goes against how markets work. Eventually, someone WILL sell, and the value of the company WILL go down.
  • What BBBY’s experience shows is that inflating a stock’s value because it is a ‘meme’ will not change a company’s fundamentals, and therefore practically guarantees its value will eventually decline. BBBY itself has been facing terrible financial problems for a while now. Even the company’s CFO, who sold a significant portion of his shares just a month ago, ‘fell’ to his death shortly after the stock’s crash! Although not confirmed as a suicide, it might give the impression to investors that the CFO knew the worst was yet to come, and thus another reason to send the share price falling even further.

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SO WHAT?

  • No matter what happened with BBBY, meme stocks are not going away anytime soon. Financial insecurity, amplified by the current economic climate, has generated an increased appetite for risk among young investors. Going forward, companies will need to consider the growing influence of retail investors and find ways to harness their power to their advantage.
  • Moreover, meme stocks divert capital to companies with poor fundamentals instead of companies who can create real value for the economy. This is definitely something to keep an eye on as it could eventually have negative repercussions on a country’s economic prosperity.
  • That being said, the chaos of BBBY further highlights the need for regulators to work hard, and fast, to ensure that the meme stock craze does not cause further damage to both the market, and the financial health of retail investors. Regulation, however, is not easy when financial markets are meant to be public and accessible to all.

This article was written by Agne, an incoming PGDL student at the University of Law, competition law geek and chef in an alternate life who holds a personal grudge against London’s air pollution for making her allergic to grass.

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InPost vs Amazon in the UK. Who will win the battle of the lockers? By Zuzanna Potocka

WHAT’S THE STORY?

InPost vs Amazon in the UK. Who will win the battle of the lockers?

Last week, we mentioned that the Polish parcel locker box specialist, InPost, had major expansion plans for the UK. Here at Watson’s Daily, we are lucky enough to have some ambassadors who are from Poland, so I wanted to get their point of view on the company given that it is so popular over there! Here is what Zuzanna Potocka had to say:

  • InPost was founded by billionaire Polish entrepreneur Rafal Brzoska. It has over 13,000 locker locations on the Polish market, which makes it the default delivery service. It began its overseas expansion several years ago.
  • InPost operates 140,000 individual lockers in the UK. It plans to set up 2,000 units by the end of 2021 and reach 10,000 sites by 2024, focusing on London, Manchester and Birmingham. It has already signed deals with landlords including Tesco, Lidl, Morrisons and TFL. Its unique selling point is that it aims to integrate post handling into the “daily routine” of a customer.
  • The model profits through an average additional shipping charge of £1.75 – £2.50 per unit. The charges decrease depending on order volume.

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WHY IS IT INTERESTING?

InPost has been trialling lockers in the UK for several years but is set to embark on its biggest investment yet. However, not all of the factors that made it a success in Poland will work in the British market. For instance, in Poland, couriers have an unreliable reputation meaning that the public are more receptive to an alternative delivery model. The country also does not subscribe to a culture of leaving parcels unattended in “safe spaces.” Consequently, many find it easier to order directly to a nearby locker and avoid rearranging deliveries.

InPost may become a solution for customers that are concerned about leaving parcels with neighbours or on their porch. Each buyer receives a unique code via text or email that is later used to open the locker. Further protection measures include CCTV and parcel tracking systems. Nonetheless, this may not be enough to adequately address potential thefts at crowded sites such as tube stations. InPost greatly restricts its liability and under consumer-seller regulation, the retailer takes on a lot of the responsibility for lost packages.

The company’s success will also depend on an attitudinal shift, away from the convenience of home delivery and

towards environmental considerations. On average, a traditional delivery driver distributes 70-80 parcels a day while an InPost operator delivers up to 1,000 orders. InPost may have to carefully choose future partnerships to dispel wider hesitations towards online shopping. Currently, its well-established partnership with the global fast-fashion retailer, Missguided, forms part of its success on the British market.

Restrictions regarding the weight and size of the ordered object, are likely to encourage a blended model of home and locker delivery. Importantly, InPost also offers returns services. The UK public may be more inclined towards dropping off orders at nearby shopping and travel sites as part of their “daily routine” instead of facing long queues at the post office. InPost affirms that it remains on track to outnumber post office sites in its three target cities. The availability of a 24/7 service may be the tipping point required to substitute customers’ habits of handling parcels.

Finally, the expansion comes at an appropriate time of year when sales of smaller products are likely to increase before Christmas.

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SO WHAT?

Delivery locker systems are not a new concept. Amazon Locker has been operating in London since 2011 and has set up 5,000 lockers across the country. Its contracts with the Co-operative and Morrisons align with InPost’s strategy. Amazon also offers an extensive number of units around university campuses. Did you know, for instance, that its largest pickup location is situated at the University of Warwick?

InPost may be able to differentiate itself by setting up lockers in locations that respond to the needs of a wider range of age groups. Assisted by a return to city commuting, it plans to surpass Amazon by the end of 2022. Interestingly, Amazon does not offer its Locker service in Poland, so this will be the first time InPost will actively compete on the market against Jeff Bezos. Instead, InPost has a strong partnership with Allegro, Poland’s biggest e-commerce platform, that has been acting as an alternative to Amazon. The deal offers Allegro customers free delivery and returns as well as an additional insurance on the products they purchase.

Regardless of the competition, a recent report by Retail Economics and Eversheds Sutherland indicates that the trend of online shopping is set to continue. Predictions concerning the sales of clothing online overtaking high street transactions, as soon as 2022, indicate that InPost should have a secure stream of long-term revenue.

It certainly looks like online purchasing isn’t going to disappear anytime soon and it may well be that consumers could take the recommendations of COP26 to heart and use InPost as a way of minimising the environmental impact of their deliveries!

Despite the high expenses of initial installations, a successful rollout is likely to incentivised other delivery companies to follow suit. DHL already offers parcel lockers in other countries, possessing experience for expansion in the UK. Parcel lockers could be the new frontier of delivery in the UK!

This article was written by Zuzanna, an LLB student at Durham University, with an unheard-of love for EU law and an even bigger passion for her morning porridge and coffee rituals (she recommends that you start adding ground sweet cinnamon to oats – it is “a game changer”).

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Will Facebook’s rebranding stop the Meta…Curse? by Yenli Nguyen

WHAT’S THE STORY?

Will Facebook’s rebranding stop the Meta…Curse?

  • During the Annual Connect Conference on 28th October, Facebook will announce its plans to shift from being a social media company to becoming a Metaverse company, with a savvy name change included! The Metaverse is a virtual, interconnected world that will allow users to interact with each other in a 3D space.
  • Facebook has made headline news for scandals including anticompetitive practices, obfuscation of user figures to advertisers, and contribution to the harm of its youth. Politicians, Facebook employees, and the public are pushing for external regulatory intervention.
  • There has been speculation regarding inevitable regulation that could delay or even stop Facebook’s Metaverse expansions altogether – a metacurse. Yet, I think Facebook is making the right choice by exploiting its technology to develop the Metaverse, associating the Metaverse with its name, and getting its foot in the door early for when we all end up inside it.

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WHY IS IT INTERESTING?

CEO Mark Zuckerberg thinks the Metaverse is an inevitable ‘reality,’ which means it could become YOUR reality.

What will the Metaverse look like? If you criticise the Metaverse on its potential to become Snow Crash or Ready Player One, then you’re in danger of creating a straw man. Remember those movies about flying cars and AI taking over the world? Well, we’ve got self-driving cars (ish) and automated document-sorting systems instead. Turns out, humans are bad at making predictions. The Metaverse will use VR/AR technology to introduce slow, but convenient changes to assist everyday situations, including 3D immersive workspaces to eschew the need for a physical office, online shopping venues, meetings with realistic

avatars and spatial audio and artistic collaborations like concerts and stand-up comedy. The Metaverse isn’t science fiction. It is a long-distance relationship on another level. Have I convinced you it’s happening yet?

How will Facebook move forward? You are probably aware of the litany of anticompetitive and moral scandals tied to Facebook that means regulatory crackdowns are due. US Congress wants to break apart the tech giant’s social media apps, a whistleblower has claimed that Facebook lies about its user metrics to advertisers and there are staunch moral concerns about the mental and physical abuse imposed on its youth. Despite Facebook’s negative global image, it is moving forward with its mega rebrand, including plans to spend $10 billion this year and to hire 10,000 European workers to build the Metaverse.

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SO WHAT?

You might say that this is like a burger shop uncovering food contamination, unhygienic premises, hogwash ingredients, addiction issues, money laundering scandals, then offering to now sell you… Sushi? If Facebook is already harming billions, then it is sensible to fear its conversion to an omniscient-super-universe-platform thing. However, the Metaverse also brings huge advantages.

Firstly, the Metaverse is an immense opportunity for cultural change. User norms on social media can hardly be attributed to top-down decision-making, but happen somewhat mysteriously. No one could foresee that Facemash would lead to Facebook, or that Facebook would be losing its youth user base like it is now. The younger generation is turning towards more immersive platforms like Fortnite and GTA, where chatting with friends is as prioritised as actual gaming. The Metaverse is catching this wave and can encourage genuine friendship-making and connection without the channel limitations of text boxes and emoji reactions.

Secondly, Facebook can use its technology to get its foot in the door before anyone else. Facebook has the world’s most active daily users, the cheapest and most popular VR headsets, world-class engineers, and billions of dollars worth of ad revenue. It has the potential to (finally) grow as a hardware company and interweave the Metaverse into its products.

Thirdly, Facebook has both the time and the resources to deal with a regulatory onslaught. Remember how long it took the G7 to agree on a tax rate? Up against the consortium of diplomats and lawyers that will incite regulations against Facebook is… well, a multi-billion-dollar company that also has diplomats and lawyers! Whether checks on Facebook’s use of user data and anticompetitive practices occur now or within the Metaverse, it is better to create the thing and deal with regulations later on than to halt the process altogether.

The Metaverse might not be the fantasy world we envisioned, but it is here to satisfy our growing expectations of life and connectedness through technology. Facebook is simply here to take the lead.

This article was written by Yenli, a fierce dairy-free baker, professional amateur violinist and lover of escaping the real world through vintage film photography. She studies MA Law at Bristol University and is an aspiring commercial solicitor.

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Memes and avatars: What’s the tea on NFTs?

WHAT’S THE STORY?

Memes and Avatars: What’s the tea on NFT’s?

  • The original image of the “Side-eying Chloe” meme was sold at auction as a “non-fungible token” (NFT) for £54,000. Bids kicked off at 5 Ether, the equivalent of £11,000 and it was bought by 3F Music.
  • While a fungible item can be swapped with another similar item for the same value, NFTs are non-interchangeable and are a form of digital ownership verified on a digital ledger known as the blockchain.
  • The increase of NFTs’ popularity alongside its inflated value may eventually attract regulatory crackdowns.

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WHY IS IT INTERESTING?

The sale of Chloe Clem’s iconic meme as an NFT is part of a growing movement that allows artists to take back control over their work. NFTs can include smart contracts that give the original creator a percentage of future sales of the NFT, allowing creators to earn royalties as the NFT is sold on a secondary market. The NFTs’ popularity could be seen as the new Gold Rush with sales volumes hitting $1.9bn in August on OpenSea, the largest NFT trading platform.

The sporting industry is now profiting from NFTs with the NBA’s NFT of a 12-second clip of LeBron James dunking

being resold for more than $200,000. SoftBank have also announced a $680m investment into French start-up Sorare, an online gaming company that allows fans to buy and trade NFT football cards.

Many have been confused as to why one would purchase something that others can view for free – you can view that special LeBron dunk on YouTube, for instance! NFTs can be seen as a continuation of in-game purchases and the gamification of life into metaverses. Dolce & Gabbana recently unveiled a digital collection of dresses and tiaras in September that would be worn by one’s digital avatars and sold as NFTs!

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SO WHAT?

While NFTs have become the hot new thing, the legal treatment of NFTs remains a developing area.  While the UK and EU recognises resale rights of creative works, the United States does not recognise them and therefore there would be no recourse for unpaid resale royalties for US-based entities. It must also be noted that buying an NFT would not necessarily grant the new owner the actual copyright of the underlying work unless that forms part of the contract.

The process of “minting” or verifying an NFT is an energy-intensive process akin to Bitcoin mining, with an average transaction on Ethereum sufficient to power a refrigerator for a month.

Some marketplaces have come forth with alternatives such as gasless minting. While Ethereum wants to replace minting with a “staking” process that would reduce Ethereum’s carbon footprint by 99.98%, this practice is still in its early stages of testing. Perhaps Ethereum could consider some manure-powered minting in the meantime?

There have also been accusations that some groups are targeting retail investors by focusing on the potential for

profits via NFT sales speculation. NFT trading has also shown signs of volatility with the average daily sale of an NFT falling by 70% from mid-February to April 2021. Many have also called into question the inflated valuations of NFTs including digital artist Mike Winkelmann who sold a crypto art piece for almost $70m. Inflated valuations of NFTs may be a cause for concern for authorities as marketplaces such as ETNA Network have announced their plans to accept NFTs as collateral to access liquidity.

While NFTs are currently in their golden era, its fast growth may lead to regulatory crackdown. Recently, OpenSea launched an internal investigation after admitting that one of its top executives had been involved in insider trading. The potential bubble that NFTs are in may eventually lead the SEC to come knocking on their door just like they did with Coinbase. That led to Coinbase abandoning its digital asset lending product Lend after warnings from the SEC. We will just have to watch this space for now.

Written by Haamsaaveni Kumar, currently an LLM student at LSE and I truly believe that pineapple belongs on pizza (PW says “Your article was going so so well right up until the bit where you talked about the pineapple. What’s going on there? 😱)