🦁 Wallets in the wild

Hello!

Today I’m out in the world exploring, meditating and looking for inner peace despite all the chaos and calamity going on in this country and the world at large right now.

So if you’re looking for a nice little distraction, we’ve prepared a special edition just for you.

Today’s story ties into the important American values of personal freedom and personal privacy — which are now, unfortunately, under attack.

— Kate Irwin

Why we need a wallet on every device in a post-AI world

I’ve been hearing more chatter about decentralized file storage lately.

Yeah, it’s not exactly a sexy topic. But one could argue that decentralized storage is integral to a crypto ecosystem that’s actually decentralized and not concentrated within one or two corporate entities. 

And even if decentralization doesn’t really matter to you, does fraud? How about the rise of AI-generated data and files that could be used to hack or scam you, or brick your phone when you need it most?

“With something like AWS [Amazon Web Services], you can’t actually verify if a file is what it’s supposed to be or not. And that fundamentally breaks blockchains and crypto transactions,” Pinata CEO Kyle Tut told me in an interview. 

Decentralized storage methods could be ultimately used as a way to combat fraud by verifying authentic information including provenance data — especially in the increasingly AI-dominated world we’re hurtling toward.

“If we want to have automated transactions, whether they’re AI-powered or not, you need to have files and data sets that are verifiable and authentic. And so that is where we spend all of our time, is ensuring that data and files are exactly what they’re supposed to be. And if they changed, we know that they’ve changed,” Tut said.

Pinata has worked with a number of NFT collections and marketplaces like OpenSea and Sorare to decentralize their assets. Typically, it’s images, videos, and JSON files that get stored. More recently, it’s worked with memecoin platform pump.fun to store memecoin art files, too.

“IPFS [InterPlanetary File System] is, like, a very difficult protocol to get to work. And so what we spend all of our time on is ensuring that it's fast and stable. We have seven-plus years of ensuring that when you're trying to get files, you're getting them fast and you're getting them reliably,” Tut explained.

But his ultimate goal is to get everyone to run an IPFS node plus a crypto wallet on every device they own. 

“That's the only way that you can generate true provenance of that file from creation to consumption,” Tut said. “Where we're going post-AI, where AI can DDoS everything, we need to verify what this file is, where it came from, who created it, when was it created? Like all those types of little things need to happen, and the only way you can do that is through IPFS and wallet signatures on-device. You have to sign this data as soon as it’s generated.

“Our whole underlying assumption and the future that we're building to is [that] all files need to be identified through IPFS, and then they need to be signed by a blockchain. We don't care what blockchain. And that's kind of the beauty of IPFS. At the end of the day, it can work with every blockchain,” he said.

Spinning up nodes and wallets left and right is certainly a lot to ask people to juggle — and isn’t realistic for everyone right now. 

But maybe this uncertain AI-driven future ahead will convince more of us that it’s worth the hassle.

Real-world assets, real-world problems

Onchain mortgages is another topic hitting the timeline right now. My main concern is around bitcoin’s price volatility and whether that could ultimately increase the number of foreclosures if homebuyers are perhaps a little too invested in crypto during a down cycle or period. 

Could — or should — lenders reasonably approve you for 100% of the bitcoin price you own at time of application? Does 50% feel like a better hedge? And what happens if the price of BTC drops significantly within a month and then rebounds? 

I wonder if this might be manipulated, potentially, and whether something like this would require homebuyers to move and park their cash into a KYC’d, centralized exchange account in order to prove verifiably to lenders that a wallet does indeed belong to them.

Such a requirement would be good news for a company like Coinbase, for sure.

If you want to listen back to our panel on creating bulletproof onchain games, it’s up now on YouTube! I like listening to YouTube videos at 1.25x speed, but maybe that’s just me.

Put it on in the background while you’re scrolling on CT and enjoy: