Private Charter (ENS-PCT)

It’s no wonder the attraction my cheap dad had for Ethereum when I explained to him what fat protocol theory is. For those that don’t know, it’s this:

The internet is a protocol. Value moves from the protocol layer to its application layer. Google, Amazon, etcetera, are its applications. They’ve become very valuable over the years and quite frankly, show no signs of contracting. In cryptocurrency however, value flows in the opposite direction. It flows from the application layer, to the protocol. Thus the name: fat protocol thesis. It’s easy to imagine then, why Ethereum is positioned better than any other cryptocurrency because of what’s built on it. And I’ll posit, that if gas fees fall and staking becomes available to the masses (2.0), it’s likely to make burnt toast of every crypto not ERC related (excluding stablecoins, bitcoin, and privacy coins), unless those protocols velvet fork into the Ethereum protocol.

It’s no wonder he crossed his arms, spit on the ground, and calmly said: “Tell me more.”

I went on about the promise of DeFi a couple years forward. What are traditionally the margins (profits) of banks will become yours. Some already can be in a limited way for the savvy, but DeFi has way too much friction (this defined as the number of steps required to accomplish something). Consider the genesis of video streaming around 1996 (which is about where we are with Ethereum’s protocol). Think of the friction there. You needed:

• to own a 56k modem
• to download a tcp/icp client
• to download a media player
• to find the website
• to add batch files

The more friction, the higher the learning curve. Fast-forward to today, and everyone carries a dozen video streaming options with them in their pocket, assuming there’s a smart phone there. Two-year-old children literally know how to use it. DeFi is unusable for the masses right now, this will equally change.

Yeah my cheap dad. Now I wake up to text messages from him asking: “When is moon?”

Well, probably after Ethereum 2.0, and now that you’re oiled, I’d like to explain a concept to look forward to after the upgrades:

—Private Charter (ENS-PCT)—

Can you picture yourself a resurrection man covered in dirt working a shovel under the white glow of a single moonbeam? Barbaric I know. That was me once. I lost my login information, but luckily had etched my private keys on a metal card before burying it in a forest. Those days weren’t long ago. Neither were the days of writing shit on paper and stuffing it in a desk drawer. Or the best one I’ve come across which I called the Victorian: A fun friend of mine once kept his keys in a very expensive [highly secured] painting. They couldn’t be gotten to unless the painting was stolen, and scanned with special equipment. He had the painting insured for twice its appraisal value (two insurers aware of the double insurance, but not of the keys, who charged him triple premiums). Then bitcoin broke $10k and it wasn’t worth it. This personage persistently wore that little edge of a smile, hoping it would get jacked. He walked with an exotic wood cane and claimed to be related to Henry James the writer. This isn’t Portrait of a Young Lady, it’s crypto for chrissakes! Thankfully we’ve graduated to multisig wallets, and currently, social wallets, which Vitalik Buterin wrote a post on recently (link below).

vitalik.ca/general/2021/01/11/recovery.html

I don’t believe any of that is even close to where we need to get. I propose the ENS-PCT (Ethereum Name Service Private Contract).

ENS-PCT is a smart contract you own. You are the dapp. Money has become like language. You can have as many as you like, but when set up, they are immutable. From it you can do everything a bank does and more: make loans, take loans, equity swaps, sending, spending, leveraging global interest rates (assuming central banks roll out their own stablecoins), help finance a war (kidding kind of), provide liquidity and stake. The latter two are important because ostensibly, they’ll allow you to never have to spend your crypto. If you want to spend, you borrow central bank stablecoins against your collateral. Because this collateral is staked or LP’d, those rewards offset the borrowed interest rate, probably by a percentage point or more (back to taking those bank margins we talked about earlier). This makes central banks compete in a way they never have before to attract borrowers to their stablecoin. So you can shop around. Also keep in mind your collateral is intrinsically deflationary (assuming it’s BTC, ETH or something of quality). The legacy financial apparatus (centralized finance) will serve decentralized finance. And they’ll have to do a damn good job of it, one that incentivizes people quite well. I believe they will. If they don’t, then the coming atomic swap abilities with privacy coins (I’m especially talking about XMR) will serve as an excellent check and balance that can wreck havoc on taxes among other things.

The ENS-PCT has a vault and wallet. From the vault, you can recall all funds from your wallet into the vault. After pressing send to send any coins out of the vault, there’s a countdown unless the transaction is cancelled by email or other secure means. These outbound coins however, can only be sent to say four immutable predetermined addresses, each of escalating security:

• a different ENS-PCT vault you set up for yourself
• an insured centralized exchange (like Coinbase vault)
• the IRS (US Treasury) who will issue a refund

Any outbound transactions are accompanied by an attached note embedded with your immutable information and instructions. Again, nothing can ever be changed after initial setup. If you don’t login within a two year period (or however long you choose, or whatever conditions you choose) any borrowing is automatically settled, all funds recalled from the wallet, and all contents sent to the fourth predetermined addressee, which we assume is the ENS-PCT vault belonging to your wife, your children, a charity, or the US Treasury, because you’re dead or incapacitated. Again, detailed instructions embedded.

Note: With immutable redundancies, private keys slowly start losing their importance

Also consider: The US Treasury should act as the probate, and I believe this is a controversial but elegant solution.

All activity within the ENS-PCT wallet is protected with an NFT instead of a passcode or keys. You’ll have vowed this NFT to your empty vault before setting everything up in a process called ASM (art secured marriage). This will be used much like Apple’s finger ID or a decentralized identity where you can choose how much registration or personal info is attached.

If you’ve gotten this far in this nonsense post of mine, I commend you. We’re almost finished.

For those talking about crypto cycles, and an eventual crypto winter, I have news for you: those ended when mass adoption got planted late last year. I can only speak of bitcoin and Ethereum (possibly stablecoins and privacy coins), but the global confidence curve of crypto is flattening dramatically. The liquidity here and every longterm metric point to a longterm collapse in volatility. It’s already happened to bitcoin. I believe the volatility [of bitcoin] will spike after $90k on the way to what is globally seen as a self-fulfilling prophecy of $100k. It likely stays in the $90k-$100k area for many many months as volatility continues edging off permanently. From there expect slow longterm appreciation, where the bank margin capture that we talked about above becomes the new form of speculation starting late 2022.

My prediction for Ethereum is a little different. It’s still the internet’s 1996 until 2.0, its major upgrades which I see in January next year. After, it will overtake bitcoin’s mkt capitalization and begin consuming everything digital, never fully, but think of digital mail (email) and the US Post Office dichotomy.

People always ask me: “What price will you sell your ETH at?” It’s a silly question. Never. There’s no need to. I’m not a trader, I’m a DAO citizen. The pre-covid days of bitcoin and Ethereum are gone. The internet is no longer “[A] telecom scam sold to people too lazy to visit their local library,” as a professor once told me. And you’d be wise to consider that before any fiat interaction, unless you’re buying land/property or an education.

Thank you for sharing my thoughts.