Jason P Davis is an associate professor of entrepreneurship and family enterprise at Insead
November 30, 2022
Despite the current crypto winter and general uncertainty surrounding the sector, blockchain technology still attracts plenty of interest in its capabilities – be it facilitating a more decentralised financial system or powering Web3 applications.
At a Tech Talk X organised by Ethereum Singapore and Insead’s Savvy Salamander Study Club, I introduced Ethereum co-founder Vitalik Buterin to a full house. Besides touching on recent developments in the Ethereum ecosystem, he unpacked tools that can help us tackle some of the most pressing problems in today’s digital space, such as identity and trust issues, privacy concerns and the ethical deployment of AI.
Crypto is moving into a third stage in its evolution, which I dub Crypto 3.0. In its initial form, Crypto 1.0 was focused on conducting simple peer-to-peer transactions over a distributed ledger in the Bitcoin blockchain. In Crypto 2.0, we saw the explosion of decentralised applications including DeFi and NFTs through smart contract blockchains such as Ethereum, which created a bona fide decentralised computer usable by anyone. Crypto 3.0 will build on these innovations and equip people with the tools to control their identities on crypto networks, making it much more user-friendly and easier to address prevailing privacy concerns.
Under the mechanisms set out in the first two stages, crypto wallets and transactions are still fully public and transparent, despite being anonymous. This is usually considered a good thing, as it allows participants to be fully aware of counterparties’ balances and perform risk-mitigation activities, or for authorities to trace criminal activity conducted over the blockchain. Both of these features were lacking in the most recent blow-ups of crypto hedge funds, centralised exchanges and quantitative trading firms that have been consuming the news.
Princess Nejla bint Asem of Jordan was one of the first members of the Crypto Arabs Community. Courtesy Crypto Oasis Company
Sheikh Humaid Bin Khalid Al Qasim is a member of the Crypto Arabs Community. Courtesy Crypto Oasis Company.
Sheikh Humaid Bin Khalid Al Qasimi (Left) with Haidar Mohammed, the animated show's creator and lead illustrator, after the launch of the Crypto Arabs project. Courtesy Crypto Oasis Company.
Sheikh Humaid Bin Khalid Al Qasimi (Left) with Mohamed Al Banna, chief executive of Lead Ventures. Courtesy Crypto Oasis Company.
However, there are several valid reasons why regular users would want greater privacy when using these networks, including better protection from hackers or an intrusive government, or to keep identities secure. Crypto 3.0 really speaks to the broader idea of identity on the internet, and how much control we have over it.
Technologies have already been created to address this problem. Ethereum Name Service, for example, allows people to generate human-friendly and readable usernames on the Ethereum blockchain that they can use to conduct secure decentralised transactions. Another crucial development that will play a major role in the coming years is expanding the use of cryptographic proof that allows a user, creator or owner to confirm the validity of certain data without revealing everything about the data itself. Called "zero knowledge proof", it enables individuals to be selective about what they reveal and when they reveal it (while proving its validity). This differs from the current predominant system of transacting over maximally transparent blockchains.
This has huge privacy ramifications. By allowing people to reveal only certain aspects of the data in question, they can establish validity while attaining greater control over their privacy. For instance, a tool called zk-SNARKs can be used to prove that you made a specific crypto transaction without revealing your identity, pointing back to your wallet or disclosing information about other transactions made from that wallet.
There are plenty of other privacy applications for this technology, particularly when you want to achieve cryptographic-level assurance without revealing too much data. These range from smart contracts and voting systems to account moderation and reputation protection. Furthermore, it can be used to prove that you are a unique human, a member of a particular community or trusted by other accounts.
There are instances when we want to prove our identities or the “humanness” of things on the internet, especially at a time when we’re seeing a huge increase in the amount of realistic AI content that could easily pass off as being created by a human. The probability that we’ll soon be flooded with such content is a real concern in the AI community, and many are hoping that crypto can help solve the problem.
The world of cryptocurrency has been rocked by instability in recent weeks. Reuters
Mr Buterin noted that it used to be relatively easy to identify deepfakes, bots and AI-generated content. But it will become increasingly difficult to discern this as the content becomes more sophisticated. The consequences could include spending our time interacting with bots that we think are real people, or the proliferation of more believable deepfakes that can be used for malicious purposes. We may also begin placing more of a premium on human-generated content. However, if almost all the content on the internet is produced by AI, we could simply be unable to find these human-generated works.
Mr Buterin suggested using a cryptographic version of digital signatures (which are used to identify websites) to confirm human identities or tag content as being produced by humans. Indeed, such tools would allow for human-generated content to be labelled as such without revealing which human produced it, thereby preserving privacy. He added that the timestamping feature of blockchains could help differentiate original content from reproductions or fakes.
There is a general perception that crypto is purely about decentralised finance and anonymous transactions – in short, all about the financial applications and less about the human side. But Crypto 3.0 looks to be a world where we will have access to tools that are much more focused on the social elements of the internet.
As the landscape evolves and we see greater efficiency, innovation and adoption, I believe there will be even more ways for us to establish and manage our digital identity, build reputation and ensure privacy, while protecting ourselves against bad actors. This could eventually lead to the creation of a decentralised social network and social media with new capabilities to facilitate this.
The evolution of the crypto space into one that’s more focused on the human aspect could have huge – and hopefully positive – repercussions for all internet users, and is certainly something to keep an eye on.
This article was first published in Insead Knowledge
One showed 28 per cent of female students at a Dubai university reported symptoms linked to depression. Another in Al Ain found 22.2 per cent of students had depressive symptoms - five times the global average.
It said the country has made strides to address mental health problems but said: “Our review highlights the overall prevalence of depressive symptoms and depression, which may long have been overlooked."
Prof Samir Al Adawi, of the department of behavioural medicine at Sultan Qaboos University in Oman, who was not involved in the study but is a recognised expert in the Gulf, said how mental health is discussed varies significantly between cultures and nationalities.
“The problem we have in the Gulf is the cross-cultural differences and how people articulate emotional distress," said Prof Al Adawi.
“Someone will say that I have physical complaints rather than emotional complaints. This is the major problem with any discussion around depression."
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
