Those of us who’ve been paying attention to new blockchain projects over this past year have noticed a strange trend. Failed or failing individuals or businesses are trying to reform their images, and it has everything to do with the still-nebulous idea of Web3.
You don’t have to look hard to find news of a “hey, yeah, I forgot that person/company/project existed” suddenly busting through the wall with all the wasted energy of the Kool-Aid Man to say they’re back, and this time they have a project that will really “change the paradigm” (or as Weird Al once put it, “Advance our market share vis-à-vis; Our proven methodology”).
At first, you think they would be laughed out of the building. After all, who thinks working with the guy that single-handedly built up and tore down WeWork is a good face for investment? Why would I give an old torrent website the light of day when all they promise is NFTs? What’s stranger about these projects is how they all seem to gain at least some traction, whether by users of the blockchain community or investors.
Because as silly as it sounds for investors to consider taking advice from the wolf of Wall Street, Web3 projects are inherently enticing for investment firms, which are already practically drooling over the thought of disruptive blockchain technology, especially that which promises to increasingly monetise industries that are already monetized, whether its carbon credits or pharmaceuticals. Who cares if it’s the universally despised “Pharma Bro” who’s making the push?
It’s an open question how far investment in crypto will go, since a recent study from Pew Research Centre showed that crypto investment among average folk has remained stagnant since last year. That doesn’t mean there aren’t massive crypto firms and even more traditional tech companies pouring millions of dollars into the scene.
Seeing dollar signs is one thing. Actually creating utility using blockchain technology is something else, and so far we haven’t seen much or anything that seems useful come from any of these once disgraced businesses or businesspeople.
Jordan Belfort
At first glance, the wolf of Wall Street himself, Jordan Belfort, seemed like the perfect incarnation of the crypto evangelist, or at least the Web3 proponents who try to weasel users into bad investments just to expand their projects and their personal portfolio. However, Belfort was first sceptical about blockchain and crypto, even going so far as to call bitcoin “a fraud” back in 2017.
Well, he’s changed his tune since then. Now, financial news outlets and desperate crypto hopefuls like to hit up or pay the known huckster who once defrauded people in his own pump and dump schemes to tell them more about how to make money off the crypto scene (which is home to its own massive slate of pump and dumps, mind you). Though Belfort shies away from any outward talk of investing in any one dubious bitcoin project, his heel turn shouldn’t be seen as a good look for an industry that’s trying to battle its way past intense calls for regulation.
Adam Neumann
You might at first think the “WeWork guy,” Adam Neumann, would have trouble finding investment for any new project ever since his co-working space company blew up in spectacular fashion back in 2019.
Well, earlier this year, Neuman put himself back in the public eye as the biggest investor for a company called Flowcarbon. What does Flowcarbon do, exactly? It turns carbon credits (created by government-sponsored carbon offset projects) into tokens that can be sold via a blockchain. This, the company says, makes them more transparent, cheaper, and easier to manage.
Despite the highfalutin ideals, carbon offsets are a routine joke for most environmentalists, as they often involve planting trees in foreign countries to mitigate carbon released in the atmosphere thousands of miles away. Even John Oliver took carbon credits to task in a recent episode. Of course, pointing out that the biggest crypto tokens are massively wasteful both in terms of energy and resources might make you seem even more of a downer for a project such as this.
Still, despite the naysayers, Flowcarbon received $US70 ($97) million in its latest round of funding from big-name crypto investors like Marc Andreessen and his firm a16z.
And even with his past failure, Neumann is still big into real estate. His new goal is to “disrupt” the real estate market with a company called Flow. It’s received a massive amount of investment — nearly $US1 ($1) billion in valuation from companies like a16z. And guess what? It will apparently have a crypto wallet tied to it, according to Forbes. Though you won’t be able to pay rent with crypto, it would work like any other crypto wallet, a Flow spokesperson told the outlet. Still, a separate report from Forbes showed that Neumann’s description for the company is eerily similar to another company he previously invested in. Neumann’s people have denied they’ll be true competitors.
Martin Shkreli
Martin Shkreli, a former hedge fund manager and CEO of two pharma firms, was once called the most hated man in America for jacking up the cost of a lifesaving antiparasitic drug from $US13.50 ($19) to $US750 ($1,041) per pill. His incredibly short jaunt in prison for unrelated securities fraud has seemed to put him in mind that the best way to make a return to glory is to somehow get the incredibly scummy pharmaceutical industry — in particular the drug discovery side of the business — to install itself into Web3 infrastructure.
Last month, Shkreli announced he was at the head of a new company called Druglike. The stated general concept is to “democratize” the early drug discovery business by offering tools and software for underfunded groups or developing nations who can’t access more expensive tech.
No, they’re not wrong about the expense of drug discovery operations, but it’s still unclear at this early stage how blockchain technology will make tech any cheaper. Will Druglike develop its own software accessible only on the blockchain? How will that be monetized? Why is the man who hiked a life-saving drug up 5,000% the face of this initiative? So many questions, and very few answers.
So it probably doesn’t help that this month, Shkreli’s crypto account was reportedly hacked, losing over 160 million MSI (which if you want to know, refers to the token Martin Shkreli Inu), which was to be the token used for the pharma bro’s blockchain initiatives. The funds went to an unknown account, and the head of Druglike has remained mum about what his next steps are.
LimeWire
I was a LimeWire kid. Growing up, I used this service to download music constantly to my oversized, off brand MP3 player with its huge (for the time) 5GB of storage capacity. I dropped off that bandwagon years before the platform went belly up. I might not have much nostalgia for it, but other past users certainly do.
Well, this latest blockchained-up version of Limewire is not the version of my youth. It was brought back from the dead earlier this year as an NFT marketplace. The company said it would have a focus on art, but also music. Trying to harken back to the early, cowboy days of the internet where neither the music industry nor courts knew precisely how to handle torrent sites and peer-to-peer downloads, sibling owners Paul and Julian Zehetmayr say they want to connect artists with fans. What that really means is that artists can sell limited editions, pre-releases, and other bundles without having to rely on a record label.
Napster
I never used Napster when I was just a fledgling on the internet. I had other go-to p2p file sharing sites (see the previous slide), but I was well aware when the company found itself in legal trouble because, well, all that obvious copyright infringement.
So — surprise, surprise — a Web3 firm bought Napster in May, planning to turn the brand into a blockchain-based site. What will Napster’s brand, which is known more for allowing users to pirate artists’ songs, gain in the process? Well, crypto investment group Hivemind wants to make Napster “bring blockchain to artists and fans.”
Which of course makes it sound like this is just going to be another NFT project. We’ve had these kinds of promises before (again, see the previous slide), but while there’s been some adoption among a few big names in the music industry like Kings of Leon or Deadmau5, most of the big NFT sales have become based on the digital receipts for derivative pieces of objectively ugly artworks. At the same time, the demand for NFTs overall has cooled dramatically.
Which doesn’t necessarily mean that artists won’t have a use for NFTs, or that they don’t have the capacity to take an axe to the music industry. But what exactly is the purpose of designating a singular point of contact for NFT based music? It’s not to become some new, decentralized breaker of chains for music artists, but to become the new industry itself.
MoviePass
There’s some projects that fail so hard it seems they’ll remain dead from now until the heat death of the universe. Then there are other projects that fail so spectacularly, it seems they’re incapable of remaining in the ground. MoviePass is one of the latter. After years of mismanagement and lying to customers, MoviePass was bought back by once-ousted CEO Tracey Spikes during bankruptcy proceedings. Then, earlier this year, the CEO leaked details about the company’s revival being tied to blockchain technology. Users will apparently be able to trade and transfer “credits,” which can also be earned by watching advertisements.
What these credits do, how much you need them, which theatres will be participating, and more details about how these credits are stored and transferred on the blockchain are all still big unknowns. The company now anticipates a beta release set for this Labour Day. Though the service has garnered “overwhelming demand” to be a part of this new project, we still have few details to actually make any inference on why blockchain technology is needed in the first place for a project like this.
Gamestop
Despite the meme stocks, GameStop is still not doing great as a company. Artificially propping up the company’s stock might have given it a little juice in its tank, but its price inevitably comes back down without major overhauls to the company’s prospects. On Thursday, the company announced it would start using its occasionally inflated stock prices as compensation incentives for store leaders and veteran staff.
So yes, the company tried for a turnaround with perhaps the strangest move possible, its own NFT marketplace. GameStop’s focus on the community of “gamers” for its NFTs seemed incoherent at first, but at first, things seemed to be going well as its marketplace surpassed comparable outlets in terms of sales. Of course, the company also had to deal with its fair share of controversy. Though now, the NFT marketplace trading volume has softened considerably, with transaction volumes down from $US7.5 ($10) million to $US1 ($1) million, according to The Motley Fool.
Blockbuster (or at least they tried)
Blockbuster died a slow death, and that’s a shame. Long after it was eclipsed by Redbox and Netflix for easy home video — and later the proliferation of streaming services — it’s become a kind of icon and relic of nostalgia. There’s even a documentary about the last Blockbuster, located in Bend, Oregon, ironically available to stream on Netflix.
Well, a few Web3 folks thought that it wasn’t enough to let such a name brand lie low. Earlier this year, the group BlockbusterDAO, a decentralized autonomous organisation, said it tried to buy the name for Blockbuster from its owner, Dish Network. What could it possibly do with that old IP? Turn it into a blockchain-based streaming network, of course. How would such a project work? How would it fund the rights to stream content through a platform that relies on consensus? We’ll likely never know. The group’s plan was to raise the necessary funds by selling NFTs, but it never managed to hit its $US5 ($7) million goal, as Dish simply refused to sell. The DAO wrote in a blog post that it changed the name of its project to R3WIND, a kind of blockchain-based video/retail service. “Think Vimeo meets shopify,” the group said, referring to its new project.
Andrew Yang
Andrew Yang rose to be the top pick of some political circles (AKA, the “Yang Gang”) during the 2020 Democratic primary and the 2021 New York City mayoral primary. He ran on the policy of universal basic income while driving his candidacy through internet-based community organization. He ran into his fair share of controversy throughout his mayoral candidacy, but in the end his high-minded ideals were replaced with complaints against homeless and rising crime, leading to him ending up fourth place in the 2021 primary.
But Yang apparently saw his internet-aided rise to public prominence as something that could go even further, or at least more niche. Back in February, Yang announced his own Web3-based lobbying firm called “Lobby3.” Anybody who wants to participate in his DAO needs to buy a Lobby3 token. The goal is to promote cash relief and anti-poverty initiatives, two things the candidate lost sight of toward the end of his mayoral candidacy. Fine enough, though the recent decline in the price of crypto likely hasn’t helped much at all. At the same time, other reports showed that his firm wants to “highlight how beneficial” crypto has been, trying to angle regulation to be more advantageous toward crypto.