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Hot Topics: Gary Gensler's Resignation, Web3 Gaming Boom & Crypto LiteracyThe episode discusses significant developments in the crypto space, particularly focusing on Gary Gensler's upcoming departure from the SEC and its implications for Web3 regulation. Additionally, it highlights insights from a Game7 report on the growth of Web3 gaming and the concerning state of financial literacy within the crypto community, emphasizing the need for better education and clear regulatory frameworks to foster innovation and protect consumers.
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Key Topics Covered:
- Gary Gensler's Departure: The announcement of SEC Chair Gary Gensler's resignation raises questions about the future regulatory landscape for crypto, with discussions on whether his strict approach has hindered innovation in the industry.
- Web3 Gaming Growth: Insights from the Game7 report highlight the significant rise in Web3 gaming, particularly in the APAC region, and the increasing adoption of layer two and three solutions, indicating a more sustainable and innovative gaming environment.
- Financial Literacy in Crypto: A concerning report reveals that only 25% of the crypto community possesses adequate financial literacy, emphasizing the need for better education to empower consumers and help them navigate the complexities of the crypto space.
What was your favorite quote or lesson from this episode? Please let us know in the comments on YouTube. https://www.youtube.com/@edgeofnft/
Episode Highlights:
- "It's very hard to create new technology if you don't know what the rules are of the game, or if the rules are changing in the middle of the game... I'm hoping that whatever happens we have a rule book to work with." - Josh Krige (Timestamp: 00:08:15):
- "They claim that the crypto community's financial literacy rate is dangerously low at 25%, which is half the U.S. average overall... I think education and emerging technology and culture go hand in hand." - January Jones (Timestamp: 00:18:45)
For the full transcript, see further below.
People and Resources Mentioned:
- Game 7 Website
- PiP World Website
- Coin Market Cap Website
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Full Episode Transcript:
Richard Carthon: Welcome to Hot Topics on the Edge of NFT. I'm Richard Carthon. I'm here with my co host Josh Krieger and January Jones. Join us for the latest news shaping Web3, Blockchain, and digital assets.
Josh Kriger: Coming up, Gary Gendler's Resonation, the Game 7 Web3 Gaming Report, Crypto Literacy Gaps, and Seasonally Appropriate Content, How to Explain Bitcoin at the Thanksgiving Table.
January Jones: It's another production of Edge of Company, a rapidly growing media ecosystem, empowering the pioneers of Web3 tech and culture.
Josh Kriger: Let's get started.
January Jones: Big news that we missed last week because it happened while we were taping this show.
But Gary Gensler, the SEC chair has announced his recognition effective January 20th, 2025. He's been a polarizing figure for the crypto world for his perceived overly aggressive crackdown on the industry. In the last full fiscal year, according to the SEC's office of the inspector general, 18 percent of the SEC's tips, complaints, and referrals were crypto related, despite the crypto markets comprising less than 1 percent of U.
S. Capital markets. So Richard and Josh, do you think Gary has a bad rap? Isn't he just doing his job?
Richard Carthon: Yeah I think unfortunately what we've seen with Gary Gensler after what happened with FTX, there had to be a stance of, Being pretty strict towards web three. There were some things he was doing before the whole collapse happened in the last bear cycle that were already very anti crypto, but even more he ramped up even more.
So after that happened and obviously for a lot of us in web three, we have been looking towards finding a different direction that is more favorable towards creating structures. That's to allow for growth and not to stifle innovation. And, you know, one of the things that the incoming president said that day one was that he would be replaced.
So instead of being replaced he decided to get out and get in front of the horse. So I think. It's going to be even tougher for whoever steps in and how they want to approach this. And I guess Josh, to kick it to you, like, who do you think potentially could step into this role and how are they going to have to approach web three as we head into this new administration?
Josh Kriger: Well, I haven't been following the latest nominations for the role yet. I'm sure there's a lot of polymath betting. Going on here, and this is probably one of the more critical roles in, in, in the administ, the new administration to a point. And also, you know, it looks like there'll also be a crypto appointee potentially in the cabinet or in the close circle of the White House as well, which will be really interesting.
One thing I'll say is you know, I don't envy anyone's job in the brink of FTX and Tara Luna and what happened to the industry. And there, there's always been a need for. The right regulations, and I think the pendulum swung a little bit too far from one direction to the other in this case.
And unfortunately, it wasn't just the quote, bad actors that have been poked at, it's been, you know, any actors, and the SEC has leveraged. The ambiguity to their advantage whenever possible. So, this might be where things continue. Had an interesting conversation with several lawyers about this recently, one representing our policy globally.
The SEC has had a history of embracing ambiguity because it benefits them. So I think that the really interesting possibility for the industry is a new administration willing to. You know, just make things less ambiguous. I think we've seen in our industry, the ability to innovate and do creative things once things are clear.
The issue right now is that everything's hypothetical. If then statements are very hard to run a business. It's very hard to create new technology if you don't know what the rules are of the game, or if the rules are changing in the middle of the game, or if you're stuck with rules that you know that happen after you start the game, and you, and it's applied retroactively, and that's been what's going on, and that's why, Gensler has been the arch enemy of the industry.
So I'm hoping that whatever happens we have a rule book to work with.
January Jones: Yeah, I would put that back on you guys to say like, isn't the SEC though, supposed to be for the consumer. And so what you're talking about, Josh is very much a business side argument, but aren't they there to protect the investors, protect the people we keep talking about being onboarded and into the crypto world.
Yeah.
Josh Kriger: Sure. And I would say having a rule book that is defined is good for consumers as well. If new things come up that need to be regulated, let's deal with them, but let's put all the rules out there and have sort of a playbook. I think this is the challenge with AI. This is a challenge with crypto.
The government needs to figure out a way. To be progressive on emerging technology in, in, and reap the benefits for consumers and business owners.
Richard Carthon: And just to add like one more new flair to something that's happening at the time of this recording Elon recently came out since he's going to be part of the department of government efficiency, AKA.
Doge they're going to be going after the IRS to audit them. So obviously IRS, SEC, two different departments, but of the same vein. And so just as we're talking about consumers it's really going to be interesting to see how the new administration really tries to switch things up from where they've been over the last several years as it relates to web three.
Josh Kriger: What's next January?
January Jones: Well, let's talk about Web3 gaming. Is it finally reaching its height? A report from Game7, a Web3 gaming company, was recently released.
One of the main takeaways, that will be no surprise to you two, is that Telegram has captured 21 percent of new Web3 game launches in 2024. So what are you guys seeing? I think you've been talking to so many Web3 companies in gaming over the last year at these conferences. Are you guys gamers yourself?
So have a unique perspective on this.
Richard Carthon: Yeah, I got plenty of takes on this. So, of the group, I'm probably the biggest gamer. But some of the things that were in that report that I want to bring up that I think are really interesting. Is that when you look at just who is leading game development in the APAC region, the Asian Pacific region contributed 39 percent towards new web three games, and then North America's next at 36%.
Truly when we go over to things like. token, 2049 even DevCon, you can see all of these builders and a lot of them going towards games. The other thing to look at was from this report, that thing's really important. It's just looking at layer two and layer threes which has 57 percent of new games utilizing these networks.
One of the biggest challenges of building this is that When people were building before, it was very expensive to build on blockchain even for people to do interactions. And so by making it more cost effective and again, building out just good games that at the backend of it, you don't necessarily know what's happening, but you know, at the front end for your end consumer, like this is just a good game at its core.
I think there's been a big shift over the last several years towards building more of that and having that stickiness, which has been great. But the other thing that's happened through this bear market is that your Continuations have gone down by 84% which means that these games are becoming more sustainable.
They're finding out ways to continue to grow. And especially for indie game indie developers, which 90 percent of all of the new games that are being built in web three are coming from indies. So they're being agile. They're being extremely efficient in making sure that they're getting the most bang for their buck, but they're also, again, leaning into making a good.
Quality game. So I think this is a really good indication of where the market is headed as it relates to Web three gaming. I myself have been bullish on Web three gaming for a long time and continue to be so in this report really just re amplified that for myself. But Josh, when you're looking at this report, what did you take away from it?
Josh Kriger: Yeah, I think there's still some nuts and bolts to see this industry get to the next level. Yeah, I think there's still some nuts and bolts to see this industry get to the next level. The fact that layer two, layer three solutions are getting traction could help address the integration scalability considerations and create a more customized gaming environment.
I think another thing that I found interesting is the proactive regulatory guidelines in South Korea, the EU while the U. S. China is still navigating a more cautious approach. Hopefully, you know, that does shift as we talked about. One, one additional component to all this that's not in the report.
But it's on my mind is the intersection between real world assets and gaming and blockchain. We've seen that narrative come out stronger and I do, you know, the gaming industry is always the first to innovate. We've seen that with telegrams. We've seen that with skins. Some of the most predominant NFT use cases happened in gaming in the early days, So, I wouldn't be surprised to see defi and real world assets enter the gaming space, especially if some of the regulatory hurdles get loosened a little bit more.
You know, the reality is we are progressing in this concept of a creator economy. The younger generations are looking. Virtual ways to make a living in gaming is one of their passions and it crosses both genders. It crosses all types of social economic landscapes. So I think this sort of report made me feel a little bit bullish in the previous report.
Their point was a lot of dry powder. Has been deployed. Now it's wait and see and now we're I think we're at the point where we're actually seeing some of the results and we'll continue to see those results. I think it goes without saying that 2025 is a critical year in sort of the evolution of the web to a gaming space.
January Jones: Well, somewhat relatedly another report from a gaming company that is gamifying financial literacy came out, PipWorld pushed out a report and it's making some waves. They claim that the crypto community's financial literacy rate is dangerously low at 25%, which is half the U. S. average overall.
Within the segments they looked at, day traders came in at the lowest literacy rate at 27 percent with whales, then getting almost a solid A at 96 percent. I am new to the space myself and the learning curve is really steep, but since joining up with you guys, I've really seen Edge of Company taking a role in crypto education in a, you know, information education But in an entertaining way.
Josh Kriger: Yeah, I, you know, that's a statistic that's concerning, but also makes me feel inspired about what we're doing with the edge of the company and the edge of NFT and our other content channels and in real life events. I think education. And emerging technology and culture go hand in hand. You can't benefit from things you can't understand.
And I think as an industry, we're constantly trying to up our game with making concepts in technology relatable. There's so many websites that I look at in our industry and I wonder who's the target audience, because it's all terminology that doesn't land for the typical consumer.
You know, and at the end of the day. You know, ETFs and these products are great, but if we truly want people to go into the pool and not dip their toes in the pool, we have to explain to them what's happening. And it's a great opportunity and privilege that we have doing content like this like our long form interviews like panels where we really do try to break it down in terms of, you know, what this stuff is all about and what are the implications on society.
Richard, what are your thoughts?
Richard Carthon: Yeah, so financial literacy is one of the main reasons I got into this space because I wanted to first learn more about this, but also wanted to educate others on how they could participate in the great opportunity that is crypto. So I have a background in traditional finance doing wealth management and then got into crypto back in 2018 and wanted to start first creating education around this just to, Teach people about the different opportunities that are here in a safe way.
One of the things that most people think when these bull cycles happen, you have all these new people coming in and they all think they're traders and they're not, they quickly learn. They are not traders because most of the time you're going to fail. You're going to be wrong most of the time, but if you come in as an investor and you have a longer term vision, then it's a lot easier, easier for you to go and find opportunities and be here for the long haul and see the returns that you.
Potentially want to be seen. And so how do you present that in a fair way? How do you do it without shilling and like having something to sell? Like, as you can tell with the edge of the team, like we're not shillers. We're here to educate. We're here to provide information and we're here to help you with your due diligence, right?
So when you're going to even look at a product to become a. Potentially become a part of you want to know about the core team. You want to know what they're building. You want to know the road map. You want to know where they're headed and what their long term vision is because you don't want to just come in for a quick second and then think they might be gone in the next several months.
You want to know that they're going to be here for the long haul. And so one of the things that we do through education and through our interviews is getting you to Get exposure to what are these new projects and these new opportunities, understanding what they do, and then giving you the tools to be empowered to then make decisions from there.
So we don't give financial advice in the sense of go buy this thing, but we give you the information to feel empowered to go do the next steps. So, I am not shocked to hear about this report, but as things turn more bullish, we are here to be your friends and to educate you along the way so that you can feel empowered to make decisions.
Josh Kriger: Yeah, absolutely. As the industry gets more he does. So do the scammers come out from all, you know, nooks and crannies to take advantage of that. So we have to close that gap and you know, certainly listening to this show, passing it on to a friend or two is one way to do that. I think that it's always good to take bite sized chunks.
This industry can be quite overwhelming. There's so much going on. And you know, it's an opportunity to dive in with a sort of caution and interest and I think conservative sort of baby steps is the approach that's necessary given this statistic, which I wasn't completely familiar with beforehand, but not surprised by.
January Jones: Well, then you guys must be pros at talking to your family about crypto at Thanksgiving. Our last story is a fun, but actually very relatable article from CoinMarketCap's Jonathan Isaac. He shared some practical talking points about how to discuss Bitcoin and crypto's broader impacts around the holiday table.
Maybe without getting too far into politics, if that is avoidable. So what's your guys take on this? How do you know, discuss this?
Richard Carthon: Yeah. So it's, it is interesting in the last bull cycle, when we were headed to the bear, it was the first time, cause I'd been in the crypto space against this 2018, and this was I think 2021 Thanksgiving and everyone was like unsolicited asking me about all, you know, advice about crypto and everything else.
And I was like, this is probably the top. The difference this year is that I don't genuinely believe we're at the top of this cycle yet. And so going, what's happened in the last three years obviously we went through a bear, we went through a cycle of everything going down and everyone thinking like, Oh, crypto is dead again.
And now like you have new all time highs, Bitcoin almost hit a hundred thousand. Everyone's paying attention again. They're like, Oh my gosh, it looks like you were right. Like this thing isn't going anywhere. Now there's ETFs, all this other stuff. I see it all over TV. The interest is there. And I think the way that you break it down for most people, what I say now is that, again, you are not a trader, you are an investor.
And if you're looking at the future of what crypto is, Bitcoin is the tide and has truly been here the longest and is, you know, going to continue to be here into the future. So start there, learn about what it is, how you can be involved, go from there. And then if you want to learn about other projects. You come to resources like us at the edge of where we can introduce to some of these other things that can make sense to you, like real world assets, crypto Bitcoin layer twos and layer ones, layer twos, everything else that we talk about.
And you can start to slowly get into the other things, but your safest place to start is Bitcoin. And you don't even have to look at politics. You can go back and just look at it. The long existence to do a quick history lesson on that, and people can really start to digest it. So, that's my first approach to it.
But Josh, what's been your approach?
Josh Kriger: Yeah, you mentioned something I think it speaks to my heart, which is the reason we started this podcast originally in March of 2021 was to learn. And I think, you know, leading with curiosity and giving people a chance to, you know, develop their own thoughts and conclusions over a period of time is really important, obviously mentioning the nonpartisan nature of this and how different countries have adopted and applied the benefits in different ways.
I think talking about some of the unique use cases. That could hit home that resonates with individuals. One of our investors mentioned that they're tokenizing a durian farm in Malaysia. I think that's a great sort of real world use case of what tokenization could be. So trying to find those types of examples that could resonate.
Everyone understands investing in a company and getting a yield on that, how crops have a yield every year. It's a pretty interesting analogy. So that might be one to try this time around. It's a fun one too, because everyone has an opinion on durian. Beyond that, I would say you know, talking about the history of Bitcoin, which is really fascinating.
There's so many cool documentaries that have popped up recently on Netflix. So maybe you know, save yourself some extra vocal cord tenacity and have pop in a movie or something and let that do some talking and then be part of the conversation thereafter. So just a few ideas.
January Jones: Well, I think a lot of people have heard of Bitcoin and I think the other one that's really penetrated popular culture is meme coins. They've heard of the meme coins. So what would you tell people at Thanksgiving about meme coins? Is that a good place to get started with crypto? Richard didn't really say that, but that's what's coming up on people's radar and that's what they're hearing about.
Josh Kriger: Well, yeah, I mean, let's just call it what it is. Meme coins are very. Fundamental, you know, form of gambling and, you know, these things crash and burn as quickly as they go up. And this has been a consistent theme and you never really know what's happening behind the scenes. So definitely not an advocate of starting with meme coins on your crypto journey.
Would encourage folks to, you know, look at the big caps, not financial advice first in sort of dollar cost average into the market with us, the small amount of their overall asset portfolio. I always look at the 1 percent rule, 1 percent of what you're investing, start there and then build from there and just get familiar with the environment.
I'll also mention You know another sort of conversation I'm sure we'll come up with folks that are in the NFT industry, creators and artists is where's the future of NFTs and where that's going. I don't think any of us truly know, but this building block of our industry is still being utilized by projects every day by layer ones, by layer twos.
There's a lot of interesting new concepts around membership. And that is coming out. I think that's here to stay, but there's also a broader conversation we had at the edge of company and edge of NFT. You guys have seen our content broaden over the last year because there's so many more fun things to talk about than there were even six months ago, and the industry is changing really fast.
So we're thinking about that in terms of how we continue to bring in, you know, our umbrella of what we educate folks on and the type of entertaining content that we want to bring to the table. So look for some fun changes as we move into the next year, Richard, your thoughts.
Richard Carthon: Yeah meme coins are gonna hold a lot of discussions.
Actually talked to a cousin yesterday about this because they're like, ah, you know, I want to get into Bitcoin, but like, you know, I can't just spend a hundred K to own one. I was like. Well, just that you don't have to spend that much money on education. You can spend 10. You spend 25. You just like the fact that you can spend a little bit to own a little bit.
It's just a concept that most people don't understand. Cause for most people who are investing in the stock market, everything else, they know they have to spend the entire amount. to own one, right? So the fractionalized opportunity that's there is one aspect of it. But then when you're thinking like, okay, you look at the price of a doge and you're like, oh, I can afford 40 cents.
I can go own a couple of those. Of course, the eyes are drawn to a lot of these memes. When you look at your biggest ROIs during these bull cycles, usually they're memes. What they don't say is that 99 percent of these memes failed. And even for the projects that get in, they do well, they might have done well for a certain amount of time.
But if you get in late, you're the exit liquidity. So you're getting at the top and you're selling low. Like it, it's hard to time that stuff. So the way that Josh was explaining it, like, let's say you have 100 that you're going to invest. Let's say that you reserve 10 percent of that for your memes.
If you want to mess around with 10 and put it here, they're figured that part out, do some day trading with memes. Have at it, but you don't spend a good portion of whatever that investment strategy is towards memes, because it's your highest risk and your highest chance of losing your investment. So, I would say don't necessarily don't participate, but I wouldn't say go all in on that side of the biz, but again, not financial advice.
Josh Kriger: Not financial advice at all. But that is a wrap for today's discussion on the latest hot topics We've covered gary gensler's upcoming resonation potential impact on the crypto industry The evolving web3 gaming ecosystem with a new report from game seven The alarming gap in crypto financial literacy and how to tackle those crypto conversations with your family during the holidays These topics showcase just how dynamic and diverse our industry is.
So share your thoughts with us, comment below, or hit us up on social media.
Richard Carthon: Thank you for tuning into the edge of NFT. I'm Richard here with Josh and January signing off. Remember to stay secure, stay curious, and catch you on the flip side.
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