Privacy, Payments, and Metaverse Shenanigans • CEO Letter #67
It's Thursday the 13th, and someone is knocking on your door… sending chills down your spine. Who is it, you ask? Well, it’s me, Taylor, CEO of Hedgehog, the crypto portfolio tracker and robo-adviser that lets you stay on top of your investments without any headache-inducing spreadsheets.
Last week, I asked for your favorite sports memories. I did not expect to be so touched by your stories of bonding with family through the love of the game. Does friendship count as a championship win? To quote the late, great father of one the respondents, YESSIR!
Remember, there's a giveaway in every newsletter. For the chance to win a Hedgehog hoodie and other merch, answer my question at the end. And now, dear ghouls and gentlefiends, our feature presentation…
I did a Q&A with Private Internet Access, a VPN company known for, well, what it says on the tin: private internet access. One cool thing about PIA is that the company has been through multiple court cases that proved PIA didn't keep logs, and thus could not provide any information about its customers' activities. Many VPNs claim not to log customer browsing details, but few have been put to the test.
We talked about Hedgehog's origin story and the security issues that impact the crypto industry. Here's a taste:
While learning about crypto both as a user and developer, observing the crazy ups and downs of this ecosystem, I realized my mission: Help normal people tap into the phenomenal opportunity opened up by this space, while managing their risk appropriately, instead of YOLOing their life savings into DOGE. (This is not an anti-DOGE statement — DOGE is love, DOGE is life! And yet… hopefully it isn't your entire net worth.)
Read the rest of our conversation on the Private Internet Access blog.
Tldr: My public thoughts on private internet access.
I received a great question in response to the last newsletter: "All this information is overwhelming. Can you help me manage things?" Yes. As described above, that is basically our mission with Hedgehog.
And you know what? All this information is overwhelming. I often feel overwhelmed by crypto myself. You are not alone!
My colleague Sonya wrote an article in response to this reader question, rounding up Hedgehog's best beginner content to guide you. Check it out and see if that helps.
Tldr: It's okay to be confused. I confuse myself every other day. Every other other day I confuse my previously confused self though, so it all evens out in the end.
Recently CNBC reported two high-profile corporate partnerships in the crypto space:
Google Cloud "will initially accept cryptocurrency payments from a handful of customers in the Web3 world who want to pay with cryptocurrency, thanks to an integration with the Coinbase Commerce service," with plans to open up this option to more customers in the future.
Visa and FTX joined forces "to offer debit cards in 40 countries with a focus on Latin America, Asia and Europe. The cards, which are already available in the U.S., will link directly to a user's FTX cryptocurrency investing account. The move allows customers to spend digital currencies without moving those off an exchange, 'like you would with any bank account,' according to Visa's CFO."
Business analyst Byrne Hobart had an interesting take on this strategy:
Crypto mostly started as an effort to build a new financial system, but as it turns out most financial systems have some level of integration — and since money has powerful network effects, the best way to expand a new kind of it is to plug into existing ones. Given that FTX makes money when people keep their assets in crypto and trade them around, it might look like a mistake to let users pull money out quickly, but one thing early PayPal found was that the easier it was to take money out, the more willing people were to put money in. A debit card is a way to cash out for individual transactions, but it's also a way not to cash out in large increments through an account transfer, but to do so one purchase at a time.
Overall, I think both of these announcements are good news for crypto. As I said last week, "big brands are clearly paying attention to this space, and more and more established companies want to get involved."
Tldr: Let's gooooooooooooooooooooooooo!
So, we all keep hearing about this metaverse thing. Facebook — excuse me, Meta — is making its employees try out the company's Second Life-esque VR platform Horizon Worlds… but it sounds like the employees are not into it. From the Verge:
A key issue with Horizon's development to date, according to [VP Vishal Shah's] internal memos, is that the people building it inside Meta appear to not be using it that much. "For many of us, we don't spend that much time in Horizon and our dogfooding dashboards show this pretty clearly," he wrote to employees on September 15th. "Why is that? Why don't we love the product we've built so much that we use it all the time? The simple truth is, if we don't love it, how can we expect our users to love it?"
In a follow-up memo dated September 30th, Shah said that employees still weren't using Horizon enough, writing that a plan was being made to "hold managers accountable" for having their teams use Horizon at least once a week. "Everyone in this organization should make it their mission to fall in love with Horizon Worlds. You can't do that without using it. Get in there. Organize times to do it with your colleagues or friends, in both internal builds but also the public build so you can interact with our community."
Oof. There's nothing like mandatory fun to put a smile on your face, right? (Wrong.) Who knows, maybe Meta will make Horizon Worlds into something cool and enjoyable — it's technically possible — but these leaked memos are not a good sign.
Tldr: Facebook employees are forced to use Facebook product and don't like it. Riddle me shocked. Just shocked.
Meanwhile, crypto-native metaverses are not faring much better. "Looking at two of the biggest companies with over $1 billion valuations, one data point suggests that users may not be returning every day," CoinDesk reported. "According to data aggregator DappRadar, the Ethereum-based virtual world Decentraland had 38 'active users' in the past 24 hours, while competitor The Sandbox had 522 'active users' in that same time."
Both Decentraland and The Sandbox disputed CoinDesk's story, saying that users who interact with the smart contracts (which is what DappRadar measures) are not the full total. Decentraland creative director Sam Hamilton said "the platform had 8,000 users on average per day, though he did not specify what makes an 'active use' versus a more passive interaction," and The Sandbox CEO Arthur Madrid "told CoinDesk that DappRadar's metric only reflects transactions between users or a primary NFT sale and not other forms of meaningful engagement."
Meanwhile, blockchain analytics company Nansen says that Decentraland has 464 daily users and The Sandbox has 748. I don't know who to believe! What I can tell you is that none of these numbers seem to justify the multibillion valuations of the metaverse ecosystem.
Tldr: The blockchain may be open-access, but that doesn't mean it shows the full picture.
Giveaway question time! What's your favorite scary movie? If horror flicks aren't your thing, I will also accept spoopy Halloween classics like Hocus Pocus, and also Die Hard (it's not just a Christmas movie).
Personally, my favorite is Evil Dead 3: Army of Darkness. Bruce Campbell can do no wrong.
Reply to this email with your answer for the chance to win some sweet, sweet Hedgehog swag.
Groovy,
— Taylor
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