And the public gets what the public wants?*

Another Australian General Election comes and goes – although with a mere 3 years between federal polls, our politicians and their parties seem to be in constant campaign mode. Certainly, the formal election campaign lacked any significant new policies, so it felt like the leadership “debates” were simply a continuation of the stale language, petty point-scoring and tedious soundbites we hear day in, day out.

Cue the constant and familiar references to crises in housing, the cost of living and climate change. Both major parties tried to build platforms promising financial incentives for first-time home owners, with policies that were expensive, ill-conceived (albeit well intentioned), and with little regard for the consequences on the housing market or the broader economy. There was a failed attempt to have an informed debate about nuclear power, and tons of the usual pork-barrelling for pet industries and favoured constituencies. Even a major credit rating agency suggested that the Commonwealth’s coveted AAA status could be at risk as a result of all the campaign largesse. And of course, any lowering of the AAA rating would likely see an increase in interest rates, which would largely defeat the object of the first-time home owner policies.

At the time of writing, the Australian Labor Party has retained power with a significantly increased parliamentary majority, based on the projected number of seats it will win. But while the seats total may look like a landslide, it’s clear that a significant portion of the electorate voted tactically to either: a) keep the Liberal Coalition out of power; b) increase the chance of a minority Government and/or hung Parliament; or c) maintain the current status quo in a turbulent and uncertain world.

Based on the counts so far, both the ALP and Liberals have each only managed to garner about one-third of the total primary votes (4,678,061 – 34.81% and 4,315,961 – 32.1% respectively). While the national swing to Labor was around 2.3% since 2022 (with the Liberals seeing an opposite swing of -3.6%), this is enough to give them a large majority in the House of Representatives, thanks to the preferential voting system.

By contrast, in 2022, the ALP secured fewer primary votes than the Liberals (4,776,030 – 32.58% and 5,233,334 – 35.70% respectively), but managed to secure government with a slim majority. The point is, that the two major parties combined face a continued decline in their share of the primary vote. Given the performances by the Greens and Independents in recent elections, there could be a case for adjusting the current system of preferences to include a weighting or allocation based on the total primary vote by party. This might seem fairer in those constituencies with very marginal results, or where parties draw a significant share of primary votes nationally, but not enough to win (m)any seats, even with preferences. But given that most independent candidates (by their very nature) are not affiliated to any party, and usually focus on local issues (and often on single policy platforms), that allocation would be very difficult to calculate on a federal scale.

Meanwhile, it felt like the number of early-voting facilities was limited compared to previous elections, and there was little or no promotion of postal vote applications. This could have been due to the relatively short campaign period (although it always feels much longer…) combined with the large number of public holidays during that time. Cynics might suggest that this was a deliberate tactic by the incumbent government as early voting and postal votes are traditionally considered to favour the Liberal Coalition. I can’t find any compelling evidence for this theory. Partly, I suspect, because the major parties recognise that undecided, wavering and swing voters make a huge difference to the final results, so encouraging people to cast their ballot on election day helps them in that regard, even though more and more voters opt to vote before the big day itself. Whether the promise of an election sausage is sufficient incentive, I’d rather not speculate!

I experienced a huge feeling of disengagement with this latest election, mainly because I didn’t identify with any policies, parties or candidates that I could really get behind. When it came to voting for the Senate, I couldn’t see 6 parties (above the line) let alone 12 candidates (below the line) that I considered deserving of my vote. But we are forced to express our preferences for a minimum number of parties/candidates, hence the candidate lists are usually very long. I always think the large Senate voting slips are problematic, especially if you want to complete the full “below the line” choices, as we don’t really know what preference deals have been done behind the scenes.

Like many voters, I had issues with the unsolicited text messages I received, on behalf of candidates and/or parties. Apart from not disclosing how they obtained my number, some of the SMS did not carry the relevant authorisation statement; the sender’s number was anonymous (presumably they use automated systems); and blocking the sender had little or no effect – they still kept sending them! Since political parties are deliberately exempt from complying with laws against spam and invasion of privacy, the Australian Electoral Commission is relatively powerless to act. Presumably it’s in the parties’ interests to keep the status quo?

I was also surprised that polling stations still use a paper-based system to tick off who has turned up to vote. (I was using the same system when I was a polling clerk back in the 1980s in London.) Although the polling officers are required to ask me if I have already voted in another location, there is no immediate way to cross-check the electoral rolls. Surely an electronic tracking system would be a better solution? And on that note, I’ll end with a suggestion that it’s about time we put voter registration, voting and campaign donations on a blockchain to support voter ID and verification with privacy, secure proof of polling and force campaign funding transparency… as well as a speedier vote count!

*(with apologies to The Jam)

What “wallet” it say about you?

Just as your e-mail domain name can say a lot about how/when you first got online, I have a theory that our choice of digital wallet will also reflect our blockchain, crypto and web3 profile. (Remember those early ISPs and e-mail services such as AOL, Lycos, Compuserve and Pacific Internet?)

Part of the challenge with early digital wallets was the UX/UI – before the advent of software, browser-based and hardware wallets, users relied on “paper wallets” to manage their private keys. The first software wallets needed to be set up very carefully, so that your seed phrase or private key was not stranded on an abandoned hard drive, and thus lost forever. I think the first BTC wallet I used was CoPay, which was an early multi-sig wallet, but which has largely been discontinued. The arrival of browser extensions such as MetaMask have made a difference when it comes to bridging between chains, and managing a wider range of assets.

Even though there is more interoperability between digital wallets (cross-chain, multi-asset), dedicated applications are still needed for BTC and other chains. Also, some use cases (iGaming, web3/DeFi) may demand more specific wallets to support particular functionality. But like many crypto users, I still maintain about 6 different applications, including exchange-based wallets.

I suppose the eventual user experience will be a seamless transition between crypto, web3, DeFi, TradFi, NFTs and RWAs. But until then, stay safe and make sure you know where your private keys are at all times!

Next week: Signing off for 2024….

 

 

Pudgy Penguins come to Melbourne

Last week, I got to chill out with some of the Pudgy Penguins crew, as they launched the Oceania chapter of their NFT community. In case you weren’t aware, Pudgy Penguins are one of the top NFT collections, and have built a loyal fan base for these digital characters.

I went to a major Pudgy Penguin “Pengu Fest” in Hong Kong last year, and got to see first hand how engaged their members are. I also gained some insights as to how this ecosystem enables their NFT holders to license the IP associated with their individual characters into royalty-based income. In short, a subset of the NFT characters are chosen to be turned into merchandise. (For example, Pudgy Penguin soft toys are available in major stores such as Walmart in the USA, and Big W in Australia.) Owners of the selected NFTs earn a percentage of the sales revenue (less tax and production costs etc.).

The most recent collection of Pudgy collectibles are the Igloo figurines, which include early online access to Pudgy World. As a proud owner of one of these plastic figures, I’m still not sure what I have let myself in for…

As well as local meetups, other ways in which the community can interact include a trading card game called Vibes, also launched via the Overpass IP licensing platform.

Igloo Inc, the parent company to Pudgy Penguins and Overpass, has also announced it is launching a Layer 2 blockchain on Ethereum, to be called Abstract, and is being positioned as a “the blockchain for consumer crypto”.

Whatever your views on crypto, NFTs, on-line worlds and collectibles, there is no doubt that Pudgy Penguins have set themselves up with the admirable goals of building a healthy and inclusive community, underpinned by the twin pillars of individual creativity and positive culture.

To crypto sceptics (and the merely crypto curious), the “community” and the enthusiasm of its members could resemble something of a cult. Someone did say during last week’s panel discussion that “I am my penguin, and my penguin is me”. But there are worse things for people to get involved with – and for younger people (I don’t regard myself as part of the Pudgy core demographic), I can see the appeal. For example, your Pudgy Penguin PFP can act as a protective avatar as you engage and explore online – allowing you to share only the personal information that you want to, while you build up trust with other community participants, and before you choose to meet IRL.

There was also a discussion about the difference between meme coins and NFTs – the short answer is that the former represent pure speculation, while the latter aim to create value for their holders. In fact, someone suggested that meme coin trading is not that different to punting on betting apps. But since most NFT collections are well down on their market highs of a couple of years ago, maybe NFT holders and communities like Pudgy Penguins are trying to convince themselves that they are still backing a winner?

Overall, however, I remain positive to the opportunities that NFTs represent – especially in the creative fields, and as a new model for IP licensing. Even if cute flightless birds from the southern hemisphere are not your thing, I don’t think you can dismiss or ignore the social, cultural and economic impact that NFTs will have.

Next week: “When I’m Sixty-Four”

 

 

Ticket scalpers? Blockchain could fix that!

Music fans of a certain age and demographic have been complaining loudly about the use of “dynamic pricing” when trying to buy tickets for their favourite band’s highly anticipated reunion tour. (There must be a pun in there about “Don’t book online in anger”?)

Part of the rationale given for using a demand-based pricing system is to disincentivise scalpers. The higher the cost of the ticket in the primary market (not the same as the ticket’s face value), the smaller the potential mark-up in the secondary market. Except that some tickets with a face value of $150 were priced at $450 at the box office, only to be re-advertised in the secondary market for several thousand dollars. In other words, the touts have simply increased their margins, in response to the so-called dynamic pricing mechanism.

Without offering any sort of apology or mea culpa, the said band have now announced additional tour dates, tickets for which will be allocated and sold in a form of ballot. Stop me if you think I’m being cynical, but by quickly adding dates to an existing tour itinerary, it shows that the band knew there would be excess demand, because it’s not that easy to reserve major (and highly profitable) venues, even 12 months in advance. And if they can run a ballot system now, why couldn’t they have done that in the first place?

All of which simply shows how out of touch bands like this are with technology and market dynamics. In short, ticket sales and allocations could have been achieved far more equitably if the band and their promoters had chosen to use blockchain, crypto and web3.0 solutions.

Here’s a simple list of options that could have been used:

1. Issue all tickets as NFTs (non-fungible tokens)

2. Limit the number of tickets per digital wallet and/or the number of wallets per ticket buyer

3. Ensure the use of soul-bound tokens to link wallet ownership and ID to specific individuals (to limit the number of tickets per wallet, and to limit the resale of tickets)

4. Run social media campaigns, quests and airdrops to allocate and distribute tokens that entitle holders to a place in the ticket queue – e.g., the more active a wallet holder is in the band’s fan community, the higher their chance of securing a priority place in the ticket queue

5. Pre-publish the expected ticket price ranges, and enable wallet holders to vote on the minimum/maximum price they would be willing to pay (using something like Snapshot)

6. Cap the amount an NFT-based ticket can be sold for in the secondary market or write the token smart contract to allocate a percentage of the resale value as a commission to the ticket issuer

Of course, the UK competition regulators are taking a close look at this ticketing fiasco, to see if so-called dynamic pricing breached fair trading or other consumer protection laws. If punters were not aware that they may have to pay far more than the advertised or face value of a ticket, this would appear to be unfair and unconscionable conduct. It’s potentially a form of under-quoting – advertise the ticket at a artificially low price, then force buyers to pay well over the face value at the actual point of sale (under the guise of “market demand”), knowing full well that the fans had little or no choice in the matter.

One final thought – knowing the volatile history of this band, the chances are that the concerts (or at least some of them) may be cancelled. Hopefully, the ticket agent and box office operators won’t be counting the advance ticket sales as recognised revenue, rather they are required to hold the funds in a verified escrow account until the performances are delivered and the ticket revenue actually earned….. (again, something that could be easily factored into a smart contract – no release of funds until the loud-mouth sings?).

Next week: Cooking the books?