Crypto in the Super Bowl: What cryptocurrency on the big stage means

ROCHESTER, N.Y. (WROC) — The Super Bowl this year was filled with two things, as usual: football, and commercials. But the content of those commercials was something unusual to most, as much of it featured a preponderance of ads for cryptocurrency.

Whether it was a bouncing QR for Coinbase — a digital platform that lets you buy and sell cryptocurrency, such as Bitcoin — for star-driven walk-and-talks, or ephemeral discussion on boldness, the encroaching rise of cryptocurrencies and NFTs seems inevitable.

So, News 8 checked in with Rochester-area economics and crypto-expert (insofar as anyone can be, by his estimation), and clinical associate professor at the Simon Business School, University of Rochester, Derek Mohr. So first off, a refresher on what these things are, as was discussed with Mohr back in 2021 when crypto was taking the world by storm, via Elon Musk.

Mohr described it back in 2021 as a kind of currency that is traded online instead of in person. Bitcoin and other cryptos are registered in an online database through a technology called Blockchain — a remarkably safe system that only allows the addition of information.

Because it’s “add only,” cryptocurrencies can only increase in value. The value increases not only because more people find it to be more valuable — because entire teams of “Bitcoin miners” work to turn other cash assets, including fiat currency, which is paper and coin money — into Bitcoin. This works even though only one block in the chain is added every ten minutes.

MORE | Bitcoin mining company Foundry, headquartered in Rochester, looking to invest $100 million

It creates a self-maintaining system where people are incentivized to keep mining, because the miners are paid per Bitcoin mined. Perhaps the most important aspect of Bitcoin and other cryptocurrencies is that they are decentralized.

“Nobody owns it, it’s its own thing; free-floating out there that is accessed by people around the world,” Mohr said. “You buy and sell everything there. All other currencies are issued by a country.”

Mohr says that cryptocurrency is just made up, and no country issues it. However, just because its value is inherently “made up” doesn’t mean it doesn’t have value. It could even have more if the demand is high enough. Which is a perfect segue into non-fungible tokens.

NFTs… In 2021

“The token — instead of a coin or a dollar — a token is a thing like at Chuck E. Cheese, where you get the little thing and put it in the machine,” Mohr said. “A token is intended to not be a monetary thing.”

Mohr instead says a token is something that is meant to be used, and cannot be exchanged for something of “equal value.” What makes these tokens “non-fungible” is that each token is not of equal value.

Someone can pay $5 for game tokens at The Playhouse on S. Clinton Avenue in Rochester, but those only have value at that establishment. If The Playhouse were to offer tokens of a different value — say some only operated certain machines, or allowed for more plays — then they would be non-fungible.

Mohr says that cryptocurrencies have moved to the token model so the SEC can’t regulate them like a normal security.

But how this works like a normal cryptocurrency is that each token is registered on the Blockchain, which is add-only technology. This “add only” function, which makes it nearly impossible to edit or change its history, is key when it comes to making art into an NFT.

“It’s unique to the thing you have, and the ownership of it is locked in forever,” Mohr said. “It’s a new way of protecting artwork, and limited edition artwork.”

He continues by saying that he believes this is the digital equivalent of an artist selling prints, and labeling them 1/100, 2/100, etc. The artist owns the original image, but will sell tangible copies in a digital form.

“It lets you prove your ownership,” he said. “That way, if I was going to sell it to somebody, I could prove that I owned it… We can go to the blockchain and check to see who owns copy 2 of 100.”

To today

“It’s still it changes so fast,” Mohr said in an interview this week. “That’s one of the things about it. The things we were talking about a couple of years ago are very different from the things now.”

It may have been one of the last things Mohr said during the half-hour interview, but it served as a perfect theme for the conversation. In 2021, cryptocurrency, then NFTs, felt like an odd internet fringe topic that was relegated to investor-types and technology pros. But now with crypto being hammered home at the Super Bowl, there’s an increasing sense these things are here to stay.

Mohr says that this is driven mainly by two factors. First, more traditional banks, investment firms, and other “big money” institutions are in the crypto space, which means they want to push it to increase demand, and grow their investment. And the second and related factor is that cryptocurrency products are now being offered.

“It is very much Wild West there with the things you can do now in terms of loans, and staking your crypto for guaranteed returns, and all kinds of things that to me look like traditional finance,” Mohr said. “So they’re essentially trying to do everything Wall Street does on the blockchain, with these newest, almost startup companies.”

With this “Wild West” look, comes volatility. Cryptocurrency’s volatility has been exposed as of late, given its sharp rises and falls — not to mention the security issues that will be discussed later — but Mohr sees the volatility coming into play as more companies enter the space, only to start and fold in a short amount of time. He says that consolidation could solve this problem, but it would undermine one of the things that proponents of crypto advocate for: its decentralization. That might make it good for investment, but widespread use might require centralization, not to mention a steep learning curve, two things which Mohr says could be a mixed bag.

“How would this roll out, If it catches on?” Mohr said. “One example would be El Salvador, which is made Bitcoin legal tender. And my sense is that’s not going well, for those he said. Because you’re telling the population, suddenly they can use Bitcoin?… It’s going to be a long process here, as some cryptocurrency implementations sort of catch on, people are going to have to catch up. But that will lead to wide differences. Some groups will be with the latest versions of things and others will be way behind.”

Mohr says that the lag in option could lead to even more income and wealth inequality if crypto adoption isn’t taken up fast enough. There is also the interest gap. Most people, according to Pew Research Center by way of the Seneca Park Zoo, have not participated in crypto.

The research says “nearly 16% of U.S. adults say they have invested in, traded, or used cryptocurrency. Adoption among younger demographics is particularly high, with over 31% of Americans ages 18 to 29 saying they have invested in, traded, or used a cryptocurrency.” But Mohr says that crypto donation platforms are a good idea for charities.

“There is an awful lot of ‘accidental billionaires’ out there who might want to give to charitable causes,” he said. “And they do not want to try to get their funds into US dollars first to do it. So if you can just go straight from Bitcoin (to donate)… I think there’s a market for that.”

Mohr joked that greater adoption might need a marketing specialist, which is an excellent transition to NFTs. The digital art platform started as a way to sell any digital art, but now there are many sites that sell variations of the same figure — like BoredApe — that people use as their profile pictures or avatars on social media. These are perhaps the most widespread use of blockchain technology, since if someone purchases one of these NFTs for use for a profile picture, they are the only ones to have it, in theory.

“I’m still not sure that they have the exclusivity that they claim to have,” Mohr said, while also acknowledging that for most people, they can simply right click and save these images as a JPEG file. “It was really troubling what just happened with the two people who were arrested for allegedly stealing the Bitcoin. They sold some NFTs and some people paid a lot for them just before they were arrested. Thanks to them, those NFTs are going to be notorious, and now there are going to be worth something… and the NFT company pulled them. And now they’re saying, ‘Hey, where’d it go? I just spent this money and it’s gone.’ So the NFT companies can pull (these products) off, and apparently, it’s on a blockchain, but they can shut their blockchain down.”

Mohr also says someone could download one of these existing NFTs, change one pixel — so the difference would be impossible to tell by the human eye — and remint the new altered image on another blockchain. It is technically a different file, and therefore can be on another blockchain. He adds that going forward, short videos might work better as NFTs, whether they are videos of the artist signing the work, or creating it. After all, NFTs were originally lauded as a way for digital artists to authenticate their work.

Another concern that has arisen in the new crypto space is the environmental impact. Mohr explains that other platforms besides Bitcoin have made an effort to be more environmentally friendly, but says that Bitcoin has its investors and miners in “an evil genius scheme.”

“A new block on the chain for Bitcoin is created every ten minutes… Bitcoin automatically adjusts the difficulty every two weeks,” Mohr said. “So as people get better at Bitcoin mining, it becomes more difficult, which means it’s a race, and you can never win, so more electricity is used. So as. The electricity use will get worse, because the difficulty level will keep going up. More and more players are starting to say, ‘Hey, I’m going into Bitcoin mining big companies now, like it’s very well funded…’ But they’re all just racing each other, and the difficulty level will go up, (which) will lead to more people bringing more resources in and all of that uses electricity.”

At the end of the day, Mohr says despite the foggy future, uncertain battles, and any other issues, cryptocurrency will likely be here to stay, because big money has investments in it. And since crypto companies in the US — which Mohr says is more regulated in The States than other countries — are still fighting to stay decentralized and out of the hands of the SEC and the US government, it means the more demand big money can generate, the more money it means for them.

“More and more of the big players are deciding they need to have a piece of this. Because otherwise, they’re losing young customers,” he said.






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