Web3 in Action: Cowboy Labs Takes on the Business of Blockchain
April 22, 2022 was an epic day for Lorenzo Melendez, 22, and Ulysses Atkeson, 21, lifetime friends and promising blockchain entrepreneurs.
Following three months of building their startup Cowboy Labs as part of Wharton’s Cypher Accelerator, a support program for young crypto and blockchain companies, Lorenzo and Ulysses were ready to pitch their business to the public at the Accelerator’s grand finale event, known as Demo Day.
They stepped up to the front of the room at Wharton’s Stevens Center for Innovation in Finance and presented the Cowboy Labs business model to an audience of potential investors, business owners and experts, and Wharton faculty.
They nailed it! Cowboy Labs won top Demo Day honors for delivering the best overall business pitch among the competing Cypher startups. “Congratulations to our @WhartonCypher demo day winners, @CowboyLabs,” tweeted Sarah Hammer, managing director of Stevens Center for Innovation. “This incredible company led by two brilliant engineers is positioned to onboard all of us to #web3 and #blockchain. Ready for take-off!”
Commercializing Crypto
Success at Demo Day was validating, say the ‘Cowboys,’ who graduated from Kent Denver High School in Colorado, U.S. (where they were world robotics champs four years in a row), and both attended Washington University in St. Louis, Missouri (Lorenzo graduated in 2021 and Ulysses will graduate in 2023). “It was great to see that others love the things we love to create,” notes Lorenzo, who calls their past three months working with Cypher pure gold in terms of connections and deep support. “It meant that we are on the right track.”
Fresh off their victory, Lorenzo and Ulysses (aka Uli) sat down with Wharton Global Youth to talk crypto, blockchain and Web3, the name that many computer scientists and engineers have given to a new internet being built using decentralized blockchains.
Cowboy hats in hand, they agree that this new world is truly the wild, wild west. “There’s a really big difference between where blockchain is and where it’s going,” says Lorenzo, who is CEO of Cowboy Labs. “Although it’s in popular media and people are talking about it and there’s a Saturday Night Live skit about NFTs, it’s still very niche. At the end of the day, only 14% of the United States owns any crypto and less than that owns an NFT (non-fungible token) or knows how to interact on the blockchain.”
So, where is the business of crypto and what can we expect from this radical new financial network? Lorenzo and Ulysses give us a peek into the commercial crypto terrain.
Pudgy Penguins. First step is to understand Cowboy Labs, a business operating in the new crypto and blockchain industry. While Ulysses, who had a bitcoin mining rig in his Colorado basement, introduced Lorenzo to the blockchain in high school, the two didn’t seriously start doing development in the space until two years ago. A crazy idea to convert all physical goods to digital goods morphed into building a single sign-on (SSO) system for blockchain, which led to their first NFT-related effort last summer in an Airbnb in Austin, Texas, developing a profile picture avatar project (see sidebar for an explanation of PFP NFTs). They later became part-owners of the Pudgy Penguins PFP, a popular set of 8,888 cartoon penguins sold as NFTs that are said to be “waddling through Web3.”
That introduction to NFT development evolved into Cowboy Labs, a company that takes on the role of Chief Technology Officer for blockchain and crypto-related projects and has the potential to also do software development. As Cowboy Labs co-founders, Lorenzo and Ulysses consult for non-crypto-native companies to help them navigate the blockchain landscape.
Here’s an example. “1 Hotels is looking to launch a project for its VIP clients,” says Lorenzo. “They know nothing about blockchain and that’s where we come in. We have a suite of development tools to improve their workflow and their drop. They’re dropping an NFT that gives their VIP clients access to free hotel rooms, as well as they’re working…to create a metaverse in which you can sleep in your metaverse hotel. We help them figure out contract standards, how to run the launch, what the security around the smart contract looks like (a smart contract is a code-based contract on the blockchain between buyer and seller), how they enable users on their website to even purchase NFTs on the blockchain. We help them understand what the Web 3.0 integration looks like.”
On the horizon. While Cowboy Labs, strengthened from its Cypher Accelerator experience, is positioned to grow and attract new investors, the market for crypto and blockchain businesses is still somewhat unstable, say Ulysses and Lorenzo. “Over the next few months, it will be interesting to see what companies continue to thrive and who shuts down their doors,” notes Lorenzo. Still, he believes that the money that has been spent in the space, from investors and others, has made Web3 too big to fail. “The technology will be figured out at a level in which it will be mass adopted,” he predicts. “I see people owning crypto and I see a lot of their interactions going through platforms that they don’t know necessarily are blockchain-based.” Both entrepreneurs are looking forward to consulting with Cypher on its new NFT Incubator for start-up companies.
Where do you fit in? Lorenzo and Ulysses admit that their generation, including today’s high school students, will have a commanding influence on the direction of Web 3.0 as a business industry and a financial practice. In fact, Cowboy Labs works daily with Vedant M., a high school student who is a complete wizard in the infrastructure of discord, the main communication platform for crypto. Ulysses encourages all teens to be curious, questioning and cautious. “There’s a lot of money flying around the space, and a lot of market dynamics are really complex and not well understood,” he says. “Don’t just throw money at crypto. Can it be used to make money? Yes. But you need to be intelligent about it.”
Lorenzo urges students to embrace coding and development. “If you want to be involved in the crypto space, it’s really important that you understand how it works at the lower level. Ultimately, that’s what’s defining everything,” he points out. “You need to know at some level how the contracts work. You don’t have to put up $1,000 to test a smart contract. You can write a smart contract in Solidity language. You can get Truffle, which allows you to deploy the contract to the blockchain, and you set it up to do it on what’s called the test net. You can create your entire decentralized application or your idea that you have in your head, but you don’t have to use real money to do it.”
Conversation Starters
What is Cowboy Labs’ business model and how promising is the start-up venture?
What is Web3? Do you agree that Web3 is too big to fail? Why or why not?
Are you an entrepreneur or innovator in the crypto space? Share your story in the comment section of this article.
Since Web3 is inevitably tied to the state of cryptocurrency, it is impossible to make a case for one without talking about the other. For this reason, many people have incorrectly said that Web3 is doomed to fail. Classic economists, like Paul Krugman of the New York Times, continue to wag the finger at cryptocurrencies, declaring them the equivalent of a pump-and-dump stock scheme. To be sure, the volatility in the market over the past few months alone suggests that there is a shaky foundation upon which these markets are built. Early investors with deep pockets receive invitations to jump on board a new cryptocurrency before the rest of the public has a chance. This creates hype that the public then buys into, causing the currency to skyrocket. Those early investors then take their money and run, leaving the general public high and dry. While these stories certainly do exist, they overlook the larger framework currently underway that will endow cryptocurrencies with more utility. That, of course, is the metaverse and the Web3.
Because investors are betting on the development of Web3 to the tune of trillions of dollars, this system truly is too big to fail. With a projected growth cap of 45%, there is simply too much funding and economic activity in the Web3 space for it to wither. Technology corporations have invested over $30 trillion in the metaverse in an attempt to further virtualize the world. By all metrics, it has worked. According to research conducted by eMarketer, the number of virtual reality users in the United States is 57.4 million and the number of augmented reality users is 90.9 million. There are more than 68 million blockchain wallet users. In this virtual world, cryptocurrency will naturally be how commerce is conducted. For example, the students featured in this article have found ways to integrate Web3 practices into brick-and-mortar business models such as hotel chains. “They’re dropping an NFT that gives their VIP clients access to free hotel rooms, as well as they’re working…to create a metaverse in which you can sleep in your metaverse hotel.” In due time, these experiences will sway non-tech consumers of the value of the Web3 tools.
While the cryptocurrency market currently seems like the Wild West, it will find stability and a regulatory framework once our daily experience in the virtual world depends on it. History speaks volumes on this front. The 2008 financial crisis was largely blamed on the overuse of derivative securities. In spite of this, derivatives remain a popular financial instrument. We can expect Web3 and its attendant techno tools — blockchain wallets, cryptocurrencies, and non-fungible tokens — to survive any fallouts and pave the way for the future.
With the recent drop in crytocurrency value, it’s hard to say whether Web3 will be a passing fade or the future of finance. NFT value has been on the decline, and many investors are selling at loss. The reputation of Web3 right now is also rather negative, with “pump and dump” schemes, and quick cash grab coins being common in the industry. Coin mining bases are also responsible for insane amounts of power usage in order to power all the miner computers. However it is hard to deny the innovation of blockchain technology. Decentralization provides us relief from the ever pervasive surveillance that exists in our current era. There will be no need for banks to “middle man” using crytocurrencies, which is good for the consumers, as that means there will be fewer fees. I’m excited to see whether Web3 will persevere and mature into everyday technology, or if this will just be another failed concept in our rise into a tech-based future.
Web3 is a concept based on decentralisation, blockchain, and cryptocurrency. The first impression of most people regarding Web3 is largely related to Bitcoin and Ethereum–that they are destined to fail. However, I do think the core of Web3, as well as Bitcoins, are not the currencies themselves, but the ideas behind them that may bring about radical changes to how we recognise currencies. Even if the cryptocurrencies fail themselves, the idea behind Web3 is not likely to.
It was often argued that cryptocurrencies are a curse to the world. The reasons can be divided into the following. For starters, they don’t contribute anything to the production and overall health of the economy. Rather, the fixed amount of issued currency made Bitcoins essentially a tool of speculation rather than real currency. Moreover, as cryptocurrency slowly limited itself to the realm of investing, it is actually shrinking its demand, while the number of cryptocurrency suppliers is increasing, almost like a bubble for the supply side. On the other hand, radical evolutions never start off as a success. When the Industrial Revolution began, the inhumane working conditions and unbalanced urbanisation made the western world vulnerable in front of extreme unethical capitalism. Poor living conditions and harsh working hours made the IR seem like a curse to the general public. By 1900, it was estimated that 35,000 people die while in factories. However, the IR was viewed as something that completely altered how humans lived, and what brought about changes is not the long working hours and poor living conditions that appeared on the surface, but the specialisation and vast production that lies in the core of the IR.
Similar effects can be derived for Web3 and the world of cryptocurrency. Personally, I do not believe that cryptocurrencies would last long. Even under the condition that they stay in the world, it is not likely that they enter the view of the public. However, just like the case with IR, it would be the core and the idea behind Web3 and cryptocurrencies that are going to affect the world–blockchain and decentralisation. Blockchain allows the information to the stored securely and privately. No third parties are aware of any information in the transaction, which would indeed be a blessing for the free world. With a million servers of a blockchain, as long as one remains functional, the information can be kept and able to be recovered, solving any concerns like Y2K once and for all. Decentralisation is also a practical way to avoid supervision, but can indeed make the world vulnerable in front of illegal transactions.
In recent years, there have always been voices in the US, suggesting for the central bank be disposed of. Though I take this opinion as a rash and inconsiderate idea, some of the reasons behind this opinion are worth noting. Bureaucracy, disinformation, and the inability of the CB itself were some of the primary issues identified by the people, which can be solved by decentralisation and blockchain. On the other hand, a constant debate as to whether or not to allow government intervention in a market failure or depression is also brought to the realm of whether decentralisation should happen or not. It was never unclear why small business cycles last for 12 years and why long business cycles last for 40 years. It was also never clear how the free market would do without the intervention of policies and open market operations. As of now, people seem to feel safe under the umbrella of a CB and a government.
Web3 is never guaranteed to succeed. It is only the beginning of a long and difficult change in people’s mindsets and the world’s functioning. In my opinion, it is not something that can succeed in a matter of a few years but requires long periods of recognition and transformation. It is too soon to say whether Web3 and cryptocurrencies will fail, but there is hope that the ideas behind these will prove to be a crucial foundation of the world economy in the future.
Web3 is a concept based on decentralisation, blockchain, and cryptocurrency. The first impression of most people regarding Web3 is largely related to Bitcoin and Ethereum–that they are destined to fail. However, I do think the core of Web3, as well as Bitcoins, are not the currencies themselves, but the ideas behind them that may bring about radical changes to how we recognise currencies. Even if the cryptocurrencies fail themselves, the idea behind Web3 is not likely to.
It was often argued that cryptocurrencies are a curse to the world. The reasons can be divided into the following. For starters, they don’t contribute anything to the production and overall health of the economy. Rather, the fixed amount of issued currency made Bitcoins essentially a tool of speculation rather than real currency. Moreover, as cryptocurrency slowly limited itself to the realm of investing, it is actually shrinking its demand, while the number of cryptocurrency suppliers is increasing, almost like a bubble for the supply side. On the other hand, radical evolutions never start off as a success. When the Industrial Revolution began, the inhumane working conditions and unbalanced urbanisation made the western world vulnerable in front of extreme unethical capitalism. Poor living conditions and harsh working hours made the IR seem like a curse to the general public. By 1900, it was estimated that 35,000 people die while in factories. However, the IR was viewed as something that completely altered how humans lived, and what brought about changes is not the long working hours and poor living conditions that appeared on the surface, but the specialisation and vast production that lies in the core of the IR.
Similar effects can be derived for Web3 and the world of cryptocurrency. Personally, I do not believe that cryptocurrencies would last long. Even under the condition that they stay in the world, it is not likely that they enter the view of the public. However, just like the case with IR, it would be the core and the idea behind Web3 and cryptocurrencies that are going to affect the world–blockchain and decentralisation. Blockchain allows the information to the stored securely and privately. No third parties are aware of any information in the transaction, which would indeed be a blessing for the free world. With a million servers of a blockchain, as long as one remains functional, the information can be kept and able to be recovered, solving any concerns like Y2K once and for all. Decentralisation is also a practical way to avoid supervision, but can indeed make the world vulnerable in front of illegal transactions.
In recent years, there have always been voices in the US, suggesting for the central bank be disposed of. Though I take this opinion as a rash and inconsiderate idea, some of the reasons behind this opinion are worth noting. Bureaucracy, disinformation, and the inability of the CB itself were some of the primary issues identified by the people, which can be solved by decentralisation and blockchain. On the other hand, a constant debate as to whether or not to allow government intervention in a market failure or depression is also brought to the realm of whether decentralisation should happen or not. It was never unclear why small business cycles last for 12 years and why long business cycles last for 40 years. It was also never clear how the free market would do without the intervention of policies and open market operations. As of now, people seem to feel safe under the umbrella of a CB and a government.
Web3 is never guaranteed to succeed. It is only the beginning of a long and difficult change in people’s mindsets and the world’s functioning. In my opinion, it is not something that can succeed in a matter of a few years but requires long periods of recognition and transformation. It is too soon to say whether Web3 and cryptocurrencies will fail, but there is hope that the ideas behind these will prove to be a crucial foundation of the world economy in the future.
A cryptocurrency is a new form of digital or virtual currency that is secured by cryptography or a decentralized system that has appeared out of nowhere in the 21st century. The interesting feature of this digital asset is that it is fair for everyone: It wasn’t a system where the rich got richer while the poor got poorer. This system has made people hooked; the idea that there was a fair method of money-making for everyone seemed attractive. I am here to warn everyone about the dangers of this.
The article here shows a case of two very successful people relating to cryptocurrency. Ulysses Atkeson and Lorenzo Melendez, who had their win on the Demo day, or a showcase for business ideas, introduced people to their commercial crypto terrain. As a result, the two set up a structure to introduce people to NFT minings. This example, however, is only the ‘success stories’ in this field of business.
NFT minings and cryptocurrency investments can be delightful, but one should be aware that it could be extremely dangerous too. Jacob Collins, my friend who always used to invest in funds, laid out all his funds on cryptocurrency. I always asked Jacob in concern, but his reply was “it’s fine.” He told me how he earned 20% profit from just 2 investments. One day, Jacob was gone. He didn’t show up for a few days. When he returned about a week later, everyone asked him how things went. It turns out that Jacob lost about 50% of his total investment funds, which include money that he borrowed from some of his other friends. His parents, who were furious after knowing this, dragged him out of school and made him work and make up for his loss. To his fortune, the total amount of money he lost was only about 800 bucks. Even if it was a small amount, this example clearly shows the potential dangers of reckless investing in NFTs or cryptocurrency.
There are ways to alert people about the dangers of cryptocurrency, and to stop people like Jacob from reckless investing. To raise awareness about cryptocurrency, I will create a club/camp in our school. The Student Investment Club, or the SIC, would host various activities, such as an investment simulation or creating a short documentary about the dangers of cryptocurrency. The results of these events portray possible outcomes hen the community is a little more knowledgeable about cryptocurrency and NFTs, a small investment fair could be held.
The potential dangers of cryptocurrency and NFTs all relate to one major problem: the dangers of new technology in the world. When cars first came out, no one realized the environmental drawbacks they had. People were all fascinated, only looking at the positive side the technologies have given us. Cryptocurrency is just an example of this. It is only recently created, which means that many people would not know the drawbacks it has.
The only solution to this would be not to let history repeat itself. Every time a new tech was introduced to the world, we all tended to not see its drawbacks. There were cases of this throughout history, which shows how we should prepare and get ready to face all the new technology that would be given to us. We tend to only look at the positive side of these new techs, so we have to look at it from every perspective to figure out the flaws. The ultimate goal would be to find the problems early and have a solution ready for them that could come in handy at any time.