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Long Reads Sunday - Issue #11

“In our youth our hearts were touched with fire.” Oliver Wendell Holmes  Labor Day is a bit like New
Long Reads Sunday - Issue #11
By Nathaniel Whittemore • Issue #11 • View online
“In our youth our hearts were touched with fire.”
Oliver Wendell Holmes 
Labor Day is a bit like New Years. After the summer slowdown, the kids go back to school and the grown ups (whatever that means) re-dedicated themselves to business. This “year” started rough, as Ethereum dipped below $200, a price it hadn’t seen for over a year. No matter how much we remind ourselves that price is only a small dimension of market health, it’s hard not to feel the gloom that a dwindling price creates.
In that context, it’s not surprising that much of the conversation these days is trying to understand how we got here; how the ICO frenzy consumed the market’s attention; why treasuries held in ETH are causing downward pressure in bad markets; how we might be able to better fund ambitious crypto projects in the future. 
While this week might have been somber, it will be interesting to see what next week looks like when people report back from Berlin. 


  1. Long Reads Sunday #11. Another Sunday, another sea of red. Put on your galoshes & sneak some hooch in your coffee as we wade through the blood with some contemplation on governance, China, death spirals, hard caps, liberalism and tyranny. https://twitter.com/mdudas/status/1038519349873700864
  2. One small organizational note - by popular request, I’m now archiving all LRS’s and delivering it via email. See the past issues or sign up here: http://whittemore.io/long-reads-sunday-archive/
  3. Okay, so back to this week. Yo, WTF happened? As tempting as it is to locate price action in specific event, the reality is that sometimes more people want to sell than want to buy. @crypto_macro captures this perfectly. https://twitter.com/crypto_macro/status/1037840898644733953
  4. Regardless of cause, one important part of down markets is exploring what got us there in the first place, with an eye to learning from mistakes. Nic explores the ICO frenzy as a manifestation of the desire for disintermediated marketplaces. https://twitter.com/nic__carter/status/1038473600016281600
  5. At @dezentral_io in Berlin, @Melt_Dem explored how capitalization through tokens came to dominate the market, including the *way* under-discussed macro economic pressures on fund managers, and where we might go from here. One of the week’s most essential reads: https://twitter.com/Melt_Dem/status/1038173464291680256
  6. The narrative of the ETH/ICO death spiral has been percolating for weeks, and with ETH dipping below $200 yesterday, everyone is watching http://www.dappcapitulation.com/ @real_vijay articulates the reserve demand issue at core: https://twitter.com/real_vijay/status/1038646626837917697
  7. But what about returns from when things *were* good? @alexsunnarborg does a massive breakdown of the ROI on ICOs from Jan ’17 to Jun ’18. The results….will likely not surprise you. https://twitter.com/alexsunnarborg/status/1037851352184107009
  8. Of course, for as gloomy as the markets seem, there’s also still plenty of forward looking as well. The Ethereum community has recently been rallying around the idea of “Open Finance” - that blockchains should be a tool for re-imagining entire the financial system https://twitter.com/nlw/status/1036778991393419265
  9. In this thread, @panekkkk looks at one of the more quickly developing parts of the crypto-powered open-finance ecosystem: lending https://twitter.com/panekkkk/status/1038562377665589248
  10. What about Stablecoins? In this thread, @paul_btc argues that inherent limitations and unpredictability to the models suggests that a basket of stable coins might be more stable than any one on its own: https://twitter.com/paul_btc/status/1038128816143720448
  11. One interesting question for an future open finance system and the crypto industry as a whole has to do with UX - and specifically, how much simpler crypto-native user experiences will have to be to resonate with mainstream users https://twitter.com/varun_mathur/status/1038107664868208640
  12. Then again, there is a counter argument that the variety of use cases of blockchains are in fact, fundamentally overstated. In this thread, @realLudvigArt argues that the only use case that really matters is securing object shared truth. https://twitter.com/realLudvigArt/status/1033638126277746688
  13. Whether one agrees with that interpretation or not, one narrative that the market *has* settled comfortably into is the idea of bitcoin as reserve currency where holding is the product-market fit. @cburniske frames that in terms of velocity statistics https://twitter.com/cburniske/status/1038016484944097280
  14. Speaking of bitcoin, @garybasin and @TaylorPearsonMe’s monster bitcoin state of the union has flown massively under the radar. Includes analysis on valuation, technology, regulation, and options on getting exposure. https://hackernoon.com/state-of-bitcoin-fall-2018-9ccddba55e54
  15. In his resent essay, the criminally under-followed @JonathanCheesm4 looks at Bitcoin from a global macro view https://hackernoon.com/why-bitcoin-why-sooner-rather-than-later-e44aa5373479?ref=tokendaily
  16. Within the Bitcoin community, a huge subject of conversation this week was ShapeShift’s announcement of mandatory KYC/AML processes for user. @katherineykwu breaks it down: https://twitter.com/katherineykwu/status/1037315100326158338
  17. One of the orthogonal issues the ShapeShift controversy brought up was questions about Bitcoin’s governance - and the right and wrong way to try to change it. Apropos of that, @willwarren89’s thread on the governance of decentralized networks seems highly relevant: https://twitter.com/willwarren89/status/1037082719543414785
  18. Exploring Bitcoin’s governance specifically, this phenomenal research paper applies the Exit/Voice conception from other corporate governances to Bitcoin and finds that it is, truly, a unique and new type of ecosystem https://stanford-jblp.pubpub.org/pub/hard-forks-bitcoin?ref=tokendaily
  19. Also regarding governance, @DeanEigenmann argues that the analogy of blockchains as companies is false, making the analogy of on-chain governance for decentralized networks to shareholder voting also false. https://medium.com/@decanus/blockchains-are-not-companies-9f8ed7c13018
  20. Then again, what the shit does ‘decentralization’ actually mean? @tayvano_ meta-threads the threads trying to explore it https://twitter.com/tayvano_/status/1037596012817211392
  21. In this essay, @tonysheng argues that we should leave ‘decentralization’ as a Platonic ideal and use more specifically descriptive words, because the lack of specificity makes it “the perfect word for scammers and authoritarians to hide behind” https://www.tonysheng.com/decentralized-definition
  22. Speaking of essays, if you’re not following @hasufl you’re doing yourself a huge disservice. With a variety of collaborators, he has been churning out some of the most thoughtful pieces of the summer. This somewhat surprising risk assessment of Tether is no exception https://medium.com/@hasufly/tethers-hold-on-bitcoin-s-liquidity-a-risk-assessment-e8a837eebdcb
  23. Speaking of doing yourself a disservice, you’d also be making a huge mistake not to fine tooth comb this tremendous thread on China’s Innovators Dilemma https://twitter.com/kylecyuan/status/1036461380449103872
  24. A concept that has been capturing growing attention is the idea of token curated registries. In their latest @multicoincap research paper @TusharJain_ & @KyleSamani go incredibly deep - finding questions unanswered but also promise https://multicoin.capital/2018/09/05/tcrs-features-and-tradeoffs/
  25. One of the reasons many are excited about crypto networks are the possibilities they present to reimagine how systems are organized and financed. An exciting paper released this week by @glenweyl @zhitzig @VitalikButerin proposes a new approach to public goods https://twitter.com/zhitzig/status/1036978042986528768
  26. Two more essays that very neatly complement one another. @harari_yuval argues that ‘there is nothing inevitable about democracy’ and that, indeed, technology could be a force for concentrating power unless we’re intentional about designing for the opposite. https://www.theatlantic.com/magazine/archive/2018/10/yuval-noah-harari-technology-tyranny/568330/
  27. This is, at heart, why @gavofyork argues that we need a Web 3.0. If not, “it runs the risk of continued corruption and eventual failure, just as medieval feudal systems and Soviet-style communism proved untenable in a world of modern democracies.” https://breakermag.com/why-we-need-web-3-0/
  28. Lastly, because as much as we build and strive for the future, we can never escape that we still must live today, read @stephendpalley’s contemplation on what $195 ETH means and then do as he says: ignore crypto, read Whitman, and come back. https://twitter.com/stephendpalley/status/1038528903889997825

 

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Nathaniel Whittemore

Bitcoin & crypto's most interesting Twitter threads and long-form essays.

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