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Long Reads Sunday - Issue #18

Wednesday marks the 10-year anniversary of Satoshi’s Bitcoin white paper. The movement it kicked off
Long Reads Sunday - Issue #18
By Nathaniel Whittemore • Issue #18 • View online
Wednesday marks the 10-year anniversary of Satoshi’s Bitcoin white paper. The movement it kicked off not only captured a feeling of betrayal by our financial institutions, but actually offered an alternative. 
A decade on, the crypto industry has matured in hugely significant and sometimes unexpected ways. This anniversary comes a few months after the cooling of the mass explosion of crypto ICOs and at what feels like the rumblings of a growing institutionalization. Coinbase/Circle’s USDC joined the ranks this week of regulatory-compliant, fiat-pegged stablecoins; Binance announced investment from the Singapore sovereign wealth fund and the drums of ETF continue to beat. 
For some, this has begged the question of whether mass institutionalization inevitably means compromising the ideals and goals that Bitcoin was founded upon. The reality, of course, is that around the world, crypto means different things to different people. As research and commentary this week suggests, it can represent a lifeline in turbulent Venezuela. In China, it is emblematic of an internal struggle between free market growth and the surveillance state. 
What’s clear is that the story of crypto is still being written. The threads and essays collected here are all parts of a narrative of which that none of us know the complete arc. Thanks for contemplating and thanks for being a part of the journey. Happy Long Reads.
-NLW
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ADMIN NOTE: Long Reads Live is going on a quick (2ish week) parental leave. We’re hunkered in Hudson Valley eagerly awaiting a (now overdue) bundle of joy, but look for brand new, Sleep Deprivation Editions in November. Check out the previous shows here: https://www.youtube.com/c/nathanielwhittemorecrypto
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1/ Long Reads Sunday #18. It’s the 10 year anniversary of Satoshi’s white paper this week, so obviously the hottest thing in crypto are regulatory-compliant fiat-pegged stable coins. Wait, what? Slap some of those daddy warbucks down for a delicious PSL, it’s Long Reads time. 🎃
2/ First, warning: aggressive shill time. @APompliano and I recently got to chat about everything from what real security token experimentation could mean to the need for better crypto communications to aliens. Plus they made me this awesome graphic. Have a listen below. https://t.co/V3VSDvaIHv
3/ On to actually news now, Coinbase looked around and saw literally everyone else launching a stablecoin and thought “screw it, let’s do one too.” There’s is actually a collaboration with Circle and will come with the advantage of plugging into their massive user base. https://twitter.com/KyleSamani/status/1054785049009291265
4/ The response ranged from excitement to skepticism. @cryptorae & @econar pointed out that Coinbase had the ability to freeze funds https://twitter.com/econoar/status/1054785269843415040 while @VitalikButerin argued the fact that power has to be written into open code represents progress https://twitter.com/VitalikButerin/status/1054941640064942080
5/ In the intro to his latest Proof of Work, @wheatpond riffs on USDC and comes to the conclusion that while USD-backed coins are a “great compliment” to real crypto, they are not, in fact the same thing. The questions of censorship and ability to freeze funds remain too great. http://proofofwork.news/
6/ As is clear from the poll below, there are a huge variety of opinions on what some are calling “fiat coins.” This is part and parcel of the battle to become new money and part of a larger question of the broader institutionalization happening across crypto. 
7/ Speaking of institutionalization, the ETF hype train did its best to pull out of the station after a meeting between the SolidX/VanEck team (who have the most promising ETF proposal under consideration) and the SEC. @jchervinsky added some relevant context: https://twitter.com/jchervinsky/status/1054778737252843520
8/ From the “no bullshit big news” files meanwhile came the announcement that the Singapore’s sovereign wealth fund would be making an investment in Binance. This is interesting both in terms of the planned fiat-crypto exchange & service planned, as well as as a marker of state-level financial interest https://twitter.com/matt_odell/status/1054565895941603328
9/ But does all this institutionalization contradict the very point of crypto in the first place? That question is worth contemplate as we role towards the 10-year anniversary of Satoshi’s WP. Highly recommend @danheld’s 4-part opus on the founding. https://twitter.com/danheld/status/1056204023764676608
10/ Perhaps even more important than trying to parse out Satoshi’s intention is to understand the larger cultural context in which crypto is finding resonance. This is, as @avichal points out in this eloquent thread, a fundamental mistrust of institutions. https://twitter.com/avichal/status/1054873255226404864
11/ It can feel, today, that in the USA, this mistrust has been reduced to a political football. In many parts of the world, the stakes are higher. @AlegW points out how in Venezuela, the purchasing power is so reduced that doctors earn $5 a month while gamers mining Zcash can make up to $200 https://www.caracaschronicles.com/2018/10/22/the-crypto-talk-why-the-world-needs-digital-cash/
12/ Venezuela today makes up 12.2% of volume on LocalBitcoins - a site facilitating local peer-to-peer exchange. This is second only to Russia and reflects a larger trend. According to research by @lawmaster @theblock_ “the importance of developing countries in the Bitcoin ecosystem is quickly growing.” https://www.theblockcrypto.com/2018/10/26/analysis-russia-and-venezuela-dominating-localbitcoins-volumes-an-intriguing-proxy-for-bitcoin-demand/
13/ In another part of the crypto world, two threads on China, both summarized by (who else?) @katherineykwu. The 1st was a regulatory definition of blockchain: https://twitter.com/katherineykwu/status/1054513051884552192 The 2nd was a court decision arguing that crypto is protected as property: https://twitter.com/katherineykwu/status/1055638520440766471
14/ Wrapping up a couple news items that have been dominating the crypto headlines for the past few weeks now. First, @CryptoMacro wrote this comprehensive recap and timeline of the entire Tether saga. https://hackernoon.com/tether-bitfinex-saga-illustrated-timeline-2d128a703f9c
15/ As prominent as Binance and Coinbase are, one could argue that the exchange that has dominated crypto mindshare in 2018 is trader-focused BitMex. @hasufl’s piece exploring the major critiques and speculative theories about exchange practices absolutely popped off https://medium.com/swlh/a-storm-is-brewing-over-the-largest-bitcoin-exchange-f956324b449f
16/ But Sundays aren’t just about recapping the news, they’re about thinking bigger and broader and there are no shortage of pieces to meet that need. In a commencement speech to the Honors Convocation at the University of Wyoming, @CaitlinLong_ called for more systemic thinkers. https://caitlin-long.com/2018/10/23/the-world-needs-more-systemic-thinkers/
17/ @cburniske sparked one of the most interesting conversations of the week with this thread on why the winning combination in crypto is likely to be centralized apps building on top of decentralized protocols. https://twitter.com/cburniske/status/1055476651914600449
18/ @obstropolos argued on @tokendaily in a similar vein that the word “decentralization” was a marketing distraction at best and that the more precise we are about the point of decentralization we’re trying to achieve - censorship resistance, accessibility, etc - the more likely we are to achieve it https://www.tokendaily.co/blog/the-death-of-decentralization
19/ @AriDavidPaul wrote an overview of the state of crypto fundraising, with one of the interesting arguments being that as hedge funds are less able to recycle capital, ecosystem funds are becoming a better target for entrepreneurs https://twitter.com/AriDavidPaul/status/1054370908176072705
20/ @BMBernstein meanwhile explains how, even in a bear market, the dearth of talent leads to massive demand for a small handful of top projects, leading to excess capital, leading to ecosystem funds & other capital anomalies & warns of an inevitable early stage deleveraging. https://twitter.com/BMBernstein/status/1055917907295768578
21/ Meanwhile, @TusharJain_ brings together a set of the ideas driving the “generalized mining” conversation to argue that the role of crypto investors is evolving and that “The best way to capture alpha as an investor is to create it.” https://multicoin.capital/2018/10/23/the-evolving-role-of-crypto-investors/
22/ The incomparable @roybahat tweet streamed a phenomenal #bloombergideas conversation around crypto with thinkers @tylercowen @NoahRFeldman @matt_levine @mirkaissar. Check the concept of “alegal.“ https://twitter.com/roybahat/status/1055528204465774592
23/ One more from the investor column, the just published thesis from @iterativecap @Leorzhang @chrisdannen @ChairmanTubeAmp argues that Bitcoin is a fundamental improvement on the process of software development & that the benefits like trustlessness etc) are resultant from those organization structure choices https://iterative.capital/thesis/ & https://iterative.capital/2018/10/25/un-fucking-the-bitcoin-narrative/
24/ Speaking of Bitcoin, @woonomic shares a monster thread on the state of the markets using a number of different indicators including Sharpe Ratio, volatility compared to other assets, Mayer Multiple, NVT ratio and more. https://twitter.com/woonomic/status/1055738190953242624
25/ @TuurDemeester brought the Bitcoin perspective to a mainstream economic crowds at the George W. Bush presidential center, speaking on “Cryptocurrencies, AI and Disruptive Technologies” alongside forks like the current president of the Dallas Fed. https://twitter.com/TuurDemeester/status/1054509024543158273
26/ Crypto’s favorite essayist @tonysheng digs deep on how the price of BTC can actually stabilize, taking head on the idea that Bitcoin is a Keynesian Beauty Contest and exploring “Narrative Bubble Loops.” Slip a lil absinthe in the coffee for this one. https://www.tonysheng.com/keynesian-beauty-contest-bitcoin
27/ One more on Bitcoin - I haven’t quite wrapped my head around $WBTC Wrapped Bitcoin yet, so here are a couple threads asking people their perspective on it. Here’s mine: https://twitter.com/nlw/status/1056225481010372610 & here is Jakes’s: https://twitter.com/jbrukh/status/1056239007095554049
28/ For those who want to focus a bit on the potential of what comes next, I highly recommend @ercwl’s live tweeting of his reading of the @elixxir_io technical brief. Elixxir has more buzz than many new projects based on it’s origin from true crypto OG David Chaum https://twitter.com/ercwl/status/1054969216636514305
29/ For some totally novel organizational form ideas, 3 great threads/essays: +@thibauld on continuous organizations: https://twitter.com/thibauld/status/1055116845500583937 +@abh1manyu on better thinking re:security tokens https://twitter.com/abh1manyu/status/1055518032385036288 +@simondlr on radical markets in the arts: https://medium.com/@simondlr/radical-markets-in-the-arts-13c27d3b7283
30/ Finally, I would be remiss if I didn’t mention all the big ideas chugging around Europe. Between the Web3 Foundation summit last week and upcoming DevCon, there is a LOT happening. @lrettig threads some from Web3 Fndn here: https://twitter.com/lrettig/status/1054288553063133184
31/ If these LRS threads feel like they move in and out of a million different thought streams, it’s because they do. @jon_choi_ called this the “crypto idea maze. Highly recommend taking some time to dig into his argument that money, finance and web crypto uses are related, but different. https://jonchoi.com/cryptoideamaze/
32/ And with that, we close! As always, tell me what you liked and what I missed. Find LRS wherever you are: 

 

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Nathaniel Whittemore

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

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