View profile

Long Reads Sunday - Issue #20

This week was another example of the crypto industry catching up with itself. The SEC's enforcement a
Long Reads Sunday - Issue #20
By Nathaniel Whittemore • Issue #20 • View online
This week was another example of the crypto industry catching up with itself. The SEC’s enforcement action against the former head of decentralized exchange EtherDelta had everyone scrambling to figure out what it meant. Was it a warning shot? A reminder that existing rules can apply to new contexts? Did it suggest that, in the future, leaders of decentralized exchanges who attempt to be pseudo-anonymous? All of the above?
Regulatory action wasn’t all that was happening this week. In the news column, we saw:
+BitMEX launching a VC arm & Binance launching a research & project transparency division
+In the world of privacy, Grincon and new ZCash Foundation grantees
+Interesting observations on the mindset of institutions and central bankers in the US and in China
Over in the realm of ideas, we were treated to:
+The unintended consequences of design decisions
+Better strategies for token distribution
+Perspectives on the possibilities for the upcoming Bakkt launch
Thanks as always and Happy Long Reads.
-NLW
1/ Long Reads Sunday #20. Wowow, 20 weeks of curated crypto madness on the books. And with the SEC getting enforcement frisky on DEXs and further calling into question just how decentralized decentralized projects have to be, it was a big one. Pump some java into your thermostat, its long reads time.
2/ On Thursday, news broke of an SEC enforcement action against Zachary Coburn, the previous CEO of “decentralized” exchange EtherDelta. CryptoTwitter’s amazing legal squad was on the case. +@jchervinsky: https://twitter.com/jchervinsky/status/1060720427327242241 +@msantoriESQ https://twitter.com/msantoriESQ/status/1060576899481636864 
3/ With usually clarity, @katherineykwu cut to the quick of the question: are DEX’s fucked? https://twitter.com/katherineykwu/status/1060584422603456514 After a conversation with a NYAG, she also put the action in larger context of regulators trying to balance enforcement with new enterprise formation. https://twitter.com/katherineykwu/status/1060913478288973824
4/ For most of us in the peanut gallery, the interesting question was the re-evaluation of “decentralized” in the context of decentralized exchanges. @jamesspediacci breaks down the challenge https://twitter.com/jamesspediacci/status/1060665232945606657 and @valkenburgh wrote more here: https://coincenter.org/entry/what-can-the-etherdelta-settlement-tell-us-about-how-decentralized-exchanges-are-regulated
5/ One of the most interesting points of conversation is whether this sort of SEC enforcement against a founder will prompt more DEX and crypto project leaders to anonymity. This was the dominant sentiment when I asked CT people what they thought would happen next. https://twitter.com/nlw/status/1060690841260437504
6/ Speaking of pseudo-anonymous, everyone’s favorite wizard-led privacy project Grin had its first GrinCon this week. For those of us muggles who weren’t able to make it +Video recap: https://grincon.org/ +Just released privacy primer https://github.com/mimblewimble/docs/wiki/Grin-Privacy-Primer 
7/ For those interested in a little more background on the MimbleWimble approach to privacy that Grin is based on, @MohamedFFouda compares MW to Monero & ZCash on the always excellent @tokendaily blog https://www.tokendaily.co/blog/mimblewimble-the-good-and-the-bad
8/ ZCash was also part of a couple interesting bits of news. The first was that the @ZcashFoundation announced its latest grant winners https://z.cash.foundation/blog/q2-grant-winners/ The second was post-DevCon rumblings of Ethereum’s growing look at zk-snarks as a scaling solution https://www.coindesk.com/as-plasma-stalls-snarks-become-new-hope-for-scaling-ethereum/
9/ A bit more from the news column, courtesy of @TheBlock__. +@BitMEXdotcom now has a VC arm: https://www.theblockcrypto.com/2018/11/08/bitmex-joins-its-rivals-in-launching-its-own-vc-arm/ +@binance launched a research arm for project transparency, following in the @MessariCrypto model https://www.theblockcrypto.com/2018/11/08/binance-is-launching-binance-research-in-an-effort-to-keep-projects-accountable/
10/ The Block’s @lawmaster also summed up an interesting nugget from the beginning of the week - a planned $125m airdrop of Stellar’s XLM to Blockchain wallet users. This will constitute the largest crypto airdrop to date. https://twitter.com/lawmaster/status/1059808114042695680
11/ Following up on previous news that @Bakkt plans to launch in December, @jchervinsky goes HAM explaining the major anticipation (and, of course, corresponding concern) around the project from NYSE owner ICE. Key line: “Bakkt’s launch has become a full-fledged narrative for when & how the bear market will end.” https://twitter.com/jchervinsky/status/1059828623471972354
12/ Bakkt is part of a larger conversation about the growing participation of the existing financial sector. On that front, @nic__carter shared observations from DC Fintech week at the IMF. TL;DR they look at it like technology, not fiat competition. https://twitter.com/nic__carter/status/1060720831486148608
13/ Speaking of central banks, @DoveyWan highlighted that, for the first time, the People’s Bank of China had published direct comments on crypto and blockchain - echoing what Nic found - that it was viewed more as a technology, not a threat to fiat money. https://twitter.com/doveywan/status/1061132417828704256
14/ Going even deeper into the existing financial infrastructure, @APompliano wrote up how a consortium of 15 banks is working with the DTCC (who process 95% of all credit derivates globally) to experiment with a blockchain-based system of trading credit derivates. https://offthechain.substack.com/p/the-dtccs-innovation-dilemma
15/ Connecting the dots back between institutional engagement and Bitcoin, @timevalueofbtc wrote about the business of Bitcoin storage in the context of Fidelity’s new @DigitalAssets https://medium.com/@timevalueofbtc/the-business-of-bitcoin-cold-storage-148fba7f1255
16/ Meanwhile, over in the build part of the world, @tayvano_ shared this awesome presentation on the unintended consequences of design, such as people not saving their private keys when crypto wallet creation was too easy. Especially as we onboard the world, UX decisions can have massively outsized impact https://medium.com/mycrypto/the-unintended-consequences-of-product-design-d35fcdfe777d
17/ Speaking of wallets and mass user on boarding, check out this phenomenal project from @austingriffith designed to make crypto transfer incredibly easy in developing markets where crypto assets can be a literal lifeline. More of this plz. https://twitter.com/austingriffith/status/1060926859116916737
18/ Ideas like the burner wallet - with real implications for real people in the real world - are the sort of things @tylercowen is “modestly optimistic” could emerge in this put up or shut up moment outside of the blinding and perhaps unhealthy focus on asset price. https://www.bloomberg.com/opinion/articles/2018-11-06/the-crypto-crash-how-a-price-collapse-could-be-good-thing
19/ Speaking of ideas, @KyleSamani wrote a phenomenal piece on @LivepeerOrg’s unique token distribution strategy, arguing that it has significant potential to increase the equitability of token distro as compared to ICOs or airdrops. Good read with important implications. https://twitter.com/KyleSamani/status/1060917343092686848
20/ Another interesting piece from the investor perspective is @cburniske’s short essay on “productive capital,” which basically argues that both supply-side productive capital (miners) and investment capital is necessary, but that many projects in 2017 over-emphasized investment. https://medium.com/@cburniske/productive-capital-in-cryptonetworks-3bad74ad9bfb
21/ One important but oft-unspoken truth is that what we measure dictates what actions we take. In yet another seminal piece, @nic__carter argues against the transaction count metric popular especially with would-be Bitcoin competitors, in favor of total economic throughput. https://medium.com/@nic__carter/transaction-count-is-an-inferior-measure-fba2d5ac97f1
22/ On the topic of Bitcoin, I would be remiss if I didn’t point out that this week saw the one year anniversary of the defeat of Segwit2x - perhaps the most important community struggle for the identity of Bitcoin in the protocol’s 10 year history. https://twitter.com/real_vijay/status/1060628388874874880
23/ Interestingly, as that anniversary rolls around, the BCash community that forked away from Bitcoin last year over incompatible visions for prioritization is itself in the grips of a civil war. It is…not without intrigue. https://twitter.com/jihanwu/status/1060740771723137024
24/ Holding aside the internal drama, one of the more interesting parts is that the Poloniex exchange is allowing advanced trading of the upcoming BCash forks. Both @ljxie and @matt_odell made observations about it: + https://twitter.com/ljxie/status/1061085501753454592 +https://twitter.com/matt_odell/status/1060400111187083264
25/ Meanwhile, as BCash’s payment-centric vision for Bitcoin is increasingly troubled, @saifedean reaffirmed the argument that Bitcoin’s most important initial role is as an international settlement layer solving for problems of currency devaluation and hyperinflation. https://www.spectator.co.uk/2018/11/the-problem-bitcoin-solves/
26/ While we’re on the topic of “problems Bitcoin solves,” a quick check in with Venezuela suggests that crypto continues to grow in significance in the countries volatile economy. The latest numbers suggest that citizens traded more BTC than ever last month https://bitcoinist.com/venezuela-record-bitcoin-october/
27/ Here’s another use case that hasn’t made it to the cover of Bloomberg: anonymous crowdfunding for the victims of sexual assault. @La__Cuen is one of the best journalists to follow for less heralded but massively important uses for crypto among vulnerable populations.  https://www.coindesk.com/sexual-assault-survivor-crypto-women-bitcoin/ 
28/ How we speak about crypto and Bitcoin - how we contextualize it and frame its importance - matters. I was reminded of @hasufl and @zhusu post from earlier in the year about Bitcoin evangelism + https://medium.com/coinmonks/evangelizing-bitcoin-729e6fc4cd2f when I read this thread by @misir_mahmudov https://twitter.com/misir_mahmudov/status/1060634120177500162
29/ A couple last notes on the other big event this week: the midterms. First, it was interesting to see Augur action as people predicted the outcomes: https://twitter.com/Disruptepreneur/status/1059942844692086788 Second, couldn’t help but notice that we got two Bitcoin governors in @GavinNewsom & @jaredpolis https://twitter.com/matt_odell/status/1060216737717600256
30/ For you history geeks, and inspired by threads from @muneeb and @ali01, here’s a quick little thread making the analogy between the 19th century competition between St. Louis and Chicago to be the lynchpin of Midwestern commerce and today’s crypto protocol wars. https://twitter.com/nlw/status/1061601110975234050
31/ Lastly, the undisputed Tweet of the Week goes to @crypto_bobby. https://twitter.com/crypto_bobby/status/1060955614644441088
32/ And there we have it! 20 LRS down, ??? more to go!  

 

Did you enjoy this issue?
Nathaniel Whittemore

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

If you don't want these updates anymore, please unsubscribe here
If you were forwarded this newsletter and you like it, you can subscribe here
Powered by Revue