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Long Reads Sunday - Issue #45

Another week, another Tether story. Well, in point of fact, it’s a continuation of last week’s story.
Long Reads Sunday - Issue #45
By Nathaniel Whittemore • Issue #45 • View online
Another week, another Tether story. Well, in point of fact, it’s a continuation of last week’s story. This time around, however, we’ve learned finally that Tether does not actually have full 1-to-1 USD reserves for USDT. Instead, approximately 74% is backed. 
The reaction has been surprisingly diverse. Some obviously (and reasonably) see it as a breach of trust and an outright contradiction of the repeated assurance that all USDT is backstopped. Others clearly see in Tether and Bitfinex a holdout to the creeping sublimation of all exchanges and Stablecoins to the US regulatory regime. 
Those who do continue to support Bitfinex will have the chance to put that support into money when the company launches a billion-dollar IEO for their native exchange token, with the proceeds of the sale intended to cover the $850m currently locked up by a host of state actors. 
In some ways, everything swirling around Tether and Bitfinex right now feels emblematic of the tectonic shift happening across the industry, as the formal, established and regulated world of business tries to wrestle the Wild West of crypto into something that more closely resembles itself. 
Happy Long Reads - NLW  

Read LRS45 on Twitter
Long Reads Sunday 45. Alright team, we gave it our best shot, but Buffet still doesn’t like Bitcoin, so I guess we’re going to just have to pack in in, huh? Nah. Growth in institutional interest, growth in consumer awareness, and hell even a sustained rise in price means its time for us to take the narrative back. Image: @phneep
2/ Okay okay, we’ll take the narrative back right *after* we talk about the latest thing that kinda makes the space look like rat poison squared. I’m talking of course about Tether. For a recap - check out last week’s LRS Takeaway clip with @hasufl.
3/ One of the central players in the drama of the missing $850m is Crypto Capital, a company that provided banking services for Bitfinex. Giving the whole sordid tale of the company is @Timccopeland @decryptmedia
4/ Of course, while the latest Tether issue has to do with Bitfinex’s missing millions, the larger long term question has been whether the stablecoin is truly backed by cash as claimed. As part of the proceedings, we now know that they are actually only 74% backed.
5/ The reaction of CT has been more varied that one might thing considering it has become clear that the company was lying. On the one hand, there are those for whom this is a final straw that makes it clear that Tether can’t be trusted.
6/ On the other hand, to the surprise of many Bitfinex and Tether have seen defense particularly from certain parts of the Bitcoin community. @TwoBitIdiot and @Hasufl both capture the underlying reason: nervousness about the only choices being US regulated +
7/ This would be a hell of discussion even if that were the end of it. But of course, it isn’t. Because what do we do in crypto when we need capital? Token sale baby!
8/ (Quick aside, to get the 101 on IEOs and how they are - or aren’t - different from ICOs, check out this quick vid by @la_cuen for @Coindesk. Cool format - would love to see more of this)
9/ The rumor was quickly confirmed when Bitfinex issued an IEO white paper to sell up to $1B worth of their native exchange token, the LEO, with many of the same dynamics as other exchange tokens like Binance’s BNB.
10/ Of course, the idea of printing money to cover debts is nothing new. Jill connected the dots back to Lincoln and General Custer by way of introducing the theme for her and @Melt_Dem @WGMGpodcast this week.
11/ @AriDavidPaul also used the context of Tether to branch off into a larger conversation about how to think about investment risk
12/ In some ways, everything swirling around Tether and Bitfinex right now feels emblematic of the tectonic shift happening across the industry, as the formal, established and regulated world of business tries to wrestle the Wild West of crypto into something that more closely resembles itself.
13/ Speaking of that traditional world, a variety of new research indicates how perception of digital assets is changing. @CremeDeLaCrypto and Blockchain released results of a poll run on their behalf by Harris poll called “Bitcoin is a Demographic Mega-Trend.”
14/ @DigitalAsset also summarized their own research suggesting that the industry can expect increased institutional investment. One interesting note, given the larger macro environment, was that nearly half of those surveyed found crypto’s lack of correlation to other assets appealing.
15/ Indeed, even as headline grabbing events like the NYAG coming after Bitfinex dominate news cycles, the professional allocators and operators continue to level up. This week, @multicoincap shared its 3 Mega Theses for Crypto - summed up by @TusharJain_ here
16/ The Mega Theses came out alongside the launch of a larger resource hub & crypto information and content archive, co produced with @ResearchCircle, @MessariCrypto and @BinanceResearch. At first glance, it seems like an unbelievably valuable resource. Kudos to everyone involved.
17/ Speaking of valuable curation resources that must have taken an ever-lovingly long time to make, I have to give a shout out to @_joerodgers who is archiving a huge array of content in an easy digital magazine format. Check it out
18/ Going back to Multicoin’s theses, the last is about cryptoassets as a non-state money. In his latest piece, @raynesteinberg asks the question: what good is a store of value if it can be confiscated by the powers that be?
19/ Related, on a recent @stephanlivera podcast with guest @saifedean, the two discuss how governments could kill Bitcoin. Check it out here or read @kyletorpey’s summary version 
20/ Indeed, for many of us in this space, one of the biggest points of excitement is how Bitcoin in particular is being used as a lifeline for people in unstable monetary regimes. At the same time, this great op ed from @criptodiana is a sobering reminder of why we need to not fetishize crisis as a validator of our theses
21/ Still, for even more on the relationship between fiat currencies, governments, and cryptocurrencies, check out this monster piece by @GandalfTheBr0wn - h/t @ricburton for surfacing this one.
22/ The narrative hooks that plug us in to Bitcoin and other cryptoassets play a distinct role in how people get and stay involved. That, according to a new piece be @dergigi looking at “Bitcoin’s Gravity”
23/ On the point of narrative hooks, @GrayScaleInvest launched a major ad campaign focusing on why Bitcoin is better than Gold and why millennials in particular should #DropGold. One interesting thing about it is that it firmly situates Bitcoin as an economic force rather than (just) a technology.
24/ If a comparison to gold is one potential entry point for mass adoption, it’s not the only one. Right after I published LRS last week, news broke that Jaguar/Land Rover was working with IOTA to allow drivers to passively earn crypto
25/ Of course, that’s nothing compared to the real big (potential) adoption news, which came when a WSJ story broke regarding Facebook’s upcoming blockchain plans. Read @TheBlock__ piece I shared here, and then check out the thread for some great further discussion
26/ Obviously, there was a ton going on this week! Just a few more pieces before we wrap. First, @delphi_digital doubles down on their call that BTC hit its bottom in Q1 and explains why.
27/ The man himself @muststopmurad steps in for 20 juicy threads on recent price action and some scenarios we might expect from here
28/ Speaking of the price (or value) of assets, @cburniske builds on his 2017 valuation piece, in the process proposing a split in our thinking between “cryptocapital” and “cryptocommodities” which he argues have distinct value capture properties
29/ I’m always interested in new thinking like this about how to measure and understand the changes in cryptoassets and crypto markets. Another one from a couple weeks ago that I missed comes from @renato_shira who proposes “SOPR” - spent outputs to predict Bitcoin local lows and tops.
30/ Finally, speaking of new thinking, I continue to be fascinated by the @AragonProject as a real no bullshit example of governance in action. Check out @evan_van_ness’s writeup of whale activity around a recent vote as well as @Melt_Dem’s takeaways
31/ That’s it for a very full week of LRS! Despite the scorn from the Oracle of Omaha, I think it’s pretty clear that the relentless march of Bitcoin and crypto continues unabated. To get LRS via email, sign up here:
32/ Oh! Almost forgot - two last notes. First, if you liked the image on the first tweet, check out all of @phneep’s awesome Bitcoin propaganda posters
33/ Second, NY Blockchain Week is coming up. I’m speaking at @EtherealSummit about narrative battlelines on Friday, and moderating a layer 2 panel the following Thursday. See you all there!

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Nathaniel Whittemore

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