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Long Reads Sunday - Issue #46

What a week.  First, there was the Binance hack. 7000 BTC were stolen, prompting one commentator to s
Long Reads Sunday - Issue #46
By Nathaniel Whittemore • Issue #46 • View online
What a week. 
First, there was the Binance hack. 7000 BTC were stolen, prompting one commentator to suggest trying to incentivize a reorg. This in turn set off a massive conversation about Bitcoin game theory and immutability
Next, FinCEN regulatory guidance came out with an array of implications. The faithful crypto Twitter legal branch jumped in to suggest who the winners and losers were, and even to hand annotate the 30+ page document. 
Of course, I can’t not mention the fact that BTC surged past $7k for a moment. Consensus Bump is back on the menu baby!
And then there were Schnorr/Taproot BIPs; interesting essays about whether controlling user data has shifted from asset to liability and the kickoff of what promises to be an absolute boatload of announcements and content coming out around NY Blockchain Week.
Happy Mother’s Day to all you cryptomoms out there! Thanks as always for reading. 

Long Reads Sunday #46. Are you kidding me, crypto? Binance Hack. FinCEN regulatory guidance. Major BIPs. Oh, and a $7K Blockchain Week surge. Strap in folks, it’s a wacky and wild long reads time. 
2/ The week started with a bang when news broke that the world’s biggest exchange, Binance, had been hacked. When the dust cleared, the thieves made off with 7,000 BTC - worth approximately $41m at the time - and reaffirmed the notion that when it comes to exchange hacks, it’s not a matter of if, but when, and what happens next. https://twitter.com/DoveyWan/status/1125921359932952576
3/ Somehow, in this case the “what happens next” was even more interesting. In the wake of the attack, Bitcoin core dev @JeremyRubin did a bit of thinking out loud, proposing that @cz_binance “coordinate a reorg to undo the theft.” https://twitter.com/JeremyRubin/status/1125919526485254144
4/ The response was explosive, triggering a massive, multi-day conversation on the nature of Bitcoin immutability. It was one of those moments where, if you were able to stay just a little bit above the fray, showed what a learner’s Paradise crypto is. 
5/ By way of example, check out this thread from @AriDavidPaul about how reorgs could arise naturally as a simple consequence of the game theory that powers the Bitcoin ecosystem. https://twitter.com/AriDavidPaul/status/1126071394545090560
6/ Most responses fell into the category of “this is an interesting theoretical conversation” or “Don’t Even Think About It.” Exemplary of that latter perspective is this thread from @udiWertheimer https://twitter.com/udiWertheimer/status/1126028992954404864
7/ At the end of the day, there wasn’t really a serious conversation about Binance trying something like this. @cz_binanace apologized for saying “reorg,” ceremonially buried the hatchet with Udi, and thanks to planning ahead, all the funds were SAFU. @lawmaster summed it all up admirably https://twitter.com/lawmaster/status/1126090906908676096
8/ If that were the only thing that happened, it would have been a hell of a week. But nope, there was more, courtesy of FinCEN releasing a comprehensive guide on crypto regulations. For the deep dive, absolute insane person and kickass crypto legal interpreter @katherineykwu annotated the whole frigging thing. https://twitter.com/katherineykwu/status/1126584955189043200
9/ For those who want the highlights, @jchervinsky does a bang up summary of the winners and losers from the report. Briefly, in the W column he has: non-custodial wallet providers; open finance DEXes & lenders; blockchain developers; anonymizing software providers; most traders. As for the L: p2p traders & arbitrageurs; crypto ATMs; and ICOs. https://twitter.com/jchervinsky/status/1126999079035244544
10/ On the ICO point, @lex_node goes just a little deeper on why the folks were most invested in utility tokens NOT being considered security tokens will wish they were when they discover what its like to comply as a money transmitter. https://twitter.com/lex_node/status/1126525607028961280
11/ One of the big points of discussion after the release was Lightning FUD where people were suggesting that somehow the guidance made it seem like running a LN node would make you a money transmitter. As part of an overall invaluable thread, @msantoriESQ puts the kibosh on that https://twitter.com/msantoriESQ/status/1126542513173663744
12/ While not related exactly to FinCEN, the SEC’s @HesterPeirce also published her latest on the SEC regulatory process, arguing in effect that the longer they wait to clarify, the more people will look to innovate in other jurisdictions https://www.sec.gov/news/speech/peirce-how-we-howey-050919
13/ Alright, so Binance hack, FinCEN guidance. Perhaps *that* is all the big stuff? Na. Because over the last 24 hours Bitcoin super smash bro’d right on through $7000. https://twitter.com/APompliano/status/1127334502764810241
14/ To get some sense of just how much activity is going on, @CryptoHayes announced a new record for BitMEX trading volume. Over $10B in 24 hours. <mind blown> https://twitter.com/CryptoHayes/status/1127482437490106369
15/ Price action is of course thrilling, but for the sake of having been through a thing and learned a thing and doing a thing a little different, maybe read @prestonjbyrne latest and contemplate it just a bit https://twitter.com/prestonjbyrne/status/1127364374451163136
16/ Given the price surge, it’s pretty clear that the “Consensus Pump” is in the lead for Comeback Meme Of The Year. That’s right, folks, New York Blockchain Week has officially kicked off, and so have the announcements. See: surprise Bitcoin full node phone from HTC https://twitter.com/DelRayMan/status/1127309204048490497
17/ Another announcement I was thrilled to see was the official launch of @makeopenmoney from @_jillruth @jammontasser @alegw. The project is designed to think critically about how money is used in unstable regimes, in hopes of better understanding how to leverage new systems to improve real lives https://twitter.com/_jillruth/status/1126851869773529088
18/ Speaking of announcements and new systems, at @EtherealSummit, @ameensol announced that @ethereumJoseph, @ConsenSys, @VitalikButerin and the EF were each contributing 1k ETH to @MolochDAO, putting the total fund at over $1M in value. https://twitter.com/ethereumJoseph/status/1126931857973612545
19/ And speaking of $1M, the global hunt for $1M in BTC @toshitreasure has seen more than 60,000 participants sign up and a group of investors step up to fund future games and explorations. Read all about it from @La__Cuen  https://twitter.com/La__Cuen/status/1127325480716316674
20/ Blockchain Week isn’t just good for the announcements though; it means waves of awesome new content as well. @cburniske’s slides from #Fluidity2019 are a great overview of where we find ourselves (especially in the context of the later market surge) https://twitter.com/cburniske/status/1126576282668552192
21/ Fluidity also gave us this awesome interview series from @crypto_bobby. This is a good way to get a sense of not only what conversations people are having, but what the vibe of the market is. https://twitter.com/crypto_bobby/status/1126929790332821504
22/ Given that Magical Crypto Conference is happening right now, @Coindesk Consensus is right around the corner, and dozens of other events are sprinkled around, the next week will be chock full. In the meantime, there are a few more things from the last week I want to hit. 
23/ First, the much anticipate Taproot and Schnorr BIP proposals have been submitted. @lucasnuzzi provides the 101 overview https://twitter.com/LucasNuzzi/status/1125482328329994240
24/ Ps, since this is a pretty big deal, check out @theonevortex thread of resources to learn more and get a sense of the implications. https://twitter.com/theonevortex/status/1125736587487318016
25/ Also in the realm of Bitcoin, an interesting conversation ensued on this thread about how Liquid and L-BTC will enable tokens (and token sales) on Bitcoin. https://twitter.com/TuurDemeester/status/1126120759976439808
26/ One of the ongoing conversations is how much enterprise and market infrastructure is likely to be built on private vs public blockchains. This piece by @amico_jeffrey suggests that transformative market infrastructure is more likely to emerge on public blockchains https://twitter.com/factora_/status/1124075009977344005
27/ Zooming out a few degrees, @VitalikButerin looks at the meta pattern of regulatory drums around tech, FinCEN guidance and more and suggests that having control over user data is shifting from asset to liability, with interesting implications. https://twitter.com/VitalikButerin/status/1126969430678937600
28/ @TorBair made similar points about this shift, arguing that privacy and centralization are fundamentally incompatible, and that we should be skeptical of calls for regulation coming from within Big Tech https://blog.enigma.co/can-centralization-and-consumer-privacy-coexist-4cf55c0ef79
29/ Newly independent @balajis meanwhile starts to ruminate on how a new generation of social networks might be built on crypto governance - aka coordination mechanisms that change the dynamics of the how groups self regulate. https://twitter.com/balajis/status/1126267992021524480
30/ Since we’re on the topic of FB & social networks, @benmezrich’s latest - “Bitcoin Billionaires” looks at the latest battle in the decades long war between Zuck and the Winklevosses. https://www.vanityfair.com/news/2019/04/inside-the-mark-zuckerberg-winklevoss-twins-cage-match?verso=true
31/ Finally, just wanted to say a big THANK YOU to all the crypto moms out there. Whether you’re the one in crypto building, trading, creating, or you’re just keeping the basement ready for when we bankrupt ourselves and have to move back in, we love you and couldn’t do it without you. 
32/ And of course, an extra special thank you goes to @jessiepray who on her very first Mother’s Day deserves all the gratitude in the world for making my and Alden’s worlds so happy and full of love. 
33/ And with that, we wrap! What a crazy, all over the place, crypto-ass week it was. I’ll be back in NYC for Blockchain Week this week so look forward to seeing you all there. As always, thanks for reading and if you’d like to get LRS by mail, sign up here. https://www.getrevue.co/profile/nlw
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Nathaniel Whittemore

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