View profile

Long Reads Sunday - Issue #61

The inescapable undercurrent of this week was the acceleration of the battle for the future of money.
Long Reads Sunday - Issue #61
By Nathaniel Whittemore • Issue #52 • View online
The inescapable undercurrent of this week was the acceleration of the battle for the future of money. 
It started when Binance announced Venus. If Facebook’s Libra felt like a top down force from outside, Binance positioned Venus as a regionalized, collaborative alternative. They even likened it to China’s Belt and Road initiative, while talking about “breaking financial hegemony and reshaping the world financial system.” 
This would not be the last time we would hear the word “hegemony,” uttered in the context of the shifting financial system, however. In a stunning speech at the annual gathering of central bankers at Jackson Hole, Bank of England governor Mark Carney argued that perhaps, the US dollar as the global reserve currency was no longer serving the global interest. Instead of switching to another single-government currency, however, the answer might lie in what he called a “synthetic hegemonic currency” - a joint effort global cryptocurrency that would effectively be Libra, minus Facebook. 
Libra itself, meanwhile, remains mired in regulatory skepticism, with reports this week that 3 Libra Association members are getting cold feet as the EU heightens antitrust explorations. On top of all this, reports are that Tether is working on a new stablecoin pegged to the Chinese yuan. 
Whatever comes of Carney’s proposal, it’s clear that Libra has raised the stakes on the global Game of Currencies - in ways that perhaps even they can’t control. 
Happy Long Reads - NLW

Central bankers doing central banker things
Central bankers doing central banker things
Long Reads Sunday #61
Long Reads Sunday #61 - How Everything Changes edition. Underneath what appeared a relatively calm, end-of-summer week was the specter of seismic change of the global money order. Don’t believe me? Well, cop a coffee and let’s dive in; it’s long reads time. https://twitter.com/paulg/status/1164396598178111488?s=20
2/ The two poles of the week were Binance announcing Venus - a regionalized, independent, government collaborative version of Facebook’s Libra - and Bank Of England Mark Carney’s stunning proposal for a “Synthetic Hegemonic Currency” to replace the US dollar as the global reserve currency. 
3/ Binance’s announcement of Venus was almost subdued. Blog posts went live Sunday, and interestingly, the blog post in Chinese was a much fuller statement, more defiant and directed in its invocation of transforming a new financial era. https://twitter.com/DoveyWan/status/1163439865876189184
4/ Binance invoked China’s belt-and-road initiative as a way to describe how, whereas Libra presented a top down, external force, Venus would be a bottoms up collaboration that allowed governments to issue digitized versions of their currencies. @DoveyWan explained more on 3@3: https://youtu.be/Ee28Z6mwV10?t=198
5/ Not content to let Binance have all the fun, Tether dove into the stablecoin fray with reports that they will issue ‘CNHT,’ a new stablecoin pegged to the Chinese yuan. @DoveyWan with why some weren’t pleased https://twitter.com/doveywan/status/1164173561361100801?s=21 and get the full backstory here https://twitter.com/TheBlock__/status/1164143870478827520
6/ In this video, @SimonDixonTwitt also gives more background on the entire space of digital versions of offline fiat currencies while honing in on the competition between a People’s Bank of China digital currency and Tether’s pegged version. https://twitter.com/SimonDixonTwitt/status/1164438185159454722
7/ The question, of course, is why is all this happening now? Well, one part of it, undeniably, is Libra. The entrance of Facebook into the global Game of Currencies has significantly increased the urgency for central banks to find their place in a digital world. https://twitter.com/davidmarcus/status/1163813174090485763
8/ That said, for as much as Libra has set off the starting gun for others, it has not yet cemented its role in the new world order whose coming it has accelerated. @JoeSquawk and the squad at @SquawkCNBC discussed reports that 3 Libra Association members are getting cold feet https://twitter.com/SquawkCNBC/status/1164851387374743552
9/ In many ways, however, all of this was simply prelude to the most seismic moment of the week, which were Bank of England governor Mark Carney’s remarks at the annual central banker gathering at Jackson Hole. https://twitter.com/Rhythmtrader/status/1164978850297761792
10/ @TuurDemeester highlighted the key points from Carney’s speech on a “Synthetic Hegemonic Currency” and summed it up here: technology has the potential to destroy the dollar’s network effect. https://twitter.com/tuurdemeester/status/1165083048674824193
11/ This idea *has* been floating around outside of Carney’s speech. For example, @ErikTownsend from @MacroVoices discusses it in his preview of a video series on the digital currency revolution, and discussed something like this in a book last year as well. https://twitter.com/ErikSTownsend/status/1165350232244314114
12/ Another recent example came from @RaoulPal on the @hiddenforcespod, who discussed the inherent disruptive potential of the basket of currencies approach. Hidden Forces host @CoveringDelta explores the manifestation of that in Carney’s SHC further here https://twitter.com/HiddenForcesPod/status/1165233860583579649
13/ As if that weren’t enough to come out of Jackson Hole, after Fed chair Jerome Powell spoke, President Trump asked (via Twitter, of course), whether Powell or Chinese Chairman Xi were a bigger enemy. @nic__carter captured what I think many were feeling after all of that. https://twitter.com/nic__carter/status/1164983029867175936
14/ So what does this all mean? Well, for one, it means we’ve entered a new phase in the battle for digital currency. It’s not just blockchain-based cryptos competing any more, and for government’s it’s no longer theoretical. Expect stories like this on Rwanda’s central bank CBDC research coming from everywhere https://www.coindesk.com/rwandas-central-bank-is-researching-a-possible-digital-currency-launch
15/ Of course, government backed digital currencies aren’t the only contenders. One major question will be to what extent bitcoin will continue to fly under the radar as things like Libra smash up against central bank efforts. BTW, lest you think this is new thinking, check out Hal Finney from ONE WEEK after the genesis block https://twitter.com/DrBitcoinMD/status/1165004233663496197
16/ One of the worries that some have with private central bank digital currencies is their potential for increasing financial surveillance. The battle against surveillance was again on display in Hong Kong, in what @NeerajKA called “the first extremely surveillance conscious protest” https://twitter.com/neerajka/status/1165365717123907584
17/ Speaking of Hong Kong, @Zooko flagged the news that Twitter had accused China of running disinformation campaigns to try to disrupt the work of Hong Kong protestors. https://twitter.com/zooko/status/1164671695677870081
18/ If you’re interested in how the dots connect between global socio-political unrest like what’s happening in Hong Kong with Bitcoin, let @gladstein be your guide via his recent podcast with @nickgillespie @reason https://twitter.com/gladstein/status/1164299091997630464
19/ The fight against surveillance was also front-and-center at Berlin Blockchain Week, exemplified by @snowden’s keynote at @Web3Summit. @avsa captured one of the great moments here. https://twitter.com/avsa/status/1163793133756456960
20/ For more on Berlin Blockchain Week, check out a couple other threads as well. @coindesk’s @christine_dkim live tweeted a number of different sessions https://twitter.com/christine_dkim/status/1164491846023897088 while @sassal0x summed up the main themes as usability, governance, DAOs and funding https://twitter.com/sassal0x/status/1164983374479548416
21/ And of course, don’t forget this uber triggering meme-driven development panel at @ETHBerlin, which was pretty much a Rorschach test for everyone in the industry https://twitter.com/tonysheng/status/1164536528028278784
22/ So, what else happened this week? Well, there was a big return of the crime narrative, with OFAC listing BTC and LTC addresses of global opioid ring leaders, the White House saying crypto was used to by Fentanyl, and an @Nytimes report on terrorists using Bitcoin. https://www.periscope.tv/NathanielWhittemore/1yNGavbZqAWJj?t=1m6s
23/ Still, @La__Cuen’s follow up about how bitcoin is actually used in places like Gaza and the Palestinian Territories got significant attention as well. The “crime is the only use” narrative is a lot harder when freelancers locked out of PayPal et al are being paid for making websites with the same currency. https://twitter.com/VitalikButerin/status/1164854002976206849
24/ This sort of usage narrative is something different than just the straight store of value. The notion that BTC will act as a safe haven got a bit more data reporting this week as well, from @_RJTodd at @TheBlock__ https://twitter.com/_RJTodd/status/1163956414932500481 and here: https://twitter.com/quantfiction/status/1164528969535954944
25/ Speaking of narratives, @AriannaSimpson waded into the fray with her thread arguing that, as good as bitcoin’s long term prospect looks, the notion that all other cryptocurrencies are irrelevant is a short term response to current market conditions, and unlikely to hold https://twitter.com/AriannaSimpson/status/1164285593322491906
26/ In some ways related, @cburniske looks over at the Ethereum community and argues that it is “enduring its 1st bear market,” comparing it to BTC in 2014/2015 and reflecting on what it means for price and market development. https://twitter.com/cburniske/status/1163895000502902784
27/ It’s not the first place I’ve seen the idea that there are certain maturity phases that all protocols go through. Reflecting on time at Blockchain week, @udiWertheimer likened the bitcoin hard fork wars to coming battles between different groups connected to Ethereum like EF, Cosmos, Polkadot https://twitter.com/udiWertheimer/status/1165324539422806018
28/ One narrative that just keeps trying to resurface is that of the fabled alt-season. In this thread @anambroid argues that value capture has simply moved elsewhere. https://twitter.com/anambroid/status/1163740479944634373
29/ One of those areas of value capture that has emerged are in the form of exchange tokens, which offer holders benefits vis a vis the business of the exchange. A big new entrant to the exchange market came with the announcement of @INXLimited’s $130m regulated IPO https://twitter.com/mayazi/status/1163708014433619969
30/ @Katherineykwu argues that INX’s regulated token initial public offering, especially when combined with a number of other recent projects positive interactions with regulators undermine certain arguments that have kept the Wild West wild. https://twitter.com/katherineykwu/status/1164569517420421120
31/ Then again, there is still a bit of wild out there. Check out this analysis from @elementus_io on how PlusToken, a Chinese Ponzi scheme, was able to accumulate $2b worth of ETH. https://twitter.com/APompliano/status/1164858259251105795
32/ Speaking of data analysis, check out these two new metrics from @hansthered over at @Ikigai_fund: 1. HODLer Index - ratio of Tx to Bitcoin Days Destroyed + 2. HODLer Network - # unique addresses. https://twitter.com/hansthered/status/1165326795568140289
33/ In the “WTF” story of the week, read about the fall of Patrick Byrne, one of the public market’s largest crypto advocates, who resigned from Overstock in the wake of his involvement in a Russian Spy Scandal https://twitter.com/randalllane/status/1164620048171974656
34/ Finally, since we started with central bank currencies and corporate coins like Libra, let’s wrap with a few more pieces on the great X factor in the future of money. @MartyBent flagged a great piece from @parkeralewis on Bitcoin’s speed. https://twitter.com/martybent/status/1165013926418907136
35/ @dergigi keeps up his great run of content with this mini thread on power re-alignment in an internet-native world https://twitter.com/dergigi/status/1164650341419442190
36/ @CitizenBitcoin does a great job overviewing the state of bitcoin podcasts. I continue to believe that this space is the vanguard of a larger shift to the importance of independent media across industries. https://twitter.com/CitizenBitcoin/status/1164983992099233793
37/ @100trillionUSD’s writing about stock to flow ratio and what it means for bitcoin have increasingly filtered into the larger global macro conversation about BTC. This week, he shared a short curation of must read articles on the topic https://twitter.com/100trillionusd/status/1163103635091406850
38/ And finally, maybe the most viral thread of the week came from @allenf32 on the cocaine binge nature of the modern economy. Agree or disagree, this thread struck a serious and unignorable nerve. https://twitter.com/allenf32/status/1164609641302523904
39/ And there we have it! Another LRS in the books. As always, thanks for reading and you can sign up to get these direct via email https://www.getrevue.co/profile/nlw
40/ And for your daily dose of LRS style content, check out the Crypto Daily 3@3. Listen as a podcast wherever you listen; get it via email at https://nlw.substack.com/ or subscribe on YouTube for the vids. https://www.youtube.com/nathanielwhittemorecrypto
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