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Long Reads Sunday - Issue #70

Even for this extraordinarily dynamic industry, few weeks in recent memory have been as head spinning
Long Reads Sunday - Issue #70
By Nathaniel Whittemore • Issue #61 • View online
Even for this extraordinarily dynamic industry, few weeks in recent memory have been as head spinning on so many levels as this one. The obvious part is the wild price action, but the undercurrent is new dynamics in the global digital currency wars. 
In the US, we saw a new realpolitik around Libra. As Zuckerberg testified before Congress, the central argument was less about banking the unbanked (although that was there as well), and more about the preservation of American leadership in the face of a China with designs on digital currency leadership. 
As if scripted, the next day China wrenched the crypto headlines back as President Xi Jinping called for the adoption of blockchain in his first formal comments on the topic. While some on Twitter debated whether it was actually significant (and whether it was behind the massive bitcoin price run up from the mid $7000s all the way to touch $10k), it certainly jump started new interest in China. Baidu searches for blockchain were up 1300% in the following days. 
I believe that over the next decade, nothing will so shape the texture of the global economy as the jostling for leverage between China and the United States. Whether it caused a short-term bitcoin price increase is much less relevant than the fact that, with these comments, China has signaled that blockchain is now part of the game. 
By the way, If you’re interested in the relationship between bitcoin and the global macro economic environment, I announced Bitcoin Macro this week - a new pop-up podcast I produced in conjunction with CoinDesk’s Invest:NYC conference. The first three episodes, featuring Travis Kling, Nic Carter and Caitlin Long, dropped this week. Give it a listen! 
Happy Long Reads - NLW 

Long Reads Sunday #70
LONG READS SUNDAY #70. I can’t imagine a better encapsulation of the state of the digital currency wars.  Congress spent 6 hours getting Instagram Gotchas grilling Zuck while with a few words, China’s President Xi totally reframed the blockchain narrative for a billion people. https://twitter.com/APompliano/status/1187924456397824003
2/ There is a lot to tell here, for those who prefer a faster summary, might I suggest this week’s Crypto Daily 3@3 podcast. Wed - Recap of Zuckerberg’s Testimony https://plnk.to/nlw/e/1000454676837 // Friday - Xi talks blockchain in China https://plnk.to/nlw/e/1000454952811
3/ Okay, now let’s go back and start with Zuckerberg testifying before the House Financial Services Committee. Before I get to summaries, check out this thread for video clips https://twitter.com/alexisgoldstein/status/1186942030112534528 or my summary thread for everything https://twitter.com/nlw/status/1187008487907303424
4/ Let’s also pause really quickly for what honestly has to be the tweet of the century when it comes to our weird relationship with Zuckerberg. https://twitter.com/The_Law_Boy/status/1187105323770875904
5/ Anyway, back to the 6 hours of testimony. For Facebook’s part, their message shifted slightly, emphasizing the China threat more than the magnanimous bank the unbanked idea. Congress’ questions too changed, more bold about the threat to USD power https://twitter.com/tayvano_/status/1187070270760030208
6/ Many of us on CT were frustrated by the low quality of the questions and the “made for social media” soundbites. See: https://twitter.com/Nicholas_Merten/status/1187084009098137600 or https://twitter.com/nic__carter/status/1187191136370057217 or https://twitter.com/balajis/status/1187135196845330432
7/ There were some bright spots. In opening statements @PatrickMcHenry contextualized saying that FB were here, in some ways, to answer for the entire digital age. Check him out recently on @laurashin https://twitter.com/laurashin/status/1186631943519195137?s=20
8/ @twobitidiot wrote one of the best summaries of the proceedings, “Then They Fight You” - arguing that Brad Sherman is crypto’s “most savvy adversary,” and echoed @naval that improved privacy in bitcoin is on a collision course with regulators https://messari.substack.com/p/then-they-fight-you
9/ @zhusu nicely summed up the different arguments for different audiences (bank the unbanked over here; Red Scare over there) from the Libra Camp https://twitter.com/zhusu/status/1187254800137650176 while @RyanSAdams put the emphasis on the China threat more baldly https://twitter.com/RyanSAdams/status/1186982110252457984
10/ Indeed, while China was a looming specter in the first proceedings, it was clear and present danger this time around. And as if scripted entirely for the sake of the narrative, within a day, President Xi ripped the focus away from Libra https://twitter.com/nlw/status/1187749071894831104
11/ First, what happened? In short, China’s President Xi Jinping made not only his first formal statements on blockchain, but affirmed their importance as a new technology for China and did so at the Politburo level https://twitter.com/cnledger/status/1187683577070096384
12/ As @DoveyWan pointed out, part of the reason it was a big deal is that the comments were shared on the daily news update of the “most official TV program” of the CCP. In other words, these comments were designed for mass reaction. https://twitter.com/DoveyWan/status/1187775583733743617
13/ Crypto Twitter’s response was divided primarily into two camps. On the one hand were those who thought it a clear example of the US falling behind: See https://twitter.com/ErikVoorhees/status/1187785928632229888 // https://twitter.com/jbrukh/status/1187727176340328449 // https://twitter.com/cryptomanran/status/1187764965282725890
14/ On the other hand were those who argued that this wasn’t something to be celebrated, but a reminder that blockchains are not solely tools for freedom and sovereignty but can easily become tools for surveillance and control. See https://twitter.com/BullyEsq/status/1187755949618089984 // https://twitter.com/gladstein/status/1187743940931403778
15/ Of course, these points aren’t mutually exclusive. But what ever the case, the discussion of interpretation was quickly drowned out by what happened next; a massive vertical rip of the bitcoin price all the way from the $7000s to touch $10k before settling back a bit https://twitter.com/krugermacro/status/1187909119849783296
16/ Not everyone was convinced that China was the reason for the pump. This perspective was summed up by @nic__carter https://twitter.com/nic__carter/status/1188111623782830081
17/ Yet whatever the correlation in terms of short term price action, it’s hard to argue that there isn’t something shifting in terms of the country’s relationship to the space, with interesting implications. @zhusu argued against applying American moral absolutism to our interpretation https://twitter.com/zhusu/status/1188204407529148416
18/ @DoveyWan meanwhile looked at the actual data around the response in China. This struck me as huge: a 1300% increase in searches for Blockchain on Baidu in the days following the announcement. https://twitter.com/DoveyWan/status/1188333632345128962
19/ At the end of the day, however, @DoveyWan’s argument is that all of this “blockchain is good” stuff is just paving the narrative path for the launch of a digital RMB designed to compete for SoV & reserve currency status around the world. https://twitter.com/DoveyWan/status/1188340117317926912
20/ That’s what it feels like to me as well. The stakes of the game when it comes to China, the US, and digital currency, is whether or not the world stays on the dollar standard, and if not, what replaces it and in what form. Full stop. 
21/ On week’s like these, it’s hard to focus on much else, but there was some other great content worth calling out. Speaking of gov’t interventionism @martybent flagged this convo about BTC futures as a tool for the Trump Admin to pop the BTC bubble https://twitter.com/martybent/status/1186751177708339202
22/ In his piece on the Libra hearings @twobitidiot referenced a poignant @naval tweet on the potential break in the bitcoin community around privacy. https://twitter.com/naval/status/1186881804239659008
23/ @matt_odell and @martybent have been discussing this on @TFTC21 a bit recently, and I liked this tweet from Matt about Lightning as a privacy Trojan Horse. https://twitter.com/matt_odell/status/1187731152318160897
24/ Speaking of good bitcoin content, in his most recent post, @bitcoinerrorlog argues that it is nodes (I repeat nodes) that secure bitcoin. Outside of any debate, both the essay and the thread double actually great 101 reads on security. https://twitter.com/bitcoinerrorlog/status/1187977239255814145
25/ And, speaking of contentious, @VitalikButerin asks how big a hack would have to be for the community to support a DAO-style HF. These threads tend to invite easy dunking but I actually think the response and debate is illuminating https://twitter.com/vitalikbuterin/status/1187854232398917632
26/ Hmm I guess all of these final shares are potential debates! Check out @fiege_max thoughtful thread and post on the energy context of the first phase of bitcoin and his argument why the future of bitcoin mining is in fossil fuels https://twitter.com/fiege_max/status/1186661082468798464
27/ Last week, Poloniex split off from Circle, leaving US customers with it. @JamesTodaroMD shared this excellent graphic of exchange dominance over time https://twitter.com/JamesTodaroMD/status/1186329292763996161
28/ The saga of Crypto Capital continued this week, with arrests and indictments. This deserves many threads all on its own, but start with this reporting from @timccopeland https://twitter.com/timccopeland/status/1187839316342521859
29/ @jack continues to show a fundamentally different level of understanding around bitcoin and cryptocurrencies. When asked if Twitter would join Libra, he responded “hell no,” arguing that the currency of the internet needed to be an internet native protocol https://twitter.com/dtapcap/status/1187960104768933888
30/ A big congrats goes out to @APompliano @MarkYusko @JWilliamsFstmed on the just announced $50m raise for Morgan Creek Digital https://twitter.com/coindesk/status/1186738270559977474
31/ Finally, a personal announcement! @CoinDesk announced a new pop-up podcast called Bitcoin Macro, produced by yours truly and featuring @Travis_Kling @CaitlinLong_ @nic_carter. I’m incredibly proud of this and would love it you gave it a listen. https://bitcoin-macro-coindesk.simplecast.com/
32/ There we have it! Another LRS in the books. Sign up for the email to get additional analysis and the full LRS delivered via email each week. https://www.getrevue.co/profile/nlw
33/ And finally, for LRS style analysis all week long, subscribe to the Crypto Daily 3@3 wherever you listen to podcasts! https://plnk.to/nlw?to=page
34/ Appendix - I was thrilled to join @ClayCollins on Flippening for an extended rap about the history of exchanges. Part 2 just came out and will be followed by a written version coming this week. https://twitter.com/ClayCollins/status/1188108194138079233
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Nathaniel Whittemore

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