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- The Blockchain Debate podcast post-debate poll is up: is Diem a glorified PayPal? Listen, then vote! [Twitter]
There’s a whole pile of Tether news — enough that I hope to compile it into a separate post later this week. The big news is: they’ve got another month’s delay out of the New York Attorney General. Let’s see what happens! [Letter, PDF]
What did you think of the Diem debate (@davidgerard vs @BryceWeiner)? Who won?
Do you think #Diem will get reduced to a PayPal, or it’ll become much more?
Vote after listening here: https://t.co/vLuJMD90u4
— The Blockchain Debate Podcast (@BlockDebate) January 27, 2021
Craigness
Craig Wright is sending out spurious copyright claims, this time on Satoshi Nakamoto’s Bitcoin white paper. Bitcoin Core removed the white paper from the official GitHub repository on receiving a lawyer’s letter. Bitcoin.org did not, and Cøbra, who runs the site, has put up a post about it. [GitHub; Bitcoin.org]
This doesn’t have much more substance to it than that time Wright registered a copyright claim on the Bitcoin 0.1 code and the white paper, in May 2019. Anyone can register a claim, and you have to do so before you can sue in US federal court — but that doesn’t make you the copyright holder.
Apart from that, Satoshi Nakamoto released both the code and the white paper under the MIT License — which lets you reuse material freely, including for commercial gain, royalty-free, in perpetuity. [Sourceforge, archive; Sourceforge, archive]
Even if Wright is Satoshi and owns the copyright, the code and paper have been out there under the MIT licence for the past twelve years — he would be estopped from suddenly changing his mind on a robust legal construct that a great many people have relied upon for so long.
I’m told that Wright is arguing in one of his Slack channels that the MIT License doesn’t apply to the white paper, for some reason. Anyone can sue for anything, but that doesn’t mean the suit has any substance to it.
Craig is now threatening to “burn cryptocurrency to non existence.” What a plot twist — Craig Wright turns out to be the ultimate Buttcoiner, come to save us all! [Twitter]
Update: the Kraken crypto exchange is now hosting the Bitcoin white paper, specifically because of the legal threats from Wright. [Kraken blog]
Container drivers
Grayscale keeps being credited in the press as a massive buyer of bitcoins, and evidence of institutional money entering cryptocurrency. This is not at all the case.
Even though Grayscale states its holdings in dollars, it accepts direct deposit of bitcoins — a large holder, or a good friend of Grayscale, can deposit bitcoins directly, and get shares in Grayscale’s GBTC fund that are valued well above net asset value. Grayscale doesn’t break out the numbers — but, the last time they did, in Q3 2019, nearly 80% of deposited value was in bitcoins, “up from 71% in 2Q19.” [Grayscale, 2019]
I hear in unverified gossip that near 100% of deposits in 2020 have been bitcoins, not dollars — perhaps Grayscale could start breaking out the number again, as this is almost certainly sufficiently material information that it should likely be disclosed in their SEC filings.
There’s a blog post from November 2020 that’s been going around, with a theory on how Grayscale pumps the Bitcoin price. Did you know that GBTC has no redemption mechanism? If people want out — too bad! But it’s all fine as long as number keeps going up. [Adventures in Capitalism]
CEO Barry Silbert left Grayscale a few weeks ago. I mentioned this and others mentioned Jeff Skilling jumping ship at Enron shortly before disaster hit, for some reason. [CoinDesk]
I think I can close up my twitter account. The funniest, dumbest possible mangling of a concept from a sidebar in a 1st-year economics textbook has happened. https://t.co/TvFxxxEZKz
— Kirsten Morry (@kirstenmorry) January 18, 2021
Lie dream of a casino soul
CoinLab has proposed an agreement such that creditors in the 2014 bankruptcy of the Mt. Gox Bitcoin exchange will get 90% of the bitcoins they are owed — not a payout in yen, as would normally happen in a bankruptcy under Japanese law. This depends on creditors accepting the deal. [CryptoBriefing; Bloomberg]
Kim Nilsson of WizSec — who personally traced how thousands of bitcoins were stolen from Mt. Gox — says that this proposal is overblown, and nothing is happening any time soon. “No, CoinLab does not deserve any credit and were never acting in good faith.” [WizSec]
Bitcoin mining is exacerbating blackouts in Iran. I’m looking forward to hot takes in Reason about how this impugns the freedom of Iranian libertarians. [Bloomberg]
(You know that’s what started off the perennial bitcoiner claim that Venezuela’s a hotbed of mainstream Bitcoin activity, despite the complete absence of real-world evidence? It was literally one guy in Reason writing about his libertarian friends in Venezulela getting arrested for stealing electricity. See Attack of the 50 Foot Blockchain, chapter 3.)
Daily Telegraph: The weird world of Bitcoin ‘whales’: The 2,500 people that control 40pc of the market. With a quote from me. And yes, Tether is mentioned. [Daily Telegraph]
J.P. Morgan: Bitcoin is the “least reliable hedge during periods of acute market stress” — that is, it’s completely uncorrelated, right up until you need it to be, as we found out in March 2020. [Bloomberg]
Channel News Asia: While Bitcoin price surges, ramped up cryptocurrency mining takes a heavy toll on the planet. Nothing here you wouldn’t know already — unless you’re a bitcoiner who’s being deliberately dense about Bitcoin’s biggest problem. [Channel News Asia]
Watching the Bitcoin PR spin machine do mental gymnastics around the environmental damage of mining is kind of hilarious.
It's like watching tobacco lobbyists claim cigarettes are a health supplement.
— Stephen Diehl (@smdiehl) January 19, 2021
Putta block
Reddit has announced a partnership with the Ethereum Foundation! There’s no detail on what they’re going to do — just allusions to past glories. Specifically, the scheme for Internet points that you could spend as a minor altcoin, maybe — that Reddit ran on a private Ethereum instance, because there was no way that doing it on the public Ethereum blockchain could scale. Perhaps they’ll do that some more. [Reddit]
Coinbase has bought Bison Trails, whose previous business was to try to hobble banks with enterprise blockchain. So that’s one less Libra/Diem Association member. [Fortune] Coinbase previously bought Libra member Tagomi. [Fortune, 2020]
Overstock is dumping Medici Ventures, its blockchain operation, to make its way in the wider world as a separate venture. Overstock’s tZero subsidiary, who do a securities trading blockchain-ish thing, will have some ownership from both Medici and Overstock. Medici and tZero were started by Overstock ex-CEO and Bitcoin fan Patrick Byrne. [Overstock]
A new low in blockchain ventures — The Leda Health fraud: rape kits on the blockchain. Silicon Valley venture capitalists are telling rape victims not to go to the authorities, or to a hospital, but to give them money instead, because CEO Madison Campbell assures you that the kits are “encrypted and backed with blockchain technology” — and never mind that “legal chain of custody” rubbish that would be needed for any of this to be legally valid. Thankfully, this awful plan hasn’t been allowed to go forward as yet. [Twitter]
The best way to lose all your money is invest in a founder who is active on Twitter.
— Nikita (@nikitabier) January 19, 2021
Who makes the Nazis?
Large payments in Bitcoin were sent in December to several far-right figures involved in the 6 January attempted US coup. Chainalysis published the sender’s suicide note — but blanked his name. [Chainalysis]
The name came out quickly — the French neo-Nazi who sent the US neo-Nazis some bitcoins and then killed himself was Laurent Bachelier, a.k.a. Pankkake, an open source programmer.
Old Bitcoin hands might remember Pankkake from Bitcoin Talk back in the day — his charm and his knack for making friends were legendary even in 2013 and 2014, such as his threats to trash companies’ reputations if they didn’t send him bitcoins not to do that — “couldn’t be bothered dealing with a neo-nazi teenage troll screaming accusations.” (Bachelier was in fact 28 at this time.) [Bitcoin Talk]
Bachelier was the author of software library WeBoob, which was kicked out of Debian Linux because of the name, and the slurs and insults in the error messages. [Debian Bugs; Twitter]
Bachelier suffered trigeminal neuralgia, which causes extreme chronic nerve pain — to the point it’s called the “suicide disease.” His suicide note also suggests that he was depressed at the supposed decline of Western civilisation — by which he seems to mean that the world wasn’t racist enough for him. [CryptoBriefing]
based on the level of rhetoric ive seen, Its almost as if all the girls on this site actually WANT bit coin (BTC) to fail. There i said it .
— wint (@dril) January 17, 2021
It’s the new thing
Weasels once again demand that the weasel exterminators take a less “weasel-hostile” approach to plagues of weasels. The FCA cracks down on crypto derivatives in the UK, and the crypto grifters — who are called “fund managers” in the headline, for some reason — are most upset. [Financial Times]
Kraken dumps XRP for US residents, from 30 January. [Kraken blog]
Ken Kurson from Modern Consensus was pardoned by Donald Trump in the last days of the previous US administration — Amy Castor, who suffered the inestimable joy of working for Ken, writes it up. Ross Ulbricht wasn’t pardoned — looks like he’s still HODLing. [Amy Castor; CoinDesk]
There is an unconfirmed rumour that the body alleged to be QuadrigaCX founder Gerald Cotten will be exhumed. I have no further information on this beyond a single Reddit post. [Reddit]
If you’re a crypto project and your main branch isn’t named “rug” are you even trying to decentralize the internet https://t.co/3PCvxpPn4I
— Josh Cincinnati (@acityinohio) January 17, 2021
New facts emerge
How can 24 billion tethers possibly move a 650 billion dollar Bitcoin market cap, huh? Because “market cap” was always a meaningless number. This is a question that’s blitheringly stupid on multiple levels — but it’s persistently asked by bitcoiners who don’t understand arithmetic, let alone how a trading market determines prices. But Amy Castor valiantly attempts to bring clues to the deliberately dense. [Amy Castor]
A nice history post from J.P. Koning on how 1880s fintechs tried to bank the unbanked. [Moneyness]
Adam Blumberg, an investment adviser who is a crypto fan, has written a detailed and patient explanation of why conventional investment advisors mostly won’t advise even a 1% to 5% exposure to cryptos. He also suggests that “Long diatribes on the history of Austrian economics don’t matter much, as the advisors can’t usually take those same explanations to clients.” [Blockworks]
Institute of Chartered Accountants in England and Wales: Don’t bank on bitcoin for payments yet — with a quote from me. [ICAEW]
I thought it was odd enough when I was quoted in the Daily Express. But I’ll give the Sun credit for spelling the name of the book correctly. [The Sun, archive]
hustle NEVER sleeps. 😤 back in 2017 i decided to invest $60 in some bitcoin. 2 weeks later, how much was it worth? nothing, it immediately crashed. did i give up? nope, i forget about it until now. apparently bitcoin is up big time. did i make some cash? no, i forgot my password
— soul nate (@MNateShyamalan) January 10, 2021
Crypto twitter knowledge of real finance = Gilligan’s Island knowledge of fixing a three foot hole in a boat
— Matt Leising (@mattleising) October 17, 2018
The best time to buy Bitcoin is whenever they have the suicide hotline pinned in the subreddit
— 𝚖𝚒𝚕𝚕𝚎𝚗𝚗𝚒𝚊𝚕 𝚊𝚖𝚎𝚗𝚒𝚝𝚒𝚎𝚜 (@Y2K_mindset) January 14, 2021
I blame movies and Samantha Pritchard for implanting the idea in my mind that investing in the stock market="your $100 turned into $10k overnight, kapow, you win" when in reality it's like "oh boy are you ready for your $100 to turn into $102.62 in 7 years :)"
— Rowdy Roddy Diaper (@PissJugTycoon) January 22, 2021
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Apparently trigeminal neuralgia defies pain treatment, even opioids don’t work.