Happy Thanksgiving to my U.S. readers! I hope you all had a less “incoherent, nasty and immature” holiday than the Crypto Twitter lead-up to the holiday. You’ll see what I’m talking about when you see how a serious technical discussion deteriorated into conspiracy theories and unfounded accusations.
On this week’s podcasts, I talk with two executives at CoinMarketCap about the history of the site, the choices the company has made along the way and its new direction. And, for Black Friday, I have an interview with the CEO and cofounder of Lolli, a browser extension that makes it possible for you to earn back as much as 45% of your purchase price in bitcoin when you shop online.
This Week’s Crypto News…
Five years ago, Vitalik wrote about 16 hard problems in cryptocurrency, and last Friday, he revisited the problems to see how the solutions to them are progressing. Scalability was number 1, and he says that since 2014, there’s been great theoretical progress, which is pending more real-world evaluation; he also says ASIC-resistant proof of work has been solved as far as possible. If you’re interested in the technical details on
Bram Cohen, creator of BitTorrent and Chia, took Vitalik to task, picking apart some of his points, beginning with, “For ‘Blockchain Scalability’ he talks about on-chain scaling with sharding as the only option. Of course it isn’t the only option, payment channel networks are much more appealing in many ways and are becoming a real thing.” Mustafa Al-Bassam had some good rejoinders to Bram: “reasonable people realise that only scaling layer 1 or layer 2, and not both, is dumb. Only in the Bitcoin space there are ‘layer 1’ and ‘layer 2’ opposing tribes in the community.”
Without getting into too much detail on this, the response to Vitalik’s blog post basically devolved into this conversation about whether or not Ethereum is a scam. Normally I wouldn’t even cover something that’s not only not news but a baseless claim, but it’s Thanksgiving, so why not just give voice to a sensible opinion. Placeholder’s Chris Burniske tweeted, “Tribalism is the biggest drain on crypto’s human resources that I see today. Tribal toxicity drives newcomers away, has caused valuable talent to leave the industry, and clouds the thinking of the committed. To those that aren’t deep in crypto, we all look like part of the same movement. It makes no sense that a movement attack itself. We end up looking incoherent, nasty, and immature. Who wants to join such a movement? Meanwhile, traditional finance is trapped in a negative interest rate experiment, capitalism is no longer working for the majority, and faith in our institutions is crumbling. A perfect opportunity for us to onboard more contributors, and yet instead we sit here bickering.” He concludes, “Lastly, unless something is provably a scam, move on. @Blockstream is not a scam, just as #Ethereum is not a scam. Someone having different subjective values than yours != a scam. The market will do the rest; save your time & energy for more valuable contributions.”
After The Block reported last week that Binance’s Shanghai office had been raided by police and then closed, Binance CEO Changpeng Zhao threatened to sue, and The Block had to walk back the bit about the police raid but stood by its assertion that there was a Shanghai office that had later been closed.
First, let’s discuss whether or not the office existed. Brenna Smith of CryptOsint did some digging and concluded that one of the offices was registered to Babi Finance, which has some of the same executives as Binance, including cofounder and chief marketing officer Yi He. She concludes, “Binance did have a hub in Shanghai through Babi Finance. Though the police did not raid their offices, the Block’s underlying reporting holds up, despite their misuse of words, as PBoC authorities did visit the office based on reports from the Shanghai state-run media.”
Now, let’s turn to the threats of lawsuits. Fortune’s David Morris said this about the kerfuffle: “The absurd contortions by Binance make just slightly more sense in light of pressures from China’s government. Binance is officially based in Malta, but Zhao was born in China and the company appears to be working to expand the business there. But the lack of clear rule of law in China makes such expansion subject to the whims of CCP leadership, and the raid/visit came just days after the People’s Bank of China ordered a crackdown on crypto scams and exchanges. By pushing back on The Block’s reporting, Binance may somehow be hoping to curry favor with Chinese authorities.”
In case you want an easy cryptocurrency and blockchain technology explainer for your friends and family over the holidays, you can hear me explain how it works on this segment on Marketplace, which, hilariously, my actual friends heard and texted me about.
If the Marketplace segment gets your friends and family intrigued, they might enjoy this article, Cryptocurrency Will Not Die, by a reporter for GQ trying to understand what crypto is about, and telling the sorry tale of some traders who rode the 2017 wave up — and crashed in 2018-2019 downturn.