This was a history-making week for the crypto space. The Treasury Secretary’s press conference on cryptocurrencies, plus the Senate and House hearings on Libra — right after the Fed Chair’s remarks and the President’s tweets last week on crypto — illustrated the inevitability of blockchain technology disrupting not only financial services but money in some way. The main theme I took away from the week is that Libra has so far been good for decentralized cryptocurrencies.
First, the biggest observation from the Congressional hearings is how much lawmakers on both sides of the aisle dislike Facebook. Particularly in the House hearings on Libra, the idea of a currency over which Facebook could wield outsized influence seemed to spark a lot of skepticism, if not outright hostility. Surprisingly, House Reps. on both sides of the political spectrum, whether inadvertently or not, ended up highlighting the benefits of decentralized crypto networks such as Bitcoin and Ethereum in their line of questioning. For instance, Rep. Sean Duffy, who pointed out that the virtue of a $20 is that anyone can use it, asked David Marcus whether or not Milo Yiannopoulos, who had been banned from Facebook, would be allowed to transact in Libras; Marcus was not able to answer. Rep. Alexandria Ocasio-Cortez made the point that currency should be a public good rather than the province of massive private companies.
And in a moment that simply put a cherry on an already surreal week, Rep. Warren Davidson said the word “sh*tcoin” in Congress. He asked Meltem Demirors if she had heard of sh*tcoins. Last year, on Unchained, Meltem she used the phrase “sh*tcoin waterfall” so much I titled the episode after the phrase. Then at the Magical Crypto Conference, she brought a toilet and threw physical chocolate “sh*tcoins” out to the audience. So the answer to that question is, oh yes.
I discuss the hearings with Peter Van Valkenburgh of Coin Center in a special (read: double-length) episode of Unconfirmed this week. And on Unchained, I’ve got an episode on a topic that every person in crypto needs to understand: how your phone number could make you vulnerable to theft and/or extortion.
Thanks to everyone who participated in our survey! The five winners of the Casa lightning node, plus a free year of Casa’s Gold membership, are: Andy from Denver, Gabby Civils, Henry Elder, Julian Gall and Rosemary Heather. Congratulations to you all! And thanks to Casa for this donation!
If you haven’t yet, sign up for the Virtues of the Crypto Revolution retreat with me, Meltem and Jalak Jobanputra of Future Perfect Ventures at Omega Institute from Sept. 20-22!
This Week’s Crypto News…
The crypto industry is used to being associated with criminal money, but lawmakers’ distrust of Facebook practically made it seem like the golden child in comparison.
- David Marcus’s testimony to the Senate, plus commentary from Coin Center’s Jerry Brito
- Rep. Sean Duffy pointed out the potential for censorship with Libra
- Rep. Patrick McHenry mentions Satoshi Nakamoto, calls his creation “unstoppable” (and sings Bitcoin’s virtues on CNBC)
- Rep. Warren Davidson uses the word sh*tcoin in Congress
- Peter Van Valkenburgh highlights the top takeaways from Sec. Mnuchin’s speech
- Caitlin Long’s testimony to the Senate calls US financial regulations “outdated” and says that gave rise to the stablecoin trend
- The Information identifies the people with power at Calibra
- According to Forbes, a bunch of developers have already been playing around with Libra
- The WSJ editorial board says Libra could help the un- and under-banked
- Matt Hougan of Bitwise reveals how Libra has already changed conversations with financial advisors
- The ‘Keep Big Tech Out of Finance Act’, which would prohibit tech companies from creating functioning as financial institutions or creating a digital currency, circulates
After people noticed a few months ago that international criminal mastermind Paul Le Roux was named in an imperfectly redacted footnote in a document in Craig Wright’s lawsuit, Evan Ratliff, the author of a recent book on Le Roux called The Mastermind dug into the “Was Paul Satoshi” question again. (He had looked into it for his book but dismissed it at the time.) He published the results of this investigation in Wired. Although his research is ultimately inconclusive, it’s still worth a read. (Plus, he discusses his sleuthing on CoinTalk.)
Three people filed court documents describing Todd’s alleged behavior, in a report by Leigh Cuen of CoinDesk.
Amidst a wave of greater scrutiny of crypto exchanges, the CFTC is investigating BitMEX, a Bitcoin exchange known for offering up to 100x leverage, over whether it has served US traders.
In an unforgettable lesson in how nascent the industry and the technology still are, last weekend, the company Tether accidentally created more than $5 billion Tethers, causing Bitcoin to drop 12%.
A brief recap of the latest on the plan to move to Ethereum 2.0. Plus, Vitalik proposes using the Bitcoin Cash blockchain as a temporary data layer for Ethereum. (Bitcoin SV has a similar number of transactions, but 94% of them come from a weather app.)
This non-official Twitter account had these gems this week: “Bitcoin did 9/11,” “Libra is not competing with central banks. It’s not a competition if you know you’ll win,” and “If you aren’t moving down and to the right, are you even a cryptocurrency?”