You may have also missed some of his colourfultweets he spiced it up with. As a 'bubble expert', Nouriel has been consistently wearing the Dr Crypto Doom cape for pretty much as long as anyone can remember, his stance being the very extreme epitome of the innate conflict between economists and technologists. But seriously, just click on a couple of those tweets to get a sense for how hopelessly he seems to have lost the plot with his Twitter megaphone. Or maybe he's just trolling?
Despite our best efforts, we find it hard not to feel utterly embarrassed for such a display.
And not because we disagree with what he says. We do of course, most of it is self-evidently a hyperbolic, blindly one-sided rant. On that, here's an absolutely epic takedown of his speech by Ethan Buchman, and here's another very balanced one by Alan Silbert (both have since been blocked on Twitter by Nouriel). For a summary of both sides arguments and senators reactions, Jake Chervinsky also published an excellent thread, without being blocked.
So yeah, one can easily disagree with a lot of it, perhaps even agree with some bits. But that's not it. It's his destructive attitude and language we are finding most disturbing. How that helps him preserve his “personal, intellectual and academic reputation”, the only things he's got at stake according to the last lines of his testimony, is truly a mystery. For sure it makes the headlines and gets him high profile speaking arrangements at least, we get that. Over here we've not been shy about constructively critiquing the excesses of this industry ourselves, or surfacing thoughtful and well reasoned arguments from all camps. In fact we are desperately seeking for those, it helps everyone grow out of their own bubbles. Ironically though, Nouriel comes across not much different from the armies of shillers he (rightly) bashes, who hear no arguments, who bite your finger off or block you the moment you point at a potential fallacy in their arguments, who shout louder and don't listen back. At the end of the day, we have learned absolutely nothing new from his testimony, zip. Nada.
That's a bit of a shame, particularly for the members of the committee. There was no attempt to educate about the technology, something that is clearly badly needed in those circles, but only to superficially emphasize the very worst emanations of it and attack with cheap ad hominems. There was another side to the testimony, with Peter Van Valkenburgh of CoinCentre, but obviously he made less headlines being less sensationalist.
Perhaps Nouriel should have spent a day or two at the latest ETHGlobal events, or maybe pop by Devcon4 in Prague at the end of the month, it's sold out but we can magic up a hard fought ticket. I guarantee he will be shocked not to find the “motley crew of crypto con men, scammers, criminals, trolls, shills, carnival barkers, self-serving ignoramuses, price manipulators, conflicted insiders” that he claims this industry is filled with. He's more likely to bump into some world-class developers and cryptographers who are dedicating their careers to this regardless of what Coinmarketcap says. Perhaps he should spend a day at Fullnode in Berlin, then jump on the first flight to Buenos Aires and hang with the Voltaire House crew and hear what they are up to down there and why they are doing it. And while he is in South America, he may even hear firsthand accounts of Venezuelans who had their gold confiscated at the boarder as they tried to flee their hyper-inflating country.
After all, we'd expect no less from someone who once claimed the following:
“I’ve found that there is nothing better than visiting a different country, even if for three days. What you can hear from exchanging ideas with people gives you a much better sense of what’s happening as opposed to what’s written.”
You said it, “exchanging ideas”, being open to new ones, respectfully. That's how we all progress here.
Anyways, that was letting some steam off. The reality though, which Albert perfectly captures in his brief remark, is that it's really down to us all. His views (not his tone hopefully) are likely to represent the perspectives of the large majority of world's population that is yet to be on-boarded. And so, if there's any chance to grow real adoption and usage beyond the early adopters that we are, it will be by learning how to convincingly address the concerns of the Roubinis of the world.
PS: As we were putting the finishing touches to this week's edition, Chris Burniske also published a post, titled The Nouriel in All of Us, which does a splendid job at expanding on and generalizing some of our points:
"While insults and expletives can be rich and colorful in person, through a screen they lazily fall flat and convince no one.
Intolerant rhetoric also kills off the diversity of ideas, as the disagreers defect over time, slowly debilitating a group’s ability to assess its own weaknesses."
Chris' post goes even one level higher, blaming a broader "breakdown in civility" in our cultures, particularly online ones, for situations like this one.
The "unwinding of ICOs" is an emerging narrative that we have commented on multiple times in the past few months, as projects like Digipulse, Cofound and Iconomi decided to find a radical solution to a native token that proved at best useless and at worst an unregistered security.
In this post Rocco goes in-depth into each of these companies, and even adds a few that we missed out on.
If you are desperately looking for your weekly dose of bullishness, here's your answer to how big it's potentially going to get. Courtesy of Multicoin.
The TL;DR is: - Digital gold: $30-$70T - Deflating the monetary premia of real estate, equity, and debt: $5 -25T - Replacement for offshore bank accounts: $1-10T - Securing the world’s assets: $1-10T (with a reference to a popular TE post!) - New economic activity facilitated by blockchains: $1-10T
Perhaps prompted by the recent headlines that some of the highest profile university endowments have written checks into crypto funds, Scott of A16Z addresses institutional investors who are trying to get their heads around how to play this emergent asset class.
The message, somewhat self-serving clearly but hard to disagree with, is that: - crypto should be considered part of the Venture Capital allocation - listed crypto assets are only a sub-set of the investable universe - diversification between listed and private crypto markets should be seeked - active, domain-specific managers are where the alpha is.
Inevitably Scott's piece attracted a counter from the Bitcoin camp, where the author argues the VC's thesis conflates equity with currencies and overplays diversification (i.e. it's all correlated, if bitcoin fails all else follows).
"Institutional investors should figure out their speculative allocation to bitcoins as a growth currency separately from figuring out their investment allocation to venture funds. These allocations are backed by very different value accrual theses and face different risks."
A strong PoS bashing, arguing that a better name would be Proof of Temporary Stake, which includes one not talked enough aspect I think, that "Keys theft sidesteps altogether the financial cost supposedly required to acquire majority stake — whereas in PoW there’s no sidestepping the fact that an attacker needs to overcome the mining hardware and ongoing energy costs to pull off and sustain a majority attack."
Economist JP Konig tries to steel-man Vijay Boyapati's theory, which you should remember from a post featured on TE, "The Bullish Case for Bitcoin".
You could sum up JP's post with the following quotes: "Whereas Vijay thinks bitcoin has yet to go mainstream, I think that bitcoin went mainstream a long time ago, probably by late 2013." "Bitcoin is a successful decentralized gambling machine, an incredibly fun censorship-resistant Keynesian beauty contest."
It's an interesting read, and we are biased of course, but every time someone tries to rationally argue all the reasons why Bitcoin is worthless and is just a bubble whose real value is 0, we just get a grin on our face. This might not be the most scientific and dialectic of approaches, but the gut feeling of witnessing the future of money has never faded for a single second since discovering this in 2010.
- Adam White (employee #5 at Coinbase) is joining Bakkt as its first COO.
- Blockstack is following Aragon's lead and is going the decentralized route for its governance and vehicles.
- IBM is chugging along trying to make enterprise blockchain a thing, now Carrefour is joining.
- ZRX launched on Coinbase Pro. Quite surreal to see something you invested in before it even existed going all this length.
- Some $28M in fiat funds of a Canadian exchange have been frozen and are being disputed
- Drama reminiscent of Tezos is emerging at Cardano, where the Foundation is being accused of not doing its job as promised.
Muun is a new mobile, non-custodial Bitcoin wallet that aims to go the Venmo path.
This looks incredibly well done. It has a 2-of-2 multisig structure with them holding a co-signing key (that key is also encrypted on the phone) as well as a 2 of 3 recovery structure with: password, access to the email or a cold recovery code.
Dragonfly Capital can finally unveil its new $100M crypto fund, led by Alex Pack and Bo Feng, though they've been actively investing for a while.
Their strategy will be to deploy capital across the board in funds, protocols and companies, with the idea of bridging the East and the West (a play that we are seeing emerge in other new funds like Primitive).
LPs in Dragonfly include Bitmain, OKEx and an incredible array of personal investors like Marc Andressen and Chris Dixon, Olaf of Polychain, head of Sequoia China, co-founder of Baidu and many others.
Blockfolio (anyone still checking it??) raised an impressive Series A round led by Pantera and involving exchanges like Bitmex and Huobi as investors.
It seems that the future for the startup is in driving community engagement for projects, with Blockfolio Signal being the first foray into helping the ecosystem "move from an era of speculation to an era of participation".
Under hyped Clearmatics raised new Series A funding from Route 66 Ventures to double down on the adoption of distributed ledger technology amongst financial institutions looking to automate the lifecycle of financial derivative contracts.
A subset, and most likely a driver, or the 'unwinding of ICOs' that we are seeing is the ongoing regulatory crack-down. This post shows that there's a lot more of that going on in the back stage than the media is exposed to.
Apparently a second round of subpoenas has gone out and as many as a dozen companies have been refunding investors and paying up fines, pressured to settle by the SEC. Though obviously that's not always practical when the token is already been issued and is traded. Even companies that raised through SAFTs are supposedly on the SEC radar.