A New Format for Long Reads Sunday

Bidding adieu to the medium that started it all

Jan 20, 2020

Note: A lot has changed this LRS. This will be the first edition to be designed exclusively for email, rather than Twitter. For a variety of reasons (that I’m happy to go into if anyone is interested), I simply don’t think Twitter is a great channel for this content any longer. At the same time, LRS was designed to match the medium, so switching to email-only requires some rejiggering. For that reason, I’m also experimenting with a switch to Substack, which I’ve found more flexible and usable than Revue. Both of these switches *are* potentially reversible, if you all have strong feedback. Respond to this or @ me to let me know what you think, and thanks as always for reading. - NLW

The Week That Was: A TL;DR

The headliner on this week has been the price action. Along with the normal questions of (why number go up?) we also saw debates about altcoin pumping and whether it suggested that perhaps our markets haven’t matured quite as much as we’d like to believe. More interestingly, we saw DeFi interact with the market action in a positive way, with money flooding into platforms like Compound in order to allow traders to participate in the hot markets without giving up their underlying exposure.

A sub-theme throughout the week was privacy and surveillance (as you’ll see in the LRS Top 5 below). In many ways, crypto today is evolving in two parallel paths - a safe, institution-friendly version on the one hand and a make-officials-nervous privacy protecting version on the other. Can they co-exist?

Finally, alongside the price action and meta questions of privacy came an inevitable discussion of where bitcoin and crypto fit in the larger geopolitical and economic landscape. This is especially fitting as we head into the World Economic Forum this week.

Long Reads Sunday Top 5

In place of the traditional full length format, I’m going to experiment with a Top 5 where I highlight the content and threads I found most enlightening.

Honorable Mention: Venkatesh Rao - “The Internet Of Beefs”

The thesis of this piece is that the internet has become inhospitable for any conversation that is not either a) completely affirming of a tribal viewpoint; or b) a confrontation with someone else’s viewpoint. It’s hard not to see the relevance to the crypto sphere. That said, I did see at least one great critique about the importance of conflict in intellectual development.

#5: @ceterispar1bus on Options

Ceteris Paribus IS RIGHT @ceterispar1bus

1/ What the fuck are options, and why is everyone talking about them all of a sudden for $BTC? In this thread I'll give a high level options 101 explainer on what call options are, and the basic dynamics of how they work.

Derivatives are undeniably one of the hottest parts of the crypto markets right now, and seem poised to do nothing but grow (see below in the notable news section for the CME launching options on BTC futures). Indeed, the growth in derivatives is one of the defining features and enablers of increased institutional engagement in the sector. This excellent thread is an ELI5 for people trying to understand options better.

#4: Bitwise Financial Advisor Survey

Ryan Selkis @twobitidiot

Unreal results from Bitwise financial advisors survey: + 76% fielded clients’ crypto questions in the past year + 58% say “better regulation” could spur them to invest + Still only 6% investing client funds We are still so frigging early.

coindesk.comMore Than Half of Financial Advisors Want Better Regulation Before Investing in Crypto - CoinDeskMore than half of financial advisors are too spooked by regulatory uncertainty to initiate or expand their cryptocurrency investments, a new study by Bitwise Asset Management found.

Bitwise Asset Management surveyed 415 financial advisors about their clients attitudes towards crypto. The long and the short of it is that they’re clients are interested (and often investing on their own) but there is work to be done before they get comfortable making bigger recommendations.

To hear more on why advisors are the gateway to the next wave of crypto investors check out my interview with Tyrone Ross on The Breakdown from last Friday.

#3: Vitalik Buterin on Digital Identity

vitalik.eth @VitalikButerin

It's becoming increasingly clear to me that issues of identity are the main ground of disagreement between many in the crypto community and @RadxChange. Thread:

The thread is couched in a disagreement with the RadicalxChange community, but really this is a much larger meditation on identity. I think the key line is: “Cypherpunks need to realize that in order to thrive they ultimately will need to solve public governance challenges in decentralized communities, and coin voting is just plain terrible.” This issue is a growing now in part as people look to DeFi and explore how they might be able to offer under-collateralized loans.

#2: WSJ on why strong encryption is good for America vs. NYT expose on facial recognition software that has gone viral among law enforcement

zooko @zooko

Editorial in the Wall Street Journal giving reasons why it is good for American citizens, business, and society to have strong, backdoor-free, encryption built into American products.

wsj.comOpinion | The Case of Bill Barr vs. AppleThe AG is ignoring the important benefits to society of encryption.

Maya Zehavi - DePi 🍕 @mayazi

There’s a point where u realize fancy crypto might be just a bandaid. Privacy is dead for all intent & purpose nytimes.com/2020/01/18/tec… via @nytimes

nytimes.comThe Secretive Company That Might End Privacy as We Know ItA little-known start-up helps law enforcement match photos of unknown people to their online images — and “might lead to a dystopian future or something,” a backer says.

The battle of privacy vs. surveillance isn’t just a central question in crypto (CBDC’s anyone?) but one of the defining political challenges of our time. In this (refreshing) WSJ op-ed, the editorial board presents not just a rights-based argument, but contends that strong, backdoor-free encryption and privacy are good for American citizens, corporations, and government. Meanwhile, the NYT covers a facial recognition software that has gone viral among law enforcement, bringing up some serious questions about privacy and power.

#1: Leigh Cuen previewing Davos and the currency ‘Cold War’

The World Economic Forum kicks off this week. Reporting from the Crypto Finance Forum in St. Moritz, CoinDesk’s Leigh Cuen gives a feel for the vibe heading into the event. Notable is the overarching context of an emerging global currency ‘cold war,’ which is bigger than crypto alone but certainly has major implications for the industry.