Long Reads Sunday #102

Happy Sunday from the Hudson Valley

Nothing much going on this week, other than major rhetorical escalation in US v. China; Tesla looking like DOGE; confirmation that PayPal is getting into crypto; and, of course, the biggest hack in social media history focused on scooping some BTC from the very tiny venn diagram of “people smart enough to have BTC and stupid enough to give it away on the internet.”

Yeesh.

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This Week’s Top Bitcoin & Crypto News

• PayPal confirmed it’s getting into crypto in letter to EU

• Beijing has released a 145-page plan to become a blockchain hub

• The IRS inks a deal with Coinbase for on chain data

• The Colorado Lottery is partnering with ETHDenver

• A Tencent food delivery company is the latest test partner for China’s new central bank currency

• Compound hits the symbolic $1B in total loans

• Bitcoin mining difficulty jumps 9.89% to hit new all time high

• Bank of England exploring a central bank digital currency

• The taxpayer advocacy service says IRS crypto letters violated rights

• Kingdom Trust retirement accounts to custody bitcoin via Fidelity Digital Assets

• A former A16Z partner is launching a new fund around platforms users can own

• $1m US Department of Energy grant for studying how blockchain could help power grid security

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This week on The Breakdown podcast

• Monday | The Real Story Behind Tesla's Crazy Rally

• Tuesday | Why Are Execs of Bankrupt Companies Being Rewarded With Millions?

• Wednesday | A Primer on the US and China's 'New Cold War'

• Thursday | No, the Twitter Hack Wasn't about Bitcoin

• Friday | What If the Too-Strong Dollar Is a Solved Problem? Feat. Jon Turek

• Saturday | Social Media Is Democracy’s Faultline: The Breakdown Weekly Recap

• Sunday | Are Stablecoins Eurodollars 2.0? Long Reads Sunday

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This Week’s Big Themes: The Hack Heard Round The World

It started simply. Around 2:15 on Wednesday, a set of accounts on Crypto Twitter from players like the big exchanges started to all show the same message about a giveaway with “CryptoForHealth.”

The attack initial was notable in simply how many accounts they were able to hit simultaneously.

By around 4:15, however, it was clear that something very different was afoot.

And it just kept getting crazier…

Very quickly, the narrative battle started.

Nathaniel Whittemore @nlw

Important question: Was this good for #bitcoin or was this bad for #bitcoin? Argue intensely in the comments.

The “bad” side was pretty obvious. 130 (as we would discover later) of the biggest accounts on Twitter were hacked to ask for bitcoin. Not only would this lead (inevitably) to people calling it a “bitcoin scam,” but it would also give ammunition for those who already sought to do away with the space.

Marques Brownlee @MKBHD

Where were you the day every major Twitter account was compromised in a gigantic Bitcoin scam?

Josh Barro @jbarro

You know, we wouldn’t have to worry about this sort of thing if cryptocurrency was illegal.

Those on the “good” side tended to focus on one of two arguments. The first was basically the “all press is good press” idea.

Alex Krüger @krugermacro

Millions of people around the world are about to hear about Bitcoin again in the following few hours. Today's hacks will be in every newspaper and media channel.

David Nage🎯 @DavidJNage

Between Elon, Gates, Bezos and influencers like Mr Beast over 100M followers have now had #Bitcoin show up in their timeline today. Even if 1% of those go search about Bitcoin that’s massive.

The other was that ultimately, this was a failure of centralization, not of bitcoin.

Tim Copeland @Timccopeland

The irony in calling this a "Bitcoin hack" is that it exposed the weakness of centralised servers, in turn making the case *for* Bitcoin.

Sahil Bloom @SahilBloom

People seem focused on whether the hack was good or bad for Bitcoin. That is missing the forest for the trees. The hack very publicly exposed the inherent vulnerability of single point of failure systems. That is the real story. Long decentralization.

Blockfolio @blockfolio

They hacked twitter, not bitcoin. Pass it on.

Undoubtedly, the brightest spot in that interpretation was hearing it from a sitting member of Congress.

Tom Emmer @RepTomEmmer

Bitcoin isn't the problem. Centralized control is.

Interestingly, for those worrying that the bitcoin narrative would stick more than the centralization narrative, those fears haven’t really played out.

Much stickier has been the concern around the power of these platforms in society. Much of the conversation has been around a Twitter control panel that the hack supposedly revealed that suggests the shadowbanning thing is real.

Joseph Cox @josephfcox

Update: I've obtained a new screenshot from a source in the SIM swapping community I've known for a while. Shows the internal panel and the @binance account. Binance is one of the accounts taken over today. Source says used a Twitter rep for the takeovers vice.com/en_us/article/…?

And when it comes to the inquiries from US Government bodies, the focus has absolutely been on Twitter’s security and what might have been.

zerohedge @zerohedge

Within an hour of the breach, Republican Sen. Josh Hawley wrote a letter to Twitter CEO Jack Dorsey asking for more information about the hack, including how the hack occurred, how many users were compromised, and whether the hack affected President Trump's account.

Still, I have to agree with Nic and Naval here. One of the most confounding parts of this is the disparity between the significance of the attack and the goal.

Naval @naval

Hacking Elon’s Twitter account and using it for a crypto scam rather than a stock-trading scam shows a complete lack of imagination.

so-called nic carter @nic__carter

They had access to every twitter account on earth and chose to engage in low grade crypto scamming. Unimaginative, frankly

Happy Sunday!

-NLW