Long Reads Sunday #81
Macro warning signs, Lightning updates and the latest contentious deplatforming
Happy Sunday, all! Last week, I tried a format trying to blend the old Twitter LRS-style with the new email medium that seemed to work. I’m playing solo dad this weekend so we’re back to a more “top 5 themes” style format, but next week we should be back to the more narrative style. At least this week you get some serious memes too. Happy Long Reads - NLW
This Week on The Breakdown podcast
Tuesday | Narrative Watch: The Future of Fud
Wednesday | Exclusive Interview with Binance US CEO Catherine Coley announcing staking
Thursday | The Unsolved Mystery of How To Fund Public Protocols
Friday | The Founders of Chainlink and Synthetix on DeFi, Derivatives and 25 New Decentralized Price Feeds
LRS Top 5 Themes Of The Week
Theme 5: Twitter Suspends ZeroHedge
Deplatforming is one of those issues that, while not about crypto per se, tends to draw significant reaction from the bitcoiner and crypto crowds in that it reflects the problems of over-powerful centralized authorities. The latest deplatforming was Twitter suspending ZeroHedge over not a Tweet, but a conspiratorial post doxxing a specific Chinese scientist it suggest was the originator of the Coronavirus.
There were a few reactions. The first basically amounted to “who cares, ZeroHedge sucks.”
The second was “yeah but even though it sucks, it probably shouldn’t be banned”
For me, the important conversation has nothing to do with ZeroHedge, per se, and everything to do with power. If we’re making an argument that a private company shouldn’t be able to censor its users, we’re effectively making the beginning of an argument that that private company should be regulated and protected like a public utility.
Theme 4: Does Ethereum Have A Marketing Problem?
There were numerous discussions across Ethereum Twitter this week about whether or not the Ethereum community should be spending more time on marketing. One has to imagine that these were in part a reflection of the recently completed Gitcoin grants, which had both technical grants and - controversially - media grants. We’ve also recently seen the founding of the Ethereum MarketingDAO, so clearly this is something people are thinking about. Let’s look at some of those discussions before I share my 2 cents.
So, here’s my take (which may be a little surprising, coming from someone who runs a crypto marketing consulting firm). I think that projects within the Ethereum community spending time thinking about what they stand for and how they tell their story; spending resources on content that helps people who are interested learn more and join the community of early adopters; and generally create content that is invitational for people who want to go down the rabbit hole - great.
What I also think, however, is that DeFi - the pretty unarguable primary focus of the Eth community at the moment - is simultaneously massively high potential and massively high risk. Right now, it is being live-action incubated by a group of early adopters who, even though they’re playing with live ammunition, fundamentally understand those risks.
THIS IS A GOOD THING. I don’t believe that right now DeFi should want lots of new users - especially generalists who aren’t already familiar with the space.
I understand that no one wants to be told slow down, but the end-game of DeFi if it works and matures is a fundamentally different way that people get to interact with their money and the financial system. That is powerful enough to be a couple degrees more conservative in growing the market than might be the instincts of some.
Theme 3: Maybe Lightning Isn’t For End Users
Earlier in the week, @nvk kicked off an interesting conversation among bitcoiners around Lightning.
What made this particularly notable, however, was the introduction of Strike by Zap. Strike allows people to interact with the Lighting Network via their banks, debit and credit cards. Here’s Zap founder Jack Mallers explaining.
The important, and I think somewhat under-appreciated, part of this development was a shift in thinking about where demand might come from. Instead of assuming that HODLers want a way to more easily “use” their bitcoin (especially when most of them see holding resources outside the legacy system as ‘using’ bitcoin), perhaps the design focus should be on merchants looking to avoid laborious fees. From the CoinDesk piece on the topic:
Theme 2: Coronavirus and the Question of Bitcoin as a Macro Asset
Bitcoin pushed up over $9,000 at the beginning of the week (and has stayed there ever since). But with the rest of the global markets tanking as the week opened, that old question of whether bitcoin was behaving as a macro asset - and more specifically, a safe haven, came up again.
Thomas Lee looked at it strictly from a numbers perspective.
But the most complete thread on the topic came from Alex Kruger, who in general thinks that arguments that bitcoin is a macro asset (or even becoming one in short order) are overblown.
Theme 1: Macro In Focus
…and speaking of the Coronavirus, there’s no way to escape that the global epidemic is setting the tone for activity across the economy. In this thread, Raoul Pal explains that it’s not just the virus itself, but the impact on an economic environment that is weaker than it seems at first glance.
So, what does one buy in that situation?
LRS Top Memes of the Week
4. On Banks
