#cryptoCurrency

[ararebreedstory]

For the longest time, when people would say "Cryptocurrency," this is what I'd imagine.

[probablyasocialecologist]

“Dead NFTs: The Evolving Landscape of the NFT Market” is a new report from dappGambl, a community of experts in finance and blockchain technology. Upon analysis of 73,257 NFT collections, the authors found that 69,795 have a market cap of zero Ether (ETH), the second most-popular cryptocurrency behind Bitcoin. In practical terms, that means 95 percent of NFTs wouldn’t fetch a penny today — a spectacular crash for assets that reached a trading volume of $17 billion amid a frenzied bull market in 2021. The study estimates that some 23 million investors own these tokens of no practical use or value.

[...]

The “Dead NFTs” report observes that the nearly 200,000 NFT collections “with no apparent owners or market share” identified by the study caused carbon emissions equivalent to the annual output from 2,048 houses, or 3,531 cars.

[mostlysignssomeportents]

The largest campaign finance violation in US history

I'm coming to DEFCON! On Aug 9, I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On Aug 10, I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).

Earlier this month, some of the richest men in Silicon Valley, led by Marc Andreesen and Ben Horowitz (the billionaire VCs behind Andreesen-Horowitz) announced that they would be backing Trump with endorsements and millions of dollars:

https://www.forbes.com/sites/dereksaul/2024/07/16/trump-lands-more-big-tech-backers-billionaire-venture-capitalist-andreessen-joins-wave-supporting-former-president/

Predictably, this drew a lot of ire, which Andreesen tried to diffuse by insisting that his support "doesn’t have anything to do with the big issues that people care about":

https://www.theverge.com/2024/7/24/24204706/marc-andreessen-ben-horowitz-a16z-trump-donations

In other words, the billionaires backing Trump weren't doing so because they supported the racism, the national abortion ban, the attacks on core human rights, etc. Those were merely tradeoffs that they were willing to make to get the parts of the Trump program they do support: more tax-cuts for the ultra-rich, and, of course, free rein to defraud normies with cryptocurrency Ponzi schemes.

Crypto isn't "money" – it is far too volatile to be a store of value, a unit of account, or a medium of exchange. You'd have to be nuts to get a crypto mortgage when all it takes is Elon Musk tweeting a couple emoji to make your monthly mortgage payment double.

A thing becomes moneylike when it can be used to pay off a bill for something you either must pay for, or strongly desire to pay for. The US dollar's moneylike property comes from the fact that hundreds of millions of people need dollars to pay off the IRS and their state tax bills, which means that they will trade labor and goods for dollars. Even people who don't pay US taxes will accept dollars, because they know they can use them to buy things from people who do have a nondiscretionary bill that can only be paid in dollars.

Dollars are also valuable because there are many important commodities that can only – or primarily – be purchased with them, like much of the world's oil supply. The fact that anyone who wants to buy oil has a strong need for dollars makes dollars valuable, because they will sell labor and goods to get dollars, not because they need dollars, but because they need oil.

There's almost nothing that can only be purchased with crypto. You can procure illegal goods and services in the mistaken belief that this transaction will be durably anonymous, and you can pay off ransomware creeps who have hijacked your personal files or all of your business's data:

https://locusmag.com/2022/09/cory-doctorow-moneylike/

Web3 was sold as a way to make the web more "decentralized," but it's best understood as an effort to make it impossible to use the web without paying crypto every time you click your mouse. If people need crypto to use the internet, then crypto whales will finally have a source of durable liquidity for the tokens they've hoarded:

https://pluralistic.net/2022/09/16/nondiscretionary-liabilities/#quatloos

The Web3 bubble was almost entirely down to the vast hype machine mobilized by Andreesen-Horowitz, who bet billions of dollars on the idea and almost single-handedly created the illusion of demand for crypto. For example, they arranged a $100m bribe to Kickstarter shareholders in exchange for Kickstarter pretending to integrate "blockchain" into its crowdfunding platform:

https://finance.yahoo.com/news/untold-story-kickstarter-crypto-hail-120000205.html

Kickstarter never ended up using the blockchain technology, because it was useless. Their shareholders just pocketed the $100m while the company weathered the waves of scorn from savvy tech users who understood that this was all a shuck.

Look hard enough at any crypto "success" and you'll discover a comparable scam. Remember NFTs, and the eye-popping sums that seemingly "everyone" was willing to pay for ugly JPEGs? That whole market was shot through with "wash-trading" – where you sell your asset to yourself and pretend that it was bought by a third party. It's a cheap – and illegal – way to convince people that something worthless is actually very valuable:

https://mailchi.mp/brianlivingston.com/034-2#free1

Even the books about crypto are scams. Chris Dixon's "bestseller" about the power of crypto, Read Write Own, got on the bestseller list through the publishing equivalent of wash-trading, where VCs with large investments in crypto bought up thousands of copies and shoved them on indifferent employees or just warehoused them:

https://pluralistic.net/2024/02/15/your-new-first-name/#that-dagger-tho

The fact that crypto trades were mostly the same bunch of grifters buying shitcoins from each other, while spending big on Superbowl ads, bribes to Kickstarter shareholders, and bulk-buys of mediocre business-books was bound to come out someday. In the meantime, though, the system worked: it convinced normies to gamble their life's savings on crypto, which they promptly lost (if you can't spot the sucker at the table, you're the sucker).

There's a name for this: it's called a "bezzle." John Kenneth Galbraith defined a "bezzle" as "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." All bezzles collapse eventually, but until they do, everyone feels better off. You think you're rich because you just bought a bunch of shitcoins after Matt Damon told you that "fortune favors the brave." Damon feels rich because he got a ton of cash to rope you into the con. Crypto.com feels rich because you took a bunch of your perfectly cromulent "fiat money" that can be used to buy anything and traded it in for shitcoins that can be used to buy nothing:

https://theintercept.com/2022/10/26/matt-damon-crypto-commercial/

Andreesen-Horowitz were masters of the bezzle. For them, the Web3 bet on an internet that you'd have to buy their shitcoins to use was always Plan B. Plan A was much more straightforward: they would back crypto companies and take part of their equity in huge quantities of shitcoins that they could sell to "unqualified investors" (normies) in an "initial coin offering." Normally, this would be illegal: a company can't offer stock to the general public until it's been through an SEC vetting process and "gone public" through an IPO. But (Andreesen-Horowitz argued) their companies' "initial coin offerings" existed in an unregulated grey zone where they could be traded for the life's savings of mom-and-pop investors who thought crypto was real because they heard that Kickstarter had adopted it, and there was a bestselling book about it, and Larry David and Matt Damon and Spike Lee told them it was the next big thing.

Crypto isn't so much a financial innovation as it is a financial obfuscation. "Fintech" is just a cynical synonym for "unregulated bank." Cryptocurrency enjoys a "byzantine premium" – that is, it's so larded with baffling technical nonsense that no one understands how it works, and they assume that anything they don't understand is probably incredibly sophisticated and great ("a pile of shit this big must have pony under it somewhere"):

https://pluralistic.net/2022/03/13/the-byzantine-premium/

There are two threats to the crypto bezzle: the first is that normies will wise up to the scam, and the second is that the government will put a stop to it. These are correlated risks: if the government treats crypto as a security (or worse, a scam), that will put severe limits on how shitcoins can be marketed to normies, which will staunch the influx of real money, so the sole liquidity will come from ransomware payments and transactions with tragically overconfident hitmen and drug dealers who think the blockchain is anonymous.

To keep the bezzle going, crypto scammers have spent the past two election cycles flooding both parties with cash. In the 2022 midterms, crypto money bankrolled primary challenges to Democrats by absolute cranks, like the "effective altruist" Carrick Flynn ("effective altruism" is a crypto-affiliated cult closely associated with the infamous scam-artist Sam Bankman-Fried). Sam Bankman-Fried's super PAC, "Protect Our Future," spent $10m on attack-ads against Flynn's primary opponent, the incumbent Andrea Salinas. Salinas trounced Flynn – who was an objectively very bad candidate who stood no chance of winning the general election – but only at the expense of most of the funds she raised from her grassroots, small-dollar donors.

Fighting off SBF's joke candidate meant that Salinas went into the general election with nearly empty coffers, and she barely squeaked out a win against a GOP nightmare candidate Mike Erickson – a millionaire Oxy trafficker, drunk driver, and philanderer who tricked his then-girlfriend by driving her to a fake abortion clinic and telling her that it was a real one:

https://pluralistic.net/2022/10/14/competitors-critics-customers/#billionaire-dilletantes

SBF is in prison, but there's no shortage of crypto millions for this election cycle. According to Molly White's "Follow the Crypto" tracker, crypto-affiliated PACs have raised $185m to influence the 2024 election – more than the entire energy sector:

https://www.followthecrypto.org/

As with everything "crypto," the cryptocurrency election corruption slushfund is a bezzle. The "Stand With Crypto PAC" claims to have the backing of 1.3 million "crypto advocates," and Reuters claims they have 440,000 backers. But 99% of the money claimed by Stand With Crypto was actually donated to "Fairshake" – a different PAC – and 90% of Fairshake's money comes from a handful of corporate donors:

https://www.citationneeded.news/issue-62/

Stand With Crypto – minus the Fairshake money it falsely claimed – has raised $13,690 since April. That money came from just seven donors, four of whom are employed by Coinbase, for whom Stand With Crypto is a stalking horse. Stand With Crypto has an affiliated group (also called "Stand With Crypto" because that is an extremely normal and forthright way to run a nonprofit!), which has raised millions – $1.49m. Of that $1.49m, 90% came from just four donors: three cryptocurrency companies, and the CEO of Coinbase.

There are plenty of crypto dollars for politicians to fight over, but there are virtually no crypto voters. 69-75% of Americans "view crypto negatively or distrust it":

https://www.pewresearch.org/short-reads/2023/04/10/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/

When Trump keynotes the Bitcoin 2024 conference and promises to use public funds to buy $1b worth of cryptocoins, he isn't wooing voters, he's wooing dollars:

https://www.wired.com/story/donald-trump-strategic-bitcoin-stockpile-bitcoin-2024/

Wooing dollars, not crypto. Politicians aren't raising funds in crypto, because you can't buy ads or pay campaign staff with shitcoins. Remember: unless Andreesen-Horowitz manages to install Web3 crypto tollbooths all over the internet, the industries that accept crypto are ransomware, and technologically overconfident hit-men and drug-dealers. To win elections, you need dollars, which crypto hustlers get by convincing normies to give them real money in exchange for shitcoins, and they are only funding politicians who will make it easier to do that.

As a political matter, "crypto" is a shorthand for "allowing scammers to steal from working people," which makes it a very Republican issue. As Hamilton Nolan writes, "If the Republicans want to position themselves as the Party of Crypto, let them. It is similar to how they position themselves as The Party of Racism and the Party of Religious Zealots and the Party of Telling Lies about Election Fraud. These things actually reflect poorly on them, the Republicans":

https://www.hamiltonnolan.com/p/crypto-as-a-political-characteristic

But the Democrats – who are riding high on the news that Kamala Harris will be their candidate this fall – have decided that they want some of that crypto money, too. Even as crypto-skeptical Dems like Jamaal Bowman, Cori Bush, Sherrod Brown and Jon Tester see millions from crypto PACs flooding in to support their primary challengers and GOP opponents, a group of Dem politicians are promising to give the crypto industry whatever it wants, if they will only bribe Democratic candidates as well:

https://subscriber.politicopro.com/f/?id=00000190-f475-d94b-a79f-fc77c9400000

Kamala Harris – a genuinely popular candidate who has raised record-shattering sums from small-dollar donors representing millions of Americans – herself has called for a "reset" of the relationship between the crypto sector and the Dems:

https://archive.is/iYd1C

As Luke Goldstein writes in The American Prospect, sucking up to crypto scammers so they stop giving your opponents millions of dollars to run attack ads against you is a strategy with no end – you have to keep sucking up to the scam, otherwise the attack ads come out:

https://prospect.org/politics/2024-07-31-crypto-cash-affecting-democratic-races/

There's a whole menagerie of crypto billionaires behind this year's attempt to buy the American government – Andreesen and Horowitz, of course, but also the Winklevoss twins, and this guy, who says we're in the midst of a "civil war" and "anyone that votes against Trump can die in a fucking fire":

https://twitter.com/molly0xFFF/status/1813952816840597712/photo/1

But the real whale that's backstopping the crypto campaign spending is Coinbase, through its Fairshake crypto PAC. Coinbase has donated $45,500,000 to Fairshake, which is a lot:

https://www.coinbase.com/blog/how-to-get-regulatory-clarity-for-crypto

But $45.5m isn't merely a large campaign contribution: it appears that $25m of that is the largest the largest illegal campaign contribution by a federal contractor in history, "by far," a fact that was sleuthed out by Molly White:

https://www.citationneeded.news/coinbase-campaign-finance-violation/

At issue is the fact that Coinbase is bidding to be a US federal contractor: specifically, they want to manage the crypto wallets that US federal cops keep seizing from crime kingpins. Once Coinbase threw its hat into the federal contracting ring, it disqualified itself from donating to politicians or funding PACs:

Campaign finance law prohibits federal government contractors from making contributions, or promising to make contributions, to political entities including super PACs like Fairshake.

https://www.fec.gov/help-candidates-and-committees/federal-government-contractors/

Previous to this, the largest ever illegal campaign contribution by a federal contractor appears to be Marathon Petroleum Company's 2022 bribe to GOP House and Senate super PACs, a mere $1m, only 4% of Coinbase's bribe.

I'm with Nolan on this one. Let the GOP chase millions from billionaires everyone hates who expect them to promote a scam that everyone mistrusts. The Dems have finally found a candidate that people are excited about, and they're awash in money thanks to small amounts contributed by everyday Americans. As AOC put it:

They've got money, but we've got people. Dollar bills don't vote. People vote.

https://www.popsugar.com/news/alexandria-ocasio-cortez-dnc-headquarters-climate-speech-47986992

Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/07/31/greater-fools/#coinbased

[animentality]

[afloweroutofstone]

Crypto corporations are by far the dominant corporate political spenders in 2024 as nearly half (48%) of all corporate money contributed during this year’s elections ($248 million so far) came from crypto backers.

Koch Industries is a distant second place in 2024. The privately held conglomerate owned by Charles and, formerly, the late David Koch, contributed $25 million to its Koch-controlled Americans for Prosperity Action and $3.25 million toward electing Republicans to Congress. Direct corporate election spending at this scale is unprecedented.

Crypto corporations’ total spending in the past three election cycles – $129 million – already amounts to 15% of all known corporate contributions since the Supreme Court’s 2010 ruling in Citizens United, which total $884 million. 92% of the corporate crypto spending is from 2024.

Since Citizens United, the crypto corporations are now second in total election-related spending, trailing only fossil fuel corporations, which have spent $176 million over the past 14 years, including $73 million from Koch Industries.

[mostly-funnytwittertweets]

[todays-problematic-ship]

Today's Problematic Ship is the Satoshi

The Satoshi was a cruise ship owned by Ocean Builders, a company dedicated to "seasteading," an attempt to create a seabourne community free of laws imposed on dry land, with strong ties to the cryptocurrency movement.

The 1991-built ship, originally named Regal Princess but renamed Pacific Dawn in 2007, was purchased by Ocean Builders in the middle of the Covid-19 pandemic in 2020. The idea was to permanently anchor the ship in Panamian waters, as the central hub of an eventual community of "SeaPods", essentially individual houses at sea, which would be arranged around the Satoshi in the form of a Bitcoin B.

It quickly became evident that the people running Ocean Builders had no understanding of how to operate a ship: they initially failed to ensure their ship had certificate of seaworthiness to allow it to sail to Panama (where the venture was to be based), and even after this no-one was willing to insure the ship, making it impossible for passengers to live onboard. They also planned to re-engine the ship while it was out at sea, a physically impossible task to accomplish without sinking the ship in the process.

The leadership of Ocean Builders blamed all this on shipping being "plagued by over-regulation." (Many of our entries here at Today's Problematic Ship demonstrate those regulations exist for a reason). The end result was predictable: by the time the Satoshi arrived in Panama it had been sold to an Indian shipbreaker.

Except Ocean Builders had signed a contract they could not honour: according to the Basel Convention, which covers the disposal of hazardous waste, they weren’t allowed to send the ship from a signatory country (Panama) to a non-signatory country (India). Thus the sale was cancelled, and subsequently the ship was arrested by Panamian authorities.

Eventually, the Satoshi was sold in 2021 a different startup company, Ambassador Cruise Line. The new venture, who actually knew how to operate a cruise ship, started successful operations with the former Satoshi, now renamed Ambience, in 2022.

The Guardian has a detailed article about the saga of the Satoshi and the seasteading movement.

[river-taxbird]

SCAM ALERT: Cryptocurrency related but can affect trans people buying HRT. I was probably 10 seconds away from having money stolen and I know what I'm doing. (Crypto Clipper)

Today I was helping a trans friend order some DIY HRT. A lot of DIY HRT places only accept cryptocurrency for security reasons. I am not looking to promote cryptocurrency or anything associated with it, but if you may be forced to use it for HRT or other reasons, you need to know this.

In general if you are forced to use crypto, you should use the cheapest coin your supplier will accept. If it is cheap, that means there is not a lot of activity on the chain and energy use will be less. I used one called Zcash as it was the cheapest one the site accepted but that's not really relevant.

I used an old coinbase account I had used for similar situations in the past. I was doing it on her PC. I got the instructions to pay on the HRT site, and I pasted the wallet address into Coinbase and just before I hit send I noticed the wallet address I had pasted didn't match the wallet address I had copied.

I looked it up and found this is from a form of malware called a Crypto Clipper, that detects when you have copied a crypto address, and makes you paste a different one so it can steal your money. I am lucky I noticed. To remedy it, I installed the free trial of Malwarebytes on her PC to remove malware, and completed the crypto transaction on my PC, and confirmed that the wallet address matched what the HRT site had given me.

I managed to avoid falling for it but it's such an easy thing to fall for, especially if you have avoided crypto thus far for extremely understandable reasons. Be careful out there! It could happen to anyone.

[anjoelito]

CONSCIOUS CRYPTO ACADEMY

Bitcoin just flew past 40K and according to the data analysts of cryptocurrency, BTC follows a 4-year cycle that aligns with the U.S. Presidential Elections... this gives us less than a year to prepare for the next Bull Market... consider joining our platform, Conscious Crypto Academy, if you're interested in the digital asset economy and don't know where to start!

[slendermusk]

xlendercoin

the BEST cryptocurrency ever because i made it and i’m slendermusk

[mostlysignssomeportents]

“Carbon neutral” Bitcoin operation founded by coal plant operator wasn’t actually carbon neutral

I'm at DEFCON! TODAY (Aug 9), I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). TOMORROW (Aug 10), I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).

Water is wet, and a Bitcoin thing turned out to be a scam. Why am I writing about a Bitcoin scam? Two reasons:

I. It's also a climate scam; and

II. The journalists who uncovered it have a unique business-model.

Here's the scam. Terawulf is a publicly traded company that purports to do "green" Bitcoin mining. Now, cryptocurrency mining is one of the most gratuitously climate-wrecking activities we have. Mining Bitcoin is an environmental crime on par with opening a brunch place that only serves Spotted Owl omelets.

Despite Terawulf's claim to be carbon-neutral, it is not. It plugs into the NY power grid and sucks up farcical quantities of energy produced from fossil fuel sources. The company doesn't buy even buy carbon credits (carbon credits are a scam, but buying carbon credits would at least make its crimes nonfraudulent):

https://pluralistic.net/2023/10/31/carbon-upsets/#big-tradeoff

Terawulf is a scam from top to bottom. Its NY state permit application promises not to pursue cryptocurrency mining, a thing it was actively trumpeting its plan to do even as it filed that application.

The company has its roots in the very dirtiest kinds of Bitcoin mining. Its top execs (including CEO Paul Prager) were involved with Beowulf Energy LLC, a company that convinced struggling coal plant operators to keep operating in order to fuel Bitcoin mining rigs. There's evidence that top execs at Terawulf, the "carbon neutral" Bitcoin mining op, are also running Beowulf, the coal Bitcoin mining op.

This is a very profitable scam. Prager owns a "small village" in Maryland, with more that 20 structures, including a private gas station for his Ferrari collection (he also has a five bedroom place on Fifth Ave). More than a third of Terawulf's earnings were funneled to Beowulf. Terawulf also leases its facilities from a company that Prager owns 99.9% of, and Terawulf has *showered * that company in its stock.

So here we are, a typical Bitcoin story: scammers lying like hell, wrecking the planet, and getting indecently rich. The guy's even spending his money like an asshole. So far, so normal.

But what's interesting about this story is where it came from: Hunterbrook Media, an investigative news outlet that's funded by a short seller – an investment firm that makes bets that companies' share prices are likely to decline. They stand to make a ton of money if the journalists they hire find fraud in the companies they investigate:

https://hntrbrk.com/terawulf/

It's an amazing source of class disunity among the investment class:

https://pluralistic.net/2024/04/08/money-talks/#bullshit-walks

As the icing on the cake, Prager and Terawulf are pivoting to AI training. Because of course they are.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/08/09/terawulf/#hunterbrook

[animentality]

[mostlysignssomeportents]

It’s jarring to read a story about a neighbor calling the police on a nine-year-old Black girl spraying for invasive lanternflies, describing the girl to a dispatcher as a “little Black woman walking, spraying stuff”, and then switch over to another tab with a story on the 30-year old “crypto kid” who might’ve just made an oopsie with billions of dollars of customer funds. On one hand, literal children are portrayed in the media as adults, and treated as such in the prison system; on the other, a man who’s been old enough to vote for over a decade is being described as “a young man in need of both defense and a friend” offering refreshments to a reporter “as if we were there for a playdate”.

Sam Bankman-Fried is not a child, Molly White