This is one of the best Tweets I have seen in awhile. He’s not wrong. The purpose of a blockchain is immutable accounting and censorship resistance. It is only with the belief in those two uses cases from which store-of-value can emerge.
We seem to be entering that time and space. The author of the above Tweet is the founder and former CEO of Comma, an Advanced Driver Assistance System, not dissimilar to Tesla’s Autopilot (which he built with 15 engineers). He was also vocal in saying that Twitter could “be run and built by 20 good engineers”. Just a few days ago, he decided to “put his money where his mouth is” and recently joined Twitter as perhaps the most overqualified intern of all time.
Coincidentally, Twitter seems to be at the center of the news cycle once again as Elon is letting people go left and right, and announcing that remaining employees must be ready to be “hardcore”. And once again, Mainstream Media is lambasting the decisions, with the current conventional wisdom being that Twitter will soon “crash”, presumably because the guy who made self-driving cars and reusable rocket ships is too arrogant to understand how software works. Or perhaps it is because they are worried about who he will let on the platform, and what they might say. This has manifested into things like CBS News suspending Twitter posting over “uncertainty” regarding the platform.
Meanwhile, Twitter’s Daily Active Users chart is the highest it’s ever been:
There has been a longstanding animosity between Media and Tech, as the latter essentially killed the business model of the former well over a decade ago. It is interesting that just a few years ago Tech workers were being criticized for being overpaid elites, driving up the cost of living in blue states, and now those same Tech workers are the victims of an evil empire. For anyone with a diversified media consumption diet, the contradictions are glaringly obvious. However, MSM appears to be banking on the fact that their core users (read: paying subscribers) tend to live and consume information only within a single silo/echo chamber. Their future Balance Sheets will be the judge over time.
I think the anti-Twitter Media saga can be summed up with this video, which depicts a couple newscasters from The Hill, reporting that the Twitter “poor work environment” meant that Elon had to re-hire two employees that he had “prematurely fired” because the “single genius actually needed employees to work for him” and that they “didn’t look happy to return”. The employees in question were Ligma / Johnson, two pranksters who stood outside Twitter headquarters pretending to be fired employees as a joke. They fooled the Media once, Elon brought them back as part of the gag, and yet they continue to be reporting on this incorrectly, crafting a story around their own narrative whilst unknowingly still being the butt end of a joke. In any event, it’s not really that important. It could have been an honest mistake. Perhaps they just didn’t do any research before reporting on, you know, the “News”.
There was a slightly more consequential misstep in News coverage this week: the fallout of the FTX saga.
NYT coverage on SBF was largely a puff-piece, stating things like “FTX and Alameda were closely linked”, a comical euphemism that ignores the fact that he committed fraud and stole billons of dollars of customer funds. I really try to stay as far away from conspiracy theories as possible, but it bears mentioning for those that don’t know that SBF was the 2nd largest donor to the Democratic Party in 2022.
Meanwhile, Forbes coverage on Caroline Ellison, the CEO of Alameda, had similar undertones, dubbing her the potential “fall victim” of SBF’s master plan. This hypothetically plays into an alt-right version of the story where SBF is left-wing villain, and Ellison is merely an innocent Harry Potter loving Crypto girl who got in over her head.
However you want to slice it, the real story should have been along the lines of what I wrote last week, and to take it a step further, both of these people should go to prison for a long time. The consensus in MSM is really that Crypto is the villain here and regulation would have solved this.
Not surprisingly, the best and most reliable news on the situation was found on Twitter. With live, breaking news Twitter Spaces interviewing experts, people close to the situation, and honest intellectual debates, the whole debacle made the schism between Twitter News and MSM News that much wider. It also left me thinking that this is the future of Media: decentralized, great moderation, multiple points of view, subject matter experts. The anti-Twitter narrative running through MSM makes even more sense now. Why would I choose to get my news with a biased spin, when I can access the source data in real time? If I want an unbiased opinion piece to help me wrap my head around a situation there are many neutral Substack/Revue/Beehiv writers popping up that don’t take a paycheck from a corporate conglomerate.
Lost amidst all the commotion, Donald Trump announced he was running for President again. This resurfaced all of his previous takes on BTC and Crypto. Trump has said BTC “seems like a scam”, and that it should be regulated heavily. He would prefer that USD remain as the Global Reserve Currency. And as I am writing this he has just been reinstated on Twitter. Gasp!
Many of you may remember this gif I created when discussing Balaji’s Realignment Theory in The Network State:
How does it look like this?
The battle over regulation (of anything: be it Crypto, Abortion, Guns, Speech, LGBTQ rights), is fought on the Top vs Bottom axis. However, MSM is continuing to fight across the Left vs Right axis, while not-quite-overtly teaming up to demonize the Bottom.
This creates an interesting matrix of Thanksgiving arguments with your favorite alt-Right-Uncle or Crypto-Nephew. Spin the wheel to choose a topic and debate! But remember to preface your argument with which quadrant you are speaking from! On a positive note, this spinning of the political axis could actually open the door to recognition that political position is non-binary and that more nuanced and civilized conversations should be had. Or.. it makes everything more complicated and convoluted and people blindly choose sides and debate against their own interests like they always do.
Getting back to the Tweet that I began the article with: Crypto is only good for regulatory arbitrage. Currently there is not a ton of use cases as was so cleverly articulated. However, with the powers that be firmly taking an Authoritarian stance, Crypto users everywhere fleeing Centralized Exchanges so quickly that many more are going belly up, and the First Amendment clearly at the center of it all… it is not difficult to imagine a near future with some more regulatory arbitrage opportunities popping up.
The interesting thing about regulatory arbitrage situations is that, by definition, they will not be unanimously agreed upon as use cases. Take for example:
Paying for an abortion in a red state
Buying a gun in a blue state
In both cases the State takes the stance on morality and inflicts its regulation. The thing that everyone can agree upon is that the State does not always represent the majority of its constituents. Look ahead further:
Self-driving cars
AI
Brain machine interface
Bioprinting
Experimental drug trials
With the State regulators increasingly becoming a Gerontocracy, asking such questions as how Facebook makes its money, it has been clear that perhaps the people in charge don’t quite have the wherewithal to make the best judgement calls. If technology disrupts industry, and said industry is a major lobbyer, you can bet that said technology will be regulated thusly.
I say all that to say this: Crypto Winter is still here. Many people are fleeing the space, vowing to never return. That is all fine and expected. We will be in a non-zero interest rate environment for another 2-4-6-8 quarters, at which point unemployment will be sufficiently high, inflation sufficiently low, and the money printer will start purring again. The underlying Crypto use case will remain, and if anything, increase in importance over time. If you’re interested in wild, unmitigated speculation.. it will be back.. with a vengeance.