The Wikileaks guy was recently crowing about how the feds cut off credit card and PayPal donations, forcing him to turn to bitcoin, so now he is sitting on a mountain of 4000 BTC which appreciated by some ridiculous amount.
Take any story, add bitcoin; now it's a ridiculous story.
Someone mentioned that Satoshi Nakomoto, the reclusive creator of bitcoin, made some of his last public comments worrying about Wikileaks traffic. What happened to that guy?
Then I saw a story that looked like a #goodlongread
- By this point, cameras and reporters were outside his former home and his office. They had long heard rumors, but the Gizmodo and Wired stories had sent the Australian media into a frenzy. It wasn’t clear why the police and the articles had appeared on the same day. At about five that same afternoon, a receptionist called from the lobby of Wright’s apartment building to say that the police had arrived. Ramona turned to Wright and told him to get the hell out. He looked at a desk in front of the window: there were two large laptop computers on it — they weighed a few kilos each, with 64 gigabytes of RAM — and he grabbed the one that wasn’t yet fully encrypted. He also took Ramona’s phone, which wasn’t encrypted either, and headed for the door. They were on the sixty-third floor. It occurred to him that the police might be coming up in the elevator, so he went down to the sixty-first floor, where there were office suites and a swimming pool. He stood frozen for a minute before he realized he’d rushed out without his passport.
It's long and starts good, but drags after the initial hook, and turns out to be a tease for a new book. A photo caption reads This summer, the cryptocurrency reached a record high of $4300 per coin as if it's not worth bothering to update for the recent record high price over $5000.
Make that $6000. Better check for yourself.
A character in the book sums up the outlook:
- I’d never met anyone who spoke so easily about such large sums of money. When I asked him the point of the whole exercise, he said it was simple: “Buy in, sell out, make some zeroes.”
The real hype is not for buying tokens with ridiculous appreciation, but for the crazy new mechanism of making zeroes: the Initial Coin Offering. Copy the source code for a blockchain, stir in some secret sauce, hire a designer to create a slick logo and website, and write up a technical paper explaining how you have created Bitcoin for Blenders or something. The sneaky part is that you don't have to ask for dollars, you accept ever-appreciating cryptocurrency tokens in exchange for ownership of your new flavor of token, promising whatever you can get away with. Since you created the token, you can set whatever parameters you think will maximize whatever you want to maximize.
Many appear intended to maximize on cash grab.
- The basic model is to pre-sell some percentage of the crypto assets the proposed network will generate as a way to fund the development of the decentralized application before it launches. The project founders tend to hold on to some percentage of these assets. Which means that raising money for a project this way is a) non-dilutive as it is not equity and b) not debt, so you never have to pay anyone back. This is basically free money. It’s never been this good for entrepreneurs, even in the 90s dot-com boom. Which makes it incredibly tempting to try and shoe-horn every project that could perhaps justify an “initial coin offering” to go for it, even if they aren’t actually building a decentralized application. After all, an ICO lets you exit before you even launch.
A Letter to Jamie Dimon was a good corrective to a lot of the hype (addressed as it is to the CEO of JPMorgan Chase, who recently described bitcoin as a "fraud," though JPMorgan is rolling its own blockchain variant).
The letter points out that blockchain solutions are inferior in every way to centralized approaches, and only shine on one dimension: censorship resistance.
This fit well with another article: Do you really need a blockchain for that?
The author argues that a blockchain is beneficial when you need
1. A shared database
2. with multiple contributors
3. who don’t necessarily trust each other
4. and you can’t designate an intermediary that everyone trusts.
Many people are making zeroes, while others are crying "bubble." This sober perspective gives me a framework for evaluating what blockchain tech is likely to be used for once things settle down.
For now, it's a game to see how many sharks can be jumped.
I thought WhopperCoin was a joke, and had to update my credulity levels. But I'm not buying Satoshi Brewery, clearly a clever parody of the ICO model applied to craft beer. Though they do have the slick web site and even a technical-looking paper...
Bonus ridiculous story: Bitcoin Exchange Had Too Many Bitcoins