<n>Below are links to articles, highlighted passages<fn>, and occasional annotations<fn> for the week ending on the date in the title, <a href="{app}/view_article.php?id=4085">enriching the raw data</a> from <a href="http://www.instapaper.com/starred/rss/1890855/5c1g08eoy9skhOr3tCGqTQbZes">Instapaper Likes</a> and <a href="https://twitter.com/mvonballmo">Twitter</a>. They are intentionally succinct, else they'd be <i>articles</i> and probably end up in the gigantic backlog of unpublished drafts. YMMV.</n> <ft><b>Emphases</b> are added, unless otherwise noted.</ft> <ft>Annotations are only lightly edited.</ft> <h>Table of Contents</h> <ul> <a href="#economy">Economy & Finance</a> <a href="#politics">Public Policy & Politics</a> <a href="#journalism">Journalism & Media</a> </ul> <h><span id="economy">Economy & Finance</span></h> <a href="https://www.bloomberg.com/opinion/articles/2022-01-19/washing-web3" source="Bloomberg" author="Matt Levine">Wash Your Meebits in Web3</a> <bq>The main point of this trade is that, in a frothy market for fast-growing companies, you can sell $1 of the right kind of revenue for much more than $1, and so <b>it is worth your while to create some revenue, dress it up to look like the right kind of revenue and then sell it to someone.</b> But another point of this trade (the one in Step 8) is that in network-effects businesses these things can be self-fulfilling, and <b>a fake business can turn into a real one.</b> If someone is looking to rent a house in an app, she’s going to go to the app she’s heard of; if yours is getting a lot of press for growing quickly and raising lots of money, she’ll go to your app. <b>This trade, as I described it, is basically fraud,</b> [...]</bq> <bq>A dollar of investment capital can be turned into revenue, and then sold to new investors at a multiple of that revenue. This is arguably good for your (early) investors. They want a higher valuation. They are happy for you to turn their money into revenue. They hope that you will turn it into long-term stable recurring revenue (Step 11). <b>But if you just turn it into fake revenue, then maybe they can still sell their shares to the next sucker before it collapses.</b></bq> <bq>“This is, essentially, a pyramid scheme,” said Dror Poleg in an infamous post about Web3 that I quoted the last time we discussed this. “A Ponzi. But it makes sense. <b>It will be the dominant marketing method of the next decade and beyond.</b>” I don’t like it! But I am not confident that he’s wrong.</bq> I'm maybe a little more confident that this might not last. Quite frankly, that's what they want you to believe. That's how a Ponzi scheme works. You have to keep dragging more suckers into it who are looking to gamble some cash on a get-rich-quick scheme. Even if they know it's a get-rich-quick scheme, they will still be willing to do it, thinking that they'll be clever enough to get out before they lose money. Or, as with many of the financiers going into it: they'll reap their commissions either way. Some of these schemes seem to have hit orbit, but I think some of these orbits are degrading. In particular, their "tethers" may pull them back to Earth. <hr> <a href="https://www.bloomberg.com/opinion/articles/2022-01-18/blackrock-still-likes-capitalism" source="Bloomberg" author="Matt Levine">BlackRock Still Likes Capitalism</a> <bq>One assumes that Musk was operating out of pure emotional grudge here, but I suppose it’s worth asking if that phone call was a good strategic move. Of course Cooley can’t actually fire the associate, which would be disastrous for its reputation. But that’s not the goal here. Other law firms that do a bunch of work with Tesla might have to ask prospective hires, like, “hey you haven’t done anything to annoy Elon Musk have you?” <b>And so current government regulators might think “hmm, I should go easy on Elon Musk so he doesn’t ruin my future career.”</b></bq> <hr> <a href="https://wallstreetonparade.com/2022/01/can-the-fed-engineer-a-soft-landing-for-the-biggest-bubble-since-12000-tulip-bulbs/" source="Wall Street on Parade" author="Pam & Russ Martens">Can the Fed Engineer a Soft Landing for the Biggest Bubble Since $12,000 Tulip Bulbs?</a> <bq>Bitcoin was supposed to be the digital replacement for gold – a safe haven in a financial selloff. But <b>Bitcoin, which along with other crypto currencies can be leveraged by hedge funds on a 100 times to 1 basis, closed down 13.94 percent on the CME today</b> while the tech and SPAC bubble known as the Nasdaq stock market, closed down 2.72 percent on the day.</bq> <bq><b>Since November 1, 2021, shares of Goldman Sachs (which became a bank holding company in 2008) have lost 17 percent</b>; JPMorgan Chase, the biggest bank in the U.S., has lost almost 15 percent, while the tech-laden Nasdaq stock market is down 12 percent.</bq> <hr> <a href="https://the-crypto-syllabus.com/brian-eno-on-nfts-and-automatism/" source="The Crypto Syllabus" author="Evgeny Morozov">Brian Eno on NFTs & Automaticism</a> <bq>I can understand why the people who’ve done well from NFTs are pleased, and <b>it’s natural enough in a libertarian world to believe that something that benefits you must automatically be ‘right’ for the whole world</b>.</bq> <bq>NFTs seem to me just a way for artists to get a little piece of the action from global capitalism, our own cute little version of financialisation. <b>How sweet – now artists can become little capitalist assholes as well.</b></bq> Always have been. Don't kid yourself. <hr> <a href="https://jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization/" source="Jacobin" author="Sohale Andrus Mortazavi">Cryptocurrency Is a Giant Ponzi Scheme</a> <bq>Given that cryptocurrencies don’t produce anything of material value, <b>this enormous waste of resources renders the whole enterprise a negative-sum game.</b> Investors can only cash out by selling their coins to other investors — but only after <b>the miners and various cryptocurrency service providers take the house’s rake.</b> In other words, investors cannot — in the aggregate — cash out for even what they put in, as cryptocurrencies are inefficient by design.</bq> <bq>This isn’t some big secret. <b>In a widely circulated 2017 paper, researchers attributed over half of the then-recent rise in Bitcoin’s price to purchases made by a single entity on Bitfinex</b>, a cryptocurrency exchange headquartered in Hong Kong and registered in the Virgin Islands. These purchases were timed to buoy the price of Bitcoin during market downturns in a way that so strongly indicated market manipulation, the authors found it inconceivable that such trading patterns could occur by happenstance.</bq> <bq><b>Should faith in Tether falter, we could see its peg to the dollar collapse in a flash.</b> This would be a doomsday scenario for crypto markets, with investors holding or trading crypto assets on unbanked exchanges unable to “cash” out, since there was never any cash there to begin with, only stablecoins. <b>This would almost certainly cause a liquidity crisis on banked exchanges as well</b>, as investors rush to cash out their crypto anywhere possible amid cratering prices, and banked exchanges processing far less volume would almost certainly not be able to pick up the slack.</bq> <bq>This renders cryptocurrency not merely a bad investment or speculative bubble but something more akin to a decentralized Ponzi scheme. <b>New investors are being lured in under the pretense that speculation is driving prices when market manipulation is doing the heavy lifting.</b></bq> <bq>The cryptocurrency market’s oft-touted <b>$2 trillion market cap</b>, calculated by multiplying existing coins by the latest spot price, is a meaningless figure. Nowhere near that much has actually been invested into cryptocurrencies, and <b>nowhere near that much will ever come out of them.</b></bq> <bq>Recent analysis shows that around $25 billion and growing has already gone to Bitcoin miners, who, by best estimates, are now spending $1 billion just on electricity every month, possibly more. <b>That money is gone forever, having been converted to carbon and released into the atmosphere</b> — making cryptocurrencies even worse than traditional Ponzi schemes.</bq> <bq><b>Tether has printed more than $8 billion in stablecoins since November</b> [2021]. Meanwhile, South Korean crypto firm Terraform Labs, which few people have even heard of, minted another $8 billion of their own stablecoin (TerraUSD).</bq> <bq>Coinbase also has its own stablecoin pegged to the dollar, USDC, managed by partner company Circle, which is also looking to go public with an SPAC deal that would exempt it from the scrutiny of a traditional IPO. <b>There are now 45 billion USDC stablecoins in circulation, most of them issued since 2020, just like with Tether.</b></bq> <bq>They fail as currencies due to high transaction costs. They fail as “digital gold” or a “store of value” because <b>they consume ludicrous amounts of energy to run what is essentially a glorified spreadsheet.</b></bq> <bq>In the case of cryptocurrency, regulation is an existential risk precisely because <b>regulatory loopholes and fraud are the only reason the industry appears profitable</b> despite being wholly unproductive and a waste of energy resources.</bq> <h><span id="politics">Public Policy & Politics</span></h> <a href="https://www.mintpressnews.com/chris-hedges-organized-workers-union-americas-new-class-war/279483/" source="Mint Press News" author="Chris Hedges">America's New Class War</a> <bq>[...] a for-profit health care system that has resulted in a quarter of all worldwide COVID-19 deaths—although we are less than 5% of the world’s population—[...]</bq> <bq>Biden has presided over the loss of extended unemployment benefits, rental assistance, forbearance for student loans, emergency checks, the moratorium on evictions and now the ending of the expansion of the child tax credits, all as the pandemic again surges.</bq> <hr> <a href="https://thebaffler.com/salvos/the-shitshow-in-glasgow-dean-wilson" source="The Baffler" author="Eric Dean Wilson">The Shitshow in Glasgow</a> <bq>Corporations and states can continue polluting while claiming “net zero” as long as they invest in projects that prevent or sequester an “equivalent” quantity of their annual pollution through carbon offset projects—reforestation, carbon capture and storage, renewable energy technology, and so forth. The problem is that most offsets are inefficient or simply nonexistent. <b>Trees store carbon, but it takes decades, and they tend to light on fire, releasing any carbon they once stored. No one has the technology to trap carbon and store it safely, reliably, and at scale—but the pollution budgets include it anyway.</b> And reliance on renewables ignores the fact that production of this infrastructure is still carbon-intensive and resource-extractive. <b>In the big picture, “net zero” isn’t “better than nothing.” It is nothing.</b></bq> <hr> <a href="https://www.counterpunch.org/2022/01/21/take-this-job-and-shove-it-the-growing-revolt-against-work/" source="CounterPunch" author="Nicky Reid">Take This Job and Shove It!: The Growing Revolt Against Work</a> <bq>I do have a theory that might shine some light on their conundrum. Are you ready? Listen very carefully so as not to miss the subtle nuances of my argument. Work fucking blows! It sucks and plebian scum like me don’t wanna live like that anymore and why the fuck would we? <b>It’s not natural and it’s not fucking healthy, spending 80% of your life stewing in traffic jams, slaving behind deep fryers, and punching numbers into computers.</b> We’re not descended from ants. People are monkeys. God designed us to eat, fuck, fight, shit, repeat, and <b>we’re done with civilization’s fucking capitalist zoo.</b></bq> <bq><b>We’ve all been duped into accepting wage slavery as the natural order of existence</b> but even a cursory glance at history tells us that this is total bullshit.</bq> <bq>This is why I oppose <b>Universal Basic Income</b>, an idea very popular with many in the antiwork community. <b>Programs like these do nothing to upend the power imbalance of the workplace.</b> They merely replace the boss man with a bureaucrat and offer you a steady trickle of income as long as you obey the state that doles it out.</bq> That is an interesting argument. <h><span id="journalism">Journalism & Media</span></h> <a href="https://johannesklingebiel.de/2022/01/12/hype-as-a-scale.html" source="" author="Johannes Klingebiel">The five Levels of Hype</a> <bq>Level 4: Magical Thinking The technology has left grounded reality and takes on magical properties. <b>The problems it is expected to solve simply by existing are growing in number and scale</b> while criticism gets ignored as minor hurdles, to be overcome soon.</bq> <bq>Level 5: Othering <b>The technology has become a group identity for its boosters.</b> Claims are exclusively utopian, and critics are painted as defenders of the old, to be left behind.</bq>