What everyone in the crypto industry must have been hearing, as they rang in the new year, were the reverberations from FTX’s collapse. Increased regulatory scrutiny and financial precarity are spreading through the ecosystem.
Among the most impacted entities is the crypto bank Silvergate. Their depositors withdrew over $8 billion-worth of digital assets in the last quarter. This figure was close to 70 percent of Silvergate’s total crypto-related deposits; during the Global Financial Crisis, for reference, banks failed when they faced slower rates of withdrawal. To muster cash and avoid the same fate as FTX, its former client, Silvergate lost more than $700 million selling off assets – greater than its total profit in the decade prior.
Coinbase, the crypto exchange, cut its costs by firing a fifth of its employees (for the second year running). A number of Bitcoin mining companies faced bankruptcy and needed bailouts from their institutional backers. These are the relatively responsible organisations. Gemini, another exchange that was unable to honour withdrawals in November, dealt with the chaos less stoically.
Cameron Winklevoss, Gemini’s co-founder, wrote two open letters accusing the CEO of the Digital Currency Group (DCG) of fraud. Gemini had partnered with DCG’s subsidiary, Genesis, on a lending product called Gemini Earn, and Winklevoss avers that Genesis is responsible for the $900 million Gemini Earn customers are missing. But some of those customers had already filed their own class-action suit against Gemini. It’s no wonder the Spider Men-pointing-at-each-other meme has been invoked to describe the whole situation.
And now, the SEC is charging both Gemini and Genesis for not having registered their product as a security. This is further proof that the big regulatory question in the US remains open, to the chagrin of legislators who had been working with Sam Bankman-Fried to classify most digital assets as commodities. Cynthia Lummis, the crypto-friendliest US senator, seems to think they’ll finally get it right this year. Until they do something, crypto will remain – to quote the latest Winklevoss missive – ‘crazy town’.
Still, there is more than just entertainment value in this month’s curated selection. Read on to learn how music NFTs further devalue musicians, why blockchain can't help global supply chains become more sustainable, which structural factors shape public perceptions of CBDCs, when cyberpunk and cypherpunk views on the metaverse began to diverge, and much more.
Ethereum is motivated by three 'imaginaries', which overlap and often contradict, but never fully undermine the ideological cohesion of the project. These are the technical vision of 'world computer', the economic vision of 'productive money', and the political vision of 'public goods'.
Contra claims that blockchain technologies can provide needed transparency, their applications in the governance of global supply chains has only increased managerialisation and spread ‘audit culture’ further. The technological novelty of blockchain ends up casting a ‘veil of transparency’ over sustainability abuses, thus exacerbating the very challenges its proponents claim to address.
From a prominent crypto sceptic, this report offers a lesson to the crypto community: until they develop new objectives, or significantly alter their technologies to meet existing objectives, the mismatch between means and ends will forever relegate cryptocurrency to the speculative space that it currently occupies – good for a news headline, but not for sea change in the financial system.
The Ethnography of a ‘Decentralized Autonomous Organization’ (DAO): De‐Mystifying Algorithmic Systems
This collaboration between an ethnographer and a blockchain industry engineer speaks to the social dynamics of governance in the context of DAOs. Although these organisations are by definition experiments in ‘computer aided governance’, they remain sites where human adaptability and resilience are crucial.
Looking for the structural drivers of public attitudes towards CBDCs, this paper finds that government performance, inflation rate, economic inequality, and technological literacy all have significant influence.
When our bodies are augmented in synthetic virtual worlds, argues this essay, our subjectivities are exposed to a cultural influence that has already been harnessed by market forms. The prospect of 'metaverses' offers an altered notion of territoriality – one where the real world is marginalised.
When it comes to the illicit use of cryptocurrencies, there is a three way race between criminals seeking to exploit evolving technology, investigators trying to detect or disrupt activity, and legislators attempting to regulate its use. Yet, it seems that the criminal use of cryptocurrencies is finally decreasing by volume relative to the entire market.
The cyberpunk and cypherpunk movements have historically clashed over a specific issue: the idea of an artificial reality created by technology. The cyberpunk view of the metaverse could be seen as techno-pessimistic, or even as a form of Luddism. The cypherpunk perspective, by contrast, embraces 'technological transformationism' and all it entails.
For a moment, NFTs seemed like a way for musicians to recoup what they had lost with the decline of physical album sales. But when one puts music NFTs in the context of both historical and neoliberal capitalist understandings of musical value, NFTs appear to actually undervalue musicians by assetizing music anew. That's why music NFTs have primarily benefitted musicians of celebrity status, like Grimes and deadmau5.
Crypto art is far from another medium to express artistic content. At present, it is little more than a storing unit for crypto value. The authors of this paper derive their argument from the market inefficiency evinced by patterns in the price discovery of crypto art.