The latecomer’s link roundup of crypto crashing news

“People with funds locked in Celsius Network have been sending letters to the judge presiding over the Chapter 11 bankruptcy case. These are excerpts from those letters.” Periodically updated with new excerpts, as new dockets get released.

““I couldn’t eat or sleep for two nights,” says Alla Driksne, a 34-year-old chef from London. “I got sick from the stress.” She has lost her life savings – a six-figure sum – in the Celsius freeze. “

A few months before Celsius went belly-up, one of their customers called in to Scam Economy — here’s a clip that includes both the pre-crash call, and some post-crash reflections. Notably, the guy isn’t a hype-man, or an enthusiastic crypto fan. He just seems sorta sad and anxious about his money, and he’s also pretty sad and anxious about Celsius’ drawbacks, but somebody convinced him that every other option is worse:

“The top #1 Google result for “blockchain production users” (and related queries) lists 34 individual “real world blockchain” projects. […] Looking into all 34, I found that 13 are already dead (including one that has been killed by the SEC), 6 are only useful within the crypto & NFT ecosystems and not in the “real world” and 14 use Blockchain in a way where removing the blockchain would not impact functionality at all, or make the product better.”

One of the big pseudo-success stories is IBM (backers of IBM FoodTrust, a system hyped by WalMart). At least, until early 2021: “IBM has cut its blockchain team down to almost nothing, according to four people familiar with the situation. “

Really enjoy this podcast interview with a climate analyst, who’s familiar with Crypto Nonsense but whose first area of expertise is fighting climate change, doing a well-informed deconstruction of the “Bitcoin is good for the environment somehow” arguments.

“The bug caused a misplacement of decimal points when refunding pavladiv.near’s USN. Instead of returning 4.9995 USN (about $5), the smart contract bug minted 4.9995 trillion USN for the user on both occasions, thus creating almost $10 trillion out of thin air.” Oooops. (These are the same people who will say “USD is unreliable because the government can just print as much money as they want”…)

“Power companies don’t take bitcoins or tethers. But the crypto trading system was running low on naïve retail suckers to supply fresh dollars. So the miners needed to do their part in propping up the price of bitcoin. Their solution was to avoid selling their bitcoins, and instead to hold them and use them as collateral against low-interest loans.”

“I left my easy six figure job in crypto because I couldn’t stand to market to such a deranged group of individuals and the toxic web3 workplace. Even though I even enjoy some aspects of crypto… the online crypto communities are extremely bizarre, mentally unwell, deranged, and socially inept. […] AMA in the comments! I need to vent.”

“A London-based software company has just launched CloneMyNFT.com which offers NFT owners the ability to “keep their NFT artwork forever” even after they have sold it. […] The system works by creating an exact digital copy of the artwork but with another unique contract on the block chain, effectively making it an almost exact clone of the original NFT.”

Note: this has been possible for as long as NFTs have existed! The only change is having a convenient site that’ll process all the code automatically.

“You don’t know anything about the metaverse but you want to do like all the best marketers around and write something on the web about it? Don’t worry, Tony is here for you and will give you all the advice you need to write the most impactful article about the metaverse ever. I have a structure that will make you jump ahead of all the competition. Follow me!” (This is so perfect, I love it so much.)

“The entire crypto space has been a Jenga stack of interconnected time bombs for months now, getting ever more interdependent as the companies find new ways to prop each other up.” The Latecomer’s Guide to Crypto Crashing.

Insert your own “SELLcius” joke here

Welp, we’re having another banner week in the crypto world, huh?

These are links I’ve been picking up over the past month or two. They go up to the Luna “we have a token that will always be worth US$1 because of Algorithms(TM), what could go wrong?” crash, but nothing yet from the Celsius “we are not a bank, because banks are Bad and we are Good, so we don’t need all those silly regulations that banks have to follow, and oops now we’re freezing everyone’s ability to withdraw your tokens” crash.

The first Patreon Creator Census has a lot of broad strokes you probably could’ve guessed, but it’s nice to see the specifics broken down. Especially when they break stuff out by “what field is the creator in?”

Creators overwhelmingly hate crypto, btw. Patreon tries to downplay it by breaking out the fields that hate it least…but that also reveals that visual artists hate it the most. You know, the field where crypto has made the biggest and hardest pitch for how useful it is? Second-most hate comes from the writers (the fields where the journalists are), and third-most comes from the game developers (the field where crypto has made the second-biggest push).

“As talk of “the metaverse” grows, and people float [NFT] theories about owning items and cosmetic skins and being able to take between games, interest in what that means practically for gamers has lead to a wild array of theories, but they’re largely pushed by people who know nothing about game development. So, as a developer, it falls to people like me who live and work in these spaces to share our knowledge.” (Link is just one article, but the whole blog is worth a read.)

“[US] Political donations from the sector surged to more than $26 million during 2021 and the first three months of this year. That influx of cash is outpacing spending by internet giants, drug makers and the defense industry — providing a fresh pool of financing for candidates heading into November’s congressional elections.”

“Ms. Blackburn consolidated many Bitcoin addresses, which might have seemed to represent many miners, into few. She pieced together a catalog of agents and concluded that, in those first two years, 64 key players — some of whom were the community’s “founders,” as the researchers called them — mined most of the Bitcoin that existed at the time.”

“All [interviewees] had similar testimonials about putting their faith in an asset they thought was stable and losing everything. Muhammad, a 30-year-old from Egypt, said that he learned about Luna from YouTubers who said that it would reach $1,000. He bought 1,000 tokens at $88. One token is now currently worth less than $0.0002.”

“[The article] uncritically repeated many questionable or entirely fallacious arguments from cryptocurrency advocates, and it appears that no experts on the topic were consulted, or even anyone with a less-than-rosy view on crypto. This is grossly irresponsible. Here, a group of around fifteen cryptocurrency researchers and critics have done what the New York Times apparently won’t.”

The blockchain arena sure is having a week, huh?

I had this interrogation of Kickstarter’s empty “blockchain proposal” written and on the desk of the Beat’s editors back in March. Was starting to worry that it wouldn’t feel timely, as the publication date got farther and farther away from news like “the Kickstarter CEO has resigned to spend more time with his family.”

And then it ended up getting published within days of “the third-biggest stablecoin goes ker-splat, setting off a rolling chain of destruction in every protocol and/or exchange that leaned on it.” (The power of decentralization, folks!)

There’s always something.

Older Kickstarter news/polling/snark:

“I have no assurances from the people who want to use it on Kickstarter that protocols are in place to protect the users. My biggest concern is I have interacted with Kickstarter three times now – sent emails and had meetings and stuff – requesting clarification of intent and a roadmap, and I have never gotten one, which makes me question the wisdom of the entire venture.”

“Will you buy comics on Kickstarter if they go through with their blockchain plans?” Twitter poll, closed with 4500+ votes.

“In many ways, Kickstarter’s weird crypto project — and the blockchain aspirations other aging web 2.0 companies are pushing on us right now — are kind of like watching a middle-aged man buy a boat. He doesn’t need to buy a boat. His life will be significantly more complicated, and likely worse, after he buys the boat. But he has somehow convinced himself that he needs to buy this boat because he has done the math and realized he is going to die soon and he thinks the boat will fix this.”

General blockchain criticism/snark:

“It turns out, businesses already use computer programs a lot. DAOs don’t bring anything to the table. So a lot of it is excuses to do things you can already do, and just say, ‘Oh, it’s a DAO. That means it’s crypto, and it’s magical, so if you don’t understand why our idea sounds so stupid, it’s because it’s very complicated and you need to think about it more.’” (Video with David Gerard, who literally wrote the book on crypto failings. Multiple books, in fact.)

“One of the most infamous examples of a game incorporating an early form of a play-to-earn system was Diablo III’s auction house, where players could buy and sell weapons and items for real money. […] But Blizzard’s experiment in monetizing scarcity was a disaster.”

“The biggest [lie] is “this incentivizes green power.” Which it does in the same way that a whole bunch of random shootings would incentivize bulletproof vests.”

This video has my new favorite example of crypto fans using The Most Elaborate Possible Technical Terms for the most absurdly mundane things: “It’s called loading. You’ve described how loading works.“

Excellent deployment of quotation marks: “‘Hacker’ Steals NFTs ‘Worth’ Millions From Opensea Users.“

Excellent Onion headlines: “Man Who Lost Everything In Crypto Just Wishes Several Thousand More People Had Warned Him“

ScamCoin investors are shocked to learn they trusted their money to notorious con artist Jonathan ScamCoin

Title grabbed from The Onion’s lists of biggest crypto heists of all time.

As of this writing, Coinopsy has records of 2,403 “dead” cryptocurrencies, compared to a whopping 414 that are still kicking.

“In May, the Federal Trade Commission reported that consumers had lost more than $80 million on crypto scams between October 2020 and March 2021 — more than ten times the amount lost during the same period the previous year, $2 million of which was lost to scammers impersonating Elon Musk.”

Gaming company co-founder on why companies like Steam have stopped trying to work with crypto: “the vast majority of those transactions, for whatever reason, were fraudulent, where people were repudiating transactions or using illegal sources of funds and things like that. And that’s just out of control, right? You want that number, realistically, in a couple of percent, not half of all transactions turning out to be fraudulent transactions. Similarly, with the actors that are currently in this NFT space, they’re just not people you really are wanting to be doing business with. ”

Some crypto miners and traders “are attempting to take advantage of a controversial tax incentive in Republicans’ 2017 major tax legislation — specifically, by investing in “opportunity zones,” which were sold as a plan to buoy the poorest American neighborhoods but have evolved into a way for wealthy investors to funnel billions in untaxed profits into virtually any venture they choose.”

“As of Feb. 8 roughly 55% of Bitcoin investors were underwater, according to cryptocurrency investment firm 21Shares. That’s actually an improvement from several weeks ago, when Bitcoin was trading about $35,000. At that time, more than two out of every three Bitcoin investors were in the red.”

Crypto Critics’ Corner constantly has conversations about crypto so smart and technical and well-informed, I can barely keep up, and it’s an absolute pleasure to listen to. Recently a guest went “the value of Bitcoin is usually given in US$, but we should give it in Tether” and I was all…listen, I could not possibly have connected those dots myself, but know juuuust enough to grasp why it’s a Big Deal. I’m hanging on by my fingertips and it’s great.

Dispatches from Balloonville

Title inspired by my new favorite player in the NFT Space:

Screw it, I like the Balloonville people. So few in the Crypto Space will openly embrace the true meaning and spirit of “unregulated trustless marketplace that anyone can participate in.” Looking forward to their next project, “Bored Rug Club”, followed by the pixelated “CryptoScammers.”

Who could have expected that this would pop??

More NFT rubbernecking:

“On February 9, 2021, an unidentified scammer used a phishing attack to steal dozens of NFTs from individual wallets. [..] In total, the scammer netted over 1100 Eth (~$3 million) from the attack. The phishing attack used a legitimate Opensea buy order.” So why call it “stealing” or “scamming”? It’s a valid blockchain transaction! Everything is fine.

“[NFT sales data] do not show the democratization of wealth thanks to a technological revolution. They show an acutely minuscule number of artists making a vast amount of wealth off a small number of sales while the majority of artists are being sold a dream of immense profit that is horrifically exaggerated. Hiding this information is manipulative, predatory, and harmful, and these NFT sites have a responsibility to surface all this information transparently. Not a single one has.”

“If you have access to a free trial of some chart-making software, you can even begin to make a corkboard map of this emerging web of ownership, business relationships, and incredibly bad art.“

Other blockchain-based definitely-legitimate-and-not-a-scam rubbernecking:

“Often used as a way to distribute free NFTs for giveaways and other promotional campaigns, there is nothing stopping someone from airdropping NFTs with abusive content—doxing, revenge porn, child sexual abuse imagery, threats, etc.—into someone’s wallet. […] And even if someone hides or burns an NFT of this sort, the transaction and its contents remain immutably on the blockchain for anyone to see.” A quick overview of blockchain-based abuses we should be worried about.

“The Football Supporters’ Association (FSA) has called for regulations of cryptocurrency-related platforms after one of sport’s biggest cryptocurrency-brands has gone into liquidation. The Times has reported that fan engagement platform, IQONIQ, has collapsed in Monaco, which has potentially left thousands of supporters in possession of Fan Tokens ‘worth almost nothing’.” Ah, the wonderful applications of crypto in sports.

“Two lists: falsehoods [about crypto and blockchain] that nobody who is interested in the world as it really is should ever repeat, at least not without heavy qualification; the second a list of truths and rules of thumb about cryptocurrency and blockchain that have been demonstrated repeatedly (often for many years) but escape notice far too often.”

Evangelists reinventing stuff that already exists:

“Why not compare Bitcoin to other networks? “Bitcoin is the Apple eWorld of money!” The original electronic walled garden, that turned out to be too expensive and not very interesting. Or compare it to other technologies — “Bitcoin is the Ford Pinto gas tank of money!” Which it frequently demonstrates.”

“I have been exploring Active Worlds for several days. It is a sort of internet archaeologist heaven, where player-created structures stretch out for what can seem like hundreds of virtual miles. There are many worlds to explore — all of which are anything but active — but this main one, AW, has been running since the mid 90s.” So we’ve had what they’re calling “the ~metaverse~” for almost 30 years now.

“Git was released in 2005 and was based on work going back to the late 1990s; Merkle trees were invented in 1979. The good bits of blockchain are not original, and the original bits of blockchain turn out not to be much good.”