EOS Is a 'Terrible Investment' – EOS Foundation CEO

The biggest crypto news and ideas of the day

Nov. 3, 2021

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Today's must-reads

Top Shelf

MISMANAGEMENT: EOS Foundation CEO Yves La Rose said the smart contract blockchain has been "a failure" and "terrible investment." Plotting a new direction for the project, La Rose said the recently launched EOS Foundation will take the reins from software company Block.one, which he claims misled the blockchain following a record $4.1 billion token sale in 2018. Separately, a group of ex-ConsenSys employees are preparing to sue a branch of the Ethereum developer, ConsenSys AG, for allegedly misvaluing Metamask, Infura and other key portfolio assets prior to a deal struck with JPMorgan.

TAKING STOCK: Marathon Digital produced 417.7 BTC in October, a 23% increase over the previous month, and plans to continue expanding its mining fleet. The publicly traded miner now holds 7,453 BTC worth about $457 million. Rival miner Riot Blockchain plans to increase its hashrate to 8.6 EH/s next year, to capture over 11% of the Bitcoin network security, it said. Overall, crypto mining stocks outperformed other crypto-linked stocks amid bitcoin's recent price rally.

KEY HOLDERS: Miami Mayor Francis Suarez pledged Tuesday to take his next paycheck entirely in bitcoin through Strike – potentially the first U.S. politician to do so. He earns an annual salary of $187,500. Meanwhile, BTC whales, or investors holding at least 1,000 BTC, are accumulating coins quicker amid inflation concerns, new data shows. Said whales bought 142,000 BCT last week. Elsewhere in crypto: Venture capitalists invested a record $6.5 billion over 286 blockchain-related deals in Q3.

CBDC CHECK-IN: China's central bank digital currency (CBDC) has been used for 62 billion yuan ($9.7 billion) worth of transactions as of end-October, according to People's Bank of China (PBOC) officials. Some 140 million civilian and 10 million corporate accounts have joined the "eCNY" pilot with no official launch date in sight. Relatedly, a JPMorgan report claims a CBDC could save global corporations $100 billion a year in cross-border transaction costs

DIALOGUE EXCHANGED: Exchange-traded fund (ETF) issuer Direxion has withdrawn its application to the U.S. Securities and Exchange Commission (SEC) to list a short bitcoin futures fund, a way to bet on the crypto's price falling, complying with an ask from the agency on Oct. 26, the day it was filed. Separately, Hong Kong Securities and Futures Commission (SFC) Deputy CEO Julia Leung said the watchdog has received "a number" of requests to launch crypto ETFs.

MONEY SPENT:

Thailand's oldest bank, Siam Commercial Bank (SCB), paid 17.85 billion baht ($536.6 million) for a majority stake in the Bitkub crypto exchange.
FTX led a $150 million investment into Chipper Cash, a fee-less, peer-to-peer payments network popular in Africa.
Celsius Network, the crypto lender facing legal trouble, is acquiring Israeli cybersecurity company GK8 for an undisclosed sum.
Huobi, the Chinese crypto exchange, is sending someone to space to celebrate its eighth anniversary.

"If you look at our financial markets, fintech is the dominant area of innovation right now and crypto is the dominant asset class in fintech."

–Rep. Warren Davidson (R-Ohio), on CoinDesk TV's "First Mover."

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What others are writing...

Off-Chain Signals

Connecticut jury finds crypto-related products are not securities (Cointelegraph)
ex-NYDFS's Matt Homer on "a federal power grab over the future of stablecoins" (Real Clear Markets) and why Congress should look to states for crypto regulation (American Banker – paywalled)
Elijah Wood touted a newly acquired NFT. A racism scandal ensued. (Input Mag)
Global investor Mark Mobius told CNBC on Wednesday that cryptocurrencies are more like a religion than investments, and that stocks are the answer at the end of the day
How banks and VCs approach crypto … from the Old Grey Lady (NYTimes)
Gary Vaynerchuk on How He Bought 59 CryptoPunks … with money, duh (Blockworks)
Bitcoin maxis go overboard defending Satoshi Nakamoto's honor from satirical film (Protos)
A SHIB Whale Just Moved Nearly $3 Billion Worth of the Meme Coin (Decrypt)
British administrator for darknet market Silk Road ordered to forfeit £490,000 in Bitcoin (Sky News)
The global supply chain crisis is disrupting shipments to US bitcoin mining firms (The Block)
Coinbase is testing a subscription service with zero trading fees and prioritized support (The Block)
Governance of DeFi Giant Curve in Flux as Smaller Convex Exerts Control (The Defiant)
Crypto media falls for $16 render of Shiba Inu billboard in Times Square … but to be honest the entire media cycle around these dog tokens is puke-worthy (Protos)

Send me what you're reading at daniel@coindesk.com. Especially looking for smart blogs and smaller publications.

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Crypto is on the rise. Crypto knowledge, however, is stuck on the runway: It turns out that 96% of U.S. adults can't pass a test on crypto basics. Throughout November, Crypto Literacy Month aims to change that. Brush up on your crypto knowledge!

Putting the news in perspective

The Takeaway

The Cube Movement

David Morris reporting today. The Cube is Life.

The mainstream media has caught on to the latest huge crypto trend, which isn't a new non-fungible token (NFT) line or a fresh dog token, but small desk tchotchkes made of one of the densest elements humans can safely touch tungsten. Spearheaded by Neeraj Agrawal at CoinCenter and investor Nic Carter, the Cube Movement has surged through Crypto Twitter over the last month or so. Midwest Tungsten – the true Cube connoisseur's American supplier of choice – has seen massive sales spikes. Twitter users have reported wait times of more than a month for new Cube orders.

Yesterday, NBC did its take on the "Tungsten Cube Bull Market" and offered a few tentative insights into the big question: Why are people into these things?

It started off as another Crypto Twitter meme obliquely commenting on speculative manias, but has become A Thing for literally material reasons: The cubes are so weirdly heavy that holding one feels like a kind of tactile illusion. To my shame, I do not own a Cube, but I have experienced its inscrutable allure, the almost supernatural sense that something so dense must be in some unspeakable way alive, an aliveness beyond the horizon of our petty human concerns. As Tim Copeland at The Block perfectly phrased it, when you hold a Cube, you sense that "it yearns to be one again with the earth."

The Tungsten Cube is basically a Magic Eye poster for your hands, in other words. But, at the risk of taking all the fun out of it (which, OK, I guess is my job), the Cube phenomenon is deeply layered and has a bizarrely large amount to tell us about not just crypto, but where we are as a society. The Cube is about Zoom and the coronavirus pandemic. The Cube is about market froth. The Cube is about the metaverse. The Cube is about income inequality.

One level up from the pure sensation of its weird density, the Cube is a digital-age reminder that we have bodies and that those bodies really, really, really matter. In purely hedonistic terms, holding The Cube is just an extreme version of the experiences that await you every minute of every day if you just get up from your desk for a little while and go take a walk or, better yet, drive into the woods and take a hike.

The Cube is cool, but have you ever picked up a random good-looking rock from the side of a river? Have you ever overheard a really interesting conversation when walking to the corner store? The Cube, in its weight, is a memory and reminder of the rich reality that's out there for the taking the second we log off. The Cube is a symptom of our Plague Years, embraced by a professional class that has been isolated behind screens and has had enough. (It should also, as a purely frivolous luxury good, be a reminder of all the GrubHub drivers and "essential workers" whose physical risk and discomfort the work-from-home cohort has been able to conveniently hide behind app screens.)

The Cube is, even more, a righteous middle finger to the wave of metaverse pitches coming fast and furious from the likes of the former Facebook and now Microsoft. The Cube rebuts the absurd idea that virtual reality is going to replace playing ping-pong or fencing in real life. Both of those ideas were presented in Facebook's Meta presentation and (to return to Earth from the realm of poets) they are gobsmackingly stupid pitches. The kind of haptic feedback and low latency needed to have even a vague approximation of these visceral experiences in a virtual world are decades, if not centuries, away. Using them as examples is probably the clearest evidence that Mark Zuckerberg's "Meta" is essentially a con meant to sell a bill of goods that will never truly arrive.

It might seem equally absurd to claim this rhetorical weight for a meme emerging from Crypto Twitter, which is almost as full of terminally online brain-poisoning victims as Politics Twitter. But as I've explored at length in my book "Bitcoin is Magic," the deep purpose of crypto and blockchain is to imbue digital objects with the permanence of the physical world – to give them, if you'll indulge me, digital density.

The Canadian media philosopher Marshall McLuhan analyzed the history of media in terms of a tradeoff between enduring communication technology (e.g., the Pyramids) and high-speed communication technology (e.g., email). Bitcoin and crypto are a novel melding of the durable and the fast. The technology's costs and inconveniences (I'm looking at you, gas fees) are not a bug, but a feature inextricable from this ambition.

Yes, OK, at the end of the day there's no denying that Tungsten Cube Mania is mostly just another fad, fueled by the newly crypto-rich who can splash out two hundred bucks or more for a 21st century Hummel figurine. But like any fad with real legs, if you look a bit deeper you'll find a weighty truth within.

–David Z. Morris

Sponsored Content

Polymesh: Crafting Tokens Both Wall Street and Washington Can Love

Security tokens are on the rise. According to STOMarket.com, well over 100 tokens compete for attention from U.S. investors, with a combined market cap exceeding $1.1 billion. Such widely held names as Apple, Tesla and Google offer tokenized versions of their stock. But still, that could be an order-of-magnitude undercount.

"There are far more private and far fewer exchange-traded security tokens," says Graeme Moore, head of tokenization for Polymath, a blockchain company that develops tools for digital securities. "The real figure is more like $5 billion to $10 billion."

This poses a multibillion dollar problem that continues to grow exponentially: regulatory compliance.