US Senators Want to Track Crypto Mining

The biggest crypto news and ideas of the day

Sept. 28, 2021

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Top Shelf

MINING MATTERS: U.S. senators Maggie Hassan (D-N.H.) and Joni Ernst (R-Iowa) have proposed legislation that would require the Treasury Department and other agencies track how crypto mining has propagated worldwide. This would be, in part, to “identify vulnerabilities” crypto introduces to “the global microelectronic supply chain.” Meanwhile, e-commerce giant Alibaba will stop selling specialized mining equipment on Oct. 8, as at least 18 more crypto platforms and companies exit China following a nationwide crypto ban.

PLEA DEAL: Virgil Griffith, the controversial Ethereum developer charged with violating U.S. sanctions law for giving a presentation in North Korea in 2019, has pleaded guilty in an agreement with federal prosecutors. He pleaded guilty to one charge of conspiracy to violate the International Emergency Economic Powers Act on Monday in a New York courthouse, and could serve between 63 and 78 months in prison after sentencing.

PLATFORM REVOLUTIONS: Revolut, a fintech company with a $33 billion valuation that offers cryptocurrency buying as part of its services, is looking to launch its own token. This will likely be an exchange token rather than a stablecoin, according to an anonymous source. Separately, U.K.-based DeFi startup Gro, founded by former Revolut growth lead Hannes Graah, has launched a liquidity mining product and governance token in a bid to turn the project over to the community.

NODEWORTHY: A roundup of new tooling and announcements pushing crypto to new frontiers:

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Sound Bites

“We thought we were going to be participants listening to North Korean presenters and then they told us ‘no, you are the presentation.’”

–Author of “Once a Bitcoin Miner” Ethan Lou on his trip to North Korea with Virgil Griffith, speaking on CoinDesk TV’s “First Mover.”

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Putting the news in perspective

The Takeaway

You Can Be a Bitcoin Maximalist and Like Ethereum

Toxic bitcoin maximalism has been in the spotlight. For the past few days noted bitcoin booster Udi Wertheimer has been kicking the cyber hornet’s nest, challenging a non-dominant opinion in some of the online spaces bitcoiners congregate that bitcoin is the one, true crypto asset.

“[K]nowingly pushing people away from bitcoin [in] the short term is, in udiverse’s opinion, highly immoral. gatekeeping is not a virtue,” Wertheimer said on Twitter, referring to himself as udiverse. He’s been on a tear, questioning the immune-like response bitcoiners activate when anyone denigrates “the coin” or mentions other cool crypto things happening on other chains. Everything “crypto” – that is non-bitcoin – is a scam; everyone who sees value elsewhere is a scammer.

Not to call anyone out in particular, but here’s a good example of a bitcoin influencer turning on Nayib Bukele, the “trojan horse” presidente of El Salvador who pushed through legislation putting BTC on equal footing with the U.S. dollar, for experimenting with Tron. “Idiot!”

Bitcoin toxicity may seem like a trivial issue. That this battle is being taken up by someone who talks in the third person as some sort of cartoon platypus speaks to the absurdity. The internet is not “real life.” Twitter’s infinite scroll is infinitely dumb. But at the same time, udiverse – the troll of trolls – has a point.

Many a public figure has been chastised for stating views counter to the bitcoin mindset – sometimes pushing them out of the fold. Best-selling author Nassim Taleb has been savaged (though he may have been asking for it), as have figures like the lovable Neeraj Agrawal. Some folks, like Bloomberg editor Joe Weisenthal, playfully engage the beast. But for many, being dogpiled by “maximalists” is an unnerving experience.

As bitcoin continues to gain prominence in the global economy and activity on the internet, it has also become central to some people’s sense of identity. Bitcoin is not just an asset to hold but a movement in which you participate. Extreme fanaticism conflates perceived attacks on the Bitcoin network to one’s sense of self. It also allows no quarter to people who haven’t yet “grokked” bitcoin, or may be troubled by its effects on the world.

“[S]eparatism used to be a fitting response, e.g., in 2017, when actual bad actors tried to hurt the movement,” Wertheimer said. “[H]owever, 2021 is different, the new crowds aren’t trying to hurt anyone, and separatism doesn’t achieve the stated goal of ‘educating’ anyone.” (Wertheimer did not respond to a request for comment.)

Wertheimer isn’t the only hardcore bitcoiner to soften his views. Eric Wall, a researcher and chief investor for Arcane Assets, has also recently begun striking out against toxic maximalism. Wall and I spoke earlier this month about how identities form in the crypto industry, what value they provide and the possibility of changing your mind. His is a story of personal transformation, but it’s not about any single individual’s beliefs – not Wertheimer’s or Wall’s – but about community orientation. It applies also to other forms of blockchain maximalism.

The strongest case for bitcoin supremacy is made by those who want bitcoin to succeed in becoming a universally accepted scarce asset.

“In order for bitcoin to compete as this store of value, we need to make sure that it stays the number one asset. If Bitcoin gets replaced by Ethereum, and then Ethereum gets replaced by Solana [and that] gets replaced by whatever the next smart contract platform or cryptocurrency is, then it's going to be very hard to make the case that we've actually invented digital gold,” Wall said over Zoom.

That’s a position Wall will fight for “until my last dying breath.” But creating an “alternative to the fiat money we have” does not preclude the success of other blockchain-based applications or tools.

Wall is a thorough if sometimes uncouth researcher. By his own account, he has made enemies of every coin camp – being labeled a Cardano, Ethereum and Bitcoin maximalist – for asking tough questions about each chain. For years, he had been skeptical of Ethereum and believed that in time, through scaling solutions, Bitcoin could achieve the same functionality as the so-called “world computer.”

Read the full column here.

–Daniel Kuhn

Financial advisors are taking a cautious approach to bitcoin as client interest in the space increases and new products offer retail investors easier access to this new asset class. As trusted guides, advisors cannot risk falling behind, even if the jury is still out on bitcoin's role in a client's portfolio.

At Bitcoin for Advisors 2021 on Oct. 6, Michael Kitces and Tyrone Ross share insights from the front lines. Apply today.

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