Discovering ADA: A Guide to CARDANO in 2023

Introduction

Cardano, one of the top ten blockchains by market capitalization, is an established decentralized network with a growing ecosystem that aims to provide a more secure, reliable, and sustainable ecosystem for cryptocurrencies, non-fungible tokens (NFTs), and decentralized applications (Dapps). 

What sets it apart from other public blockchains is its scientific philosophy and meticulous, academic nature, which has seen it develop at a much slower pace than rivals like Solana and even Ethereum as the world’s first peer-reviewed blockchain. With so many new security threats draining user funds in the Web3 space, this tortoise vs hare approach and emphasis on longevity is not necessarily a bad thing.

Cardano was founded in 2015 by Charles Hoskinson, one of the co-creators of Ethereum. 

Hoskinson famously left Ethereum in 2014 due to a dispute with one of Ethereum’s well-known faces, Vitalik Buterin, over the commercial route the network should take. 

Cardano continues a course that connects all Web3 technologies, including artificial intelligence (AI). In 2020, IOHK (the developer of Cardano) and SingularityNET Foundation announced that a significant portion of SingularityNET’s decentralized protocol and platform had been ported from Ethereum to Cardano. The partnership is continuing to blossom, with big strides being made to soon enable AGIX staking on Cardano, according to the latest SingularityNET report.

What is Cardano?

Cardano is an open-source, decentralized public blockchain for building and deploying Dapps, digital assets and more to help serve a variety of purposes for the common good, especially in less developed countries. 

Developed by Input Output HK (IOHK), Cardano is a research-driven, flexible layer-1 blockchain written in the Haskell programming language with a sustainable and scalable design. It takes a long view to the development of its network, prioritizing security over being first to market. 

Launched officially in 2017, Cardano finally added its Plutus smart contract functionality in September 2021 with its successful Alonzo hard fork. This opened the blockchain platform to the decentralized finance (DeFi) sector while being interoperable through bridges with Ethereum, EVM chains and non-EVM blockchains.

Smart contract capabilities are needed to help build a robust, secure, scalable, and energy-efficient blockchain platform for building Dapps.

What is ADA? 

Cardano got its name from Gerolamo Cardano, an Italian mathematician. Its native currency, ADA, is named after English mathematician Ada Lovelace. 

ADA currently has a market cap of over $10 billion and a fully diluted value (including all potential tokens) of $13 billion. The ADA coin can be used to send and receive payments, cover transaction fees on the Cardano network, or for staking (through pool delegations), trading, or just simply a long-term HODL investment. It can be easily bought and sold on the open market or almost all leading crypto exchanges. 

ADA Tokenomics

ADA has a maximum token supply of 45 billion, with an inflationary emission rate. There are currently already 35 billion ADA in circulation, and it has the following token distribution: 

  • 57.60% is allocated to ICO
  • 11.50% is allocated to the Team
  • 30.90% is allocated to Staking Rewards
Credit: Tesfu Assefa

Cardano Basics: How Does the Cardano Chain Work?

Architecture

Cardano uses a unique two-layer architecture system to meet its goals of sustainability and scalability. The two layers are:

  1. Cardano Settlement Layer (CSL), whose purpose is to account for value and handle transactions
  2. Cardano Computation Layer (CCL), whose primary purpose is the execution of smart contracts and Dapps. This splitting is required to allow Cardano to have a high throughput.

Cardano Programming language: Plutus (Haskell)

Cardano has a unique native smart contract language called Plutus to ensure that smart contracts are executed correctly. Plutus Core is a Turing-complete script written in the functional programming language Haskell, which makes it fully testable in isolation. Plutus Core forms the basis of the Plutus Platform – a development platform to develop Dapps on Cardano.

Consensus mechanism: Ouroboros (PoS)

Cardano uses Ouroboros, a unique proof-of-stake consensus mechanism that is provably secure and energy-efficient. This is different from the proof-of-work (PoW) used by Bitcoin. PoW, a consensus mechanism popularized by Bitcoin, relies on miners who use highly specialized equipment to be the first to solve a time-consuming math puzzle. 

While it scores big on decentralization, it’s high on energy costs and low on speed. 

PoS does not demand as much energy as PoW and provides a more sustainable solution. Instead of miners staking their energy costs, PoS relies on validators who stake their cryptocurrency to validate transactions. 

The Cardano network is distributed across staking pools. Each stake pool has a slot leader who is rewarded for verifying and adding new blocks to the chain. ADA holders may stake their tokens to specific stake pools, thereby increasing their chances of being chosen as stake leaders and enjoying rewards.

Layer-2 scaling: Hydra 

It’s well-documented that Cardano can be a bit slow, with a current max of around 6 transactions per second, and an average of only 2TPS. 

In May 2023, the Hydra Head layer-2 scaling solution went live on Cardano’s mainnet to help speed up the network and boost its DeFi capabilities whilst lowering transaction fees. Speculation that it can handle up to 1 million TPS is probably unrealistic, but what is certain is that it will significantly speed up and scale Cardano transactions once it’s optimally operational. 

Cardano Background

Let’s take a look at the teams and communities behind this fascinating chain. 

Cardano was launched in 2017 as a third-generation blockchain (Bitcoin is a first-generation chain while Ethereum is a second-generation one) and started life as an ERC-20 token before it migrated to its own mainnet. 

It is closely tied to three entities that provide the infrastructure, tools and services it needs to scale – the Cardano Foundation, Emurgo, and IOHK. 

  • The Cardano Foundation is a Swiss-based non-profit organization that oversees the worldwide development and advancement of Cardano in enterprise applications. Apart from supporting and engaging with the Cardano community, The Cardano Foundation helps to build the tools that the Cardano community requires to solve problems in new, innovative ways.
  • Input Output Hong Kong (IOHK) is a blockchain infrastructure and engineering company founded by Hoskinson and Jeremy Wood in 2015 that is contracted to design, build, and maintain the Cardano platform.
  • Emurgo is Cardano’s founding entity and provides services and products to builders that drive Cardano’s push into the Web3 ecosystem.

Cardano’s Use Cases and Ecosystem

ADA, Cardano’s native cryptocurrency, has seen a surge in adoption in the U.S., and this is fueling the growth of its ecosystem.

Cardano’s ecosystem – which will be covered in a follow-up article – spans Web3, DeFi, NFTs, gaming, decentralized exchanges (DEXs), the metaverse, and more. These are the key areas that continue to propel the crypto industry forward as a whole.

But how do you explore and learn more about Cardano and its ecosystem?

Here are three DYOR (do-your-own-research) tools at your disposal:

  1. CardanoCube

CardanoCube is a platform for discovering and exploring projects and Dapps building on Cardano. This is important for stakeholders such as investors and developers who need to have a clear picture of the ecosystem before taking a plunge. 

The platform wants people to have up-to-date, accurate information about the Cardano ecosystem and the developments happening around it.

  1. CoinMarketCap and CoinGecko

In crypto, all research often starts with CoinMarketCap and/or CoinGecko, the world’s two most popular crypto data aggregation platforms. Both have dedicated landing pages solely for the Cardano ecosystem, namely:

CoinMarketCap Cardano ecosystem projects
CoinGecko Cardano ecosystem projects

  1. DeFiLlama

A vital tool in any DeFi degen’s arsenal is DeFiLlama. Use it to find out what’s happening on-chain on Cardano and its most popular Dapps like decentralized exchanges. 

According to its Cardano page, the network currently has a total value locked (TVL) of $162 million and 35,400 active users. 

Credit: DeFiLlama (Cardano’s page on August 18, 2023)

What Can Cardano Be Used For?

Due to its versatility and scalability, Cardano has a myriad of use cases. The biggest at present are:

  1. DeFi

Much like Ethereum, the Cardano platform can be used to build and deploy DeFi protocols such as lending protocols. A core vision for Hoskinson and IOHK is to create a new financial system for emerging markets and to help “bank the unbanked” in less developed countries, that is people who do not have access to traditional financial services. 

DeFi on Cardano therefore is a crucial component to the success of the chain’s vision, and makes the implementation of scaling solutions like Hydra and other new products even more important.

  1. Supply chain management 

The platform can be used to implement secure and transparent supply chain solutions to ensure the traceability and authenticity of products. In 2021, Cardano rolled out an anti-counterfeiting supply chain solution.

  1. Voting and governance

The platform can be used to build tamper-proof voting solutions

  1. Identity verification 

Cardano can be used to protect people’s identity by building decentralized identity verification systems, which will also help people without official government IDs gain access to decentralized financial services such as micro-loans and potentially universal basic income. 

Cardano’s Push in Developing Nations

New technologies and innovations usually favor first-world countries. However, Cardano wants to take a different approach by starting with Africa. 

How does Cardano see opportunities in Africa?

Cardano wants developing nations to break free from the traditional banking system (about 45% of people in Sub-Saharan Africa don’t have access to financial services), expensive middlemen, and political structures that favor a few. The blockchain platform sees an opportunity in Africa where the continent’s young population is more receptive to new technologies.

Third world countries stand to benefit a lot from blockchain technologies. This is because they rely on legacy systems of government that usually have big, open backdoors for corruption. It is estimated that developing nations lose $1.26 trillion annually to corruption, tax evasion, and theft. By using automated blockchains, African nations could close the tap of corruption.

This focus on emerging markets sets Cardano apart from almost all other blockchains and could set it on a course of explosive adoption for decades to come.

Final Thoughts on Cardano

Cardano distinguishes itself from its peers through a 2-layer architecture and a commitment to sustainability. Its use cases range from staking to leveraging the power of smart contracts. The Cardano platform offers developers, investors, and other crypto stakeholders several opportunities to engage with the ecosystem, which is growing in leaps and bounds since its launch.

Join us for our next article on Cardano which will take a closer look at its ecosystem and use cases.

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Crypto Trading Bots on Telegram and Discord: DeFi’s New Killer App?

Introduction

As Decentralized Finance (DeFi) matures to better serve crypto users and keep them safe, new technologies and strategies are emerging to help traders maximize their profits. One innovation that has gained significant attention in recent years is the use of crypto trading bots, most recently by Telegram and Discord users.

Ever tried to snipe a trade on Uniswap, or a new NFT mint, only to see the price spike right as you’re executing the transaction, forcing you to increase your price slippage tolerance just to get the trade through? The reason is often crypto trading bots, which have been a dirty little secret used by top traders for a while now, and is only now with the advent of artificial intelligence coming to broader awareness. 

These automated tools have revolutionized the way traders interact with the market, making it easier than ever to execute trades and manage portfolios. In particular, the rise of Telegram and Discord bot traders has changed the game, offering new recourse for DeFi users who want to avoid the risk of trading on centralized exchanges.

Disclaimer: Please be aware that Crypto Trading Bots come with significant financial risk as they’re rarely reviewed for code and security issues and are often created by anonymous teams. Therefore the risk of phishing or rug pulls remains high. Do not share the private keys of a big wallet with these applications under any circumstances and do your own research. 

Understanding Crypto Trading Bots

Crypto trading bots are automated software programs that interact with cryptocurrency exchanges to analyze trading data, place trades, and manage orders on behalf of the trader. They operate based on predefined algorithms and trading strategies, allowing for rapid, round-the-clock trading that would be impossible for a human trader to achieve.

Trading Bots and AI

Artificial Intelligence (AI) plays a crucial role in the functionality of these bots. Machine learning algorithms analyze market trends, make predictions, and execute trades with increasing accuracy as they learn. This makes them invaluable for both novice and experienced traders.

The Rise of Telegram and Discord Bot Traders

Telegram and Discord, two popular messaging platforms, have become hotbeds for crypto trading activity. Developers have created bots that integrate with these platforms, allowing users to trade using their messaging apps as the controls, while under the hood are sophisticated functions from copy trading to airdrop farming. Let’s take a look at the most popular. 

10 Key Features of Crypto Trading Bots

In crypto trading, speed matters. Crypto trading bots come with a range of features designed to expedite and seamlessly automate the trading experience. Broadly, some of the most popular features include:

  1. Trade Execution

Bots can execute trades quickly and efficiently based on predefined rules

  1. Copy Trading

Bot users can input wallet addresses and automatically copy these wallets’ trades and transactions.

  1. Multi-Wallet Creation Sniping

Some bots help users create batches of wallets. The user can execute the same trade on multiple wallets at a time, to bypass limits on individual wallets.

  1. Liquidity Sniping

They can execute a buy order when the bot detects liquidity being added, maximizing the number of tokens a sniper gains on a new token.

  1. Method Sniping

This is an advanced form of sniping tokens that allows a sniper’s buy transaction to execute as early as possible based on the ‘Method ID’ of a developer’s pending transaction.

  1. Airdrop hunting

Some bots can automate the process of applying for airdrops by fulfilling various criteria required by new crypto airdrops.

  1. Stop Loss and Take Profit Orders

These bots can automatically execute trades when a token reaches a certain price, allowing users to automate buying and selling.

  1. Anti-Rug Features

They can detect potential rug-pull attempts by token developers, and execute a quick sell to liquidate the position before liquidity is pulled.

  1. Honeypot Checking Features

They can detect incoming malicious transactions by a token developer, and liquidate the position before it becomes a honeypot.

  1. Native Tokens 

Many bots have released their own native tokens. Holders of these tokens usually enjoy lower fees on the platform and exclusive access to certain features.

Case Study: Unibot and Other Successful Bots

Crypto markets are currently awash with dozens of new crypto trading bots, thanks to a wave of influencers hyping their potential, which has seen the native token prices of some shoot through the roof. (Many of them dropped 50% in value in one weekend recently – another reminder to not invest without doing proper research.)

Unibot, a Telegram decentralized exchange (DEX) trading bot, is a prime example of the success that can be achieved with these tools. Since its launch, Unibot has swollen to a market cap of over $1 million. Other bots like Maestro, MEVfree, and LootBot have also gained attention for their unique features and profitability.

According to research by channels like Crypto Banter and other tools such as CoinGecko’s Telegram Bots list, here are a few of the hottest new Telegram trading bots (Warning: these tools have not been reviewed and may come with serious financial risk. User caution is advised when interacting with these tools):

Trading BotDescription
Maestro Maestro is currently the most popular Telegram crypto bot trader. It automates on-chain tasks, simplifies processes, and generates significant fees. It offers customizable trading experiences, allowing users to set orders, stop losses, and take profits, automating transactions based on their parameters.
Unibot Unibot is another profitable trading bot on Telegram. It offers features like whale-tracking and copy trading, and it also provides revenue sharing.  At present, it has a valuation of $171 million, very high compared to other bots. 
Wagie bot Wagie bot is a trading bot that integrates with GMX, allowing users to open purpose trades directly from the bot through Telegram.
Alpha Scan Alpha Scan is a project that tracks and highlights social mentions of different tokens, helping users identify trending crypto assets early.
Collab. land Collab.land is a bot used on Discord and Telegram to access gated content. I also serves as an infrastructure for deploying crypto bots.
LootBotLootBot is an airdrop-focused Telegram bot that automates on-chain interactions and acts as a streamlined frontend for hundreds of chains. It allows users to create or follow automated tasks that could help with objectives such as Airdrop Farming.
NeobotNeobot is an analytics tool that provides real-time notifications on different events, and is recommended by reputable influencers. It is more geared towards researchers than traders.
Genie botGenie Bot is a B2B software offering AI chatbot services to protocols and projects. 
BetbotBetbot is a competitor to Roll Bit that allows users to play various casino games on Telegram. 
Credit: Conor O’Higgins via Midjourney

The Future of Crypto Trading Bots

As the crypto market continues to evolve, it’s clear that trading bots will play an increasingly important role. With their ability to automate complex trading strategies and execute trades at lightning speed, these bots have the potential to revolutionize the industry. As more and more traders recognize the benefits of these tools, we can expect to see continued growth and innovation in this space.

Negating the Risk of Telegram Bots

While the benefits of crypto trading bots are clear, security concerns should not be dismissed. As with all innovations in crypto, it doesn’t take long before the bad actors arrive to look for ways to exploit new users’ lack of knowledge for scams and phishing attacks, or even smart contract vulnerabilities or backdoors added by the bot creator.

Therefore, to avoid hacks or scams or rug pulls, it’s crucial to research any bot you choose to use and interact only with bots from verified developers. While many bots will create a new wallet for you, some applications will request access to your existing wallet. To be safe, users should create a new ‘burner’ wallet to connect to the bot and only transfer in an amount they’re comfortable losing. Also, it’s advisable that once a trade’s closed, a user should withdraw all their funds from that address as soon as they can. 

How to Get Started with Telegram and Discord Bot Traders

To get started with Telegram and Discord bot traders, follow these steps:

  1. Research your coin: do research on CoinGecko or CoinMarketCap on LISTED coins. Do note that any listed coin’s price will most likely be significantly inflated, therefore it’s important to study its 7-day or 30-day performance, and also review its total market cap and full diluted value. If you want to degen in really hard, you can look at DexTools to identify Telegram bot coins before they get picked up by these sites. Due to the frequency of scams however, this is not recommended. 
  2. Create an account: Use Coingecko or CoinMarket and follow their social links to check out the bot on social media and then its website. Visit the website and follow instructions, such as joining a Telegram or Discord channel. 
  3. Understanding bot commands: Familiarize yourself with the bot’s commands and features through the provided documentation.
  4. Risk management strategies: Set clear risk management parameters to prevent excessive losses.
  5. Use small investments: Begin with a small investment to get acquainted with the bot’s performance and effectiveness. 

Conclusion

As crypto trading bots proliferate, they’re going to be a necessary evil for those trading to stay relevant, with even leading exchanges like Binance now offering them. Telegram and Discord bot traders in particular represent an exciting opportunity as it simplifies the experience of getting trading bots to execute popular functions.

By automating complex trading strategies and offering a new level of convenience, these tools are helping traders of all levels to maximize their profits. As with any investment, it’s important to do your research and understand the risks involved. But with careful use, these bots offer a promising way to navigate the ever-evolving world of cryptocurrency trading.

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Steal This Singularity Part 2: The More Things Change, The More You’ll Need To Save

Steal This Singularity Annotated #2

Four score or make that four columns ago, I presented Part 1 of Steal This Singularity Annotated, promising: “Every fourth one of these Mindplex articles will be an annotated and edited excerpt from my multipart piece titled Steal This Singularity, originally written some time in 2008. This will continue until I get to the end of the piece or the Singularity comes. Annotation is in gray italics.”

As it turns out, this second presentation will just about cover it. I’m so happy with how I critiqued (made fun of?) my transhumanist and singularitarian friends that I may not need to do a lot of annotating.

Part Three: The More Things Change, The More You’ll Need To Save

It was 2008 — maybe a week or two into my first experience working with ‘official’ transhumanism (as if) as editor of h+ magazine. I was being driven down from Marin County to San Jose to listen to a talk by a scientist long associated with various transhumanoid obsessions, among them nanotechnology, encryption and cryonics. As we made the two-hour trip, the conversation drifted to notions of an evolved humanity, a different sort of species — maybe corporeal, maybe disembodied, but decidedly post-Darwinian, and in control of its instincts. I suggested that a gloomy aspect of these projections was that sex would likely disappear, since those desires and pleasures arose from more primitive aspects of the human psyche. My driver told me that he didn’t like sex because it was a distraction, a waste of brain power… not to mention sloppy. As a boomer who was obsessed with sex most of my life, as I’ve hit my seventies, I’ve had the peculiar experience of completely forgetting about sex for days at a time. Nonetheless, as a matter of principle, I still believe that repressed sexual energy is a giant badness. It’s essential to my distaste for right-wing fundamentalist Christians, the Taliban and the like.

Putting aside my personal experience, which has caused me to view my earlier life’s priorities with a certain note of bewilderment, I must confess to a curiosity regarding the reports that young people today are far less interested in sex. Is it a loss of male testosterone so much worried about by right-wing talking heads? Is it an evolutionary mutation? Was the driver I thought I was making fun of in the above comments on to something? Is the oncoming climate apocalypse perhaps rearranging some instincts? (Can I suggest that instincts exist? And do I dare to eat a peach? And can I find a classy way to exit this subject?)

I arrived at a Pizza Hut in an obscure part of San Jose. This gathering of about 15–20 transhumanoids would take place over cheap pizza in the back room that was reserved for the event. There was even a projector and a screen.The speaker — a pear shaped fellow clad in dress pants held up by a belt pulled up above his stomach — started his rap. I have a funny memory of a couple of MONDO 2000 staffers going to an extropian gathering at the end of the ‘80s. Jas Morgan and Morgan Russell (both of whom had a certain dandyish élan) and were accustomed to the classy party extravagances dished up by Queen Mu at the MONDO house, complete with her homemade desserts returned with noses upturned. The party was in a dicey little under-decorated house in one of the Bay Area’s strip mall suburbs with chips and dip and Coca-Cola. It was noted that the attendees looked like they didn’t pay much attention to their misshapen bodies nor did they seem to have any sort of fundamental aesthetic for making life extraordinary. They wondered at the Extropians’ desire for more of that life – and suggested that maybe quality rather than quantity should be considered.  Now, I’m not sure how I should think about this. I’ve been thinking hard about why people outside urban areas were attracted to Donald Trump. I think it’s partly because they could sense and identify with his resentment of the culture-makers of New York City. He wanted to fit in but they considered him tacky and lacking class. Yes, class. Do liberals and even many leftists have class? And what does that say?

Somehow related, there’s this funny and interesting piece by Sam Kriss, in which he textually executes all hipsters before obsoleting nerd culture. Let me say this right out loud: MONDO 2000/1990s cyberculture was hipster-nerd back when hipster wasn’t yet a swear word. Now we’re just washed up on the shoreline of cultural desolation with few identity life rafts to relate to, and mere survival rearing its jeering head. We’ll see fire and we’ll see rain.

As I recall, he predicted major nanotechnology breakthroughs (real nanotechnology i.e. molecular machines capable of making copies of themselves and making just about anything that nature allows extremely cheaply) within our extended lifetimes, allowing us, among other things, to stay healthy indefinitely and finally migrate into space.

I recall him presenting a scenario in which all of us — or many of us — could own some pretty prime real estate; that is, chunks of this galaxy, at the very least that we could populate with our very own advanced progeny (mind children, perhaps.) I’m a bit sketchy on the details from so long ago, but it was a very far out vision of us united with advanced intelligences many times greater than our own either never dying or arising from the frozen dead and, yes, each one getting this gigantic chunk of space real estate to populate. (That these unlivable areas can be made livable either by changing it or ourselves or both with technology is the assumption here.)

Once the speaker had laid out the amazing future as scientifically plausible, he confessed that he was mainly there to make a pitch. Alcor — the cryonics company that he was involved in — needed more customers. As he delineated how inexpensively one could buy an insurance policy to be frozen for an eventual return performance, he began to emphasize the importance of a person in cryonics not being considered legally dead… because that person could then build interest on a savings account or otherwise have his or her value increase in a stock market that was — by all nanocalculations — destined to explode into unthinkable numbers (a bigger boom).

For the bulk of his talk, the speaker dwelt on the importance of returning decades or maybe even a century or so hence to a handsome bank account. It was one of those “I can’t emphasize this enough” sort of talks that parents used to give to their 20-something kids about 401ks. 

As the floor opened up to audience participation, the questions continued to dwell primarily upon the financial aspects of suspension and its aftermath. Insurance. Savings. Investments. Finally, a woman raised her hand and asked something along the lines of… “In light of all the stuff you’re predicting, will US currency still be meaningful in that future?”

An audible groan went up from a portion of the gathering, implying, “fuckin’ stupid hippie asking that ridiculous question again.”

So there they were accepting…

•  Raising people from the dead

•  Becoming more or less immortal

•  Making intelligences many times more powerful and capable than our own

•  Individual earth humans privately owning big chunks of the galaxy

…but they could not imagine that the local (local in time, perhaps, more that space) currency and the nuances of its valuation and growth would be irrelevant in that envisioned world. Given that transhumanists are among those pushing forward cryptocurrencies, I find it curious that our speaker didn’t consider the likelihood of some extreme discontinuity in currency, rendering those savings and investments meaningless. Transhumanist culture – before and after the 2008 financial collapse – has a trust in finance management to glue obsoleting accounts to futuristic ones. Late-stage capitalism isn’t late-stage at all. Its coming death has been greatly exaggerated. It’s unbreakable: the capital you possess now will somehow transfer seamlessly into whatever system is collaboratively summoned by or with our smart machines. 

This, it seemed to me, represented a stunning and peculiar kind of stasis sitting at the heart of radical technological change or the imaginings of same, a clinging to the most trivial and boring sort of continuity by the very sort of people predicting extreme “disruption” and radical discontinuity. The Singularity then, if any, would present before us as an unthinkably complex quantum accountant, as — figuratively speaking — a godlike 1950s bespectacled nebbish, a bean counter (literalized already by the fashion for “quantified life.”)

Part 4: The Worm Earns (Or It Can Fuck Off and Die)

Cut to a Singularity Summit that same year, also down in the sainted city of San Jose. During one of the talks, the speaker, Marshall Brain, at that time the host of the TV Show Factory Floor and author of Robotic Nation spoke about the exponential acceleration of robot technology that the conference was, in its essence, about. He noted that the degree of automation that was soon to arrive would lead to such a loss of jobs that it would be necessary to start providing people with a guaranteed income.

This time, it wasn’t a slight groan that arose from the gathered transhumanoids. There was actual hissing from a substantial segment of the audience. It was the first and only time I ever heard this kind of response at one of these gatherings.

(Transhumanoids tend to pride themselves on a Spock-like calm logic. They are not rowdy sorts.) Guaranteed income has gained popularity since. Possibly the situation is reaching the point where you either have to kill the poor or hand out some free tickets; or Andrew Yang’s presidential campaign charmed the pants off of a few hardline libertarians or perhaps, upon noting a rise in working class union militancy, some anarcho-capitalists are thinking they’d better throw the dog a bone.

Again, allow me to contextualize. Here we were at a conference about the Technological Singularity — the time upcoming soon, according to most singularitarians, when we would design intelligences that — in the words of original singularitarian Vernor Vinge — would be to our intelligence as we are to the worms. Nonbiological life would be more competent than us in every way imaginable. And, in fact, even stopping short of the singularity, we were hearing from a whole bunch of speakers about the rise of machines doing more with less better than us in nearly every field of endeavor. And yet, here again, the Infallible Papacy of Contemporary Currency raised its head, angrily this time — with the emotional/ideological undertow undoubtedly ranging from the Randian/libertarian virtues of being financially “self-made” combined with the immorality of assisting anyone not so self-made as one’s self…. to the Calvinist idea of the ennobling nature of work.

That the very same people that can applaud building intelligences that make them about as interesting and useful as a worm can get their knickers into a twist over the idea of humans not having to “earn” tickets to live is indicative of a Calvinist/Randian determination to punish “slackers” even in the face of an endlessly self-replicating, robot-delivered “free lunch.”

Incidentally, during a lunch break following Brain’s talk, I was explaining to a friend why the audience had hissed at Brain when a large, heavy-set man standing behind me on line turned beet red and started shouting at me about how many people were killed by the Chinese communists and how capitalism had defeated communism because planned economies don’t work. I didn’t engage with him, but I would now point out that the nation states and their economies that outlasted Marx-Leninism were the United States, which had a New Deal mid-20th Century, and the European “welfare states” that this beet red fellow no doubt refers to as “socialistic.” A lot of Republican-influenced persons have been convinced in recent years (by people who know better) that centrist Democrats like President Biden are communists. The term is bandied about virtually without context by politicians that are also appealing to these same people with populist anti-corporate and, in some sense, anticapitalist rhetoric. I suppose this goes back to Mussolini. Nothing new here.

Indeed, what Brain was suggesting was not collective farms, totalistic planned economies and the eventual end of all private property, but merely a logical extension of the “welfare state” in response to the conditions predicted (and already starting to occur) by technophile futurists.

Or maybe not even that. During the ’70s, many libertarians, even Ayn Rand quasi-acolyte Milton Freidman, suggested less bureaucratic paths to guaranteed income, once workers were replaced by machines. So, in concrete terms, the barbarism that doesn’t want to resolve superfluous labor and other forms of exclusion from the economy may be more a function of the psychological acceptance of post-Reagan/Thatcher conditions than it is of Randian ideology. (People younger than myself have grown up stepping over the homeless on their way to whatever for their entire lives. The scale of homelessness that continues to exist is a post-Reagan phenomenon).

Part 5: There’ll Be Pie in the Sky When You Don’t Die

Credit: Tesfu Assefa

The conservative or apolitical transhumanist/singularitarian argument against the Steal This Singularity approach is, fundamentally, that it’s unnecessary. The tech will produce democratized abundance and liberties beyond our wildest imaginings and all we need to do is hang on tight and support science and technology and, generally, not stir too much shit up. I call this the “there’ll be pie in the sky when you don’t die” argument, which is a play off of a Woody Guthrie satire, which is, in turn, about 40 times more obscure to young 21st Century Americans than even an Abbie Hoffman reference. A lot has changed since I wrote this in 2008. Not only are a lot of younger people fairly radicalized leftists, a pretty strong sense of history is emerging among some (fostering bizarre reactions in the wilds of Florida and elsewhere). Also, within this milieu, tech negativity has gone a bit too wild. (I must follow up on this theme soon.) GenXers and older millennials really just want to go back in time to before the internet existed.

Basically, the narrative goes that we’re going from home/desktop media, which gave all of us the equivalent of a printing press and broadcast studio from which to have a voice in the world to 3D home printing i.e. manufacturing. If we get molecular technology and tie that in with 3D manufacturing, every man and woman can make what they need from very little in their homes. Of course, that assumes homes, but that’s one brief example of a path to democratized abundance that seemingly doesn’t require any political activism.

Of course, the past and the present are prologue, even in consideration of technologies as disruptive as those being promoted and predicted by transhumanoids and singularitarians. Such was my point in Part Three of this mess about folks clinging to today’s currency as a life raft while sailing about the entire galaxy visiting other property owners. We have both the willingness and the talent to snatch scarcity out of the jaws of abundance and oppression out of the jaws of liberation. We do it today when we impose austerity based on the abstraction of global debt and when we let the US-based National Security Industrial Complex build one-way transparency by using the same now-completed Virtual Panopticon to shield itself from investigation while having full access to everybody else’s data.

Since the dawn of the digital culture, there has been a tug of war between the notion of

•  Free — stuff that can be easily copied and shared should be shared, because otherwise you create scarcity in the face of nearly limitless (virtual) wealth

•  Business — the systemic legacy of selling intellectual and creative stuff, starting companies that lock replicable bits behind turnstiles and make a business of it. Bill Gates took the side against free and did very well by it.

As much protested by the likes of Jaron Lanier, creative artists and writers are now stuck in the middle of this inconclusive dialectic.

During the early 1990s, digital countercultural idealists trumpeted the idea of free. There was a broad feeling amongst those of us at play in the fields of the arising tech revolution that if the anarchic shockwaves of shifting social relations brought about by — among other things — the digitization of cultural stuff and the resultant ease with which that stuff could be copied unto infinity and accessed from anywhere hit us, then we would happily surf those crazy waves of change.

The other part of that deal, as many of us perceived it, was that everything else had to change too. We knew that the end of scarcity in the digital realm would be “heightening the contradictions” (as they say) in the industrial capitalist model. We assumed that either capitalism would rise to the challenge by finding ways to support those disintermediated or displaced by technical change — or it would be forcibly altered or dissipated in the forward rush of boundary defying technologies.

Rather, we’ve been subjected to that same stasis — stuck in these same primitive currency valuations and their correspondent debts — and we stand today as perfect examples of what could not only continue but expand under the regimen of home manufacturing — that is, the utter disintermediation and abandonment of formerly wage earning (and eventually, business-making) people for the crime of not being able to come up with a sublime enough hustle in the midst of satiated needs to get some other human being to pass those currency tickets that legitimize his or her existence to hir.

We shall see. As a famous poet once said (I’m paraphrasing): First they disintermediated the livelihood of the musicians, and I did not speak out for I wasn’t a musician. Then they disintermediated the livelihood of the writers, and I did nothing for I wasn’t a writer. Then they automated the programmers, and suddenly a whole lot of libertarians decided that guaranteed income was a thing. Not bad guesses for 2008.

Part 6: White Babbits  (2008)

Yes I did top the whole thing off with some song  lyrics. They are now a song and a video.

One pill makes you smarter
And one pill makes you small
And the ones that mother gives you
Ritalin or adderall
And your phallus
Needs Viagra after all

And if you go fleecing Babbitts
‘Cause the banks are gonna fall
Tell ’em the hookah smoking anarchist
Has got you by the balls
Call alice — she’s totally appalled

White men on the radio
Get off on telling you who to hate
And your friend has joined the teabags
And you spend your weekends straight
And your phallushas a Cialis date

When logic and proportion
Have fallen sloppy dead
And the fat cats are aging backwards
While your friends are filled with dread
Remember what the lab rat said
Freeze your head!
Freeze your head !

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Regulatory Gaslighting? SEC and BlackRock To Decide Crypto’s Future In the US

Introduction

In early June 2023, the US Securities and Exchange Commission (SEC) delivered the latest blow against the crypto industry and its investors in the United States by filing lawsuits against the two biggest US crypto exchanges, Coinbase and Binance, and adding several top cryptocurrencies to its list deemed to be securities.

With all appearing to be lost for the digital assets sector in the US, crypto firms and VCs like A16Z swiftly announced plans to move operations abroad at friendlier locations such as the EU, UK, Singapore and Hong Kong. 

The SEC’s actions ended a tumultuous first half of 2023, where federal regulators allegedly launched a coordinated attack, thought to be delayed retaliation for the investor carnage that FTX led in 2022. Dubbed Operation Choke Point 2.0, its perceived aim was to cut off all banking services to the US crypto industry – an aim in which it has largely succeeded, with many of the biggest crypto-serving banks closing their doors. 

Less than two weeks after the SEC actions, which spooked TradFi away from crypto, there was a stunning reversal of fortune. An unlikely savior in the form of BlackRock, the world’s largest financial assets manager, appeared and flipped the Crypto Fear and Greed Index meter back to the right. BlackRock announced it had filed its first Bitcoin spot ETF (exchange-traded fund) application with the SEC, rallying the price of Bitcoin to over $30,000. Interestingly, BlackRock listed Coinbase as its official crypto custodian

Soon, ETF filings from several other TradFi and previous crypto applicants rose from the dead, essentially looking to ride the coattails of BlackRock into the promised land of mainstream crypto adoption. BlackRock has over $10 trillion assets under its management, and a 1% allocation to Bitcoin could move the market in ways hard to imagine. BlackRock’s gold ETF track record shows this.

A Bitcoin spot ETF approved by the SEC has long been a crypto sector’s holy grail, but with dozens of applications rejected by the SEC with little to no explanation, it got to the point where Grayscale, creator of the flagging GBTC Trust, decided to sue the SEC in return for not approving its ETF filing. 

With a filing success track record of 575-1 and big sway in Washington, crypto pundits believe that BlackRock will finally achieve what countless other firms couldn’t: get a spot Bitcoin ETF approved and open the floodgates for mainstream crypto adoption. 

Was this all part of the plan, taking out the crypto incumbents in the US to make way for a Wall Street takeover? Or did BlackRock expedite its ETF launch and intervene in order to save the US crypto sector? Nobody knows yet. However, with the Bitcoin Halving less than a year away, the FOMO is back in crypto, despite fears of a recession and new interest rate hikes. 

Let’s review what we do know, and dissect the current landscape of crypto regulation in the US.

Current landscape 

While crypto regulation in other jurisdictions like the EU (under MiCA) and Hong Kong has become much clearer and better streamlined, the opposite is happening in the United States, where several federal agencies are involved in regulating this burgeoning sector, each with its unique mandate and approach. This is causing a lot of confusion in the process, despite President Biden’s March 2022 executive order to federal agencies to analyze the digital assets sector and make recommendations to help the US remain in front. 

Here’s a quick primer on the main players in the US: 

  • The Securities and Exchange Commission (SEC) oversees cryptocurrencies it deems to be ‘securities’: tokens sold to investors with the expectation of return. The SEC has been proactive in enforcement, taking action against several companies for violating securities laws, but has been criticized for failing to provide clear guidance in the process.
  • The Commodity Futures Trading Commission (CFTC) regulates cryptocurrencies it classifies as commodities. These tokens, often traded on exchanges, are used for hedging or speculating on price movements. In 2015, the CFTC issued a framework for regulating cryptocurrency derivatives, providing guidance on their classification and trading.
  • The Financial Crimes Enforcement Network (FinCEN) enforces the Bank Secrecy Act (BSA) with the aim of stopping anti money-laundering and countering the funding of terrorism (AML/CFT), requiring financial institutions to report suspicious activities. In 2013, FinCEN issued guidance for cryptocurrency businesses to comply with the BSA, requiring them to register with FinCEN and report suspicious activities. 
  • The Internal Revenue Service (IRS) treats cryptocurrencies as property for tax purposes, meaning transactions are subject to capital gains taxes. In 2014, the IRS issued guidance on how cryptocurrency businesses should report their taxes.
  • The Office of Foreign Assets Control (OFAC) also plays a significant role. OFAC, responsible for enforcing economic and trade sanctions, requires cryptocurrency businesses to block transactions involving sanctioned entities, and caused a lot of consternation when it blacklisted Tornado Cash, a cryptocurrency mixer.
  • The Office of the Comptroller of the Currency (OCC) charters and regulates national banks. Under its Acting Comptroller Brian Brooks, it confirmed in 2020 that national banks and federal savings associations could provide cryptocurrency custody services, allowing them to hold cryptocurrencies for their customers. Interestingly enough, after leaving office, Brooks served as the CEO of Binance.US until he suddenly resigned in 2021.

The SEC and CFTC have been vying for years in a turf war over who gets to officially regulate the crypto space, publicly classifying cryptocurrencies as ‘securities’ and ‘commodities’ respectively.

The SEC – being the much bigger regulator – considers itself to be the headlining agency, and of course, the government funding it attracts and financial settlements it collects from plaintiffs in court also serve as powerful motivation.

Operation Choke Point 2.0

Operation Choke Point 2.0 refers to the efforts of the US government, including the White House, Federal Reserve, OCC, FDIC, DOJ, and influential members of Congress, to limit the cryptocurrency industry’s access to traditional finance and ‘debank’ them. Their goal is to hinder the industry by making it difficult for traditional banks to work with cryptocurrencies. This operation is seen as a continuation of a previous campaign that targeted risky industries like payday lenders.

The strategy involves labeling banks that deal with cryptocurrencies as ‘high risk’. This leads to increased costs for these banks, restrictions on their activities, and the risk of facing negative evaluations from regulators. These measures drive a wedge between the US crypto industry and the banking system it needs to function.

US lawmakers, regulators, and agencies have shown an attitude towards cryptocurrencies best described as strong pessimism. This has resulted in negative actions like banks withdrawing services from crypto-related clients, and crypto companies being denied entry into the Federal Reserve system.

Some of the casualties so far in 2023 are: Signature Bank, Silicon Valley Bank, Silvergate, and Custodia, who all played a vital role to provide banking services to US crypto firms. 

SEC vs Crypto

The SEC shocked the digital assets sector in 2023 when it sued the world’s two leading exchanges, Binance and Coinbase, in short succession for a list of transgressions. This bold move has made the industry sit up and wonder if the organization (led by former MIT blockchain professor Gary Gensler) has a personal vendetta against the space. 

After 2022’s cascade of crypto custodial collapses (most notably FTX, which cost retail investors billions in lost assets) the government’s reserves of trust are running low for trustless technology. 

Of course, there lies the great irony: anyone that understands cryptocurrency and blockchain technology will know that it was created for this very reason: to negate the risks and drawbacks that come with using centralized financial intermediaries, most notably the risk of fraud, scams, and a gradual erosion of your portfolio through fees and monetary inflation. 

SEC chairman Gary Gensler openly stated in the last 12 months that he considers almost all cryptocurrencies – with the exception of Bitcoin – to be securities, in accordance with the Howey Test. He refused to label Ethereum (which the SEC previously declared was not a security) during his recent appearance in front of Congress, most likely due to legal considerations. The SEC is currently fighting the crypto sector in several battles, most notably the three-year long case against Ripple and XRP, which may end up providing very important legal precedent. 

Credit: Tesfu Assefa

The Case Against Binance and Coinbase

The SEC leveled serious charges against Binance and its CEO Changpeng Zhao (or ‘CZ’), alleging various legal violations, including failure to register as a broker-dealer, misleading investors, permitting unauthorized trading, mishandling customer funds, and inflating trading volumes. Binance’s considerable $1 billion legal fund implies a prolonged legal battle, which could significantly shape the future of the cryptocurrency industry.

As for Coinbase, the SEC alleges that it has operated without necessary licenses, acting as a stock exchange, broker, and clearing agency. Accusations include unregistered facilitation of trade for 13 cryptocurrencies considered as securities, and running an unregistered ‘staking-as-a-service’ program. These alleged breaches have reportedly yielded substantial illegal profits. The SEC aims to halt these operations and retrieve any illicit funds. Coinbase vehemently denies these allegations, citing a lack of clear regulatory guidelines.

Understanding the Howey Test

The SEC contends that crypto investors satisfy the Howey Test’s four conditions:

  1. they invest in projects’ initial fundraising rounds known as ICOs,
  2. cryptocurrencies are part of a common enterprise, traded on the same exchanges and subject to the same market forces
  3. investors expect profits,
  4. and their profits rely on the efforts of others

Coinbase CEO, Brian Armstrong, argues that not all listed coins meet these criteria, and that some initially deemed securities have become commodities due to their decentralized nature.

Conclusion

With so much confusion, crypto holders can be forgiven for feeling US regulators are gaslighting them. 

Are the SEC and other regulators under Biden trying to kill off crypto? Or are they trying to gentrify it enough so that TradFi giants like BlackRock can run the neighborhood as they see fit? 

Will all cryptocurrencies bar Bitcoin and Ethereum be deemed securities in the future? Will stablecoins be outlawed to make way for Central Bank Digital Currencies? Will we see a reform of securities law in the US to accommodate digital assets and move away from 1933’s outdated Howey Test?

This article provides answers to none of the above, and any article that claims to do so should be viewed with caution. There are likely many pieces in play that have not been revealed yet, such as the 2024 US presidential elections where crypto users’ votes can become pivotal and where a change of administration could see a big shift in strategy, reflected in new regulations and legislation. 

Also, the geopolitical game that the EU, UK, China and Middle East are playing to lure the best and brightest in blockchain to their shores will have to be addressed by the US sooner rather than later, and the SEC and Gensler in particular have been subjected to immense pressure from Congress to provide regulatory clarity in order to retain US crypto firms. 

The cases against Coinbase, Binance, and others like Ripple will continue likely for years, and serve as important battlegrounds for the future of crypto not only in the US, but globally. This is a war that the crypto industry has expected for years. 

As the saying goes: First they laugh at you, then they ignore you, then they fight you, and then you win. What victory will look like in the end and whether it brings a satisfying end to crypto’s crusade to reform the financial system remains to be seen. 

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