Everything is automated and also terrible

Crypto Crash

I think a lot of things to do with cryptocurrency are confusing because people view it solely as a financial thing, when it’s really not.

Now, mind you, a lot of parts of the crypto world just do not make any sense, full stop. But I do think that if you view the diehard core of the cryptocurrency community as a socio-political movement dedicated to fully automating the internet rather than people gambling on internet money, a lot more things fall into place. (Though, there’s a lot of gambling on internet money.)

For instance, a blockchain is essentially an automated way to keep timestamped records. Think of it like a Google spreadsheet without a single owner that no one can edit, only add to. The first blockchain, created in 2009, was Bitcoin, which makes sense, it was a direct response to the Great Recession. But in theory, there are uses for this technology other than just cryptocurrency and most are related to automation. In fact, almost every mad blockchain thing that has appeared in last 13 years is basically just a — usually misguided — way of automating some kind of process. NFTs automate parts of an auction, DAOs automate decisions made within internet communities, and algorithmic stablecoins, like the ones currently in free fall this week, are meant to automate a centralized bank.

Blockchain technology has gotten better over the years, but I still have yet to find any one particular thing that a blockchain does better than, well, any non-blockchain alternative. But one newer blockchain innovation takes this desire for automation a step further — smart contracts. The concept was developed in the early 90s, but the general idea is you have a bit of code that executes a certain function when a list of parameters are met. Smart contracts work with Bitcoin, but it’s a pain in the ass and no one really uses them. But Ethereum, an alternative blockchain, or “altcoin,” that was released in 2015, is actually very good with smart contracts. It’s why a lot of Bitcoin maximalists derisively say that Ethereum is not cryptocurrency, but a programming language.

If you’re having trouble picturing this, imagine I make 69 $W33D tokens on a blockchain. I could then program a smart contract to only allow holders of these tokens to sell them on April 20 every year.

As of today, the whole crypto market is down, but the real stars of the crash are a crypto coin called Luna and a token called TerraUSD, or UST. The coin and the token worked together via a smart contract to support what’s called an algorithmic stablecoin. (I swear I’m walking you through this as slowly as possible. Bear with me.)

Like all crypto things, a stablecoin sort of makes sense until you think about it for a second and then realize it absolutely doesn’t. They aren’t meant to go up and down in price, instead staying “pegged” to some kind of fiat currency, like the dollar. And the stablecoin typically stabilizes itself with a reserve of whatever cash it’s pegged to. TerraUSD had a different system. Instead, it tried to fully automate the process with the help of the Luna coin. So in this set-up, reserves of Luna and TerraUSD are being created and destroyed and traded back and forth to hopefully keep everything worth $1. And investors were incentivized to support this ecosystem because they could make money both on the interest gained for holding Luna and also because if TerraUSD dropped down to, say, $0.99, they could still trade it for $1 of Luna. It’s just a cent, but those cents add up.

Now, you may, at this point, be trying to figure out why a stablecoin exists in the first place. I’ve heard crypto traders refer to day trading crypto (which no sane person should ever do) as a game of Frogger. And I’ve heard that, in this analogy, stablecoins are the patches of grass you can rest on. The thinking goes that if you've made a bunch of money in crypto, you can park it in a stablecoin to save where you are. The problem though is that, at least in the US, you’ll still going to have to pay capital gains on that transaction (if you report it to the IRS, I guess). The other reason people use them is because of local banking restrictions around crypto. Which makes stablecoins a kind of automated bank, as it were.

So what’s happening this week is that the automated bank stopped working, but remained automated, causing one half of the Luna/TerraUSD to go berserk and make TerraUSD worthless. In case you were wondering, this is not what “stable” looks like.

Coindesk is reporting that it could have been a coordinated attack. Fast Company is speculating the whole thing could have been premeditated. And CNBC links the TerraUSD tumble to the larger crash happening within the market at the moment. All of these things could be true.

Luna Foundation Guard, the organization responsible for maintaining the stablecoin, said they plan to lend out $1 billion worth of Bitcoin to buy TerraUSD and restablize the stablecoin. Which is actually the real punchline of this whole thing. Bitcoin was born out of a Great Recession-era distrust of banking institutions. Diehard crypto supporters see automated digital finance as a way to prevent the next recession. The reason most crypto evangelists want this level of automation is because they believe the global financial system is rigged. They don’t want to make it more fair or less rigged, they just want to create a new, automated system that they have first mover’s advantage on. The problem is that automated finance is actually a terrible idea. No one can be trusted with our money and so we should let a series of internet protocols and pieces of code thoughtlessly manage it for us, the thinkings goes. Except, here we are, with crypto traders desperately lending out Bitcoins to bail out their sketchy algorithmic bank which they can’t turn off or pause because it’s completely automated.

Oh, also, according to Coindesk, Do Kwon, the CEO of the group behind TerraUSD used a Rick And Morty-themed pseudonym to previously run another failed stablecoin before this. Very cool.

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Tumblr Blaze And Blocked Tags

Last month, Tumblr rolled out Blaze, an ingenious little feature that lets users pay some money to blast a boosted post at all the users on the site. There’s no targeting, just an estimated number of impressions. By all accounts, it’s actually just what the site needed. Even if it was briefly hijacked by proselytizing Catholics.

Users seem to love the chaos it has added to an already chaotic site and, honestly, for all of the talk happening over on Twitter about it being a “public square,” this actually feels much more akin to hanging up a flyer on your small town’s main street. Sometimes you might see an ad for guitar lessons, sometimes it’s just a weird guy showing off his cool lizard.

One downside of Blaze though, which has surfaced recently, is that it appears to not integrate with users’ blocked tags. If you don’t know about blocked tags, it’s similar to muted words on Twitter, but Tumblr users take it way more seriously. I think the reason content warnings, trigger warnings, and blocked tags are so important for Tumblr users is obviously related to the community’s big emphasis on inclusivity and social justice, but also the site just functions different. A bad tweet might blip across your timeline. But a bad Tumblr post takes up way bigger screen real estate.

The users who surfaced this issue, for what it’s worth, are actually super supportive of Blaze and seem to want to figure out a way for it to work in a way, which is pretty refreshing.

The Left’s War On Pizza Hut

Powerful right-wing brain genius Jack Posobiec has been posting a bunch about how you can’t sit down for dinner in Pizza Huts anymore, even going so far as to tweet the phrase, “Pizza Hut nationalism.” Incredible stuff all around. According to Posobiec, the declining in-restaurant atmosphere of Pizza Hut is actually a great illustration of how the left has destroyed America over the last 30 years. This is all, of course, objectively wrong and idiotic. I assume this doesn’t really need much explaining, but it definitely wasn’t America’s left that helped fast food chains become more ubiquitous and also worse over time.

But beyond that some of the photos that Posobiec is sharing of American Pizza Huts aren’t even from America. As many Twitter users have pointed out, that rundown Pizza Hut in the upper right up there is actually one from Australia that was abandoned like 15 years ago. Also, I’m not even clear what he’s trying to say! Is he saying that we should have better Pizza Huts than China because we’re America? But if we don’t, and in his head, the woke left got rid of our Pizza Huts, how did China end up with good ones?? The more I think about this the angrier I get.

I Don’t Think The Ladybug Thing Is Real

TikTok user @arkeslo posted a bunch of TikToks claiming they planned to release hundreds of thousands of ladybugs in New York City, that they were then “sued” for “environmental terrorism,” then put on house arrest, then cut their ankle bracelet, and then, finally, fled to Colombia. And all of this appeared to have happened in the last few days.

These are all very funny, but I just do not think any of this happened in real life. Happy to be proven wrong about this!

Furries Of The World Unite

This furry is named Michael Vestigo and he’s now working with other Starbucks employees in Seattle to unionize stores in the state. Here’s a great VICE interview with Vestigo.

A Good 4chan Post

Some Stray Links

• The ballad of Zebulon Ross

• “Cops Bust Into 16-Year-Old Trans Girl’s Bedroom During Her Twitch Stream”

• “The YouTubers are not okay”

P.S. here’s the first Among Us.

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