Five Minute Blockchain Newsletter No. 39
August 25, 2022• Issue No. 39
Five Minute Blockchain
Welcome to a new edition of the TruBlo newsletter. We are funding 45 early-stage blockchain ideas to explore new options for “trusted content on future blockchains”. A list of all TuBlo projects is here: https://www.trublo.eu/projects/Our main question for selecting news and links below: How is the field .of blockchain, content and trust evolving?
Updates this week:
Estimated reading time: 4 min 10 sec
TRUST
Spyware use in Europe, homemade
In Greece, Thanassis Koukakis, a financial journalist, discovered spyware on his phone. This case seems to be part of a whole wave of spyware uses.
“Over the past 13 months, it has been revealed that spyware had targeted opposition leaders, journalists, lawyers and activists in France, Spain, Hungary, Poland and even staff within the European Commission, the EU’s cabinet-style government, between 2019 and 2021. The bloc has already set up an inquiry into its own use of spyware, but even as the 38-person committee works toward producing a report for early 2023, the number of new scandals is quickly mounting up.”
One key finding – the spyware was developed in Europe, not elsewhere:
“What sets the scandal in Greece apart is the company behind the spyware that was used. Until then the surveillance software in every EU scandal could be traced back to one company, the notorious NSO Group. Yet the spyware stalking Koukakis’ phone was made by Cytrox, a company founded in the small European nation of North Macedonia and acquired in 2017 by Tal Dilian—an entrepreneur who achieved notoriety for driving a high-tech surveillance van around the island of Cyprus and showing a Forbes journalist how it could hack into passing people’s phones. In that interview, Dilian said he had acquired Cytrox and absorbed the company into his intelligence company Intellexa, which is now thought to now be based in Greece. The arrival of Cytrox into Europe’s ongoing scandal shows the problem is bigger than just the NSO Group. The bloc has a thriving spyware industry of its own.”
A deep dive into the fall of Three Arrows
Long report about the founders, set-up and the reasons for the downfall of the crypto hedge fund. Apparently, “playing with money” was a big part of it, sheltered by a hybrid that the complex technology would make the blundering hard to detect.
“Bear markets in crypto tend to make any stock-market action look like child’s play. The crashes are so severe that insiders call it “crypto winter,” and the season can last years. That’s where Three Arrows Capital found itself by the middle of January 2022, and it was poorly equipped to weather it. The GBTC position ate an ever-larger hole in 3AC’s balance sheet, and much of its capital was tied up in restricted shares in smaller crypto projects. Other arbitrage opportunities had dried up. In response, Three Arrows seems to have decided to ramp up the riskiness of its investments in hopes of scoring big and getting the firm back on a solid footing. “What made them change was just overreaching for returns,” says a major lending executive. “They were probably like, ‘What if we just go long? In February, Three Arrows took one of its biggest swings yet: It put $200 million into a buzzy token called luna, which was founded by a brash, alluring South Korean developer and Stanford dropout named Do Kwon, with whom Davies and Zhu had been hanging out in Singapore.”
CONTENT
How a small, slightly different view might grow into deep distrust
Even if views on a complex issue differ, it should be possible to find a consensus for the best solution over time. A factor in this should be the amount of available information – the more, the better. That would be an assumption based on common sense. But it might not be true at all. Instead, the abundance of information might amplify small different views into deep distrust of “the other side”.
„We show that small biases may lead to substantial and persistent divergence in both trust in information sources and beliefs about facts, with partisans on each side trusting unreliable ideologically aligned sources more than accurate neutral sources and also becoming overconfi- dent in their own judgment.”
Could the abundance of information on the web and social media overwhelms and confuses humans? And that this leads to more extreme positions instead of compromise?
Dark Patterns: Bad when used by others, but ok when used by your company?
Benedict Evans points to two articles published in The New York Times: One criticising the use of “dark patterns” on technology platforms. And other technical articles where the news organisation talks about its optimisation to gradually funnel online visitors into subscriptions.
The use of technology to funnel first-time visitors gradually towards a possible subscription is not automatically a “dark pattern”. The expression describes UI/UX layouts of websites where users have difficulty saying “no”. Such patterns are used in all kinds of applications, often leading to complaints by users who only later find out they were tricked into consent for a setting, for marketing purposes or even a subscription which can not be cancelled anymore.
But Evans has a point that often, double standards apply to the use of
The technical report about using Machine Learning to gain more subscribers does not mention such approaches. But the point is: As everyone tries to optimise the business revenue, the occurrence of tricks, cover-ups and harmful business practices will likely not go down but up. One fact from the published article: After reaching 10 million paying subscribers, the NYT aims to reach 15 million by 2027. Such ambitious growth often applies tricks to achieve such goals in time. High pressure to reach goals was a significant reason for Volkswagen’s scandal around engine emissions.
The New York Times: Stopping the manipulation machines ($)
The New York Times: How The New York Times Uses Machine Learning To Make Its Paywall Smarter
BLOCKCHAIN
In Argentina, Crypto is more practical for many transactions than cash
A recurring doubt regarding the future of cryptocurrencies (and blockchain) is the question of practicality. Where is the practical, day-to-day use?
One country where this is different is Argentina, a country where cryptocurrencies have a growing appeal, despite the volatility.
Two main reasons: The local currency, the peso, has lost value for decades. The second problem is that banks have imposed restrictions on bank accounts. Having a bank account in another currency with a bank outside of Argentina is no real option because one would have to travel there to get the money. This is why many people in Argentina store money they have in bricks – they buy bricks when they have money and store them.
“Argentinians who use crypto are increasingly untethered from the local Argentinian economy and increasingly plugged into the global cloud economy. Crypto is providing new solutions to problems that Argentina has faced for generations, and many Argentinians are excited about its potential to make it easier and safer to make, use, and store money.”
People in El Salvador want reliable banking.
“N1co is Central America’s first neobank, thriving because El Salvador still needs basic financial inclusion.”
Bitcoin Depot to go public at an $885 million valuation
The company is operating a network of Bitcoin ATMs in the US.
“Founded in 2016, Bitcoin Depot claims to be the largest provider of such ATMs in North America with more than 7,000 kiosks in the region. These ATMs function by connecting with a wallet and, after a verification process, allow the user to insert fiat money to receive BTC, LTC or ETH in their wallets.”
The percentage of crypto investors did not grow in the past 12 months
According to a survey by PEW Research, the number of people dealing with crypto has remained at the same level as a year before, at roughly 16%.
(In 2020) Pew researchers asked 10,371 Americans if they have “ever invested in, traded, or used a cryptocurrency.” Some 16 percent of Americans said they had. Last month, the nonprofit asked another sample group — slightly smaller, at 6,034 Americans — the same question. And again, 16 percent said they had invested or traded in the alternate currency.
Related:
- 64% of crypto-versed parents want crypto to be taught in schools Cointelegraph
- 72% of Russians say they never bought Bitcoin Cointelegraph
Ethereum Merge to begin September 6
The Ethereum Foundation says it will begin the Merge on September 6, split into two parts, the second running between September 10-20
Short links
- cbETH: Coinbase offers liquid staking service & token for Ethereum ahead of the Merge The Block
- Authorities in Afghanistan shut down 16 crypto exchanges in one-week Coindesk
- Revenue is a feature. Some companies can think about it later; others must figure it out earlier. Benedict Evans
- Mana: “BlackRock for the new economy” TechCrunch
- BalkanID will use AI for Identity Governance TechCrunch.
- Privado helps developers be compliant with privacy laws Forbes
- ThirdWeb raises 24 million for web3 development kit TechCrunch
- Polygon founder launches fund with $50 million for web3 investments Cointelegraph
- How traditional banks cope with digital assets Blockdata
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