Dapps don't care about your feelings

What you need to know today in crypto and beyond

March 4, 2021

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Welcome to The Node, CoinDesk's newly redesigned flagship daily newsletter.

Formerly known as Blockchain Bites, The Node aims to be your daily pulse check for what matters in crypto and beyond. In every issue, you'll find a digestible summary of the day's most important news, a thoughtful take on current trends by one of our writers and, to wash it all down, our favorite trending meme or tweet. It's all part of a balanced information diet.

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Send feedback to marc.hochstein@coindesk.com – we'd love to hear from you!

– Marc Hochstein, Executive Editor

Top Shelf

Today's must-reads

HELPFUL HAYES? Arthur Hayes, the founder and former CEO of BitMEX who has been on the lam since October, could surrender to U.S. authorities next month. According to a federal prosecutor, who has been in talks with Hayes' lawyers, the fugitive founder may volunteer himself into U.S. custody in Hawaii. Hayes was charged with other BitMEX founders for violating the Bank Secrecy Act and conspiracy to violate the act. 100x, BitMEX's parent, announced independently it will hire a veteran from auditor PwC as chief financial officer.

RELEASE THE VALUATION: Kraken co-founder and CEO Jesse Powell says his exchange may seek a public listing "sometime next year" but there are "no guarantees." "We are certainly on track, though $10 billion is a low valuation," Powell said on Bloomberg TV. "I wouldn't be interested in issuing shares at that price." Powell's statement comes as rival exchange Coinbase is being valued as high as $100 billion.

TOKEN COMMEMORATION: NFTs are going mainstream. Storied news wire Associated Press is auctioning off a non-fungible token artwork commemorating the first U.S. election recorded on a blockchain. Meanwhile, a group of Banksy-inspired artists have purchased a Banksy original, burned it and turned the work into a digital token to auction off for charity. (Banksy is not involved in the effort.)

– Daniel Kuhn

Sound Bite

Overheard on CoinDesk TV

Laser-Eyes Lummis

"The pile of U.S. dollars it takes to get to $1.9 trillion is halfway to the moon. That's inconceivable," U.S. Senator Cynthia Lummis said on CoinDesk TV this morning. She was speaking about a new coronavirus-related stimulus bill that's winding its way through Capitol Hill.

For Lummis, a Republican representing Wyoming, the national debt is one of the top U.S. priorities. She recalled that when she entered Congress in 2009, the national debt was "just under $10 trillion … Now we're almost bumping up against $30 trillion."

"No one has a credible plan to pay back this debt," she said. That's part of the reason why Lummis is among the most bitcoin-friendly politicians in the country. While running for office, Lummis committed to educating her fellow senators on cryptocurrency and hard-money economics. In office, she's adopted the "laser eyes" meme popular with all-conquering bitcoiners.

"A lot of my colleagues just don't know about cryptocurrencies, and bitcoin specifically," she said.

Putting aside the threat she sees in China's digital yuan pilot chipping into the U.S. dollar's hegemony, Lummis said education is a necessary step before sensible regulation can be written.

"I want Americans to stop looking at cryptocurrencies, bitcoin specifically, as something that is a space where criminals play," she said.

Watch the full segment on First Mover.

– D.K.

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Introducing "The Hash," news analysis on CoinDesk TV

From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy.

We cut through the hyperbole and confusion to explain what's happening in this fast-changing industry and why it matters to investors, companies and governments.

On "The Hash," a daily panel show, CoinDesk journalists Zack Seward, Benjamin Powers and Will Foxley choose five of the day's big stories to hash out and analyze. With a personality-driven, fast-paced, entertaining format, it presents themes ranging from serious to fun.

Watch "The Hash" daily on YouTube or CoinDesk.com.

The Takeaway

Putting the news in perspective

DAPPS DON'T CARE ABOUT YOUR FEELINGS

Sticks and stones may break my bones, blockchains will never hurt me.

As CoinDesk's David Pan reported Wednesday, anonymous blockchain developers recently built decentralized apps (dapps) with inflammatory themes on Binance Smart Chain (BSC). Their apparent goal was to taunt Binance CEO Changpeng Zhao (CZ), and see if he'd try to censor the apps (and perhaps make a broader political statement).

One of the two dapps is called Tanks of Tiananmen, a reference to the 1989 protests in Beijing which, as David diplomatically puts it, "the Chinese government considers a very sensitive topic."

The developers described the app as a sort of twisted game in which the user plays the role of the Communist Party and faces off against "the pro democracy movement lead [sic] by the great CZ," presumably a non-player character.

For American readers, it's as if someone created a role-playing game called Rifles of Kent State, and cast Coinbase CEO Brian Armstrong as the hippie girl with the flower. Or if that reference is too old to sting, picture Hoods of Abu Ghraib, Waterboards of Guantanamo, Drones of Yemen, or – trigger warning, grab your puppies – Op-Eds of Cotton. I'll stop before some degen out there gets some smart ideas.

The difference, of course, is the United States has a robust if imperfect tradition of free speech, constitutionally and culturally. Washington may try to regulate cryptocurrency to discourage money laundering or fraud, but it's hard to imagine the government trying to squelch even the most tasteless reminders of dark chapters in our nation's history. (At least until there are millennials on the U.S. Supreme Court, Lord help us.)

The same cannot be said today for the People's Republic of China. While Binance's headquarters location remains a perennial mystery, the Tank devs seem to think the PRC has sufficient leverage over CZ that he would remove the app to avoid its wrath.

The other dapp testing the limits of what's permissible on BSC is called Slave. At first I thought this was a reference to the detention facilities in China where reportedly more than 1 million Uighurs are being held, which would have put the app in the same topical-if-crude bucket as Tanks.

Then I saw a screenshot of a deleted web page for the app, which I will not reproduce here. You will have to take my word for it that the imagery was appalling, and unrelated in any discernible way to Chinese politics, though after Voltaire, I would defend to the death the devs' right to publish it. Just not on CoinDesk.

But Enlightenment values, which may not be long for this world, are not what make blockchains censorship-resistant.

From the article:

The developers apparently hope the offensive and sensitive nature of the dapps would force Binance to get rid of them, proving BSC, unlike Ethereum, is not decentralized and can be controlled by a centralized institution, said Jason Wu, CEO and founder of decentralized crypto lending platform DeFiner. He noted that BSC has far fewer nodes than Ethereum.

As of press time, Tanks and Slave were still running on BSC. If the network really is a worthy competitor to Ethereum, CZ couldn't remove the dapps even if he wanted to.

And that, of course, is the anonymous devs' point. A dapp that can be censored ain't a dapp.

– M.H.

What are bitcoin and ether's value propositions for investors?

A new report by CoinDesk Research explains how the two most popular cryptocurrencies by market capitalization behave in the market, how their infrastructure differs, and what on-chain metrics say about them.

Download "Bitcoin + Ether: An Investor's Perspective" from the CoinDesk Research Hub.

Off-Chain Signals

What others are writing....

We don't usually link to sponsored content, but just wanted to point out that this is an actual thing that Deloitte placed in the Wall Street Journal's CFO Journal site for corporate treasurers: "Does Bitcoin Belong on Your Balance Sheet?"

We're not going to bother reading, much less summarizing, it. We're just astonished that it exists. Remember when Deloitte deemed bitcoin the redheaded stepchild of enterprise blockchains?

- M.H.

The Chaser...

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