Crypto-curious

Curiosity has finally gotten the better of me. I’ve just signed up with Ziglu to buy a tiny fraction of an Ether and an absolutely miniscule fraction of a Bitcoin.

Money, done differentlyZiglu
Money doesn’t need to be confusing. Buy and sell digital currency within seconds at great rates. Send or gift both traditional and digital currency to anyone – instantly. Payments in any currency to family, friends or businesses – instantly and anywhere.

I’m not the only one a little curious.

Crypto by the county – how attitudes vary across the countryZiglu
When we commissioned a poll at the beginning of the year to get a view of attitudes towards cryptocurrency across the country, we weren’t expecting such a difference in attitudes between regions of the UK. Londoners are over four times more likely to have invested in crypto than the Scottish; the Northern Irish are 50% more curious about crypto than the East Anglians.

Brits curious yet baffled by cryptocurrencyFinextra
Of the three in ten people (31%) curious about investing in crypto, 62% have held back from buying any because they do not understand the market, while 43% say they do not know of a safe way to buy it. However, the nationally representative survey of 2,000 Brits, commissioned by money app Ziglu and conducted by OnePoll, also found that they would invest if they had a better understanding of cryptocurrencies (64%) and mainstream financial institutions start offering crypto to retail customers (36%).

CEO Mark Hipperson is the man behind Starling Bank, and is no stranger to tricky conversations with regulators and investors when starting things like this.

Ziglu wants to bring the challenger bank mindset to cryptoTech.eu
“So you’re launching a new bank that’s going to be an app only bank. Your website is not going to do any servicing, which was pretty unique at the time, it’s through this app only. You’re not going to deal with cash, you’ve got no branches, you’re not going to deal with cheques and you’ve not got billions of pounds in reserves like all the other big banks. And you think you’ve got a chance to compete in the marketplace?”

It was scepticism overcome as the app-only bank model has been normalised, he added, and people now expect that ease and usability in all their dealings with financial services.

Ok, so now what?

What can you buy with Bitcoin?The New York Times
Pornography, patio furniture and an at-home coronavirus test are among the odd assortment of goods and services people are purchasing with the cryptocurrency.

What is cryptoart and should I care?

If you cross Simon Stålenhag’s digital painting style with Noah Kalina’s work ethic, you might end up with Mike Winkelmann, AKA Beeple. Here’s a mention of him from 2017.

“Do androids dream of electric sheep?”: A CGI master made a new artwork every day for 10 yearsDesign You Trust
Beeple is Mike Winkelmann, a graphic designer from Appleton, Wisconsin, USA. His short films have screened at onedotzero, Prix Ars Electronica, the Sydney Biennale, Ann Arbor Film Festival and many others. … For 10 years he’s been posting a new digital illustration—ranging from the abstract to representative, sci-fi to surreal, somber to sarcastic—every 24 hours.

All that effort has paid off, after Christie’s auctioned off a digital collage of the results.

Beeple’s opusChristie’s
Minted exclusively for Christie’s, the monumental digital collage was offered as a single lot sale concurrently with First Open, and realised $69,346,250. Marking two industry firsts, Christie’s is the first major auction house to offer a purely digital work with a unique NFT (Non-fungible token) — effectively a guarantee of its authenticity — and to accept cryptocurrency, in this case Ether, in addition to standard forms of payment for the singular lot.

That’s quite a lot of money, regardless of the currency.

JPG file sells for $69 million, as ‘NFT mania’ gathers paceThe New York Times
After a flurry of more than 180 bids in the final hour, a JPG file made by Mike Winkelmann, the digital artist known as Beeple, was sold on Thursday by Christie’s in an online auction for $69.3 million with fees. The price was a new high for an artwork that exists only digitally, beating auction records for physical paintings by museum-valorized greats like J.M.W. Turner, Georges Seurat and Francisco Goya. Bidding at the two-week Beeple sale, consisting of just one lot, began at $100.

With seconds remaining, the work was set to sell for less than $30 million, but a last-moment cascade of bids prompted a two-minute extension of the auction and pushed the final price over $60 million. Rebecca Riegelhaupt, a Christie’s spokeswoman, said 33 active bidders had contested the work, adding that the result was the third-highest auction price achieved for a living artist, after Jeff Koons and David Hockney.

Beeple sold an NFT for $69 millionThe Verge
The record-smashing NFT sale comes after months of increasingly valuable auctions. In October, Winkelmann sold his first series of NFTs, with a pair going for $66,666.66 each. In December, he sold a series of works for $3.5 million total. And last month, one of the NFTs that originally sold for $66,666.66 was resold for $6.6 million.

But has anyone actually looked at this collection of images? All of them? Whilst the futuristic sci-fi imagery shown above is interesting, if a little derivative, there are some major issues with the rest of it, to say the least. Let’s just say leaving off the titles of the original images was a very wise move.

I looked through all 5,000 images in Beeple’s $69 million magnum opus. What I found isn’t so prettyArtnet News
We’ve passed through a racial uprising and a reckoning with sexism, and the cultural project of the moment is… innovating new ways to worship decade-old, BroBible-level brain farts? During a time of immiseration, investors are competing to throw tens of millions of dollars… at this?

Nevertheless, here we are.

Beeple’s USD 69M NFT enters art historyCryptonews
A non-fungible token (NFT) piece of art thirteen years in the making was just sold for a whopping USD 69.35m at famous British auction house Christie’s, becoming the most expensive NFT ever sold, and positioning the author among the top three most valuable living artists. … According to Bloomberg, prior to the sale, Christie’s Noah Davis said that “there have been a handful of really dogged, really serious clients pursuing it, and they are mostly people who are very steeped in crypto.”

Very steeped in crypto? Who are these people?

Rich millennials are splashing millions on crypto artBloomberg
The decline [in art market sales due to the pandemic] would have been much worse were it not for wealthy collectors who spent more time at home and wanted to beautify their surroundings with art. It was a similar picture with virtual works. More hours glued to a screen encouraged crypto investors — flush with Bitcoin gains — to explore the nascent medium of art attached to a non-fungible token (NFT), a digital certificate of authenticity that runs on blockchain technology.

Who spends millions on NFTs? Meet Beeple’s crypto-rich early collectorsARTnews.com
The digital artist Beeple’s first major collector was Tim Kang, founder of Cue Music and an investor in cryptocurrency. Well before Beeple’s $6.6 million sale at Christie’s, Kang had broken all previous records by buying Beeple’s “MF Collection” for $777,777.77 on the non-fungible token platform Nifty Gateway in December of 2020. This sale launched Beeple from a niche artist working on the digital fringe to a force to reckon with, as the auction made clear three months later. […]

“Crypto and blockchain is more than just a stock; the underlying application is a paradigm shift. Anyone can have an opportunity to participate in a global market,” Kang said. “I have been waiting for so long for the breakthrough, for this to really impact the world beyond just cryptocurrency. Digital art is the perfect medium to communicate the underlying implications of blockchain on self-sovereignty.” NFTs demonstrate how blockchain technology can offer decentralized forms of authority: secure ownership without a gallery or foundation.

No shortage of hyperbole.

Beeple’s ‘5000 Days’ NFT sold for USD 69.35M at Christie’sDesign You Trust
“We must recognize the record-breaking sale of Beeple’s opus as what it is: a watershed moment for our industry. This sale will allow the public to see the capabilities of NFTs in the art space, however, it is just the beginning of the NFT revolution, which will ultimately change the way we live,” Justin Banon, CEO and Co-founder of Boson Protocol, the developer of a “capture resistant dCommerce ecosystem” using NFTs encoded with game theory, said in an emailed comment.

A “revolution which will ultimately change the way we live”? Goodness me. I looked up Boson Protocol, wanting to check if dCommerce was a typo. It seems not, though I’ve no idea what a decentralized, capture-resistant, autonomous commerce ecosystem that operates within a liquid digital market that unlocks two planetary-scale value pools actually is!

Decentralized forms of authority notwithstanding, theft is still theft.

Reports of stolen art on NFT marketplace raise issues for crypto collectorsHyperallergic
The blockchain has frequently been hailed as the future of art commerce, offering a way to ensure a work’s authenticity while creating an unalterable digital record of provenance on a public ledger. But recent reports of hacking on Nifty Gateway, a popular marketplace for non-fungible token (NFT) art, have raised questions about potential security flaws in the system. Several users have taken to social media in the last few days to claim they had NFTs stolen on the platform, with little recourse to get them back.

This isn’t limited to just slightly racist and homophobic digital collages, of course.

Quartz is selling the first-ever NFT news articleQuartz
Quartz is auctioning an article converted into a non-fungible token, or NFT, giving its eventual buyer unimpeachable, blockchain-verified proof of ownership. The process to do this, we found, was surprisingly easy.

Buy This NFT Column on the Blockchain!The New York Times
The first step in making my own NFT was setting up a digital “wallet” that would be used to hold my token, as well as any cryptocurrency I made from selling it. I used a browser extension called MetaMask and set up an empty wallet for Ethereum, the cryptocurrency network of choice for NFT collectors. Then I had to find a place to hold the auction. I chose an NFT marketplace called Foundation, which hosted the sale of the famous “Nyan Cat” graphic this year for nearly $600,000.

Crypto token of New York Times column sells for $560,000The New York Times
@3fmusic could not be reached as of Wednesday afternoon. The user appeared to be an avid collector of NFT artwork. In addition to the Times token, their collection on Foundation also includes such works as “The result of 2020,” an image of a sad-looking Kermit the Frog, and “Mushy’s Midafternoon Nap,” an image of a cartoon toadstool sitting on a log.

I tried getting my head around cryptocurrencies before, but I’m still none the wiser. Headlines like this don’t help.

Bitcoin’s record-breaking surge means one man ended up paying £440m for two pizzasSky News
Bitcoin’s volatility can also have consequences. Laszlo Hanyecz bought two pizzas for 10,000 BTC in 2010, back when the cryptocurrency was worth pennies. Fast forward to now, and this crypto stash is worth a staggering £440m.

One of the collectors above said that digital art is the perfect medium to communicate the underlying implications of blockchain on self-sovereignty. Everest Pipkin, digital artist and author of the following essay, would strongly disagree with that. It’s a long piece, and I’m including more than I would normally here, but I think its clarity is worth sharing. As he explains, it’s not cryptoart specifically that’s so environmentally damaging, it’s anything that’s “minted” on a cryptocurrency blockchain, be it Bitcoin, Ethereum or any other, because of a process called “proof of work”.

Here is the article you can send to people when they say “But the environmental issues with cryptoart will be solved soon, right?”Everest Pipkin
Proof of work, in essence, is a way to confirm that computational effort has been expended by “the prover” (the system doing a task). The idea was originally conceived in 1993 as a way to disincentivize things like spam or bots. Proof of work was supposed to be unnoticeable by normal human users, but would make things like the thousands of requests needed for a denial-of-service attack hard to run. It is like a little puzzle for your computer.

Fast forward to 2009, which saw proof of work (along with another technology called the blockchain, a kind of public ledger) used for a very different purpose; making the digital currency Bitcoin. This is a simplified explanation, but to make a bitcoin, Bitcoin “miners” task their specialized computers to solve those proof of work puzzles, competing with one another to validate blocks on the blockchain. A successful solution – which is somewhat rare – rewards the miner with the new coin. The more a computer “works” (the more energy is expended) the more competitive it is. You can think of it as a lottery, with every kilowatt-hour a ticket. This process is called mining.

This started innocuously enough – mining in 2009 was a background process that could run on a laptop as it idled. However, the difficultly of mining blocks in the blockchain is designed to increase over time. This is because as the network grows, the relative rate of new coins mined stays stable (for Bitcoin, about 1 block is mined every 10 minutes).

To solve the problem of more computers mining, the proof of work puzzles get harder. Miners get more computers, better GPUs. The puzzles get harder. Miners move to places with cheap electricity. The puzzles get harder. Miners retrofit warehouses, air-condition shipping containers. The puzzles get harder. Monumentally harder.

After a decade+ of a growing cryptocurrency market, what we’ve been left with is a financial network that uses more energy than Argentina, with no regulatory structure or federal oversight whatsoever.

I get that scarcity can affect prices; the more rare something is, or the harder it is to find, the more value is has — in the real world.

However, in a digital context scarcity must be constructed – there is nothing that demands the next block in the blockchain be harder to make than the last. If anything, the opposite should be true – computers grow ever more efficient and powerful. This means any scarcity is artificial, a process that demands ever more energy, ever more resources lost to continue to operate and return, for no other reason than to insure that tomorrow it will be even more expensive – which makes the wastefulness of today a good investment.

This is why cryptocurrency is valuable. There is nothing high-tech about it. There is no miracle. It is simply futures speculation without the speculation – no guessing required, because we know it will be more wasteful tomorrow; it is baked into the tech.

The whole thing makes my head swim. Here are some other attempts at explaining why blockchains and cryptocurrencies are bad ideas.

Why Bitcoin is so bad for the planetThe Guardian
In a year, bitcoin uses around the same about of electricity as the entire country of Norway. The digital currency is one that allows people to bypass banks and traditional payment methods. It is the most prominent among thousands of so-called cryptocurrencies and has been repeatedly reaching new records – but is it sustainable?

As NFT sells for $69M, artists question environmental impact of blockchainHyperallergic
As crypto-art speculation rises, however, so do the planet’s temperature and questions about the carbon footprint of NFTs. These unique works are typically sold in “drops,” timed online sales held by NiftyGateway, OpenSea, SuperRare, and Foundation, to name just a few of the most popular marketplaces. NFTs exist on the energy costly Ethereum blockchain; in layman’s terms, they are created (“minted”) based on a process known as proof-of-work (PoW), which necessitates the use of large networks of processing machines that emit CO2.

NFTs are hot. So is their effect on the Earth’s climateWIRED
The works were placed for auction on a website called Nifty Gateway, where they sold out in 10 seconds for thousands of dollars. The sale also consumed 8.7 megawatt-hours of energy, as he later learned from a website called Cryptoart.WTF. That figure was equivalent to two years of energy use in Lemercier’s studio. Since then, the art has been resold, requiring another year’s worth of energy. The tally was still climbing. The problem, as Lemercier saw it, went well beyond himself. His fellow artists were becoming millionaires overnight as the cryptoart world exploded. But so was their role in emitting carbon. Artists didn’t seem to understand the scope of this problem—Lemercier himself hadn’t—and the platforms making the sales didn’t seem interested in clarifying.

I know other areas of our online life affect the health of our physical world…

We finally know how bad for the environment your Netflix habit isWired UK
Netflix claims that one hour of streaming on its platform in 2020 [produces less CO2] than driving an average car a quarter of a mile.

… but this whole cryptoart topic seems so wasteful and unnecessary. To summarise:

Power into artthings magazine
In short. Watch more Netflix. Don’t buy, encourage, promote or celebrate cryptoart.”

Will he stay or will he go?

The election that could break AmericaThe Atlantic
The worst case, however, is not that Trump rejects the election outcome. The worst case is that he uses his power to prevent a decisive outcome against him. If Trump sheds all restraint, and if his Republican allies play the parts he assigns them, he could obstruct the emergence of a legally unambiguous victory for Biden in the Electoral College and then in Congress. He could prevent the formation of consensus about whether there is any outcome at all. He could seize on that un­certainty to hold on to power. […]

Let us not hedge about one thing. Donald Trump may win or lose, but he will never concede. Not under any circumstance. Not during the Interregnum and not afterward. If compelled in the end to vacate his office, Trump will insist from exile, as long as he draws breath, that the contest was rigged.

And this, from The New York Times, has been getting a great deal of attention today. But will it make a difference?

Long-concealed records show Trump’s chronic losses and years of tax avoidanceThe New York Times
The Times obtained Donald Trump’s tax information extending over more than two decades, revealing struggling properties, vast write-offs, an audit battle and hundreds of millions in debt coming due.

Charting an empire: A timeline of Trump’s financesThe New York Times
Tax records provide a detailed history of President Trump’s business career, revealing huge losses, looming financial threats and a large, contested refund from the I.R.S.

Time is money

Here’s a simple but effective way of getting across the differences in salaries and incomes from Neal Agarwal.

Printing money
Visualizing rates from minimum wage to the national deficit.

Another one of his constructions that caught my eye was Who Was Alive? Enter the year you’re interested in, and the page will list dozens of famous figures throughout history, with their ages and portraits. In 1944, for instance, Marilyn Monroe, Fidel Castro and Miles Davis all turned 18. Imagine that party.

It’s all relative

That guy from Amazon has been out shopping.

Jeff Bezos Sets Record With $165 Million Beverly Hills Home PurchaseBloomberg
News of the sale emerged just days after filings showed Bezos cashed out $4.1 billion of Amazon shares and comes amid reports that he’s also entered the art market. He reportedly set a record for artist Ed Ruscha at a Christie’s auction with a $52.5 million purchase of “Hurting the Word Radio #2” in November and also bought “Vignette 19” by Kerry James Marshall for $18.5 million.

Sounds like a lot of money, right?

Jeff Bezos bought the most expensive property in LA with an eighth of a percent of his net worthThe Verge
It is literally impossible to imagine just how rich the wealthiest people on the planet are. The difference between their bank accounts and yours — yes, you, the person reading this — is that they can spend the monthly interest on their holdings and buy things like airplanes and islands. It is probably important to note here that Amazon paid zero dollars in federal income tax on $11 billion in before-tax profit in 2018; this year, it will pay out $162 million on $13.3 billion in profit — a whopping 1.2 percent effective tax rate.

An eighth of a percent? It’s all relative, as this interactive graphic from The Washington Post, very cleverly demonstrates.

What Michael Bloomberg’s $11 million Super Bowl ad would cost you on your budgetWashington Post
Very few of us can comprehend what it’s like to be uber-wealthy like Mike Bloomberg, one of the richest people in the world and a Democratic presidential candidate. For example, the former New York mayor spent $11 million of his own money on a 60-second Super Bowl ad. How much money would that mean to you? Let’s put the finances of the ultra-rich into the context of everyday life.

its-all-relative

(via FlowingData)