China's Latest Mining Crackdown

What you need to know today in crypto and beyond

June 18, 2021

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Today's must-reads

Top Shelf

MISINFORMATION: MicroStrategy’s CEO Michael Saylor argues that the problem around bitcoin’s bad environmental reputation isn’t bitcoiners, but the press spreading “misinformation” about it, he said at a meeting of the new Bitcoin Mining Council Wednesday. He also reiterated that the council’s responsibility is to provide an informative space to educate people about bitcoin mining.

CHINA: China is increasingly pro-digital money but anti-crypto. On Friday, the Industrial and Commerce Bank of China, a state-owned Chinese commercial bank, introduced a feature that allows users to convert digital yuan to cash at ATMs. This can be done at more than 3,000 locations in Beijing. At the same time, the ban of mining operations in China continues, with the most recent one happening in Sichuan.

SWITZERLAND: BBVA will open bitcoin custody and trading to private banking clients in Switzerland, the Spanish banking giant said Friday. The move comes after a six-month trial with a select group of users. The bank plans to expand into other cryptocurrencies. The service will be available only in Switzerland because of the country's clear regulations and widespread adoption of digital assets.

MORE DEFI TOKENS: Crypto-asset manager Grayscale added 13 more tokens to the list of potential investment products, the company tweeted Thursday. Among those are tokens from DeFi protocols 1inch, Bancor, Curve, Polygon and 0x. The news comes as DeFi continues to get “weird,” with a new era of building novel protocols on top of novel protocols, CoinDesk’s Brady Dale reports.

IRON IS HOT: Billionaire Mark Cuban is calling for tighter regulation of DeFi and stablecoins following a massive drawdown in the partially collateralized, algorithmic stablecoin protocol Iron Finance. Nearly $2 billion vanished in what has been called “the world’s first large-scale crypto bank run,” including Cuban’s stake, which he said "was [large] enough that I wasn't happy about it."

–Helene Braun

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“I think it was actually quite negative that when Michael Saylor announced his recent $500 million raise to buy more bitcoin, the price of bitcoin did nothing. That was an indicative of how little buying power is left in the market.”

–Richard Byworth, CEO of EQONEX Group, on “First Mover.”

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Putting the news in perspective

The Takeaway

The Infinite Tomato Economy

It’s been another wild week, so let’s ease back to talk about something entertainingly dumb: This tweet from Thursday about how to turn $50 into $3.9m in two years by planting tomatoes.

It’s very hard to know where to start with this. It’s a kind of nth-dimensional object melding hustle-culture brain rot and venture capital pitch-deck anti-math. It encapsulates some of the most pernicious ideas of our economic era, particularly the fetishization of “scale” and a total, unexamined contempt for actual labor. The author’s unrestrained self-importance and manifest ineptitude at real-world business thinking, all while trying to sell himself as a business and investing coach, would be completely at home in the most shameless corners of the crypto hype machine.

Obviously the proposal itself doesn’t make a lick of sense, starting with the fact that you can’t sell most tomatoes for a dollar. Twitter user @keewa was even more incisive, writing that the scheme assumes “infinite growth within a finite system.” In other words, this makes sense only if you assume you don’t need anywhere to plant the tomatoes, or anyone to pick them, or really any inputs whatsoever except seeds.

Of course, we’re not really talking about tomatoes here – Huber meant it as a metaphor for the benefits of compounding re-investment. The problem is that his metaphor played out actual numbers, which were totally unrealistic. In fact, math seems to be a recurring problem for Huber, who backed his way into the tomato-farming tweet by first insisting that he’d rather be given $50 a month for the rest of his life than $1 million cash today. When it was pointed out that you’d have to live for well over 1,000 years for $50/month to be as valuable as $1 million today, Huber was undeterred from his thesis.

Are you enraged yet? Good. Because this was all a very on-point troll.

When not in character as a Dumb Hustler Twitter Guy, Huber writes this of his training courses: “I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.” He claims to run a network of storage facilities, which is the sort of capital-intensive, not-very-scalable business he’s arguing has been overwhelmed by the rampant quest for 10,000% venture-capital returns and gigachad s**tcoin pumps. He’s trying to warn people against the kind of get-rich-quick BS his tweet satirizes.

Huber’s troll succeeded, though, because there are so many would-be influencers and cosplay “investing gurus” out there saying more or less the same brain-dead stuff unironically. The original $50/m vs. $1 million today question was posed by a guy going by Side Hustle King, who endorses the “law of attraction” as part of his brand. For those not familiar, “the law of attraction” is basically The Secret, a pile of mystical nonsense that argues you can simply visualize good things and they’ll happen to you.

Now, I empathize with hustle-culture fans. Unscientifically, it seems like it attracts a lot of folks who are out to better themselves from modest circumstances, and no shade on that. The real problem is the sort of higher-up people Huber is satirizing, who manipulate that desire for self-improvement to sell extremely bad ideas at a huge markup. The crypto version of this is day-trading Telegram groups and training courses, many of which are (allegedly) scams run by dopes and charlatans looking to take your money, not educate you.

More interesting is the way Huber’s troll indicts tech investing and business models. The reason the tomato tweet is so deliciously infuriating is that it replicates the most pernicious logic of venture capital and finance over the last two or three decades: that all businesses are basically interchangeable, and the abstract unit economics is all that matters.

Seeds, after all, don’t grow themselves, brain genius. Not only do you need very expensive land and labor, you need a highly sophisticated set of skills from horticulture to marketing. Ignoring those complexities was key to the growth of some of the biggest startups of the 21st century, and the consequences have often been devastating.

Nobody remembers this, but Uber for many years told investors that its blood-red balance sheet was essentially meaningless because it was about to invent driverless cars and wouldn’t have to pay drivers anymore. Then an autonomous Uber killed a woman in Arizona and they stopped talking about that. But in the meantime, the app had gutted the conventional taxi industry, where nearly a century of work had gone into establishing safety standards and worker protections. Facebook’s commitment to huge scale and zero labor made it extremely slow to hire enough people to monitor the site for silly little things like overt promotion of genocide.

So if you saw Huber’s tweet and got mad at it, take a second to think about what you should really be mad about. It’s an infinite tomato economy, and we’re stuck living in it.

–David Z. Morris

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