The Daily Parker

Politics, Weather, Photography, and the Dog

The collapse of crypto

I want to call attention to an article from October by Ben Mackenzie and Jacob Silverman that seems prescient today:

Securities and Exchange Commission Chairman Gary Gensler has compared [the cryptocurrency industry] to betting in unlicensed, unregistered casinos. “We’ve got a lot of casinos here in the Wild West,” Gensler said in a chat last month with the Washington Post. “And the poker chip is these stablecoins.” In this casino, the chips themselves might be just as risky as sitting down at the blackjack table.

A stablecoin is a digital currency whose value is directly linked to another asset, kind of like the dollar under the gold standard. The value of a stablecoin is supposed to remain constant. Such cryptocurrencies are useful because converting fiat money into and out of a cryptocurrency like Bitcoin can be slow and cumbersome; if you load up on stablecoins, you’re dealing in the coin of the realm and can make your transactions quickly. The most popular stablecoin by a country mile is Tether. According to a recent study, 70 percent of Bitcoin trading is done in Tethers. On any given day, Tether is by far the most-traded coin, its volume often double that of Bitcoin. If you want to gamble at the crypto casino, you need Tethers.

I was never into betting on crypto for the same reason I was never into online poker: There’s no human interaction involved, and drinking at my desk while watching numbers flicker by on a screen is not my thing. I’m also not eager to gamble on things where I don’t know the risks involved and when I may be playing by different rules than others. For all of its talk about ensuring trust via strong code and decentralized authorities, the crypto industry remains, like many pockets of its mainstream finance counterpart, profoundly concentrated and often untrustworthy.

For those who look past all this and end up on the losing end if this $2 trillion bubble pops, it might be catastrophic, especially as crypto exchanges increasingly resemble unlicensed banks, with some now encouraging users to directly deposit their paychecks into crypto. For the average investor/gambler (is there a difference anymore?), one would be best advised to heed a popular saying in Vegas: Look around the poker table; if you can’t spot the sucker, you’re it.

Forward to this past week, and the tulips South Sea Company Ponzi scheme crypto market seems like the casino is closing.

Just one or two stories today

Sheesh:

And finally, when I left for San Francisco on Saturday morning, it was 10°C and sunny. Here we are about 76 hours later and it's 30°C. We really don't have spring or fall here some years.

The ambassador's a dodger, yes, and I'm a dodger too

A little-known United Nations agency would like its $22 million back, please:

At the United Nations, two officials had a problem. The little-known agency they ran found itself with an extra $61 million, and they didn’t know what to do with it.

Then they met a man at a party.

Now, they have $25 million less.

In between was a baffling series of financial decisions, in which experienced diplomats entrusted tens of millions of dollars, the agency’s entire investment portfolio at the time, to a British businessman after meeting him at the party. They also gave his daughter $3 million to produce a pop song, a video game and a website promoting awareness of environmental threats to the world’s oceans.

Things did not go well.

Transparency and accountability: it's not just a good idea, it's the law.

(The headline comes from this traditional Anglo-American song. Grift goes back to the beginning of speech, it turns out.)

Head (and kittens) exploding!

Leading off today's afternoon roundup, The Oatmeal (Matthew Inman) announced today that Netflix has a series in production based on his game Exploding Kittens. The premise: God and Satan come to Earth—in the bodies of cats. And freakin' Tom Ellis is one of the voices, because he's already played one of those parts.

Meanwhile, in reality:

  • A consumers group filed suit against Green Thumb Industries and three other Illinois-based cannabis companies under the Clayton Act, alleging collusion that has driven retail pot prices above $8,800 per kilo. For comparison, the group alleges that retail prices in California are just $660 per kilo. (Disclosure: The Daily Parker is a GTI shareholder.)
  • Illinois Governor JB Pritzker (D), one of the indirect defendants in the pot suit, signed a $46 billion budget for the state that includes $1.8 billion in temporary tax relief. Apparently, I'll get a $50 check from the State that I can apply to the $600 increase in property taxes Cook County imposed this year, which is nice, but I think the state could have aimed a bit lower on the income cap for that rebate and given more help to other people.
  • Shortly after US District Court Judge Kathryn Kimball Mizelle (a 35-year-old who never tried a case and who graduated summa cum mediocrae laude from the legal powerhouse University of Florida just 8 years ago and earned a rare "not qualified" rating from the ABA upon her appointment in 2020 by the STBXPOTUS) ruled against the CDC in a case brought by an anti-masker, the DOT dropped mask mandates for public transport and air travel in the US. In related news, the Judge also said it's OK to piss in other people's swimming pools and up to the other swimmers not to drink the water.
  • While the Chicago Piping Plovers organization waits for Monty and Rose to return to Montrose Beach, another one of the endangered birds has landed at Rainbow Beach on the South Side. He appears more inclined to rent than buy, but local ornithologists report the bird has a new profile on the Plōvr dating site.
  • NBC breaks down the three biggest factors driving inflation right now, and yes, one of them is president of Russia. None, however, is president of the US.
  • Along those lines, (sane) Republican writer Sarah Longwell, who publishes The Bulwark, found that 68% of Republicans believe the Big Lie that the XPOTUS won the 2020 election, but "the belief that the election was stolen is not a fully formed thought. It’s more of an attitude, or a tribal pose." Makes me proud to be an American!

And finally, via Bruce Schneier, two interesting bits. First, a new paper explains how a bad actor can introduce a backdoor into a machine learning training session to force specific outcomes (explained in plain English by Cory Doctorow). Second, an attacker used a "flash loan" to take over the Beanstalk crypto currency voting system and stole $182 million from it. Because Crypto Is The Future™.

Web3 is coming for your kitchen

Via Molly White, a new company called Gripnr wants to monetize your D&D campaign, and it's as horrible as it sounds:

Gripnr plans to generate 10,000 random D&D player characters (PCs), assign a “rarity” to certain aspects of each (such as ancestry and class), and mint them as non-fungible tokens, or NFTs. Each NFT will include character stats and a randomly-generated portrait of the PC designed in a process overseen by Gripnr’s lead artist Justin Kamerer. Additional NFTs will be minted to represent weapons and equipment.

Next, Gripnr will build a system for recording game progress on the Polygon blockchain. Players will log into the system and will play an adventure under the supervision of a Gripnr-certified Game Master. After each game session is over, the outcome will be logged on-chain, putting data back onto each NFT via a new contract protocol that allows a single NFT to become a long record of the character’s progression. Gripnr will distribute the cryptocurrency OPAL to GMs and players as in-game capital. Any loot, weapons, or items garnered in-game will be minted as new sellable NFTs on OpenSea, a popular NFT-marketplace.

As a D&D veteran who once played a character (for 5 minutes) with Gary Gygax* as DM, I can't see how any gamer would want to do this. Molly White has spent the last two years documenting the ways scammers and grifters have used "the blockchain" and "NFTs" and other Web3 buzzwords to steal (or, as I believe, launder) billions of dollars. Gripnr seems like just one more scam, but I could be wrong: Gripnr could just be a lazy get-rich-quick scheme for its creators.

Somebody call lunch!

I've gotten two solid nights of sleep in a row, and I've got a clean desk for the first time in weeks. I hope that this becomes the norm, at least until November, when I'll have a packed musical schedule for six weeks as the Apollo Chorus rehearses or performs about 30 times. But that's seven months off.

That gives me plenty of time to listen to or read these:

And finally, in compiling geographic source data for Weather Now, I discovered that the International Civil Aviation Organisation (ICAO) assigned an official designator the location where the Ingenuity helicopter landed on Mars: JZRO, for Jezero Crater.

NotPetya was NotRussia, says court

Via Bruce Schneier, the New Jersey Superior Court has found that the NotPetya attack that disabled much of Merck's shipping network in 2017 was not an act of war by the Russian government, and therefore Merck's insurer may be on the hook for a $1.4 billion payout:

The parties disputed whether the Notpetya malware which affected Merck's computers in 2017 was an instrument of the Russian government, so that the War or Hostile Acts exclusion would apply to the loss.

The Court noted that Merck was a sophisticated and knowledgeable party, but there was no indication that the exclusion had been negotiated since it was in standard language. The Court, therefore, applied, under New Jersey law, the doctrine of construction of insurance contracts that gives prevalence to the reasonable expectations of the insured, even in exceptional circumstances when the literal meaning of the policy is plain.

The Court also noted that under New Jersey law, 'all risks' policies extended coverage to risks not usually contemplated by the parties unless a specific provision excluded the loss from coverage.

36 Group's article included the court order from December 6th. The ruling only applies to New Jersey, but I expect insurance companies will take hard looks at all of their "all risks" policies to see how much exposure they could have to another cyberattack. I suspect insurers will start demanding people protect their networks better, too, the way they have encouraged people to buy safer cars.

It might also bankrupt Ace American Insurance Co., but that won't change the follow-on effects of this ruling.

Really December now

I'm looking ahead to two long rehearsals, three performances, and squeezing into my tuxedo, all while the temperature drops over the next six hours to a predicted -9°C. I conclude from these facts that it's the beginning of winter.

I also just spent the last hour trying to get Visual Studio to log into the correct Azure subscription. So instead of reading these things at lunch, I had to let them pile up:

And now, back to the mines.

Spicy poké

I swear, the local poké place used three shots of chili oil instead of one today. Whew. (Not that I'm complaining, of course.)

While my mouth slowly incinerates, I'm reading these:

On that last point, comedians Jimmy Carr and Emil Wakim lay down epic burns against anti-vaxxers:

Thursday afternoon miscellany

First, continuing the thread from this morning, (Republican) columnist Jennifer Rubin neatly sums up how the Republican justices on the Supreme Court seem poised to undo Republican Party gains by over-reaching:

We are, in short, on the verge of a constitutional and political tsunami. What was settled, predictable law on which millions of people relied will likely be tossed aside. The blowback likely will be ferocious. It may not be what Republicans intended. But it is coming.

Next up, Washington Post sports columnist Barry Svrluga argues that the Major League Baseball labor dispute and the lockout announced this morning will do nothing to prevent baseball from continuing its fade into irrelevance:

What can’t happen as MLB and the players’ union negotiate, though, is the actual game they stage being forgotten. Whatever the flaws in its salary structure and the dispersal of revenue, there’s money to go around. ... What should matter more than the money, then, has to be the game itself. The game itself is wounded.

Finally, today is the 20th anniversary of Enron filing for bankruptcy. In honor of that history, I give you the Deodorant Building Enron Headquarters in downtown Houston as it appeared in June 2001:

Sure Happy It's Thursday!