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For the next week, I’m running a sale: your first year for $50 instead of the usual $70. That means more posts for your dollar, and that’s what life is ultimately all about.
The crypto crash is evolving into a full-blown meltdown, which is reverberating through the entire ecosystem. The big story, of course, is the collapse of Terra Luna, which was ignited by the general crypto freefall and is now having its own follow-on effects.
Chances are you might have received a couple of newsletters trying to break this down, but it’s interesting, so I may as well kick the newsletter off with it. By now you are most likely passingly familiar with stablecoins, which are cryptocurrencies pegged through some mechanism to a fiat currency. Rather than pingponging all over the place due to whatever is happening in the crypto world on any given day — like, for example, some overleveraged roid fiend imploring his Discord cult to pump some shitcoin or another — stablecoins remain stable and exchangeable with fiat, thus introducing liquidity to the system.
Stablecoins are increasingly of interest to regulatory bodies around the world, particularly in the U.S., because they represent the most substantial point of interaction between the crypto economy and the ‘real’ economy. They are, in other words, the most legible point at which playing silly buggers with internet funny money becomes a genuine systemic risk. The comparison often drawn is to money market funds, which were delightful, safe and cash-like before the GFC hit, and then they weren’t.
There are broadly two types of stablecoins. The first are, ostensibly, backed — either by fiat currency, other crypto, or commodities. Tether (also known as USDT) is an example of a fiat-backed stablecoin. In a perfect world, there is 1 US dollar in a bank for every 1 USDT — meaning that even if you have a very large amount of the latter, you should be able to convert it into US dollars relatively easily.
For a long time, that’s what Tether said was the case. Many column inches have been dedicated to proving that this was in fact not the case, and Tether now admits it is backed by a mix of cash, short-term commercial loans and “short-dated U.S. government obligations". But, it says, you shouldn’t worry about all that, because at the end of the day you can still convert them to US dollars whenever you like. Don’t worry about what happens behind the curtain — it’s boring, fuggedaboutit. Amid the current crypto crash, Tether is wobbling from its $1 peg. Were it to go to zero, that would be quite a big deal.
The other broad type of stablecoin are algorithmic. Rather than being pegged to some other currency or asset, they use a system of algorithms and smart contracts to manage supply, keeping the price stable that way. If the price dips below the chosen peg, it’ll try to reduce the number of tokens in the marketplace, and if it goes above it will increase the number of tokens. Plenty of crypto guys were very excited about algorithmic stablecoins, as they promised a means of building a crypto ecosystem that wasn’t so tightly connected to the fiat economy.
TerraUSD and Luna are two coins founded by a — forgive me for this unkind description — absolute shit-for-brains freak named Do Kwon. TerraUSD is the stablecoin, pegged with smart contracts and fairy dust at 1 USD, and Luna is its floating cousin, which is designed to help manage the supply of TerraUSD, as you can theoretically always exchange one for the other.
I say fairy dust, because despite the promise of magic supply managememt, that’s really the true basis of any stablecoin. As Matt Levine wrote at Bloomberg:
The basic thing that makes Terra valuable is confidence in it. The essential source of this confidence is ... just sort of recursive social belief? If you think that everyone else will treat Terra as worth a dollar, then you will treat it as worth a dollar, and you won’t sell it for $0.90 in a panic, which means that it won’t go down to $0.90, etc. But if you think that everyone else will treat Terra as worth zero, then you will dump it as fast as you can at whatever price you can get, which means that it will go down below $0.90, etc.
Do Kwon is basically exactly what you think of when asked to picture the absolute worst crypto guy you can imagine. Case in point:
At the time of writing, TerraUSD is worth about US40c. The natural value of a stablecoin is either one (it works as promised) or zero (it doesn’t work as promised). So we’ll see which of those two values it ends up at. And Tether. These are the metrics more worth paying attention to rather than, say, the current bitcoin price.
Also worth reading: this bit at CoinDesk on Kwon.
If you have been on social media at all for the last month or so, chances are you have been absolutely assailed by content and memes from the Johnny Depp / Amber Heard defamation trial. It seems like it doesn’t matter what sort of algorithm you have cultivated on any given platform — they are all going to assume you want to see an absurd amount of Depp/Heard trial stuff.
It’s also likely the vast majority of it has been pro-Depp, in a weirdly intense and sweaty way. You experience that feeling of the world’s algorithms slowly pivoting towards emphasising something, and a bunch of people racing to keep up.
I’m not going to pretend I’ve been paying close enough attention to the case itself to form a strong view about the actual facts at hand. It does strike me as unlikely that the meme framing of Johnny Depp as an innocent small bean landing viral smackdown after smackdown in the courtroom on crooked lawyers is accurate. (I also find the popular TikTok allegation that Heard literally bumped coke from her nail on the stand vanishingly unlikely. But I’m no expert.)
But I’m definitely interested in how weird the vibe of the internet discourse is. Plenty of people have pointed out that it has the vibe of being astroturfed, even if most of the participants and commenters are real (albeit highly strange) people.
As Rolling Stone reported in an article titled “Are Johnny and Amber’s Stans for Real?”:
But Cyabra, a Tel Aviv-based startup that analyzes online conversations and spots disinformation, believes that Depp’s online fan base is overwhelmingly real, at least on Twitter. The company, which is backed by investors like Peter Thiel, and whose clients include the U.S. State Department, studied data on the platform spanning from March 13 — about a month before the trial kicked off — through April 25. Scanning relevant keywords and hashtags associated with the couple, Cyabra then examined profiles that participated in the conversations around those phrases. Using proprietary AI, the company identifies fake accounts, the most influential accounts, and the sentiment and “velocity” of the conversation (how quickly people are tweeting and commenting on a given topic). Synthesizing that data, Cyabra CEO Dan Brahmy tells Rolling Stone that “the majority of the profiles that are on Johnny Depp’s side and support him are real people, almost 95 percent of them. These are genuine people who love Johnny Depp.”
(As an aside, the notion of a State Department-linked, Peter Thiel-backed Israeli ‘disinformation’ startup doing Johnny Depp stan research is weird as hell. Doesn’t the deep state have bigger fish to fry right now?)
I’ve been trying to figure out what gives this particular fandom war its unsettling energy. It is an online fandom war after all — two warring pop culture tribes, likely operating under the gentle auspices of a proper PR campaign, one of which is displaying overwhelming battlefield dominance. I think the weirdness comes from the fact a reasonably staid court trial in which nothing objectively interesting is actually happening is being slammed through the meat grinder of an always-on Twitter, TikTok, YouTube and Twitch, and it is generating demand for these weird meme cuts and true crime style deep dive videos that wring increasingly unhinged content from every second.
There’s a decent bit in Polygon which pursues the same line of thought. It also pulls the thread of my favourite grand theory of everything: that the collapse of Tumblr after its porn ban unleashed a tidal wave of drama refugees on the rest of the internet, who imposed their own fandom-based version of reality onto the other platforms.
Conley pointed to the Tumblr porn ban as a potential inflection point for internet fandom. After a mass exodus of about 150 million users, following the site’s controversial ban on NSFW content in 2018, Twitter became the new home base for fandom content. And the site’s very different incentives around going viral and being engaged drastically changed the way fandoms interacted with each other.
“They are no longer mostly contained within their circles. Now, one of the most exciting things that can happen to a fandom is to be seen. They want to see themselves on the trending page,” Conley said, pointing to how K-pop fandoms try to dominate the site. “Like everything else on sites like Twitter, fandom on big social media platforms is less about mutual enjoyment or subject matter (like it used to be on blogs or forums) but about volume,” she said.
I don’t necessarily buy it, but it’s fun to think about. I think there’s definitely something to the K-pop fandom comparison, which is notoriously aggressive and detached from reality, and maybe there’s something dislocating about seeing that sort of energy applied to a guy who was in Pirates of the Caribbean.
Here’s a funny post:
As you can see, it was widely shared. Take a look through the replies and you can see multiple tweets from obvious bot accounts linking to shonky websites with names like ‘Shirt Cloud’ where you can buy the shirt, all of which purport to offer “the original”.
Any shrewd buyer of novelty shirts, of which I’m sure there are many that subscribe to The Terminal, will quickly discern that these shirts are not exact matches for the shirt in the tweet. The fonts are wrong, the formatting doesn’t match, and the colour is off. They do not capture the shirt’s joie de vivre.
T-shirt bots aren’t a new phenomenon. The business model is pretty simple. They crawl Twitter for people replying some variation of “I want this on a shirt” to a picture, and automatically take the picture and upload it onto one of the many online t-shirt stores, before tweeting the link in the original thread. They then take a cut of the sale price of whoever decides to buy it from the link. It’s obviously shitty and rude, but it’s an elegant little workflow in its own way.
Key to this digital flea market is the fact most of these online shirt stores are very loosely policed when it comes to copyright. Australian company Redbubble, one of the largest companies in the space, is absolutely polluted with copyright infringement, and was hit with a fresh class action this year for selling counterfeit prints.
Many artists have seen their work stolen and turned into cheap t-shirts via this method, which led to a campaign in 2019 where people would create obviously copyright-infringing or parody images, then invite their followers to invite a botswarm by replying with a trigger phrase, ideally causing either embarrassment or the full weight of Disney’s lawyers to fall upon them.
I was particularly interested in the replies to the Lehman Brothers shirt because they are obviously not bot-driven. Part of the shirt is slightly obscured and its not at a great angle, so there’s clearly a human hand involved somewhere here. One of the accounts replying actually seems to work exclusively with pictures of other people wearing funny shirts, and tries to recreate them for sale. But it’s one of those cases where, because the account seems to just reply with shirt links and retweet random Elon Musk posts, it’s very hard to tell where the bot ends and the human begins.
It’s an example of what I call convergence – describing those crossover situations where bots become sufficiently advanced to appear humanistic, while at the same time human behaviour becomes sufficiently artificial to appear botlike. You see this a lot with relentlessly partisan political posters too, who have settled on a means of repetitious communication and hashtagging that looks almost identical to automated propaganda operations running out of some basement in North Macedonia.
It’s a really bizarre kind of mimesis that, once you start seeing it, it’s hard to unsee.
One from earlier in the year, but I didn’t catch it at the time — a great essay on ‘vibe’, ‘mood’ and ‘energy’ as frames of understanding. “The products of mass culture have learned to speak a new language: the language of the occult.”
Here’s a story after my own heart: comparing the state of the crypto economy with James C. Scott’s Seeing Like A State.
Really great thread about the teal independents at the Australian election, and what they mean for the two major parties. I wrote something similar for subscribers here, but I think this thread captures a few nuances I didn’t.
A good writeup of French philosopher and sociologist Jacques Ellul’s concept of ‘technique’, which is a great and enduring framework for understanding technological society that deserves more of a run than it gets.
A bit of global warming gothic for you: water levels are dropping in Lake Mead, a reservoir in Nevada, which is exposing the dead bodies of multiple likely murder victims.
Two plane-related stories. First, this about a plane that accidentally circumnavigated the world. And then this, about a passenger with no flight experience who managed to land a plane this week after the pilot passed out.
It's funny that you've got a link to a piece about Ellul in your Elsewhere section, because when you made the point about what you call convergence all I could think was "Ellul saw this coming!"