The Week: Autopilot, insider trading and spooky stories

Want some links too? You got it pal.

Welcome to this week’s free edition of The Terminal. Here’s what I’ve published in the past week:

If you’re not subscribed to the paid edition of the Terminal, you can do so below for $7 a month or $70 a year.


The insider

The big news in the crypto/NFT world right now is the insider trading scandal at OpenSea. For the uninitiated, OpenSea is the largest NFT marketplace, recording $3.4 billion in sales volume in August alone.

In short, blockchain sleuths worked out that the company’s chief product officer, Nate Chastain, was flipping NFTs he knew were going to be featured on the front page of the marketplace, which is hand curated. Featured artwork is obviously going to see a surge in demand and therefore price, and he was repeatedly leveraging that price differential. From The Verge:

On Twitter yesterday, a user named ZuwuTV posted a thread claiming Chastain operated “secret wallets” that purchased the site’s front page NFTs before they were “featured,” later selling them for a profit once the price increased due to their exposure. In the thread, ZuwuTV identified a September 14th transaction where Chastain allegedly sent 5 Ethereum (around $17,000 USD) from his known wallet to an anonymous wallet that then sent the money to a third account. According to another user, ricefarmer.eth, the account purchased four NFTs by artist Dailydust, one titled “Spectrum Of A Ramenfication Theory,” which OpenSea directly featured soon afterward. The account is then alleged to have “flipped” the NFTs for a profit of roughly 2 Ethereum and funneled the money back to Chastain’s original wallet.

It’s a funny story, especially this line: “In a late-night Twitter Spaces titled “Investigating allegations” (with the monocle face emoji at the end), over 1,700 NFT collectors and traders joined to discuss the situation.”

The crypto and NFT community are treating this as essentially evidence that the system works. “We just invented anti-insider trading by putting this on blast,” one community member told The Verge. “If this were a humongous trading firm, they would have done so much to bury the story.”

I’m not sure it’s fair to say they “invented anti-insider trading”. But you can argue the transparency of the blockchain made it possible for very enthusiastic amateurs to do their own financial forensics — all the info is right there to sift through, after all.

A critic might say two things. Firstly, you could say that despite all the utopian visions of NFTs being a wonderful new way for artists to be remunerated, when you’re dealing with abstractly valued assets like this there’s plenty of space for crooked behaviour and pumps by those who control the platforms and the middlemen. All of the worst aspects and most perverse incentives of art and financial markets are replicated here.

Secondly, despite the central pitches of crypto world being decentralisation, anonymisation and anti-censorship, it was pretty trivial for ‘the mob’ to seize on a few infosec failures and expose this guy. They were doing the right thing in this case, of course, but I think it raises thorny questions about how these kind of systems actually work in practice.


Saving face(book)

The Wall Street Journal has a series called The Facebook Files out this week, based on a review of internal documents. The big takeaways:

I don’t think anything here is particularly startling — Facebook has been accused of all of these things to varying degrees before. But there’s still a sense of a company with the scale, reach and power of a massive nation-state trying to contend with how it can balance all of its internal interests (while also making a lot of money.)


“Not perfect!”

Doing the rounds this week was this video of a Tesla driver testing out the car’s autopilot feature, showing the car veering towards some pedestrians instead of going straight like the GPS indicated. As the tweet says, the original video does appear to have been removed due to a ‘copyright claim’.

It’s interesting to see the freewheeling, ‘move fast and break stuff’ tech ethos applied in this case — a consumer product essentially being beta tested on the public at large by a handful of Tesla enthusiasts who love to post videos of themselves interacting with the car’s features.

I shared this in a paid post this week, but this Recode story captures the sheer complexity of trying to get autonomous driving systems to work in the face of complex urban environments and unpredictable human behaviour:

Humans are proficient behind the wheel, but they’re also imprecise and occasionally wayward. So until 100 percent of the vehicles on the road are fully autonomous — something many analysts think is actually highly unlikely — every autonomous vehicle will have to be able to respond to the edge cases plus countless quirks and tics exhibited by human drivers on a daily basis. It’s the stuff we’re able to swat away without missing a beat while driving ourselves, but getting computers to try to manage it is a really big deal.

Or, maybe more succinctly, this tweet:


Strange but true

When I was a kid, I was extremely into reading the sorts of books at the library in the `130 range of the Dewey decimal system, which covered the paranormal and occult. You know, dubiously true stories of ghosts, UFOs, Bigfoot sightings and other unexplained phenomena. I never really believed much of it even back then, but something about that whole milieu was extremely appealing to me. I think it was the contention that there were still a raft of things in our age of reason that were not legible to objective inquiry, or had eluded scientific understanding.

Much of this genre can be traced back to Charles Fort, an early 20th century American writer who concerned himself with pseudoscientific investigation of ‘anomalous phenomena’. His 1919 book ‘The Book of the Damned’ popularised many notions that still hang around in pop culture and urban legend: stories of poltergeists, rainstorms of frogs and fish, mysterious disappearances, UFO sightings, etc. It’s a tough read, by the way. Here’s an excerpt which is pretty representative of how the book is written:

There can be no real science where there are indeterminate variables, but every variable is, in finer terms, indeterminate, or irregular, if only to have the appearance of being in Intermediateness is to express regularity unattained. The invariable, or the real and stable, would be nothing at all in Intermediateness—rather as, but in relative terms, an undistorted interpretation of external sounds in the mind of a dreamer could not continue to exist in a dreaming mind, because that touch of relative realness would be of awakening and not of dreaming.

Anyway. I had really strong memories of one particular book I owned and the stories in it — dubiously retold folk tales in conjunction with outright fiction — but I could never remember it beyond the vague sense it had deeply informed my personality over the years. I put my mind to it last week to figure it out, and realised it was this: 1949’s Strangely Enough by C.B. Colby.

(The way I figured it out was Googling a passage I vaguely remembered until I found someone had uploaded the entire two-page work to short story platform Wattpad as their own writing.)

I ordered a used paperback of the book because I think it’s a cool little artefact. Don’t really have a point with this entry. But it’s my newsletter!


This week’s reading

  • A great read about Couchsurfing.com, and the weird tensions that arose when it started to behave less like a utopian gift economy outfit and more like a business.

  • A chronicle in The Guardian about Satoshi, the “world’s first cryptocurrency cruise ship". It’s very stupid.

  • Think this did the rounds just about everywhere, but this longread in The New Yorker which compellingly makes the obvious point that life for many Afghan women under the US occupation was also really horrible.

  • An anti-NFT piece from Everest Pipkin from March, during the first wave of the craze. A lot of it is focused on the environmental dimension, but I thought it also explored a succinct contrary view from the artistic perspective.

You can send me tips, comments or feedback by replying to this email, or hitting me up at james@jrhennessy.com.