User departures could threaten its diversity and spur Web3 adoption |
December 23, 2022
Exploring transformation of value in the digital age
By Michael J. Casey, Chief Content Officer
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The circus that is Twitter under Elon Musk can seem like a sideshow to crypto, albeit one that’s impossible not to watch. But to the crypto community a mass “Twixit” has some real implications, given the prominent role the platform plays in crypto’s process of discourse and debate. This week’s column dives into those implications.
For the weekly “Money Reimagined” podcast, my co-host Sheila Warren and I decided to do a year-end special on our own. No guests, just the two of us bantering about a year that changed crypto. It was a blast. I hope you agree. Have a listen after reading the newsletter.
Happy holidays to all of you. Thank you for your continued support.
Launched in September 2017, KuCoin is a global cryptocurrency exchange with its operational headquarters in Seychelles. As a user-oriented platform with focus on inclusiveness and community action reach, it offers over 700 digital assets, and currently provides spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending to its 20 million users in 207 countries and regions.
In 2022, KuCoin raised over $150 million in investments through a pre-Series B round, bringing total investments to $170 million with Round A combined, at a total valuation of $10 billion. KuCoin is currently one of the top 5 crypto exchanges according to CoinMarketCap. Forbes also named KuCoin one of the Best Crypto Exchanges in 2021. In 2022, The Ascent named KuCoin the Best Crypto App for enthusiasts.
The End of Crypto Twitter as We Know It?
(Rachel Sun/CoinDesk)
If Elon Musk’s controversial leadership of Twitter sends the platform into the slow death spiral many are predicting, what happens to Crypto Twitter?
Insider Intelligence this week predicted Twitter will lose 30 million users over the next two years. And it is reasonable to assume that Crypto Twitter, including crypto enthusiasts, critics, meme propagators, NFT creators, coin-pumpers and related trolls will see exits.
More to the point: What will the community look like, in terms of its diversity of ideas, after those departures?
Generally speaking, the kinds of people considering leaving Twitter – some folks are calling for a mass “Twixit” event – are probably different in their political and ideological persuasions from those adamant on staying.
Those enthusiastic about the new Twitter and so committed to stay are likely to be more supportive of Musk’s stated mission as “a free speech absolutist” to end “shadow-banning” and remove supposed political bias from content moderation. They tend to align with Silicon Valley tech leaders in their ongoing battle with the mainstream press. Their ranks include a large number of libertarian-leaning people who staunchly defend property rights and are suspicious of government intervention and surveillance.
However, the diverse array of backgrounds and political leanings on Twitter has mattered to crypto because of the role it has played in crypto discourse. As a decentralized community with no central decision-maker, there needs to be public fora for stakeholders in the industry to hash out ideas and differences.
Creating a more homogenous, increasingly fortified pool of ideologues, whether of the left or the right, could make things even more unbearable for anyone expressing a view that challenges that majority. Eventually, when the dissenting minority is driven away, perhaps the toxicity will die down. But then what are you left with? Groupthink.
None of this is in crypto’s interest. It’s axiomatic that permissionless, open-source environments thrive on a plurality of ideas from which the “wisdom of the crowd” can be drawn.
Now, I’m not especially worried that if Crypto Twitter shrinks to the point where it ceases to be a useful, open, multi-viewpoint forum, the crypto community will lose its capacity to properly debate and develop ideas.
The era of Web3 may shift us out of centralized social media altogether and into wallet-based, on-chain networks of conversation that, while siloed for specific projects, create links of interoperable exchange across communities in which ideas can intersect, clash and synthesize into new concepts.
It shows the CoinDesk Market Index (CMIX) represented by the yellow line, and its component sectoral indices, in a different color, were all impacted to varying degrees by the collapse in November of FTX. The only sub-index to outperform the broad CMIX index was the CCX, representing the currency sub-index ex-stablecoins, a group dominated by bitcoin. The biggest underperformer was the CNE, the CoinDesk Culture & Entertainment Index.
I readthe steep decline in the Culture and Entertainment Index (CNE), which was heavily influenced by metaverse assets, as a counterintuitive positive sign.
This was the sector that was subject to a lot of hype going into market correction because we were coming off the relatively recent boom in non-fungible token prices for digital art. Since then, the focus in Web3 entertainment opportunities has not been on milking high-paying users to pay exorbitant prices for unique digital collectibles but on consumer brands and mainstream companies using non-fungible tokens (NFT) and related tools to engage with fans and loyal customers at a much, much lower, more accessible price point.
Building this business model might not immediately produce the hockey stick gains needed to sustain the high prices for metaverse and other platforms’ tokens, but it feels like a much more lasting approach to value creation.
The crypto market is at a critical juncture – we need strong players to act and lead.
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In searching the Crypto Twitter coverage of the effort to rouse support among Bitcoin users for the #UASF in 2017, I found this Samson Mow classic from the day of the soft fork’s implementation. You get the sense of drama, the power of the meme, with its play on “USAF” and its rallying cry to the troops.This was Crypto Twitter at its peak:
What if large-scale exchanges and industrial bitcoin mining were regulated out of existence yet bitcoin itself continued to be used at local levels and mined with low-scale, off-grid renewable energy community-based projects?
Not such a bad world, huh? And if the backlash against crypto gets heavy, it’s one that’s quite imaginable.
Relevant Reads: Another Miner Falls
Bitcoin miners have been hit by a perfect storm this year: a depressed bitcoin price, higher interest rates and electricity prices, and exposure to collapsed crypto exchanges. On Wednesday it claimed another victim. Here’s CoinDesk’s coverage this week of the bankruptcy of the publicly listed Core Scientific (CORZ), one of the biggest players in the field, accounting for about 10% of the Bitcoin hashrate.
CNBC was the first to report that a bankruptcy was imminent, noting that Core Scientific planned to keep mining through the bankruptcy. This write-up by Sam Reynolds noted the trail of mining dominoes that have fallen in recent months.
When the news was confirmed, the company announced that in addition to filing for bankruptcy protection it had reached a deal with some of its creditors to restructure its debt. Aoyon Ashraf and Eliza Gkritsi wrote up the details.
