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Crypto is weathering a bitter storm. Some still hold on for dear life.

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Crypto is weathering a bitter storm. Some still hold on for dear life.


Stablecoins, as the name suggests, are designed to be the rocks of the crypto ecosystem, pegged sturdily to real-world assets like the dollar. Exchanges use stablecoins to even out the volatility of other coins, and crypto investors may favor them as a safer bet to park money. They have served their function pretty well so far, although questions around consumer safety and their potential for illicit activity have certainly caught the attention of regulators.

Algorithmic stablecoins, however, are different. They are a DeFi experiment in a stablecoin that doesn’t peg itself to fiat money or hold collateral assets to stabilize its value. Instead, they are usually supported by a second token, in a push-me-pull-you math equation. Terra, for example, balances variations in the stablecoin’s value by increasing or decreasing the supply of Luna tokens through incentives; investors can profit off these exchanges, which keeps them—in theory—trading tokens in the amounts the algorithm predicts they will. But much of this is magical thinking.

Well before the Terra crash, algorithmic stablecoins were generally understood to be much less stable than regular ones. Even Sam Bankman-Fried, CEO of the crypto exchange FTX and notable “crypto billionaire”, argued on Twitter last week that the two types of stablecoins are so distinct from both a functional and risk perspective that “[r]eally, we shouldn’t use the same word for all these things.” 

So why pursue algorithmic stablecoins at all? Because algorithmic stablecoins were supposed to be the DeFi holy grail: a stable unit of value that self-corrects independently and elegantly, like water naturally finding its own level. They appeal to Bitcoin purists because algorithmic stablecoins aim to avoid what regular stablecoins like Tether and USDC rely on to function: a tie to the real world and traditional markets. They operate on code alone—besides, of course, the human traders the system presumes will act in a predictable way. If algorithmic stablecoins perform as promised, they could demonstrate that code is the future of finance, lending new credibility to the crypto worldview. 

For a while, it looked like Terra’s experiment might just work. In February, Terra closed a multi-million dollar sponsorship deal with the Washington Nationals. Just over two months ago in March, its blockchain—the seventh most valuable in the world at the time—became the number two staked network, unseating Ethereum. But on Monday, May 9, things went off course. Someone may have pushed UST’s value to start dropping, by acting against the algorithm’s predictions. Then the coin crashed to well below the $1 value it was designed to maintain, fueled by very human, fear-driven “bank runs.” When UST reached $0.37 on Thursday, the company that manages it, Terraform Labs, even made the last-resort call to temporarily stop transactions on its network to protect against further decline and then froze them once more overnight—preventing any token holders from taking what little they had left and running. Since the network restarted, Terra’s UST has continued to fluctuate well under $0.50; LUNA hovers just above zero.

Each company in the crypto ecosystem has its own explanation for why it’s faltering. Coinbase’s much-anticipated new NFT marketplace had an underwhelming launch at the end of April, which may have put off investors and hurt its stock price. The Luna Foundation Guard, the nonprofit that supports Terraform Labs, had stockpiled $3.5 billion in Bitcoin by early May and then seemed to sell off a chunk of its stash in order stay afloat as the price of UST began to dip; both actions could have helped contribute to drops in Bitcoin’s value. Some Terra/Luna supporters even accused BlackRock and Citadel of intentionally manipulating the market to force UST to crash—a rumor vicious enough to prompt the companies to respond, asserting that they had no hand in the event. Then there’s the question of management. CoinDesk reported that the CEO of Terraform Labs was also behind a previous failed algorithmic experiment; maybe his leadership was another hole in the stablecoin’s boat. 

But all of these faulty pieces add up to an experimental system that is vulnerable to the same market trends as traditional finance—only without strict regulation and strong guardrails. The price tag of last week’s wild ride tallied up to some $270 billion in crypto assets lost. Even the non-algorithmic powerhouse stablecoin Tether briefly ducked below its $1 peg last week, indicating standard stablecoins may not be immune to volatility. And the impact of all this activity likely doesn’t end at crypto’s border. With banks launching crypto products and non-algorithmic stablecoins relying on the paper dollar to keep them steady, the crypto industry is clearly “tethered” to the rest of the financial market in multiple ways; the question now is if the plummeting coins will drag down traditional stocks in return. In January, Paul Krugman predicted in The New York Times that crypto assets may be the new subprime mortgages—bad eggs that have the power to spoil the whole market. This week, individual crypto investors have claimed to have lost their life savings already. There may be more pain in store.

But even as social media fills up with mocking memes and skeptical news outlets label this the start of a crypto “winter”—a term used for technologies that undergo a prolonged period of public disinterest and lack of innovation—crypto executives and investors are not just betting on the crypto ecosystem making a return to its glory days, they are planning for it. Even the word “winter” implies there will be a spring for the believers who can wait it out. On Wednesday, Terra founder Do Kwon tweeted a threaded letter to the Terra community, describing his plan to resuscitate the stablecoin, assuring the community it would turn around. “Short-term stumbles do not define what you can accomplish,” he wrote. “It’s how you respond that matters.” Coinbase founder Brian Armstrong is also claiming a full-throttle focus on the future as the company’s stock tipped back up on Thursday after losing half its value. In an internal memo that Armstrong made public, he wrote “Volatility is inevitable. We can’t control it, but we do plan for it. …I just know that we will make it through to the other side, and we come out stronger than ever if we focus on what matters: building.” 



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The Download: a curb on climate action, and post-Roe period tracking

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The US Supreme Court just gutted federal climate policy


Why’s it so controversial?: Geoengineering was long a taboo topic among scientists, and some argue it should remain one. There are questions about its potential environmental side effects, and concerns that the impacts will be felt unevenly across the globe. Some feel it’s too dangerous to ever try or even to investigate, arguing that just talking about the possibility could weaken the need to address the underlying causes of climate change.

But it’s going ahead?: Despite the concerns, as the threat of climate change grows and major nations fail to make rapid progress on emissions, growing numbers of experts are seriously exploring the potential effects of these approaches. Read the full story.

—James Temple

The must-reads

I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology.

1 The belief that AI is alive refuses to die
People want to believe the models are sentient, even when their creators deny it. (Reuters)
+ It’s unsurprising wild religious beliefs find a home in Silicon Valley. (Vox)
+ AI systems are being trained twice as quickly as they were just last year. (Spectrum IEEE)

2 The FBI added the missing cryptoqueen to its most-wanted list
It’s offering a $100,000 reward for information leading to Ruja Ignatova, whose crypto scheme defrauded victims out of more than $4 billion. (BBC)
+ A new documentary on the crypto Ponzi scheme is in the works. (Variety)

3 Social media platforms turn a blind eye to dodgy telehealth ads
Which has played a part in the prescription drugs abuse boom. (Protocol)
+ The doctor will Zoom you now. (MIT Technology Review)

4 We’re addicted to China’s lithium batteries
Which isn’t great news for other countries building electric cars. (Wired $)
+ This battery uses a new anode that lasts 20 times longer than lithium. (Spectrum IEEE)
+ Quantum batteries could, in theory, allow us to drive a million miles between charges. (The Next Web)

5 Far-right extremists are communicating over radio to avoid detection
Making it harder to monitor them and their violent activities. (Slate $)
+ Many of the rioters who stormed the Capitol were carrying radio equipment. (The Guardian)

6 Bro culture has no place in space 🚀
So says NASA’s former deputy administrator, who’s sick and tired of misogyny in the sector. (CNN)

7 A US crypto exchange is gaining traction in Venezuela
It’s helping its growing community battle hyperinflation, but isn’t as decentralized as they believe it to be. (Rest of World)
+ The vast majority of NFT players won’t be around in a decade. (Vox)
+ Exchange Coinbase is working with ICE to track and identify crypto users. (The Intercept)
+ If RadioShack’s edgy tweets shock you, don’t forget it’s a crypto firm now. (NY Mag)

8 It’s time we learned to love our swamps
Draining them prevents them from absorbing CO2 and filtering out our waste. (New Yorker $)
+ The architect making friends with flooding. (MIT Technology Review) 

9 Robots love drawing too 🖍️
Though I’ll bet they don’t get as frustrated as we do when they mess up. (Input)

10 The risky world of teenage brains
Making potentially dangerous decisions is an important part of adolescence, and our brains reflect that. (Knowable Magazine)

Quote of the day

“They shamelessly celebrate an all-inclusive pool party while we can’t even pay our rent!”

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The US government is developing a solar geoengineering research plan

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The US government is developing a solar geoengineering research plan


The move, which has not been previously reported on, marks the first federally coordinated US effort of this kind. It could set the stage for more funding and research into the feasibility, benefits, and risks of such interventions. The effort may also contribute to the perception that geoengineering is an appropriate and important area of research as global temperatures rise.

Solar geoengineering encompasses a range of different approaches. The one that’s gained the most attention is using planes or balloons to disperse tiny particles in the stratosphere. These would then—in theory—reflect back enough sunlight to ease warming, mimicking the effect of massive volcanic eruptions in the past. Some research groups have also explored whether releasing certain particles could break up cirrus clouds, which trap heat against the Earth, or make low-lying marine clouds more reflective.

The 2022 federal appropriations act, signed by President Biden in March, directs his Office of Science and Technology Policy to develop a cross-agency group to coordinate research on such climate interventions, in partnership with NASA, the National Oceanic and Atmospheric Administration (NOAA), and the Department of Energy. 

The measure calls for the group to create a research framework to “provide guidance on transparency, engagement, and risk management for publicly funded work in solar geoengineering research.” Specifically, it directs NOAA to support the Office of Science and Technology Policy in developing a five-year plan that will, among other things, define research goals for the field, assess the potential hazards of such climate interventions, and evaluate the level of federal investments required to carry out that work. 

Geoengineering was long a taboo topic among scientists, and some argue it should remain one. There are questions about potential environmental side effects, and concerns that the impacts will be felt unevenly in different parts of the globe. It’s not clear how the world will grapple with tricky questions regarding global governance, including who should make decisions about whether to deploy such powerful tools and what global average temperatures we should aim for. Some feel that geoengineering is too dangerous to ever try or even to investigate, arguing that just talking about the possibility could make the need to address the underlying causes of climate change feel less urgent.

But as the threat of climate change grows and major nations fail to make rapid progress on emissions, more researchers, universities, and nations are seriously exploring the potential effects of these approaches. A handful of prominent scientific groups, in turn, have called for stricter standards to guide that work, more money to do it, or both. That includes the National Academies of Sciences, Engineering, and Medicine, which last year recommended setting up a US solar geoengineering research program with an initial investment of $100 million to $200 million over five years. 

Proponents of geoengineering research, while stressing that cutting emissions must remain the highest priority, say we should explore these possibilities because they may meaningfully reduce the dangers of climate change. They note that as heat waves, droughts, famines, wildfires, and other extreme events become more common or severe, these sorts of climate interventions may be among the few means available to rapidly ease widespread human suffering or ecological calamities. 

Setting standards

In a statement, the Office of Science and Technology Policy confirmed that it has created an interagency working group, as called for under the federal funding bill. It includes representatives of 10 research and mission agencies, including NOAA, NASA, and the Department of Energy.  

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How to track your period safely post-Roe

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How to track your period safely post-Roe


Why use a period tracker?

Stress or dietary changes, among other factors, can make periods irregular and unpredictable. Tracking them can help expose underlying health issues, such as fibroids, which are noncancerous uterine growths. It can also help people spot patterns in mood and energy, which can often be affected by ovulation. People trying to get pregnant often use period trackers to figure out when they’re most fertile. 

So why are people panicking?

The overturning of Roe v. Wade in the US triggered laws that made abortion illegal in 13 states, and more states are likely to ban abortion in the coming months. In states that have banned abortions, people could now be prosecuted if they are alleged to have had one. The worry is that their digital data footprint could be used to build such a case. Missing your period is not a crime, but evidence of it could be subpoenaed and used to bolster a case against someone suspected of an abortion. 

What do companies that make period-tracking apps have to say about this?

We reached out to some of the major period-tracking apps—Flo, Clue, and SpotOn (an app from Planned Parenthood)—for comment on what their privacy settings are and whether they would turn information over to authorities in states where abortion is illegal. Clue and SpotOn did not respond, though Clue stated on Twitter that because it is based in the European Union, it is not permitted to share data with authorities in the US: 

“We would have a primary legal duty under European law not to disclose any private health data. We repeat: we would not respond to any disclosure request or attempted subpoena of our users’ health data by US authorities. But we would let you and the world know if they tried.”

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