The Chopping Block: If Vitalik Is the Pope of Crypto, Is Justin Sun the Inverse Pope? - Ep. 590
Jan 3, 2024
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Laura Shin, an independent journalist and author of 'The Cryptopians,' joins the discussion about the crypto landscape. The crew debates whether Vitalik Buterin is the 'Pope of crypto' and if such figures are necessary. They explore the need to return to cypherpunk ideals focusing on privacy and decentralization while critiquing the industry's shift towards financialization. Finally, they delve into the implications of an upcoming Bitcoin ETF, discussing its potential market impact and the contrasting philosophies of influential crypto leaders like Justin Sun.
Vitalik Buterin's post emphasizes the need for a return to cypherpunk ideals and building a better society in the crypto space.
Balancing the philosophical principles of cypherpunk with practical considerations is a challenge in the crypto industry.
Vitalik serves as a prominent figure, analogous to a pope, whose message is interpreted differently by individuals and groups in the crypto community.
Deep dives
Vitalik emphasizes the importance of returning to cypherpunk roots
Vitalik's recent post calls for a return to the cypherpunk ethos of pushing for an open and free society, decentralization, censorship resistance, and community collaboration. He points to the need for thinking about governance from first principles, quadratic funding, public goods funding, and further enhancing privacy. While some have emphasized the financial and practical aspects of crypto, Vitalik reminds that crypto can serve those who cannot trust their governments and need alternative resources. He urges the community to focus on building a better society and fulfilling crypto's original ideals.
The tension between cypherpunk philosophy and financial practicality
There is an ongoing tension between the philosophical principles of cypherpunk, focused on strong safeguards of privacy and countering government intrusions, and the practical aspects of banking the unbanked and reinventing Wall Street. While some in the crypto space prioritize these ideals, others are more focused on ease of use, transaction fees, and end user metrics. The challenge lies in finding a balance between these perspectives and creating solutions that fulfill both the philosophical ideals of decentralization and the practical needs of users.
The need for a pope in the crypto space
Vitalik, as a prominent figure in the crypto community, serves as a kind of pope, reminding the community of its philosophical values and virtues. However, like any religious figure, his message is interpreted and applied differently by various individuals and groups. Some may align with his call for a return to cypherpunk roots, while others may lean more towards pragmatic solutions or prioritize financial interests. The diversity of perspectives and interpretations is necessary for a healthy discourse and evolution of the crypto space.
Balancing philosophical ideals with real-world challenges
Crypto faces the challenge of balancing philosophical ideals, such as decentralization and censorship resistance, with real-world challenges and practical considerations. While it is important to hold onto the core principles that underpin crypto, it is equally crucial to address the needs and preferences of users, create user-friendly products, and adapt to regulatory environments. Striking a balance between these two aspects is essential for the continued growth and impact of the crypto industry.
Bitcoin ETFs are likely to be approved soon
Bitcoin ETFs are on the verge of approval, with several major firms, including BlackRock, Bitwise, and WisdomTree, already getting ready to launch their own ETFs. The expectation for approval is high, with market participants predicting an 88% chance of approval in the next two weeks. While excitement surrounds the impending approval, there is also some disappointment due to the decision to allow only cash redemption for the ETFs. This differs from the usual in-kind redemption process for most ETFs, making the Bitcoin ETFs less efficient. However, the general consensus remains that the ETF approval will have a significant impact on the market and attract a significant amount of capital.
Cash redemption and its impact on grayscale and market makers
The decision to have cash redemption for the Bitcoin ETFs instead of in-kind redemption has raised concerns and implications. First, it affects grayscale the most, as all existing grayscale bitcoin trust (GBTC) holders will have a tax event this year when the trust converts to an ETF. This may result in outflows from grayscale as holders look for alternatives. Additionally, the cash redemption structure heavily favors market makers in the designated market, primarily Coinbase, granting them a significant advantage. This disparity and perceived favoritism towards certain market participants has led to criticism of the decision. Some argue that it goes against the mission of consumer protection and could potentially lead to legal challenges against the Securities and Exchange Commission (SEC). Overall, the cash redemption structure has raised questions about its impact on grayscale, market dynamics, and the overall experience for ETF participants.
Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news. This week, they are joined by Laura Shin, the host of Unchained, to discuss the latest post from Ethereum co-founder Vitalik Buterin, who argues that crypto needs to get back to its idealistic cypherpunk roots. Is Vitalik the Pope of crypto, as Haseeb argues, and is there even a need for such an exemplary-type figure? And how do other influential crypto folks like Solana’s Anatoly Yakovenko and Tron’s Justin Sun fit into this dynamic? The gang also discusses the likely imminent approval of a spot Bitcoin ETF in the U.S. and what it might mean for Bitcoin’s price and Ordinals Inscriptions.
Show highlights:
Who won the group’s bet on what the circulating supply of PayPal’s stablecoin, PYUSD, would be at the end of the year
The Orbit Bridge hack and how the potential involvement of North Korea could be a problem for the industry
How Vitalik’s post urging for a return to the cypherpunk ideals sparked a debate within the community
Whether Vitalik is like “the Pope of crypto” and whether there’s even a need for one
Why it’s so important to keep the cypherpunk ethos, according to Tarun
Why Tom believes, after reading Vitalik’s post, that the wrong lessons are being learned
How Vitalik and Solana’s Anatoly Yakovenko could represent the religious leaders of two different approaches
Whether Justin Sun is the “inverse of Vitalik”
How GBTC holders are the most impacted ones given that the spot Bitcoin ETFs will be created and redeemed in cash
Whether the SEC is picking favorites in the Bitcoin ETF landscape
What could happen to the price of BTC if the ETF is approved
Whether the rise in Bitcoin’s price will increase fees so much that it crowds out Ordinals Inscriptions
