This Could Be An Issue

Allyson Versprille's Wall Street Banks Side With Nemesis Elizabeth Warren on Crypto Crackdown describes this improbable occurrence thus:

The Bank Policy Institute, a trade group for lenders that Warren often blasts, threw its weight behind bipartisan legislation that the Massachusetts Democrat and three of her Senate colleagues reintroduced this week. The bill aims to force the crypto industry to comply with tougher rules for combating money laundering and terrorism financing.

“The existing anti-money laundering and Bank Secrecy Act framework must account for digital assets, and we look forward to engaging in this process to defend our nation’s financial system against illicit finance in all its forms,” BPI said in a statement.

The three colleagues are Joe Manchin (D-WV), Roger Marshall (R-KS) and Lindsey Graham (R-SC). It is worth noting that Senators Warren and Graham also have a bill to tighten regulation of big tech, described in their "Guest Essay" for the New York Times entitled When It Comes to Big Tech, Enough Is Enough.

Follow me below the fold for the sting in this bill's tail

Anti-trust

Technology markets, and others that share their strong economies of scale, naturally tend to evolve into oligopolies, if not outright monopolies. Brian Arthur described the mechanism in 1994's Increasing Returns and Path Dependence in the Economy. This tendency has been supercharged ever since Richard Posner and George Stigler of the Chicago School got the Reagan administration to hamstring anti-trust enforcement. We see the result in technology and many other markets, dominated by a few giant companies devoted, in Cory Doctorow's memorable coinage, to enshittification:

Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.

This process applies more broadly than just to platforms, except the part about dying. Below the fold I discuss a recent development that provides an opportunity for you to take action to push back against it.

NY Fed: Metastablecoins

Stablecoin circulation

Last May, in the wake of the Terra/Luna crash, I wrote Metastablecoins, describing how coins like USDT intended to be stabilized via arbitrage were always at risk of the market over-running the arbitrageurs firepower, and More Metastablecoins, quoting from Bryce Elder's report on Barclay's analysis of "asset-backed" coins such as USDT that, while they claim to be fully reserved, do not offer immediate unrestricted liquidity:

We think that willingness to absorb losses, even though USDT is fully collateralized and has an overnight liquidity buffer that exceeds most prime funds, suggests the token might be prone pre-emptive runs. Holders with immediate liquidity demands have an incentive (or first-mover advantage) to rush to sell in the secondary market before the supply of tokens from other liquidity-seekers picks up. The fear that USDT might not be able to maintain the peg may drive runs regardless of its actual capacity to support redemptions based on the liquidity of its collateral.

Now Kenechukwu Anadu et al of the NY Federal Reserve have a deep dive into the events of May 2022 entitled Runs on Stablecoins. Below the fold I have some comments.

Blog on vacation

I have a stack of books that I set aside for summer reading, so this blog is on vacation for two weeks so I can at least reduce the height of the stack.

The Philosopher of Palo Alto

I just finished reading John Tinnell's The Philosopher of Palo Alto. Based on Stanford Library's extensive archive of Mark Weiser's papers, and interviews with many participants, it is an impressively detailed and, as far as I can tell, accurate account of the "ubiquitous computing" work he drove at Xerox PARC. I strongly recommend reading it. Tinnell covers Weiser's life story to his death at age 46 in 1999, the contrast between his work and that at Nick Negroponte's MIT Media Lab, and the ultimate failure of his vision.

Tinnell quotes Lucy Suchman's critique of Weiser's approach to innovation:

Under this approach, Suchman claimed, a lab "[provided] distance from practicalities that must eventually be faced" — but facing up to those practicalities was left up to staff in some other department.

To be fair, I would say the same criticism applied to much of the Media Labs work too.

As I was at the time a member of "staff in some other department" at Sun Microsystems and then Nvidia, below the fold I discuss some of the "practicalities" that should have been faced earlier rather than later or not at all.

2023 Storage Roundup

It is time for another roundup of news from the storage industry, so follow me below the fold.

Code Isn't Law: An Analogy

Source

In Trader Charged in $110 Million Market Scam Faces Dec. 4 Trial David Voreacos reports that Avraham Eisenberg is now in the "find out" phase:

Prosecutors claim Eisenberg manipulated Mango Markets futures contracts on Oct. 11, when he drove up the price of swaps by 1,300%. He used them to borrow about $110 million of cryptocurrency from other Mango depositors, the US alleges.

Four days later he posted on Twitter: “I was involved with a team that operated a highly profitable trading strategy last week.” He also said he believed “all of our actions were legal open market actions, using the protocol as designed.”

Below the fold, my analogy