The Sun Bay Paper Page 10 May 20, 2022 - June 2, 2022 One of the Largest Cryptocurrencies Is Dead. Where Do We Go From Here? A catastrophic cryptocurrency crash, one that many considered to be the largest in history, occurred after UST, an algorithmic stablecoin that was designed to keep a value of $1, fell to approximately $0.10. The value of its sister currency, Luna, plummeted from approximately $90 to $0.0002. This collapse simultaneously sent the prices of virtually every major cryptocurrency, and the digital assets that hold value in those major cryptocurrencies such as certain non-fungible tokens, tumbling. To understand why this occurred, we must first examine the ecosystem of cryptocurrencies from a macro perspective. Stablecoins are digital currencies that retain the value of a certain asset, typically fiat money — government-issued currency. As the United States dollar is the reserve currency for a significant number of countries, United States dollar stablecoins are often used by cryptocurrency investors to park funds in a nonvolatile digital asset that can be quickly changed to a more volatile asset such as Ether, among others. Accordingly, a person who earned $100,000 from a cryptocurrency transaction — or some other amount — might convert that cryptocurrency into a stablecoin pegged to the United States dollar as he or she waits for another investment opportunity. The method by which stablecoins maintain their value is often relatively straightforward. The central authority that produces the stable coin will maintain capital reserves that enable the price of the stablecoin to equal one U.S. dollar, as well as additional funds in case the price falls below $1.00. So, if there are 100,000 stablecoins, there should theoretically be $100,000 in reserves. In actuality, the vast majority of stablecoins are valued slightly less than $1, albeit often within a thousandth of a penny. UST, the token that catastrophically failed, operated differently. It was intended to solve the problem of having a centralized authority inside a decentralized ecosystem, i.e., if the centralized authority collapsed, so would the decentralized money, thereby undermining the objective of investing in a decentralized asset. In the same spirit, there is a lack of capital reserve transparency, which is important for cryptocurrency. Thus, UST algorithmically tied its price to the U.S. dollar by using a mechanism that incentivized arbitrage and the issuance and destruction of tokens. By doing so, there was both transparency and decentralization; any transaction that influenced the price was accessible to any individual, and no centralized authority could go bankrupt, mismanage their funds or harm investors. However, there was a significant problem with this, one that had been anticipated for some time. One of the major conspiracy theories that has received the most attention for causing the crash is that a cryptocurrency wallet sold $350 million worth of UST, causing panic that would have prompted the Luna Foundation Guard — the organization that holds Bitcoin reserves that it uses to support the price of UST in the event of a crash — to expend $3 billion worth of Bitcoin in an attempt to save the stablecoin. This did occur, and if it were true that the attacker predicted this, as the theory suggests, they would have earned a profit of almost $800 million from their short position on Bitcoin, as $3 billion worth of Bitcoin were sold at once, causing the price to crash. As we can see, this is how the intricate network of cryptocurrencies is interconnected. Since Bitcoin is the most popular and trustworthy cryptocurrency, a drop in its price often leads to a crash in the prices of all other cryptocurrencies. In fact, most prominent cryptocurrencies have a price correlation William Shakespeare mirrored my forlorn attitude with something he wrote several hundred years ago: “All the worlds a stage; and all the men and women merely players.” (1603) Let me present some nonsensical recent performances. Abortion supporters are making a claim that puzzles me. They argue that the leaked SCOTUS draft decision is evidence of our democracy’s decline. That makes no sense. The draft opinion states that abortion policy should be made by legislatures, not in court. There’s bipartisan support, including the late Ruth Bader Ginsburg, that the Roe decision was tenuous in its construction. Many agree that the courts aren’t the place for creating new law, which happened with Roe. Let the people decide through their legislatures, not a handful of judges. What could be more democratic than that? The release of the draft abortion decision brought claims that recently seated Supreme Court justices lied during confirmation hearings. They’re accused of not respecting the doctrine of “stare decisis,” the principle of using precedent to decide cases. That begs a question: should nominees be expected to guarantee how they’ll vote on controversial issues? I’ll quote Justice Neal Gorsuch to demonstrate the type of careful, nuanced responses nominees from both parties are often forced into. In 2017, when asked about respecting abortion rulings as precedence he stated: Roe is a “precedent of the U.S. Supreme Court, worthy of treatment as precedent like any other,” having been “reaffirmed many times” it carries “considerable” weight. He added, “there are instances when a court may appropriately overrule precedent after considering a lot of factors.” My next nonsense selection is a repeat performance from one of my earlier lists. One of America’s biggest ever opportunities to “do good” was recently missed because the Biden administration decided to squander America’s precious energy independence. Pipelines were discontinued and the availability of drilling on public land reduced. We soon found ourselves in need of help to solve an energy shortage. At the same time, Ukraine and all of Europe needed a new source of fossil fuels to support them during the war with Russia, which continues still. We need a wartime energy protocol. The President should authorize an “operation warp-speed” for providing oil and gas for the U.S., Ukraine, Europe, and eventually for others who depend on soviet produced fossil fuels. The attitude of the administration toward fossil fuels, in the critical short term, must change for America to properly address several potential existential threats, including the Ukrainian war. The administration’s constant scolding of the fossil fuels industry must change to a new enthusiastic partnership between producers and our government. Reflect on the lawand-order problems which accelerated after the George Floyd killing. Riots and violence quickly evolved from legal protests. Many people were killed and billions of dollars in damage ensued. Foolishly, many progressive state and local governments stood by and let lawlessness happen as if the violence was justified. Somehow, this evolved into a “hands-off” law enforcement reform which has failed miserably. Crime is going unpunished in many places and riots continue in others. “Catch and release” seems to be the rule in many areas. A recent example was when comedian Dave Chappelle was attacked while on stage. The assailant possessed a lethal “knife-gun,” but soon after the arrest, he was released without felony charges. While many loudly proclaim the need to crack down on crime, too many people object. Incredibly, one enthusiastic reformer wrote that “law and order” supporters are pursuing the evil agenda of Adolf Hitler. It’s difficult to comprehend how some people think. Border security and immigration control continues to be a huge topic, and one aspect is hardest for me to comprehend because we were on the right track before the current administration squandered our progress. Trump had completed 400 miles of border wall with three hundred more miles ordered. But the hustle-andbustle along the border quieted as workmen scurried away from the unfinished project. President Biden had been sworn in and immediately discontinued the unfinished project, leaving about $100 million in construction material to rust away. Trump had chosen a common-sense method – a barrier for slowing things down and sorting things out, enhanced by electronic surveillance. It was a “stop and sort” method, while Biden chose a “whoops, better chase” approach. Given more time and space, there are so many more absurd performances to discuss. Perhaps I’ll deal with some of these at another time. To wit: insisting on reasonable election security is a “Jim Crow” type obstacle to voting; influential opinion maker Rolling Stone magazine labeled the Buffalo shopping center murderer a “mainstream republican;” and many, many more. I’ll conclude with another fitting theatrical reference. Composer Steven Sondheim was obviously thinking about out world of foolishness when he recommended that it may be time to just “Send In the Clowns.” (1973) myslantonthings.com Steve Bakke, Fort Myers Command Performances at America’s Theater of Nonsense Cont. to pg 15
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