Snippings

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Anticipating a “quantum emergency” that could endanger Ethereum’s security, Buterin has delineated a strategic response involving a preemptive hard fork. This critical update would revert the network to a pre-theft state. It will require users’ adoption of advanced, quantum-resistant wallet software.

Central to this strategy is introducing a novel transaction protocol outlined in Ethereum Improvement Proposal (EIP) 7560. Employing Winternitz signatures and zero-knowledge proofs (STARKs), this method enhances transaction security against quantum decryption efforts by concealing the user’s private key. It ensures robust protection for Ethereum’s digital assets in the face of quantum computing advancements.

From: Vitalik Buterin Unveils Plan Against Quantum Hacking Threats – Techopedia.

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US department stores offer all kinds of perks to get customers to sign up for their branded credit cards at the register. Store cards, with their high interest charges and late fees, turn out to be far more lucrative than running a brick-and-mortar store.

Credit cards accounted for less than 5 per cent of total sales at the three companies in 2022. But they made up 87 per cent of Nordstrom’s total operating income in 2022 and 55 per cent of Macy’s, according to Citigroup. At Kohl’s, they generated 381 per cent of total operating income, meaning without credit cards, the company would have made an operating loss.

From: Why US department stores have most to fear as credit card debt sours.

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“We’d really recommend you don’t use that method of payment.”

From: Taylor Swift fans scammed buying Eras Tour tickets – BBC News.

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ver the 340 hours and 28 minutes the cameras were doing live facial recognition over 62 separate deployments, they saw 417,730 faces, scanning an average of 20.4 people every minute.

The system was alerted to the presence of suspects 362 times – and only 10 of these were false – a false alert rate of 2.8 per cent.

From: How facial recognition cameras are catching rape, robbery and drug suspects: Interactive map shows where Met Police are making arrests thanks to the ‘biggest breakthrough in crime-fighting since DNA’ | Daily Mail Online.

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A drug dealing family have been jailed for more than 50 years after the mother was found by police sitting next to nearly £500,000 in cash on her bed.

From: Family behind £1.4m drugs cartel are jailed for more than 50 years after mother, 66, was busted by cops sitting next to a £500,000 pile of cash on her bed – with five people prosecuted | Daily Mail Online.

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But here’s the easy way to evaluate the settlement:  are merchants better off than before the litigation? It’s hard to conclude that they are.

When the litigation began in 2005, American merchants paid the highest interchange fees in the developed world. After the settlement, American merchants will still pay the highest interchange fees in the developed world.

When the litigation began in 2005, average interchange fees were 1.75%.  After the settlement, they will be at 2.19% and only held at that level for five years.
In other words, what do American merchants have to show for nearly 20 years of litigation? A nearly 25% (44 bp) increase in interchange fees. If that’s where things end up, then merchants’ litigation strategy has been a complete failure.

From: The Proposed Credit Card Interchange Settlement – Credit Slips.

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The surveillance industry is unified; the surveilled are not. The rewards from surveillance are concentrated. The costs of surveillance are diffused. This is as good a working definition of corruption as you could ask for: conduct that produces concentrated gains and diffuse losses.

From: The credit card fee victory is a defeat | by Cory Doctorow | Mar, 2024 | Medium.

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My sense is that most Salvadorans found this whole thing baffling. Not many had heard of Bitcoin, and far fewer could accurately describe what it was, let alone how it was going to function as a parallel currency and financial system. But Bukele somewhat brought them around through his innate popularity and by giving everyone in the country $30 worth of Bitcoin in the new government-backed Chivo Bitcoin wallet app. Hopefully, this would get the Bitcoin flowing in El Salvador’s economy.

To use another It’s Always Sunny in Philadelphia analogy, this went a little like the gang’s Paddy’s Dollars scheme. Salvadorans eagerly got their 0.0000001 BTC or whatever and then immediately spent it anywhere it was accepted (which was not at every store despite the legal mandate), and then the vast majority of Salvadorans never purchased or received another BTC again. A few entrepreneurial types absorbed a lot of Bitcoin and held it, but most people just saw the endeavor as a weird government hand-out that annoyingly required them to wait in line at Bitcoin ATMs that have been gathering dust ever since.

This is how it was explained to me by a Salvadoran who lived through the event and spent all of his BTC on beer. For more concrete data, the New Yorker:

“a recent survey [presumed from mid-2022] by the Chamber of Commerce found that eighty-six per cent of the country’s commercial businesses have never conducted a bitcoin transaction.”
From Bitstamp.net:

“However, a year after the adoption of Bitcoin, economic surveys found that the cryptocurrency was not widely used. Only an estimated 20% of businesses accepted payment in bitcoin and less than a quarter of Salvadorians had made a purchase with the currency. According to the Central Reserve Bank, bitcoin was only used in 1.9% of remittance payments between September 2021 and April 2022. In a university survey, 71% of respondents said the Bitcoin Law did nothing to improve their finances.”
From Reuters:

“Some 88% of Salvadorans did not use [BTC] in 2023, according to a survey by the University of Central America’s public opinion institute. Just 1% of remittances were sent in bitcoin.”
So, Bitcoin as a legal tender has been a bust for Bukele. But other aspects of Bukele’s Bitcoin affection have been more successful.

Bukele is often derogatorily referred to as a “crypto bro” or a “tech bro” with a “startup” mentality of “move fast and break things.” In that spirit, his regime has made a series of BTC purchases seemingly as pure financial speculation. The first buy of 400 BTC was made in September 2021, the day before Bitcoin officially became legal tender. Unfortunately, within 48 hours, the price of BTC fell from about $52,000 to about $43,000, likely due to speculators buying on the news (that making BTC legal tender will increase BTC buys and price) and selling on the event.

Bukele’s financial fortunes only worsened from there as he happened to buy BTC at the height of a cycle, and prices continued falling and flatlining for about two years. Bukele responded by doubling down again and again until the government-owned (as of writing this) 2,845 BTC at an estimated total cost of $121 million.

Critics breathlessly followed the disaster with periodic news articles celebrating the latest loses of the Salvadoran government’s fiscal reserves. Bukele was derided as a moron suckered into the never-ending global scam that is cryptocurrency. In early 2022, as the BTC cycle neared its bottom, El Salvador’s sovereign debt bonds took a dive. In negotiations, the International Monetary Fund demanded that Bukele revoke Bitcoin’s legal tender status. Bukele refused and managed to muddle through the crisis by scraping together $560 million to buy distressed national debt bonds off the international market as a show of confidence.

Whether by determination or Wall Street Bets-style autism, the Salvadoran government’s Bitcoin investments officially entered the black on December 5, 2023 when the BTC price passed about $42,000. As of writing editing this in late February 2024 March 2024, the BTC portfolio stands at a $26 million or 21% $78 million or 64% profit. It’s not clear yet whether Bukele will hodl indefinitely or make some sales on behalf of the Salvadoran taxpayer, but Bukele continues to reiterate that 1 BTC = 1 BTC.

So Bukele may have the last laugh on Bitcoin speculation, but I’m less optimistic about the prospects of Bitcoin City.

From: Notes on El Salvador – Matt Lakeman.

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As a “friend with intellectual benefits” at Palo Alto Research Center from the start of the 1980s, I watched Xerox, PARC’s parent company, repeatedly reject business plans to take the lab’s phenomenal inventions to market. In doing so, it was unwittingly neglecting a unique opportunity to lead the personal-computer revolution. The problem was that PARC, a high-risk venture, had to compete with the near-certain returns from investing equivalent sums in extending Xerox’s patent-protected copier business (for example, by hiring more salespeople or field engineers).

From: Is Techno-Monopoly Inevitable? by William H. Janeway – Project Syndicate.

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Steve Eisman, who famous because of his bet against the US housing market before 2008, which led to his starring role in Michael Lewis’ “The Big Short” was recently asked about cryptocurrency and said that it is just another thing that people like to speculate on because they like to speculate and “That’s its only use. That and money laundering, which is a use“.