7th March 2022 > > Russian crypto bans again.

tl;dr

Defining the trilemma and bans on Russians’ Coinbase accounts.

Market Snap (at time of writing)

Market Wrap

Shorts are getting over leveraged here, which is nice. Any positive news from Ukraine, if such a thing was possible, could lead to a lot of pain for the leveraged children.

Occasional Series – Timewasting

Earlier this season I witnessed the most egregious display of timewasting ever occasioned by Newcastle when they eeked out a thoroughly undeserving 1-1 draw at Vicarage Road.

To be fair, when you have sold your soul to a murderous, racist, misogynistic dictatorship which inflicts imprisonment and flogging onto any individual that loves someone of the same sex, then time wasting in a football match is low on your list of moral priorities.

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Yesterday I watched Arsenal play the same routine at the Vic. It started after just 5 minutes when they got an early goal and was continuing at 76 minutes when they were 3-1 up.

When a supposed top four team is too scared to play football away to a strong candidate for relegation, that team has lost its sporting compass.

Arsene Wenger will be a very disappointed man this morning.

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The solution is a simple one. Book the goalkeeper at the very first hint of timewasting. That will speed things up.

Curious Cryptos’ Definition of the Day – the Blockchain “trilemma”

A term first coined by Vitalik Buterin – the creator of the Ethereum blockchain – in 2011 the trilemma is a description of the challenge developers face in creating a blockchain that is:

- Decentralised;

- Scalable;

- Secure.

The trilemma posits that compromises must be made that favour 2 of these characteristics over the 3rd.

It is true that the original design of BTC sacrificed a significant degree of scalability in the pursuit of secure decentralisation. Layer 2 solutions like Lightning are designed specifically to address the issue of scalability which has a direct impact on the speed of transactions, and the cost of those transactions to the user.

The move from ETH 1.0 to ETH 2.0 was inspired by the desire to build scaling solutions into the Ethereum blockchain at Layer 1.

Curious Cryptos’ Commentary – Update to yesterday’s comment about crypto bans

After Brian Armstrong, CEO of Coinbase, had read and digested my well-founded criticism of his firm’s approach to allowing Russian based clients to access Coinbase – in stark contrast to almost every legacy financial institution – he has responded with deeds of action, not just words.

Coinbase has now blocked “over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own protective investigations.”

However, he then appears to contradict himself:

“During onboarding, Coinbase checks account applications against lists of sanctioned individuals or entities, including those maintained by the United States, United Kingdom, European Union, United Nations, Singapore, Canada, and Japan.”

Either Coinbase checks upfront, and the accounts are not opened, or Coinbase is now checking the 25,000 accounts that have been blocked.

One should expect all the centralised exchanges (CEX) to follow suit.

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Please note my comments should not be seen as approval or disapproval of the actions taken by CEX. I merely point out that there is a yawning chasm when comparing the actions of the legacy financial institutions and the CEX.

This yawning gap might cause problems for the likes of Coinbase going forward.