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Today's must-reads Top Shelf  HACKED: The DeFi mainstay Badger DAO protocol has fallen victim to a hack that cost its users $120.3 million in cryptocurrencies, including 2,1000 BTC and 151 ETH. Users first reported possible problems in the protocol's channel on messaging app Discord at 9 p.m. ET Wednesday. Rumor is that the hack is the result of an exploit in the Badger.com user interface, and not in the core protocol. Many affected users report suspicious requests for personal information while claiming yield farming rewards and interacting with Badger vaults.
BULKING UP: Meta, formerly known as Facebook, has updated its criteria for running cryptocurrency ads, greatly expanding the number of projects that can market on its highly trafficked social media platforms. Tax services, news outlets or some crypto wallets don't need approval to advertise while crypto exchanges and full-service wallets and mining-related hardware and software companies do.
WORRIED: Crypto-friendly U.S. Sen. Cynthia Lummis (R-Wyo.) has expressed concerns about the crypto track record of President Joe Biden's nominees to head the Federal Reserve for its next term, current Fed Chairman Jerome Powell and Fed Governor Lael Brainard. As a result, Lummis is likely to oppose the nominations and rally other senators against them unless the Fed addresses her concerns, an aide to Lummis told CoinDesk. In an op-ed in the Wall Street Journal, she wrote that her faith in the Fed has been "deeply shaken by its political approach" to digital assets.
BLOCK(CHAIN): Fintech and digital payments giant Square Inc. has changed its name to Block in a move that reflects changes to its business focus, days after CEO Jack Dorsey said he was leaving Twitter. Dorsey's company is building a hardware wallet and considering creating a bitcoin mining service. The company said "Block" has many associated meanings, including "building blocks," neighborhood blocks and the blockchain. Square's crypto project, Square Crypto, will also change its name to Spiral.
–Helene Braun
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Overheard on CoinDesk TV... Sound Bites  "There's no difference between the Fed printing out money and the private sector producing cryptocurrencies. They're all fiat money. So, what you need is you need institutions in which there is trust."
–Cato Institute VP of Monetary Studies Jim Dorn, on "First Mover."
What others are writing... Off-Chain Signals 
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Putting the news in perspective The Takeaway  Jack Dorsey Takes Square Deep Down the Bitcoin Rabbit Hole Hi, David Z. Morris here. As we wrap up a year jam-packed with high-profile adoptions of crypto by big players, yesterday may have given us the concluding exclamation mark. Days after Jack Dorsey announced that he was stepping down as Twitter CEO, the other company Dorsey runs announced that it was changing its corporate name from "Square" to "Block." For those who have been paying attention to Dorsey's trajectory, the signal here could not be clearer.
Dorsey has spent the last five-odd years fascinated with cryptocurrency and blockchains, primarily Bitcoin. He has heavily promoted and supported the development of the Bitcoin Lightning Network, and supported Bitcoin developers directly through a unit called Square Crypto (which will now be renamed, rather awesomely, Spiral). He added Bitcoin functionality to Square's Cash App. At Twitter, he recently rolled out Lightning-based tipping, and before stepping down promised NFT (non-fungible token) avatar integration.
Now he's going to turn Square into an entire cryptocurrency and blockchain company. There's little other serious way to evaluate the name change to "Block," as in the transaction batches processed on blockchains. (Already taken: "The Block," a cryptocurrency research and news outlet; Blockchain.com, a wallet and block explorer; Blockworks; BlockFi; Block.One. I could go on.)
The potential here is huge. Square has a huge user base, between its small business checkout systems and consumer app. Its revenue from those two businesses has grown massively in recent years (though that growth has slowed recently), providing a firm financial and customer foundation. Dorsey will be able to look for real opportunities to improve those existing customer experiences with crypto. And his demonstrated commitment to public, open-access blockchains means those integrations will likely lift the whole sector. Strangely, though, Square/Block seems to be downplaying the obvious "crypto" elements of the rebranding. The accompanying press release does list "blockchain" as a source of inspiration for the name, but includes it alongside pablum like "building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music"
That's a huge contrast to the other major name change of the past month, which saw Facebook becoming "Meta." Facebook went full-court press on announcing that pivot, and it got a lot of press coverage.
The difference is that Facebook was at least in part trying to change the conversation away from the regulatory and legal problems that have been bedeviling it. Another factor is that, frankly, the pivot from social media advertising to a virtual reality "metaverse" makes no sense financially, so Zuckerberg and company knew they had to wow the credulous rubes in the mainstream press with barbecue sauce jokes.
Square, by contrast, is a successful company that does not regularly facilitate crimes against humanity.
There's no reason to think the name change is a PR play. In fact, Square's hesitation to talk about the name change in terms of "crypto" makes it clear it sees risk in the opposite direction: Square investors at this point know that they're holding a growth company with an established model and might very well get squirrely if it seemed like Dorsey was about to turn it into his personal blockchain playpen.
This morning's market seems to reflect that ambivalence: As the new world gestates in the flesh of the old, Block is trading flat.
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Thursday, December 2, 2021
Is Square a Bitcoin Company Now?
