Bitcoin started as a rebellious, anti-establishment technology. In many parts of the world, and for many people, it remains exactly that.
At the same time, however, there is a wave of traditionalists and institutional players moving into the space.
Are they buying into the revolution, or are they trying to capture value while fitting the disruption into a box that maintains the current power structure they lead?
Those are the key questions explored by Meltem Demirors in her new essay “Unintended Architecture.” The piece is our selection for this week’s “Long Reads Sunday.”
On this week’s edition of The Breakdown Weekly Recap, NLW argues the big story of the week was actually a set of smaller stories that preview the faultlines and economic debates likely to absorb us in the coming months.
These include:
The Federal Reserve signaling that fiscal stimulus needs to do more
The beginning of the battles on fiscal stimulus
The introduction of the “not safe to vote” narrative
Chaturbate executive Shirely Lara is a sex industry veteran who sees bitcoin as a crucial part of her business. The bitcoin-friendly porn executive talks with CoinDesk reporter Leigh Cuen about bitcoin, sex and feminism.
Chaturbate COO Shirley Lara, one of the most experienced platform executives in the adult content industry, has been keen on bitcoin’s potential since 2018.
“We accept 20 different cryptocurrencies for token purchases. The most popular ones are bitcoin, ethereum and litecoin,” Lara said.
Experts, including Lara, estimate there “thousands and thousands” of cam girls working across platforms like OnlyFan and Chaturbate at any given time. That dwarfs the incumbent porn industry. Today, OnlyFans alone is estimated to have 60,000 content creator accounts and millions of registered viewers, despite some criticism from sex workers on Twitter.
Many of the leading sex industry corporations, like OnlyFans, Chaturbate and MindGeek, appear to be owned by (relatively secretive) men, who are far removed from the public performers. Lara, who joined Chaturbate in 2011, is one of the rare examples of a woman who worked her way up to the executive level without first creating a personal porn star brand. Her work is primarily technical and operational.
“I don’t think crypto is a trend. I think it’s definitely here to stay,” Lara said, noting the steady incline of bitcoin usage among performers in Colombia and Romania. “They’ll use cryptocurrency as a way to jump on [Chaturbate] and get started while they figure out the banking stuff.”
Meanwhile, her global operations allow performers like Honey Li, in Europe, to stack sats through Chaturbate. Li said a little bit of her earnings, in addition to whatever she needs to pay bills, is set aside as bitcoin savings. For Lara, having this choice was crucial to the platform’s crypto integrations.
“You asked if we hold on to bitcoin? We don’t. We cash out. But our broadcasters do (hodl), and I think that is so smart,” Lara said.
With porn production stalled or canceled in hubs like Miami, Las Vegas and Los Angeles, the entire sex industry is shifting geographies.
More performers are relying on social media to broadcast from home. Bitcoin may now offer a different use case for platform performers versus high-end escorts, for example. The sex industry is hardly a monolith.
Tech tools
While social porn platforms inspire more mainstream content creators to dabble in adult themes, this further divides in-person service providers and filmmakers.
One such provider, Nina Mona, has been using bitcoin in the sex industry for two years. For her, she emphasizes bitcoin privacy tech, which would be irrelevant for users who already submit know-your-customer information to a central platform. She uses bitcoin to accept payments and also to pay advertisers without sharing her credit card information.
“I noticed a wave of OnlyFans signups when in-person work became less viable. I considered it, but don’t think the return is worth the workload or risk of exposure for me,” Mona said. “It seems safer to limit myself to a small set of screened clients than to share compromising material with a broader and less invested audience. Every set of eyeballs is an additional threat.”
In the United States, Mona said most clients that book sessions with bitcoin resided in the Bay Area, Los Angeles or New York. Now that COVID-19 sparked some domestic migration, it’s unclear how this will impact sex workers who focused on urban hubs. For some, this means more travel and extremely selective bookings.
Performers and escorts may both operate their own wallets, even if they use platforms like OnlyFans or Chaturbate, especially to receive gifts and tributes from afar. Plus, Lara said the teledildonics trend, where internet-connected sex toys can be set to vibrate when their accounts receive payments, create new opportunities for clients to incorporate money into their fantasies.
“There’s this whole teledildonics spectrum that is growing in popularity,” she said. Li agreed with Lara, especially because there are toys for both genders that can be used in synchronized ways.
“I use teledildonic toys for work, basically every shift!” Li said. “They're tip-activated when I work...You can also sync the vibrations up to a spotify account or a voice note sent by your partner.”
Slow growth
Mainstream platforms like Chaturbate and the competitor FanCentro already accept cryptocurrency and have been working with it for years. Usage is niche, yet steady.
Many sex workers say a direct transaction and relationship is more profitable than payment facilitated by a platform. Chaturbate, for example, charges nearly half of the performer’s earnings. It provides a valuable service, but clients will need to be willing to pay in bitcoin if the performer aims to graduate to her own independent site.
“If we’re headed that way, it’s going to be a long time before we hit that milestone, because of the different governance in each country,” Lara said.
One FanCentro user and crypto owner, who goes by the alias WesMan83, said he would be happy to pay a sex worker directly in crypto if she preferred. He finds erotic service-providers that suit him using mainstream platforms like Twitter and OnlyFans, as well as personal recommendations from other clients and providers.
“I think it's important for people to understand that sex workers deserve to be paid for what they do and there is nothing wrong with what they do,” WesMan83 said. “They provide an entertainment service and work very hard for what they create. I think it's important that those of us who are proud to pay, help remove the stigma surrounding it.”
That was Chainlink co-founder Sergey Nazarov’s answer when asked to describe the true disruption of decentralized finance to a traditional finance audience.
On this episode of The Breakdown, Sergey and NLW discuss:
Brand-based contracts vs. math-based contracts
The history of smart contracts
What it means to build an “abstraction layer” for “universally connected smart contracts”
Key moments in the history of smart contract infrastructure
Where smart contracts and DeFi are in terms of analogies to the early internet
Why Sergey believes traditional finance will inevitably shift to a math-based contract model
Special purpose acquisition companies have been around since the 1990s, but have seen a significant uptick in popularity in recent years. Companies like Virgin Galactic, Draft Kings and Nikola have changed SPAC’s reputation from a tool for second- and third-tier private equity shops to win fees to a legitimate alternative to initial public offerings. In 2020, SPACs have made up roughly 40% of the IPO market.
Recently, chatter around SPACs reached a fever pitch with the listing of Bill Ackman’s Pershing Square Tontine Holdings - the largest-ever SPAC.
In this episode, NLW breaks down:
What a SPAC is
Standard SPAC terms
Why the traditional IPO process has generated growing discontent, especially from Silicon Valley
The benefits of SPACs for companies and investors
The downsides of SPACs for companies and investors
A number of reasons explaining why SPAC popularity is surging now
How Robinhood retail traders are creating an important bridge buyer for SPACs
Why Ackman’s Tontine Holdings SPAC could change how we think about SPACs in the future
One year ago, the Financial Action Task Force, the global anti-money laundering watchdog, ruled that crypto transactions data should be controllable, and ever since the question has been not if you KYC your users but how you do it.
However, not all bitcoiners have surrendered to this norm. Hodl Hodl and Bisq don’t provide centralized custody and don’t check user’s identity. They also don’t employ the blockchain tracing tools to block the “tainted” coins (blacklisted as coming from illicit activities), which became a must for major exchanges these days.
What comes with this? A chance to buy and sell bitcoin without revealing your identity, as well as much more responsibility over how you buy and store your crypto. Max Keidun, the CEO of Hodl Hodl, and Steve Jain, contributor to Bisq, dig into why in the times of crypto-compliance people still might need (or maybe just lawfully want) to keep their bitcoin deals to themselves.
There are more questions to arise from such an old-school-cypherpunk situation: how can you make sure you don’t get scammed at these p2p platforms? What do you do if you buy “tainted” coins blacklisted by the FATF-abiding exchanges and vendors?
Max and Steve share their takes on this, and the main explanation is probably: “everything has a price.” Including freedom from surveillance and data leaks.
We also touch the matter of decentralization that is important to both Hodl Hodl and Bisq. Hodl Hodl is planning to open-source itself, so that everyone can clone and run their own p2p bitcoin exchange in case the regulators go after Keidun and his team. And Bisq has gone full decentralized last year when it turned all its decision making over to a DAO.
This week on Long Reads Sunday, our selection is “Whose Century?” by Adam Tooze in the London Review of Books.
Nominally a review of four recent scholarly works on the conflict between the U.S. and China, Tooze main argument is that the central problem with viewing this as a new Cold War is the idea that it is new.
Instead, we need to understand that, contra Fukuyama’s famous essay, history didn’t end with the fall of the Berlin Wall – at least not for the Chinese. What’s more, the narrative of having “won” the Cold War fails to take into account the West’s spectacular failures in Asia.
Only by reframing our understanding can we make sense of the most important geopolitical conflict of the coming century.
