Start Up No.1913: Coindesk for sale?, Bankman-Fried speaks up, Apple has still been advertising on Twitter, what if Gai?, and more

You think that ebooks last a long time? The physical version is more likely to be readable in 20 years’ time. CC-licensed photo by Mike Mozart on Flickr.

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On Friday there’s another post due at the Social Warming Substack at about 0845 UK time.

A selection of 10 links for you. Very smoothly. I’m @charlesarthur on Twitter. Observations and links welcome.

Online news site CoinDesk attracts suitors amid crypto crash • Semafor

Bradley Saacks and Liz Hoffman:


CoinDesk, the online news site whose story on cracks in Sam Bankman-Fried’s crypto empire sparked an industry-wide meltdown, has attracted takeover interest as its owner tries to reassure investors, people familiar with the matter said.

One of the approaches suggested a $300m purchase price but it was considered too low, some of the people said. CoinDesk was making about $50m in annual revenue from a mix of traditional online advertising and its popular Consensus conference.

It is part of Barry Silbert’s privately held Digital Currency Group, a conglomerate that includes Grayscale Investments, which manages funds that own bitcoin, ether, and other coins, and Genesis, which lends against customers’ crypto holdings. That business is under pressure, as the collapse of Bankman-Fried’s FTX exchange spreads chaos and contagion through cryptoland. Bankman-Fried is an investor in Semafor.

There’s no formal sales process for CoinDesk, but it has attracted interest from a broad set of potential buyers, including private equity firms, family offices, rival publications including Blockworks, and hedge funds that hunt for distressed assets, the people said.


I’d take that “$300m was offered but it was too low” bit with a pinch of salt. Very much “someone offered to buy my car for a huge price, you wouldn’t know them, they live in another town”. And the $50m from ads and a conference? Could be, given the madness around crypto. Though that isn’t profit, of course. Running a conference (especially amid Covid) wouldn’t have been the easiest thing.

But the irony of the news site that yanked apart the crypto mess being up for sale to make up for the crypto mess is too rich.
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Live: Sam Bankman-Fried speaks at the DealBook Summit • The New York Times

Lauren Hirsch, Ryan Mac and others:


SBF’s overall defence, the narrative that he is trying to build, is that the losses were FTX’s customers’ accounts — money that those clients had lost on margin, and that FTX was required to cover. He’s not denying that he, or FTX, used clients’ deposits to cover FTX, and Alameda’s losses. In fact, he’s saying he was allowed to cover one client’s losses with the money from others. That’s a more sophisticated argument, but it still may not be legal.


There’s a ton of this stuff, including the fact that he’s talking against the advice of his lawyers. He strikes me as someone whose trading smarts (which he does have; it’s how he made his money originally) make him think he’s smarter than everyone all the time. He isn’t, and his business wasn’t, and the implosion is coming.
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Crypto lenders’ woes worsen as bitcoin miners struggle to repay debt • Bloomberg via Yahoo

David Pan:


Beleaguered crypto lenders are being dealt another blow from Bitcoin miners as they weather the aftermath of the FTX collapse.

Miners, who raised as much as $4bn from mining-equipment financing when profit margins were as high as 90%, are defaulting on loans and sending hundreds of thousands of machines that served as collateral back to lenders. New York Digital Investment Group, Celsius Network, BlockFi, Galaxy Digital, and the Foundry unit of Digital Currency Group were among the biggest providers of funding to finance computer equipment and build data centers.

The liquidity crunch hitting digital-asset markets after FTX failed comes as low Bitcoin prices, soaring energy costs and more competition weigh on miners. Loans backed by the computer equipment, known as rigs, had become one of the industry’s most popular financing tools. Many lenders are now likely facing substantial losses since they can’t seize any other assets besides the machines, whose value has dropped by as much as 85% since last November.

“People were pouring dollars into the mining space,” said Ethan Vera, chief operations officer at crypto-mining services firm Luxor Technologies. “Miners ended up dictating a lot of the loan terms, so the financiers moved ahead with a lot of the deals where only the machines were collateral.”


Not going to see that money again. Lots of overheated mining rigs going cheap real soon now. (Bitcoin’s price, meanwhile, is gyrating around the $17,000 mark: money seems to be moving back into it, though these days, who knows.
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Editor’s note: a review of criticisms of a ProPublica-Vanity Fair story on a COVID origins report • ProPublica

Stephen Engelberg:


On Oct. 28, ProPublica and Vanity Fair published a story about an interim report on the origins of COVID-19 released by the Republican oversight staff of a Senate committee. The interim report was the product of a far-reaching investigation into the question of how the pandemic began, and we wanted to give readers an inside view of the team’s work and share independent experts’ views of its findings.

The debate over COVID-19’s origins has been contentious from the start, and the report’s conclusion that the pandemic was “more likely than not, the result of a research-related incident” triggered criticism. Scientists, China observers and others questioned the Senate team’s findings and our reporting about them.

Over the past several weeks, reporters and editors at both publications have taken a hard look at those criticisms.

Our examination affirms that the story, and the totality of reporting it marshals, is sound.


They really weren’t going to walk it back, but even the “Chinese translation experts” they called in don’t really agree with them. This was a terrible story, with no sensitivity to bureaucratic Chinese phrasing, which started from a conclusion and tried to work back to find any details that might support it. James Palmer of Foreign Policy isn’t buying it.
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Apple buying more Twitter ads despite Elon Musk claims: report • Gizmodo

Thomas Germain:


On Monday, Elon Musk picked a public fight with Apple, accusing the company of freezing its advertising on Twitter and wondering aloud if the alleged pause was because “they hate free speech in America.” In fact, Apple spent $84,615 on Twitter ads that very same day, according to data from Pathmatics, a digital ad analytics company. The day before that, Apple spent a full $104,867.

The data contradicts Musk’s claims that the iPhone maker “mostly stopped advertising on Twitter.” Apple’s Twitter advertising purchases actually grew from October to November, Pathmatics’ research showed. Apple spent $1,005,784 on Twitter ads in the first 28 days of November, already more than that company’s October budget of $988,523, according to the analytics firm.

The data shows Apple’s Twitter ad spending hasn’t changed much from its typical buys. The figure has fallen from unusually high numbers over the summer—$2m in July and $3.3m in August, but, between January 2021 and September 2022, Apple spent an average of $1,473,390 a month on Twitter ads, according to Pathmatics’ report.

Apple was Twitter’s top advertiser in the first quarter of 2022, making up 4% of the entire company’s revenue during that period for a total of $48m, according to internal documents cited by the Washington Post. Though Apple’s recent Twitter spending decreased slightly, a million dollars in a single month is a far cry from “mostly stopped.”


This is why you should pay no attention to what gets tweeted. It’s unconnected to the truth.
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The cult of Gai • Togelius

Julian Togelius:


Imagine a religion that believes that one day, soon, the deity “Gai” will appear. This deity (demon?) will destroy all humanity. They are then obsessed with how to stop this happening. Can Gai be controlled? Contained? Can we make it like us? Won’t work. Gai is just too smart.

Therefore, the religion devolves into a millenarian cult. Its charismatic leader says that humanity will cease to exist with >99% probability.

People outside this cult may wonder how they are so certain that Gai will appear, and what its attributes are. Followers of the religion point out that this is obvious from the way society is going, and in particular the technology that is invented.

The omens are everywhere. You can see the shape of Gai in this technology. This other technology bears the unmissable marks of Gai. It is unnatural, decadent, and we should stop developing the technology but we cannot because society is so sick. Maybe we deserve Gai’s wrath.

But what will Gai look like? What will it want, or like? We cannot imagine this because we are so limited. The only thing we know is that Gai is smarter than any of us could ever be, and will teach itself to be even smarter.

You can tell adherents of this cult that all the other millenarian cults have been wrong so far, and their deities have failed to show up. You can tell them that all their sophisticated arguments only made sense to people who already believed. But that won’t convince them.


In case you haven’t figured it out, Gai is “generalised artificial intelligence”. This feels like a reverse form of Pascal’s Wager: the consequences of being wrong are so bad you might as well not worry about it.
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Parliament approves Government’s privacy penalty bill • Australian Government Attorney-General


Companies which fail to take adequate care of customer data will face much higher penalties following today’s passage of the Albanese Government’s legislation to significantly increase penalties for repeated or serious privacy breaches.

This is the first step in cleaning up the former government’s mess. The former government started a Privacy Act Review in 2020, and never finished it. It pledged to legislate tougher penalties, and never did it.
The Albanese Labor government has wasted no time in responding to recent major data breaches. We have announced, introduced and delivered legislation in just over a month. These new, larger penalties send a clear message to large companies that they must do better to protect the data they collect.

The Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 increases the maximum penalties for serious or repeated privacy breaches from the current A$2.22m (US$1.39m) penalty to whichever is the greater of:
• A$50m;
• three times the value of any benefit obtained through the misuse of information; or
• 30% of a company’s adjusted turnover in the relevant period.

The Bill also provides the Australian Information Commissioner with greater powers to resolve privacy breaches and quickly share information about data breaches to help protect customers.


Pretty serious fines; everyone’s getting on board with this sort of law.
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Getting banned from the App Store was the best thing that happened to us • TechCrunch

Marco Nardone:


It was October 2013, and I was on a plane from Hong Kong to London. It’s a 13-hour journey, so I had plenty of time to kill. But instead of tuning out to in-flight movies, I found myself oddly drawn to watching the plane’s flight path.

It was the same dull, slow-moving animation I’d seen countless times before, but this time was different. I’d spent a lot of time thinking about what the next big app in social messaging was going to be, and as I flipped through British Airway’s in-flight magazine that showed its hundreds of routes around the world, a vision started to crystallize.

“I need to make an emergency call,” I said.

There was apprehension, and possibly a faked medical emergency involved, but finally I managed to reach our COO.

“Emerson, I’ve got an idea, and it’s either gonna be worth zero or a billion.”

Despite the skepticism, I got to work anyway, pulling up Photoshop and completing Fling’s designs by the end of the flight.

The vision was clear: Fling was going to be a platform that allowed you to send any real-time message to 50 random strangers in the world. We built the app in a matter of weeks, and within a month we had nearly half a million downloads and incredibly active users. They were sharing snippets of their lives all over the globe, from America to Zambia.

Fling’s vision was coming to life without any of the roadblocks I’d expected. It seemed too good to be true…and it was.


Guess for yourself: you can anonymously send pictures, yes pictures, to 50 random people. You allow male users. You allow female users to receive messages sent by the random male users.

“The more flings that women sent on their first day, the more unlikely they were to come back.” App Store being the App Store, it got yanked. “Random messaging” was banned.
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Epson quitting laser printers doesn’t address its bigger sustainability issue • Ars Technica

Scharon Harding:


Epson’s recent announcement touts a “commitment to sustainability,” as well as Epson’s planned 100 billion yen (about $722.2m) investment into “sustainable innovation”—while also plugging its latest printers, of course. But this company’s strategic shift doesn’t feel like as grand of a green step as Epson’s PR reps would like you to believe.

We don’t have to tell you about the inherent environmental concerns around home and business printing. An oft-cited 2012 study reported that 375 million ink and toner cartridges enter US landfills annually, which doesn’t even touch on the paper and energy consumption.

But people and businesses need to print things, and printer businesses and their employees have a need to keep those businesses alive. So we don’t blame Epson for seeking a way to make its printer business appear greener. But we do lament it continuing to ignore a large environmental concern with its business that it could easily address.

As we reported in August, Epson has bricked printers over purportedly oversaturated inkpads, even if the printer would physically work otherwise. Epson does this, it says, because ink could leak throughout the printer. But designing products to stop functioning, also known as planned obsolescence, is a big no-no for green tech. We shudder to think of the number of functioning Epson printers that were thrown in the garbage by less technically trained users who didn’t know the device was still usable.

This throwaway mindset is disturbingly commonplace in the printer industry. In 2020, for example, HP bricked ink cartridges outside of its Instant Ink subscription program and has also used DRM to block non-HP ink cartridges from working in HP printers.

…Lately, reviewers like Consumer Reports find that laser printers are faster and better at printing text than inkjet printers and have better reliability, though the latter seems debatable among experts. And as noted by reviewers like PCMag, cheap laser printers tend to print faster than cheap inkjet printers.

And while inkjet printers tend to be cheaper to buy than laser ones, their ink costs tend to be higher.


Epson using slightly spurious claims about sustainability to focus on something that makes it more money and is easier to control? Hard to imagine.
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Digital books wear out faster than physical books • Internet Archive Blogs

Brewster Kahle is curator of the Internet Archive:


Ever try to read a physical book passed down in your family from 100 years ago? Probably worked well. Ever try reading an ebook you paid for 10 years ago? Probably a different experience. From the leasing business model of mega publishers to physical device evolution to format obsolescence, digital books are fragile and threatened.

For those of us tending libraries of digitized and born-digital books, we know that they need constant maintenance—reprocessing, reformatting, re-invigorating or they will not be readable or read. Fortunately this is what libraries do (if they are not sued to stop it). Publishers try to introduce new ideas into the public sphere. Libraries acquire these and keep them alive for generations to come.

And to serve users with print disabilities, we have to keep up with the ever-improving tools they use.

Mega-publishers are saying electronic books do not wear out, but this is not true at all. The Internet Archive processes and reprocesses the books it has digitized as new optical character recognition technologies come around, as new text understanding technologies open new analysis, as formats change from djvu to daisy to epub1 to epub2 to epub3 to pdf-a and on and on. This takes thousands of computer-months and programmer-years to do this work. This is what libraries have signed up for—our long-term custodial roles.

Also, the digital media they reside on changes, too—from Digital Linear Tape to PATA hard drives to SATA hard drives to SSDs. If we do not actively tend our digital books they become unreadable very quickly.

Then there is cataloging and metadata. If we do not keep up with the ever-changing expectations of digital learners, then our books will not be found. This is ongoing and expensive.

Our paper books have lasted hundreds of years on our shelves and are still readable. Without active maintenance, we will be lucky if our digital books last a decade.


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• Why do social networks drive us a little mad?
• Why does angry content seem to dominate what we see?
• How much of a role do algorithms play in affecting what we see and do online?
• What can we do about it?
• Did Facebook have any inkling of what was coming in Myanmar in 2016?

Read Social Warming, my latest book, and find answers – and more.

Errata, corrigenda and ai no corrida: none notified

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