December 18, 2017

Meet the Latest in Cryptocurrency Technology

I am, obviously, out of touch with the bold new world of cryptocurrencies. According to the Wall Street Journal today, the biggest initial coin offering of the year is for EOS, which, it turns out, is not a coin at all. It’s not clear if EOS is even a product. Rather, it’s the open-source brainchild of block.one, which says that it “provides end-to-end solutions to bring businesses onto the blockchain from strategic planning to product deployment.” Here’s the elevator pitch:

Whatever. But back to EOS. What is it? Answer: it is an “operating system-like construct.” Will block.one be selling EOS? Answer: no, it will be released under an open source software license. After that, third parties can go to town on it. And what does EOS stand for? Answer: “We believe that EOS means different things to different people. We have received numerous amazing interpretations of what EOS stands for or what it should stand for so we have decided not to formally define it ourselves.”

So far this sounds like a parody. But it’s perfectly real, and it’s funded not by normal venture capital or anything else that gives investors any rights, but by the daily sale of tokens that are, explicitly, worthless: “The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.” And just in case this disclaimer isn’t enough, you can’t buy them in the United States and block.one itself is registered in the Cayman Islands. Why take chances?

The Journal says block.one has raised $700 million this year and has a market cap of $4.5 billion. What they don’t say is that this is actually a market cap of 6.3 million Ethereum, which is allegedly worth about $4.5 billion. No actual dollars or yen or euros have changed hands here. So to summarize:

  • block.one will not be selling its primary product. In fact, it’s not really clear exactly what they will be selling.
  • EOS tokens provide neither an ownership share in block.one nor any claim on its earnings.
  • EOS tokens are layered on top of Ethereum, a cryptocurrency that may or may not have any actual intrinsic value.

Even in the heyday of pre-crash CDOs and synthetic CDOs and all their demon spawn, derivatives all had at least a notional connection to a real income stream of some kind. But EOS appears to be valueless all the way down. If this isn’t the behavior of a bubble, I don’t know what is.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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