The Breakdown - Narrative Watch | The NBA, Hearthstone & Hong Kong - Why Censorship Resistance Matters

Episode Date: October 9, 2019

First it was the NBA aggressively distancing itself from comments from Rockets GM Daryl Morey in support of Hong Kong protesters. Then it was Blizzard banning a player from competitive Hearthstone play for making a pro Hong Kong statement live on air. On this Narrative Watch, we dig into the uncomfortable tension between China's role in the globe business world and it's tight control over dissent and critique - and more specifically, why it is a reminder of the need for permissionless, decentralized, censorship resistant alternatives in money and technology.  Watch: https://www.youtube.com/nathanielwhittemorecrypto

Capital Management, CIO, Kyle Bass, and Yahoo Finance is Julia LaRoche with me here at the desk as well. Kyle, you know, we should point out the timing of this has certainly added to the backlash, and this is because the NBA is holding a preseason game over in Shanghai right now. And yet I saw this this morning. I thought, you know, this is kind of what we've seen before, with Marriott, with Delta, with Zara, all these companies that do business in China, but that don't necessarily toe the line. What does it say about the risk that comes with doing business in China? Yeah, I think it's, I think it is unbelievable, and that the NBA issued an apology.

I think it's crazy that the GM of the Houston Rockets, Moray, deleted his tweet. I mean, are you telling me that we can't exercise our right to freedom of speech in the U.S., defending the liberties, freedoms of U.S. citizens, and the morality and the values that we fought so hard to enjoy in our country, we have to apologize. Welcome back to another narrative watch. All right. Hot button today. So today we're going to be talking about censorship resistance in practice, right?

Not just in theory. And so obviously, you know, if you have been paying attention at all, a couple different interesting stories having to do with people coming out in support of the protests in Hong Kong only to be quickly rebuffed. by their industry context. And so I wanted to look into that. I think it's an important issue that goes pretty far beyond just this one situation. And I think has a lot to do with the fundamental and existential raison debt for cryptocurrency

networks and related technologies in general. So first, let's talk about this idea of censorship resistance. What are we talking about when we're talking about censorship resistance? it's one of the key ideas actually that cuts across different subsections of the crypto space. So last year, Eric Torrenberg wrote a post called Money Crypto versus Tech Crypto, where he divides the world into kind of, on the one hand, the folks who are looking at and care most about an uncensurable new type of kind of non-sovereign money, right, the Bitcoins of the world. And then on the other hand, tech crypto, which is the idea of, you know, decentralized alternatives to social networks and things like that, right? Censorship resistant, you know, alternatives effectively.

And so in both of these cases, censorship resistance is a key idea. In fact, it's one of the few things that they actually, that they have in common. So when it comes to the money crypto side of things, that censorship resistance is about permissionlessness, about anyone being able to. use it about it being unsurveailable, right? At least there's not a central power that can that has the control to surveil it as opposed to something like you know in particular, you know, the digital digital central bank digital currencies that seem to be coming. It's unseasable, right? You can't just kind of step into someone's bank. So this idea of censorship resistance in the money crypto side of things refers to the notion that just because someone doesn't like

what you have to say or your beliefs, they can't censor you, right? They can't censor you, right? They can't put a stop to it. Whereas in traditional money systems, particularly credit and debit networks, that's a lot different. On the tech crypto side, you know, it's really about this idea of eliminating the difference between owners and participants in a network so that the owners of a network, i.e., you know, a Twitter, an Amazon, a Facebook, or whatever, can't make arbitrary decisions that may negatively impact people who participate in that network or simply presage the needs of the network owners over the needs and the values of the network participants, right? So that's, you know, fighting deplatforming as an example that's come up a lot this year.

So the point of this is that there's this idea of censorship resistance that I think cuts across a lot of different elements of the crypto kind of ecosystem. So what happened? The context for both of these news stories is ongoing protests in Hong Kong. We've talked a lot about it here, our narrative-wise. and on the Crypto Daily 3 at 3. But effectively, there's a series of protests that have been going on for coming up on six months now that were initially triggered by an extradition law, which would allow basically people to be shipped

back to China, but then metastasize into something much bigger. We've seen as many as 2 million people out demonstrating. And it's really about this kind of the fundamental tension between Hong Kong as a place where there is, you know, the pretense are theoretically liberty, but then the ever-presenting ever-present kind of control of Hong Kong right around the corner. That's the larger meta-context. So let's talk about the thing one. So basically the first thing that happened was Darry, who is the GM of the Houston Rockets, tweeted out something that basically said that basically said that he supported Hong Kong, right? So he said, fight for freedom, stand with

Hong Kong. This triggered a just absolute avalanche of response. But before we even get into that, you might recognize Darrell Mori or Moray as from his previous comments on Bitcoin. He's been kind of vocal about being interested in Bitcoin, interested in digital assets. And so, you know, kind of part of this trend that we've seen over the last three, four, five months of professional sports athletes being some of the folks who are pushing the idea of Bitcoin into the mainstream. So anyways, like I said, Daryl Mori has these comments that go out about Hong Kong. And then there's this huge backlash, right? So the NBA, basically, he's thrown under the bus by everyone. He's thrown under the bus by the Houston Rockets owners. He's thrown under the bus by the NBA.

He apologizes almost immediately. He says, I did not intend my tweet to cause any offense to Rockets fans and friends of mine in China. I was merely voicing one thought based on one interpretation of one complicated event. I've had a lot of opportunities since to hear and that tweet to hear and consider other perspectives. I have always appreciated the support, the significant support our Chinese fans and sponsors have provided,

and I would hope that those who are upset will know that my offending or misunderstanding them was not my intention. My tweets are my own and in no way represent the Rockets or the NBA. So this just catapulted this to the next level by actually having this apology, right? Because all of a sudden, you have this sort of content coming from the New York Times.

This is an opinion piece. The world's wokenest sports league bows to China. And this talks about basically the contrast between how much the NBA has valued its place, its role as basically a place where its players can express themselves, right? You know, as opposed to the NFL, right, where Colin Kaepernick is. had such issues. The NBA is supposed to have a different, a different idea, right? And now they are creating a huge, huge, you know, stink about this. And it's because the NBA is massively popular in China, right? So as amounting it is, 500 million Chinese watch at least one NBA game

last season. NBA's business operations, they're valued at more than $4 billion. So this is a huge financial interest, right? And it's one of the, you know, it's an extraordinarily sensitive subject. But that didn't stop a lot of folks from from being just angry about how this all went down. So we have here, Jonathan Chang from the Wall Street Journal, he's the China Bureau Chief, basically sharing this tweet analysis that shows a huge amount of the tweets amplifying, the controversy around Moray are actually not real, right? They're bots, which is totally in lines with what we've seen before with bots as a mechanism of political destabilization. You have Kyle Bass, who is kind of like a China perma bear, really valuable perspective from

the standpoint of you know exactly where he stands and you're always going to have that poll of the conversation. He was on the phone in that first clip we showed. He said, just imagine what the NBA and the specific people are teaching our children. Chase money while scrapping your personal values. Forget democracy, freedom, and universal suffrage that your company has fought and died for. Focus on hoping the Chinese hand out money. And he honestly was not the only one who felt like this. This is Aaron Ruper from Vox. He says, my goodness, Adam Silver, this NBA owner, or commissioner rather, reputation should never recover from this.

This is the statement. And basically, it's just a whitewashing of the whole thing. He says to anybody asking me what the context is, the NBA and Houston Rockets are siding with China over Rockets General Manager at D. Moray after Moray posted a tweet supporting pro-democracy movement in Hong Kong. It's a stark illustration of the normalization of authoritarianism. So this is a really interesting. I think we'll take a pause here just to talk about the larger context. So you can go basically through every prominent Republican Twitter threat and find them condemning this and being angry and using it as a kind of another piece of a political

football against a war with China. But it's it's hard. for this one to fall strictly along, strictly along party lines, right? We haven't really had to deal with in recent history this type of issue where you have a, on the one hand, a deeply interwoven market participant that is nominally capitalist, nominally free markets, at least as they relate to us, but that at the same time exerts incredible authoritarian control over the social lives and political lives of their citizens. And this is, you know, a collision course that's just been there forever. The ways through that, the ways to deal with it, the right response, there's tons of debate, right? And you're going to see really serious fractures along different political

lines about that. But what's undeniable is that this tension between a liberal market participant and illiberal social and political control can't exist. exist in easy stasis forever. At some point, the dam breaks and something happens. And that's kind of what we're starting to see. Now, of course, there are lots of different, there's pragmatical points of view, right? So Nate Silver says, there's a lot of logic to calling China's bluff. In the long run, it seems very unlikely that organizations that do significant business with China are going to be able to constrain all their talent and all their executives from expressing support for Hong Kong. It talks about movies, right? So this would be interesting enough to me already,

was just the only thing. But then another thing happened. So basically, Blitzchung, a professional Hardstone player, he was during an interview after a tournament, you can see it here, he basically made a pro-Hong Kong statement. He said something to the effect of Hong Kong, the Revolution of Our Times. You can see here in the view, the interviewers

ducked their heads because they didn't want to be associated with it. They knew immediately that it was serious, that this had happened. And so basically, the long story short here is that Harthstone actually banned Blitzcheng for voicing support, right? They banned him from competitive participation. I'm trying to find the other piece on this that I thought was really good. Yeah. So breaking, effective immediately, Blizzard has removed Hong Kong. hearthstone player blitzchung from hearthstone grandmasters uh i think he was actually south korean

um rescinded all his prize money and have suspended him from pro play for one year for his recent interview uh blizzard has also fired both of the heartstone casters working the event both of whom literally ducked underneath the desk during the interview and neither of which to my knowledge had any idea it was going to be said very cool blizzard blizzard has also disabled comments on the news which are normally open and from scrolling back through hundreds of posts this is the only time they've done that can't imagine why. So a huge, huge deal, right? Heartstone is an extraordinarily popular esport. This is this person's living that they're afflicting. And it was a, you know, a five-second political statement, right? South Park was also just recently blocked in, in China as well.

And of course, in true South Park fashion, they said, official apology to China from Trey Parker and Matt Stone. Like the NBA, we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom and democracy. She doesn't look at all like Winnie the Pooh. Tune into our 300th episode this Wednesday at 10. Long live the great communist party of China. May this autumn storghum harvest be beautiful, bountiful. We good now, China? Classic South Park fashion. But another interesting thing happened, which is that God's Unchained, which is a hearthstone style, Magic the Gathering style

trading card game, responded to this. So they said, Blizzard just banned Blitzchung and stripped his hearthstone winnings because they care about money more than freedom. We will pay all his lost winnings and a ticket to our 500K tournament.

No players should be punished for their beliefs. Today, Blizzard proved that centralized game companies will censor and explore their players if it is in their immediate financial interest. At God's Unchained, we have built on censorable items with an open economy and market. Even if we disagree with your views,

we can't take away your cards. So, and this is, you know, blew up. It's got nearly 5,000 likes since then. So, you know, God's Unchained, this is in some ways exactly, it's not actually, let me take that back. It's not exactly what it was designed for. What it was designed for is a response to the idea of, you know, true digital ownership of goods and being able to really have people,

you know, when they play a digital card game, own the card so they can do whatever they want. with them and there aren't restrictions on them. That was the idea. What they've wandered into is a very different level of censorship resistance where they're now getting at the idea of what a, you know, what type of people a centralized platform will or won't pay and what type of speech can actually impact you from that. So, you know, it'll be interesting to see. I haven't seen anything else about whether Blitz-Chung-Walkan enjoying God's Unchained. Obviously, I think it's a, it's a smart move simply from the standpoint of PR. It helps emphasize what is different.

and what's trying to be different about these networks. But the reality is that there's larger question remains of censorship resistance in all of the networks that we participate in. And these things aren't new somehow, but we are seeing the fault lines and the cracks in the uncomfortable alliances that make markets work sometime. And we're going to have to sort these things out.

So I think for me, the narrative this week is that, you know, we're seeing the resist in censorship resistance start to actually come out, right? We are seeing what this could look like in practice, not just in theory. And this is bigger, I think, than just, you know, random political person being deplatformed or whatever by Twitter. This is a much larger systemic question of how the U.S. is going to handle, you know, market participants that play by a different set of rules. And moreover, whether there's room and demand for an alternative infrastructure where it's not just, you know, don't punish people, it's can't punish people for political beliefs. So anyways, that's what I wanted to share for today.

Obviously, this is a, on the one hand, it is an emerging narrative because there is this new context that is clear and present and relevant. but it's also kind of the largest in some ways meta-narrative of this entire space. So we'll just kind of have to wait and see how it plays out. And until then, root for all the folks who are building uncensurable, private, or permissionless networks because we need them. All right, guys, thanks for joining for Narrative Watch today. I will be back tomorrow with another Crypto Daily 3 at 3. Peace.