I’m sort of a train nerd, so I probably have a million Shinkansen photos on my iPhone. Now, I have a million and one. I’m really happy with how this one turned out. In addition to the N700 Series Shinkansen, I managed to get both the classic Tokyo taxi and Toyota’s new model in the same frame.
Justin Tabb:
We have been in business for over a year and a half, and even with the struggling crypto market, we have been fortunate to hit good points most of the time with conversion to fiat for use in building the company. While we utilized Bitcoin and Bitcoin Cash upfront to get the business up and running, all those upfront costs were associated with building the business, and we still have roughly half the Ethereum that we raised during the ICO and nearly all of the Ripple and LiteCoin we raised are still stored in Cold Storage.
Okay, someone is lying here. According to Substratum’s whitepaper, the BTC, ETH, XRP, BCH, and LTC collected during its ICO was hedged four ways into BTC, ETH, USD, and USDT (25% each). Now, Justin Tabb is saying there is still XRP and LTC “stored in cold storage,” which is impossible if Substratum did indeed hedge its funding as stated in its whitepaper. Also, Substratum does not have “roughly half the Ethereum” it raised during its ICO left. Substratum raised 17,778.25 ETH, and there is currently 5,150.991684 ETH left in the treasury – that’s 29%. Last time I checked, 29 ≠ 50.
We don’t ever want to put out a substandard product just to hit some arbitrary deadline.
The only one who’s been constantly making release date promises since 2017 is Justin Tabb himself. In September, Tabb said, “Before December 31, 2018, SubstratumNode Production Version 1 will be available. Quote me on it.” In a December interview with Datadash, Tabb assured viewers that a production version of SubstratumNode would be released before the end of the year. The only “arbitrary deadlines” that exist when it comes to SubstratumNode is Tabb’s own shilling arbitrary deadlines.
CryptoPay is still very much in the pipeline.
Quote me on it.
Over the past few weeks, I’ve been working on optimizing this website by implementing Cloudflare full-page caching on certain pages, refactoring CSS, and reducing the number of requests per page load. Every page on staging-brian.kinsta.cloud has a Twitter icon in the top left corner and an Instagram icon in the top right corner. Previously, the two icons were two separate PNG images. After a little Photoshop and CSS magic, I’ve cut that number in half. Now, both icons are displayed with the same PNG image.
She’s been to the summit, but I haven’t – hoping to change that next year.
On February 26, Substratum moved another 1,200 ETH to Kraken – most likely to liquidate into USD to cover operating expenses. ETH was worth ~$133 on the day of the transfer, which means Substratum’s 1,200 ETH liquidation was worth ~$159,600. Substratum made a similar transfer of 2,500 ETH (~287,000) earlier this year on January 25, 2019. My guess is Substratum liquidated 2,500 ETH in January in order to cover operating expenses for January and February, while the most recent 1,200 ETH liquidation will be used for expenses in March. These recent liquidations support the hypothesis that Substratum’s burn rate is ~$150,000, a figure which I first wrote about in August of last year after observing liquidation patterns in April and May.
Will and I were recently invited on the CryptoBasic podcast again to talk about Substratum’s delisting from Binance. We had a ton of fun with Brent, so be sure to check it out when you have some time. The summary for the show is below.
Brian Li of BrianLi.com.Net and William McKenzie of getting attacked by Substratum fame are back on the show again since Substratum was recently delisted from Binance. We unpack their delisting, their assertions to each of the delisting points, and what it means to the crypto space. Brian and William are basically the boogeymen for the entire SUB community. They’ve been called everything from Chinese government shills to Russian spies. In the end, there is a massive intersection of the SUB community that blames these two individuals for their own shortcomings as a project. We discuss that as well in this episode.
Since Substratum is so interested in “setting the record straight,” let’s take it one step further and set the record straight regarding SUB’s status as a security. Substratum’s whitepaper states the following.
Justin Tabb:
Binance announced on Friday that SUB is being delisted from its exchange. This decision came as a surprise, with no advance warning. We are terribly disappointed in the decision and their handling of the delisting. To be specific:
- We were not questioned regarding any issue(s) to make sure the issue(s) is factual before making this decision.
- We were not given an opportunity to clear up any real/perceived issue(s), such as a probationary status or deadline to fix.
- We were not given any conditions for relisting.
Informing projects of an imminent delisting doesn’t make sense. It would incentivize the project’s management and insiders to partake in insider trading to dump coins before the news goes public. Binance did the right thing in this situation, and Justin Tabb’s expectation for “advance warning” before a SUB delisting can only be described with one word – silly.
Binance has since indicated that our delisting is due to the trading of ICO funds. We are attempting to reach out to Binance to provide them with documentation to show that is not the case.
Substratum, and Justin Tabb in particular, loves to play the blame game. First of all, it hasn’t been confirmed that Binance delisted SUB because of Tabb’s ICO fund trading announcement. In a Twitter thread between CZ (CEO of Binance) and Abram Cookson (COO of Substratum), CZ tweeted, “maybe stop trading the funds you raised that was intended for product dev? Anyway, will observe Cunningham’s law and stop responding. wish all the best.”
Justin Tabb took CZ’s statement to mean that SUB’s delisting was a result of the alleged trading of ICO funds. However, Tabb neglected CZ’s reference to Cunningham’s Law which states that “the best way to get the right answer on the internet is not to ask a question; it’s to post the wrong answer.” Thus, it’s presumable that there’s more to the story behind SUB’s delisting, but CZ did not want to get into the real details. CZ has done nothing wrong here. Binance is a centralized exchange, and more importantly, it’s CZ’s centralized exchange. He has exclusive right to make business decisions that he deems favorable for his business. In this case, CZ felt it was best to delist SUB. It’s his decision, and it’s pointless to argue against that.
Substratum has been a supporter of Binance, and fully support their right to run their business as they see fit. But, we believe their listing/delisting procedures are in dire need of review, as their decisions have a ripple effect, not just for Substratum, but for the industry as a whole.
As I wrote previously, the details regarding the delisting process is clearly laid out in Binance’s delisting announcement, and Substratum has not delivered on quite a few of these criteria. Quite frankly, based on Binance’s provided delisting criteria, it’s not surprising SUB was delisted.
Substratum has worked tirelessly to bring its vision into reality. We have consistently delivered releases on the path to our first product release – SubstratumNode. The Node project has already proven the ability to deliver censorship-free content throughout the world.
This has nothing to do with Binance’s delisting announcement. Regarding the node’s ability to “deliver censorship-free content throughout the world,” I spent about 15 minutes and was able to block SubstratumNode traffic with ease.
The Substratum development team remains focused on delivery and our upcoming release. We will not be deterred or distracted by influences outside of our control. We remain vigilant in pursuing freedom of information to all – true net neutrality.
Substratum is not distracted or deterred? Ha, alright Justin. In conclusion, this statement was handled in typical Substratum fashion. Many words were written, and barely anything was said.
Nicholas Merten:
It’s very important, whether you’re invested in Substratum or not, to not look at this in a black and white way. This has little to nothing to do with the actual value of Substratum or SALT as a project. The fundamentals are completely separate from Binance doing this, in my opinion.
I don’t know much about SALT, so I’ll just speak about Substratum. The project’s fundamentals are not “completely separate” from Binance’s choice to delist SUB. The quality of Substratum’s management is fundamentally broken, and this is obvious from the missed deadlines, lackluster PR strategy, and the CEO’s inability to not overpromise. Furthermore, losing 99% of SUB trading volume effectively kills the network’s monetization model – it is indeed black and white. I’m not the only one who thinks this. Substratum’s own CMO has stated that the team is exploring monetization models that don’t require SUB.
If you actually look over the reasoning for why Binance delisted these coins, you can make a lot of arguments that SALT, a platform that has function where you’re actually able to put up your crypto into basically locking up your funds like most of these crypto lending platforms and earn interest off of it – it has been working. If you look at Substratum as a team – they have a full team, an office that I’ve been to multiple times and I’ve actually seen them coding and developing, and not to mention has broken through the firewall of three major nations that censor content from their citizens.
Terrible point. BitConnect also had a team and an office. I’m not saying Substratum is on the same level as BitConnect – that would be foolish. However, arguing for a project’s legitimacy by saying it has a team and office is not convincing. Regarding Substratum “br[eaking] the firewall of three major nations that censor content from their citizens,” that’s simply not true. It’s clear that DataDash has no clue how firewalls work.
Anyone can set up an instance of ShadowSocks or OpenVPN on an unblocked IP address and watch YouTube videos in China. This is not the same thing as “breaking through the firewall”. Considering Substratum hasn’t launched its production version with encryption, it’s much too early to state the project has managed to bypass the security infrastructure of nation states. A more accurate description of the current situation would be “Substratum has managed to route data in and out of China because the government doesn’t give a s*** about blocking the IP addresses of Substratum’s nodes.” By the way, blocking nodes on the Substratum network is easy.
The problem is I think their delisting process was really unprofessional. It’s one thing to eventually have to announce to the public that you’re delisting a project – in this case, that’s understandable. But to not give the team any fair warning or reasoning as to why that’s happening, as they do it or beforehand, is extremely unprofessional.
I think Binance handled this extremely professionally. There is literally zero upside to informing a project about a delisting before it happens. Humans are greedy, and this would undoubtedly result in insider trading. Binance has no reason to be associated with assisting a to-be-delisted project with insider trading – there is too much at stake.