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Ethereum makes its big change...
September 15, 2022 View Online | Sign Up | Shop

Morning Brew

The Ascent

Good morning. You don't see something like this in the corporate world every day: A billionaire just unbillionaire'd himself. Patagonia founder Yvon Chouinard and his family transferred their ownership of the $3 billion outdoor brand to a trust and a nonprofit working to fight climate change and preserve undeveloped land, the NYT reported. It's to ensure that all of the company's profits, ~$100 million per year, will be directed toward these causes.

It's an unprecedented move by a business leader, but then again, Chouinard's never really been into that lifestyle. "I was in Forbes magazine listed as a billionaire, which really, really pissed me off," he told the Times.

Jamie Wilde, Matty Merritt, Abby Rubenstein

MARKETS

Nasdaq

11,719.68

S&P

3,946.01

Dow

31,135.09

10-Year

3.408%

Bitcoin

$20,226.55

Moderna

$139.40

*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean.

  • Markets: Stocks ended the day slightly higher, calming down a bit after posting their worst day since 2020 due to higher-than-expected inflation data. The Nasdaq was buoyed in part by Moderna, which popped on reports it might provide Covid vaccines to China.

CRYPTO

Explain the Ethereum Merge like I'm 5

An Ethereum coin looking at another Ethereum coin in a mirror Francis Scialabba

Five might be pushing it, but…during the night, Ethereum merged the two blockchains it was running into one, which Ethereum claims will reduce its energy use by 99.95% and pave the way for the second biggest cryptocurrency network to grow.

The Merge's main impact will change the way "blocks" of transaction data are added to the Ethereum blockchain. While this means major surgery for Ethereum, individual owners won't feel a thing—no changes need to be made on their end, and gas fees and processing speed are expected to stay the same.

What's happening under the hood?

For years, Ethereum has been using two parallel blockchains: The original one, Mainnet, relies on a mechanism called proof-of-work—a process that involves users competing to solve cryptographic puzzles to add new blocks to the blockchain in order to earn ether rewards.

Mainnet's younger sibling is the Beacon Chain, added in December 2020. It grows by using proof-of-stake, in which "validators" put up a share of their crypto as collateral ("staking") for the privilege of being randomly selected to verify that a new block of data is correct. Once a certain number of them agree that the block is accurate, it's added to the blockchain, and the validators are rewarded.

Mixed together, the Beacon Chain will be like Sriracha to the Mainnet's mayo: The blocks that make up the Mainnet will still be there, but the new, combined blockchain will just taste like Beacon Chain—new blocks will only be added using proof-of-stake, not proof-of-work.

But…why?

Proof-of-stake is much more energy efficient than proof-of-work, since it limits how many users work on each block. Ethereum accounted for 20% to 39% of all of crypto's electricity use as of August, and its annual carbon emissions are on par with Singapore's. The Merge could make a major dent in the sector's environmental impact, and possibly even pressure the No. 1 electricity chugger, Bitcoin, into reducing its energy use.

Less energy demand also opens the door for future upgrades Ethereum has planned to speed up transaction processing and to scale.

Now run along and annoy everyone with this information at your next dinner party.—JW

        

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WORLD

Tour de headlines

Freight trains Jonathan Kirn/Getty Images

Looming railway strike gets freightening. If you were planning on taking a long Amtrak ride today, you aren't. The company canceled all long-distance passenger trips in preparation for a rail worker strike that could happen as early as 12:01am on Friday. Representatives from rail worker unions and freight companies spent yesterday with Labor Secretary Marty Walsh trying to reach agreements on working conditions. Two unions have ratified deals, one negotiated a deal that was rejected by its members, and three more are still in talks.

California slaps Amazon with antitrust lawsuit. The state's attorney general claims the way Amazon dings sellers when products are listed for cheaper elsewhere stifles competition and forces consumers to spend more money. The new suit comes as Amazon works to fend off similar claims in DC and to keep the FTC at bay. And it's not the only Big Tech company facing antitrust rows: Google lost its bid to get a record-setting $4.13 billion fine tossed in the EU.

The pandemic is close to past tense, officials say. The WHO's director-general said yesterday "the end is in sight" as Covid deaths worldwide fell 22% last week to the lowest number reported since we first hunkered down in March 2020. The agency is more cautious about the number of new cases: It noted that some of the 28% drop there could be attributed to countries relaxing Covid testing and reporting guidelines in the last few months.

LAW

Texts more embarrassing than 'u up?'

Brett Favre Cindy Ord/Getty Images

Ever cringed at the thought that someone else might see your texts? That's how Brett Favre is probably feeling. Texts revealed in a court filing Monday paint a picture of the Pro Football Hall of Famer's involvement in a scheme to use cash taken from a welfare program—meant for poor Mississippi families—to fund a volleyball stadium at the University of Southern Mississippi.

The scandal: The texts are just the latest twist in an ongoing saga. A state agency lodged a civil suit against Favre and several others in May, after a mother and son who ran a nonprofit that helped divert the welfare money pleaded guilty in an ongoing corruption case.

What's Favre got to do with it? About $1.1 million of those misspent funds went to him in 2017 and 2018 for speeches he never gave. That money then got put toward the stadium at the school where his daughter played volleyball.

He's since repaid that money and has maintained that he didn't know where it came from. But the new texts between Favre and the nonprofit leader (including one where he worries about the media finding out about the money) cast some doubt on those denials and show that Mississippi's then-governor, Phil Bryant, was "on board" with the plan. Neither Favre nor Bryant has been charged with a crime.—AR

        

FINANCE

Take me down to the paradise Citi

Beach in Spanish city of Málaga Antonio Luis Martinez Cano/Getty Images

In the competition for top talent, banks have pumped lots of money into starting salaries, but to woo future bankers Citi is betting on beautiful beaches and actual happy hours. Yesterday, 27 Citigroup analysts kicked off the bank's new two-year program that is supposed to prioritize work–life balance for employees in the Spanish city of Málaga.

The program promises eight-hour days M–F, a stark contrast with most Wall Street newbies' grueling 24/7 work schedules. On the downside, the Málaga analysts make about half the $100k salary of their counterparts in traditional analyst roles. Still, 3,000+ people applied for the program.

Taking on burnout: If we had a dollar for every article roasting investment banks for working their junior bankers too hard, we'd have…a senior banker's salary. But the criticism heated up last year when a leaked slide deck revealed how the 95-hour workweeks of Goldman Sachs first-year analysts were taking serious mental and physical tolls.

Still, the banking landscape isn't all blue skies and beach views right now. Goldman Sachs is planning layoffs, and JPMorgan said investment banking fees could fall 50% this quarter.—MM

        

GRAB BAG

Key performance indicators

Several members of Congress over 70 Tom Williams/Getty Images

Stat: The US is a young country, but Congress is old—and getting older. About 25% of its lawmakers are over 70 and the average age in Congress keeps climbing, according to Insider. An average of 10% of Congress was under 40 from 1950 until 1990, but since 2000 it's only been around 4%.

Quote: "Take that and shove it, Napa."

These iconic words were once spoken by cheap wine pioneer Fred Franzia, who died Tuesday at age 79. Franzia is best known for dreaming up "Two Buck Chuck," the Trader Joe's exclusive that made affordable wine feel classy and caused some of your worst hangovers.

Read: Can this purple tomato get health-conscious shoppers into GM foods? (Wired)

WHAT ELSE IS BREWING

  • Interest rates on 30-year home loans surpassed 6% last week for the first time since 2008, tamping down demand for mortgages.
  • Xi Jinping traveled outside China for the first time since the pandemic began, first to Kazakhstan, then to Uzbekistan, where he's expected to have a one-on-one with Vladimir Putin to discuss the Ukraine war.
  • Prosecutors say Adnan Syed, whose murder conviction was the subject of the podcast Serial, should get a new trial since new information about alternative suspects has come to light.
  • Indiana's abortion ban, the first state ban passed by a state legislature after the Supreme Court overturned Roe v. Wade, takes effect today, though the law is being challenged in court.
  • Queen Elizabeth II's coffin arrived in Westminster and she will lie in state there until her funeral on Monday. The line of people wishing to pay respects is expected to stretch 10 miles, but you can catch the BBC's livestream from your couch.

BREW'S BETS

Brew's Bookshelf: Here are the books we're most excited to read this month.

Is America's best kept secret Wisconsin? Let this man from Japan be your guide to the Badger State.

Malcolm Gladwell isn't worried about being wrong. At least not on Revisionist History, his podcast that reexamines the past and asks whether we got it right the first time—like an astonishing experiment during World War II that people are still arguing over 75 years later. Listen now.

No show, no problems: Stay-put heel grips keep Bombas No Show Socks on your feet, not in that sweaty spot beneath your heel *shudders in discomfort*. Try them today.*

A fitness plan you can actually stick with. Future pairs you with a coach who will adjust your workout plan as needed to work with your schedule. Get 50% off your first 3 months.*

*This is sponsored advertising content.

GAMES

The puzzle section

Brew Mini: Today's supersized Mini will have you filling in words like it's third grade again. Play it here.

Three headlines and a lie

Three of these headlines about Queen Elizabeth II are real and one is faker than feeling a buzz from Heineken 0.0. Can you guess the odd one out?

  1. Queen Elizabeth II's death inspires Kanye West to settle beefs
  2. Study shows that "Elizabeth" represented 95% of all newborn girls' names in the UK last week
  3. Queen Elizabeth II's bees have been informed of her death
  4. King Charles got the ultimate promotion. 100 staffers could lose their jobs.

If you love Three Headlines and a Lie, play along on The Refresh from Insider and dive deeper into these weird headlines.

Boss reacts to 'quiet quitting' TikToks

Boss reacts to 'quiet quitting' TikToks

Everyone is talking about "quiet quitting" right now. But at this office, they have dogs that rise and grind. Watch this CEO react to "quiet quitting" TikToks.

Check out more from the Brew:

The Money with Katie Show digs into how financial literacy shifts reality on its axis, who the winners and losers are in our economic era, and why scamming has become a millennial pastime. Listen or watch here.

Receive unlimited access to over 330 shortcuts and 120 of Excel's most used functions when you shop the PC Excel Dictionary Bundle. Get yours now—also available for Mac users.

FROM THE CREW

Refreshing convos with top business leaders

Business Casual logo

Listen to the Brew's Business Casual podcast to learn about the business topics shaping your life right now. Host Nora Ali cuts through the jargon to bring you convos with top business leaders you already know and rising stars. Check out these recent popular episodes:

This editorial content is supported by Real Vision.

ANSWER

We made up the one about babies being named Elizabeth. But feels like it could be true...

         

Written by Jamie Wilde, Matty Merritt, and Abigail Rubenstein

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