You want to know the one thing about cryptocurrency reporting that drives me mad? It’s not just from the mainstream press either – the specialised press is even more guilty, if that’s possible.
If I counted on my fingers the number of articles a week that use an image with a physical bitcoin, I would need more hands.
Why do so many articles insist on representing bitcoin as a physical thing? It’s not.
And insisting on presenting it that way – as if us humble humans are incapable of grasping the concept unless we can see it – is condescending.
It speaks to our comfort with the visual.
Most of our development as humans has been building on what we can see. The realm of ideas has traditionally been left to the philosophers, while money and power typically went to the engineers. It’s one of the many reasons art has had such a pull on us over the centuries. Ideas that we can’t see are hard to wrap our heads around.
And everyone knows that money means coins, right? (It doesn’t.)
To be fair, understanding finance is not for everyone – ledgers and compound returns are not straightforward. And if seeing a bitcoin helps us accept that it is real (or, as real as anything gets in the money world), then, sure, let’s use images.
As long as we hang on to the notion that money has to be physical, we won’t fully understand the underlying implications. And, it puts physical boundaries around an abstract concept while anchoring us in the limitations of the past.
The very press that strives to help us understand how this new technology will impact the way we see the world, is perpetuating the old paradigm. It needs to stop.
Quartz’s John Detrixhe interviewed ex-Barclays CEO Anthony Jenkins, and the result makes for compelling reading. Since he jumped across the chasm from big bank to startup (his company sells cloud services to banks), his take on the balance between disruptors and incumbents is worth listening to.
“I think the biggest trend that we’re going to see if the next five years is the fight back of the incumbents. The incumbents are going to wake up, and are waking up, and saying, we’ve got to get in this game.”
We’re seeing this in blockchain technology, with big banks experimenting like crazy. As I mentioned the other day, there’s so much more going on “under the hood” with enterprise financial applications than we realise.
BBVA and BBVA Bancomer (majority-owned by BBVA, no surprise) are testing a blockchain platform for FX trade matching. As usual with capital markets, this terminology needs some unpacking.
“Trade matching” is the process of 1) verifying the validity of a trade request (is the trade actionable, is the client registered, etc.), and 2) checking that it can be executed at the requested price.
This is more complicated than it sounds, as there are a lot of details that need contrasting, confirming and comparing. Plus, there is often some uncertainty – what if the bid/ask prices don’t match? How much leeway do the institutions have? Which trades have priority?
Notice that it does not sound like the settlement takes place on the platform. Just the trade set-up.
One aspect I find perplexing is that the press release claims that the current system of matching produces a lot of errors, because different systems struggle to communicate with each other. It’s possible that their definition of “matching” is not the same as mine – isn’t it carried out on the same platform? So, no communication problems? And, wasn’t matching introduced to reduce the number of errors vs. the more labour-intensive “affirmation” system?
Further questions: Will the matching be random, or first in first out? How will order “leftovers” (the parts of an order that don’t match – the buy/sell amounts are rarely the same) be handled?
I’d be interested to see more information on this, because there may be a lot about matching that I don’t know. Or, it may be press-release hype. I hope not.
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These miniature scenes are, um, strange, to say the least… But since I have yet to come across a small world I don’t find fascinating, I’m sharing them with you. You might find them as disquieting as I do.
I’m sure that Jamie Dimon is a very smart man… for last decade’s banking.
According to Vanity Fair, he told an audience on Friday:
“The blockchain is a technology which is a good technology. We actually use it… Gold bless the blockchain. Cryptocurrencies, digital currencies, I think are also fine.”
The term “cryptocurrencies”, however, apparently does not include bitcoin. It’s not clear why. Dimon’s explanation:
“I don’t personally understand the value of something that has no actual value.”
Without even going into the intrinsic value of fiat currencies (and, for that matter, gold – it’s nice and shiny, but so are sequins – it can be argued that it has value because we’re used to thinking it has value), I’m confused as to why other cryptocurrencies are ok but bitcoin not.
Bloomberg reported on Friday that JP Morgan’s CFO Marianne Lake said on a conference call earlier this week that the bank was “open minded” about the potential uses of cryptocurrencies.
It’s getting annoying hearing a big bank CEO talk publicly about a subject he does not seem to truly understand. It’s ok to not understand. Just stop talking about it publicly.
Surely it’s the mark of a good leader to recognize what he does not know, and lean on those in his team who do?
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Check out Josh Nussbaum’s market map – hours of painstaking work to give us a visual overview of what sort of work is going on in various sectors. Plus, he offers his top-down comment on what to look out for.
“Why bother with moral philosophy when common sense serves most of us perfectly well? The simple answer is that, as history shows, commonsensical beliefs are very often wrong.”
It’s also disturbing – is it productive to question your values? How much ethical discomfort should we encourage? When is tradition helpful, and when does it slow us down?
“Though our intuitions are very often wrong, they’re nevertheless necessary to give morality its meaning. If we have no emotive response, if no one cares at all when an act of evil is committed, then morality does not exist… And so rational thinking and moral instinct are in a constant state of slippery conflict.”
This would make a great subject for teenagers to think about. If we learn to question our parents’ beliefs more thoroughly (rather than just rejecting them because they’re old fashioned), we might end up with a generation more open to change, and more willing to look for solutions to tough problems rather than assume (hope) they’ll go away.
The main problem will be deciding what the problems are. Perhaps they’re not what we assume. (And like most of you, what I have is not so much answers as more questions, which lead to more questions – how many layers down should the questions go?)
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I used to love doll houses when I was little. There was a time I even dreamed of becoming a curator for museum dioramas. So of course I am mesmerized by these little scenes of gloom and portent. Gazing at them, I feel drawn into a hypnotic story that won’t have a happy ending but from which I can’t tear myself away. And, I find them utterly beautiful.
Give me this over VR any day.
By Andy Acres, founder of Chimerical Reveries. Via MyModernMet.
The silence of the past couple of weeks was an unexpected but needed break – some big issues got thrust to the fore, both personal (my mother had a stroke) and professional (a big decision that was once clear is now decidedly less so).
My mother pulled through (what she lacks in size she more than makes up for in force of personality). The part of the NHS deck that we got dealt was impressive – lovely doctors and nurses, and an incongruously pleasant hospital. We were so lucky, and are deeply grateful.
I had no idea that relief could be so exhausting.
And, as for the professional decisions, some news coming up (although I still don’t know what it will be).
I’ve heard this said before, and I can confirm that it’s true: the worst weeks of your life can also be the most illuminating.
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A good friend suggested that, to cope with the anxiety, I follow Hillary Clinton’s example. She swears by alternate nasal breathing. I’m pretty sure I could do the swearing part.
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Keeping with the personal tone of this post (don’t get used to it), Things You Probably Don’t Know About Me #1: I like Eminem’s music.
Notice how I don’t say that I’m a fan of Eminem, because I don’t know him personally. But his music? One of my favourite Spotify playlists. Top fave this week: Beautiful.
So, his Trump rap blew me away. While entertainers appear to be getting increasingly politicized across the spectrum (with uneven distribution), this is Eminem, people, the entertainer that to my over-educated, liberal-elite eye most represents the demographic that voted for the current president.
But, he yet again showed me that I was wrong, with guts:
“Any fan of mine who’s a supporter of his / I’m drawing in the sand a line.”
“If Eminem feels a need to object, if Eminem can easily seize the moral high ground from the president of the United States, and if it now falls to Eminem of all people to defend core civic values, what does that say about us?”
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Anyway, stuff has been careening along in blockchain in my absence. I was at a conference in Dublin last week: the very well-organized Blockchain for Finance. I’m often reminded of the saying “if you’re the smartest person in the room, you’re in the wrong room”, and there I was definitely in the right room. Great people, too-short conversations and some interesting anecdotes.
The main takeaway for me is that there is more going on “under the hood” than we realise. I’ll elaborate more another time, but we should brace ourselves for a flurry of real-world applications early 2018.
It’s getting exciting, and my head spins when I start thinking about what the next steps will be. I would have written screenfuls more on this, but see Section 1 of this post.