Bits and stuff: April 8th, 2018

An excellent article from Jemima Kelly of the FT Alphaville team on Vitalik’s “testing” of the ethereum waters with his April Fool’s “joke” about a hard cap on supply. She also talks about how hard caps are pointless when open-source chains can be forked and ICOs can be spun out on whim.

Of course, the ethereum community is split on whether a hard cap would be a good idea or not.

Hmm, conflict in a crypto community over the best way forward? This leaves us wondering when talk of an ethereum fork will materialize – capped ether vs non-capped ether – even though the possibility of a fork makes the cap pointless… But, it’ll be an interesting experiment to watch.

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This longform article in The Guardian – “The demise of the nation state” by Rana Dasgupta – should be included in every history syllabus from high school up.

“When we discuss “politics”, we refer to what goes on inside sovereign states; everything else is “foreign affairs” or “international relations” – even in this era of global financial and technological integration. We may buy the same products in every country of the world, we may all use Google and Facebook, but political life, curiously, is made of separate stuff and keeps the antique faith of borders.”

It’s an epic, zoom-out look at the rise of populism, pointing out that it’s not just the west, and it’s not just a national problem.

“The most momentous development of our era, precisely, is the waning of the nation state: its inability to withstand countervailing 21st-century forces, and its calamitous loss of influence over human circumstance. National political authority is in decline, and, since we do not know any other sort, it feels like the end of the world.”

The author talks about “post-national solidarities”, and the impact on human life (and death):

“Since 1989, barely 5% of the world’s wars have taken place between states: national breakdown, not foreign invasion, has caused the vast majority of the 9 million war deaths in that time.”

And, of course (this is The Guardian, after all), financial deregulation is part of the problem:

“Today’s failure of national political authority, after all, derives in large part from the loss of control over money flows… These fleeing trillions undermine national communities in real and symbolic ways.”

Does this mean that finance is becoming more centralized (concentrated in the hands of the wealthy), or decentralized (ignoring borders)? Will cryptocurrencies change this by putting more of this borderless wealth in the hands of anyone, or will it entrench the have/have not divide?

The whole article is worth reading for its take on citizenship, the EU, international law and global financial regulation.

“There is no reason to heed those interested parties who tell us global financial regulation is impossible: it is technologically trivial compared to the astonishing systems those same parties have already built.”

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This… is brilliant. Simple yet effective, and possibly enough to get people to think differently without them noticing.


By Pejac, via Colossal.

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At first I though this piece (by Maryland governor hopeful Alec Ross) was political fluff, perhaps, but nevertheless awesome… Now I’m perturbed. “Blockchain as a political tool” not only buys into the fluff but also perpetuates it, elevates it to slogan status and entrenches misconceptions and misaligned expectations.

A pro-innovation stance is good – but if misdirected will end up wasting money and setting progress back by years.

As an example, just take a look at the news that a bill that would allow residents of the US state of Georgia to pay their tax in cryptocurrency has stalled, due to “a lack of understanding”. It will have to be resubmitted in January 2019.

Meanwhile, in Arizona, a similar bill is again moving forward after stalling earlier in the year. Interestingly enough, the revision is removing “bitcoin” as the specified cryptocurrency. I seriously doubt that this will help it get passed.

There’s so much more to unpack here, from why the lack of understanding persists, why anyone would want to pay taxes in cryptocurrency and how, if passed, this could affect the nature of asset and the growth of the sector.

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It’s hard to draw a big-picture conclusion from the Wall Street Journal’s provocative article on the diminishing weight of auditing in the Big Four’s revenue. While the easy thing to do is to jump up and down chanting “blockchain will replace auditors!”, that’s actually far from clear. Sure, the technology affords increased transparency and immutability of data. But, “garbage in garbage out”, so verification of the data will still be a valuable service.

In line with both this and the shift towards consulting fees, most of the big auditing firms have their own blockchain departments. These could benefit from the trend of increased outsourcing of technology builds.

However, the impact of the spreading custom (sometimes mandated by law) of changing auditing firms every few years is unclear. Will it boost technology spend, as proprietary platforms are more frequently replaced? Will it make spending more selective, since the maintenance (and replacement) costs will be significant? Or will it increasingly push development towards open-source solutions that don’t depend on the chosen provider?

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I’m far from a cryptocurrency maximalist, and am more interested in what blockchain’s can’t do than what they can, so it would be fair to think that I’m enjoying the growing chorus debunking the hype of both.

To some extent, yes, but I am now getting increasingly irritated by a new kind of hype: articles that decry blockchain’s futility and crypto’s lack of fundamentals, without understanding either. There are many smart realists out there (you’ll see me retweeting their stuff in approval). But as the hype cycle moves into the trough of disillusionment, others are jumping on the negative bandwagon without having the credentials or depth of knowledge to present arguments that hold up to either fact-checking or logical scrutiny. I’m not naming names because they don’t deserve the publicity – and that, more than reasoned debate, seems to be more what they’re interested in.

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Northern lights or not, this looks like a gorgeous place to spend a night (I’m assuming it has heating…)



Iceland’s Panorama Glass Lodge, via MyModernMet.

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