Bits and stuff: moving, markets and more conferences – July 1, 2018

It’s been a crazy week so this update will be short because now that conference season is OVER (until September, anyway), I have to:

  • Pack up and move out of my apartment in Madrid (building work)
  • Help my dad move out of the family home in London (moving into a residence, sniff)
  • Pack up and sell the family home in London (heartbreak)

…not to mention start a new project at work (more information on that soon).

All within the next couple of weeks.

I’m not whining, but if you detect a note of overwhelm in there, you’re not wrong*.

(*reminds me of a phrase from the series “Billions” that stuck with me – “we are not uncertain”)

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The Network Forum post-trade conference in Vienna was awesome. Low-key (no media) and high-level (all the major banks and FMIs were there), with a surprising depth of blockchain knowledge and exploration.

The Blockchain Expo in Amsterdam was diluted and haphazard. I chaired the Transforming Financial Services track, which had some good speakers (Richard Crook from RBS, Carlos Kuchovsky from BBVA and Ville Sotiu ?? from Nordea were excellent) and a couple of interesting panels (with representatives from BNY Mellon, Santander, etc.). But, there was also a fair amount of hype and superficiality.

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I would love to participate in more of the former and less of the latter – but, going forward, will probably end up participating in less of both. Got some real work to do.

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This article by Alexandra Scaggs for FT Alphaville is one of the most important that I’ve seen in a while, in that it addresses not only the increasing centralization of tech services, but also how we manage to delude ourselves that things will be different going forward.

It’s especially interesting given the parallels that can be drawn with the cryptocurrency world, vis. Coinbase and Circle’s recent expansion announcements.

Centralization is an inescapable feature of capitalism. Even stiff regulation won’t stop it, as – like life – the markets will find a way. Capital flows to where the efficiencies are (or will be), and that implies eventual centralization. Even well-meaning blanket rules like the new GDPR end up enhancing what they set out to avoid.

More on this later, so much to talk about here…

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Nicholas Bette gave us an insight into some of the issues that blockchain applications for the real estate sector will have to overcome – and, no surprise, the list can be largely exported to other sectors as well.

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If you were in any doubt as to how intertwined politics and the markets have become, take a look at this twist to the tale: Nigel Farage of the UK’s far-right UKIP party could be in trouble for market manipulation. It’s not so much that politicians manipulate markets (we sort of knew that), it’s that they can do so, intentionally, for financial gain.

And not just the politicians. Here we have hedge funds offering polling organizations vast sums of money for a sneak peek at polling results.

We knew that capital markets were never the fair, level playing field they purport to be – but this seems extreme, and insultingly blatant.

It’ll be interesting to see if this story goes anywhere.

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The launch of a crypto fund by veteran venture capitalist firm Andreesen Horowitz sends an intriguing signal, but not one that most people think.

First of all, it’s not necessarily the boost that the bear market has been eagerly awaiting. $300m – the initial amount of the fund – is a lot of money, but still only just over 0.1% of the total crypto market cap. And, Chris Dixon’s post detailing the strategy emphasizes that it’s an “all-weather fund” that will invest “consistently over time, regardless of market conditions”. In other words, it’s not going to pour all of the capital into the crypto market within the first few weeks.

Second, they’re not pouring money into cryptocurrencies, with a view to acting like one of the many crypto hedge funds already out there (and which have been, on the whole, doing poorly so far this year). They’re not planning to trade crypto currencies to gain the maximum short-term return.

It turns out that the fund will invest in both tokens and the companies behind them. And the plan is to hold, not churn.

What’s also interesting is the reason behind the launch. Venture funds can’t invest more than 20% of their capital in “liquid” assets such as cryptocurrencies, which limits the number of investments a traditional fund can make.

Going around this limitation by setting up a dedicated fund is a strategy that other funds dabbling in crypto could imitate. With fewer constraints, it’s likely that the amount of institutional or family office money backing these ideas will increase. A rising tide and all that…

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Game of Thrones fans, brace yourselves – this is chocolate sponge covered in silver chocolate filled with strawberry coulis that oozes which cut. By chef Ben Churchill (via MyModernMet).

by Ben Churchill, via MyModernMet
by Ben Churchill, via MyModernMet

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