Bits and stuff: February 18, 2017

An awesome article from my colleague Marc Hochstein, with one of the best quotes I’ve read in ages, from Primavera De Filippi:

“You cannot assume that just because a technology dis-intermediates and is trans-national that it cannot potentially be used to reinforce existing social, political and economic structures.”

RIP, John Perry Barlow.

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In The New York Times, Peter J. Henning raises the issue of cryptocurrency regulation. Who should regulate cryptocurrencies in the US? Both the SEC and the CFTC appear to be in a game of “not me” – and they both have a point. The SEC regulates securities – cryptocurrencies such as bitcoin have not been defined as such (and to do so would defy logic). The CFTC regulates derivatives on commodities – and while it has labelled bitcoin a “commodity” (not totally unreasonable), its remit does not cover the cash market, just commodity-based derivatives.

“The C.F.T.C. “does not have regulatory jurisdiction over markets or platforms conducting cash or ‘spot’ transactions in virtual currencies, or over participants on those platforms.” To reach actual trading in cryptocurrencies, Congress would have to extend its authority to cover a cash commodity market, something lawmakers have not done.”

At the moment, cryptocurrency exchanges are loosely covered by a patchwork of state money transmission laws – but, cryptocurrencies have not officially been designated “money” – and having to get licensed in every single state is not practical. The result is a clunky, fragmented or off-the-radar network of exchanges that do not offer much protection to the user.

The article posits the creation of a new organization – a Cryptocurrency Council, for instance. This would not only be able to develop a national approach to cryptocurrency transmission and exchanges – but it could also further investigation into use cases, offer a focal point for fraud investigations and develop a comprehensive base of information on usage. Most importantly, it could offer an umbrella of respectability to the nascent field, while recognizing that a new concept deserves a new mindset.

In the end, trying to fit cryptocurrencies into one of the existing asset definitions for regulation purposes isn’t working out well for anyone. Time to re-think the paradigm.

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The FT’s Henry Mance gave us a brilliant tongue-in-cheek take on us vs. Big Tech:

“This week, 1m people signed an online petition protesting against a redesign of Snapchat, the adult-proof messaging app. They wish to express — I quote — a “general level of annoyance”. They have probably already slammed their bedroom doors. They might not come down for supper.”

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Here’s a blockchain use case: In Ghana, over 80% of landowners lack title to their land – and 2/3 of Kenya’s land is “owned” without title…

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Bloomberg reports that the UN’s World Food Programme expects to be able to cut millions of dollars from the costs of administering its food programme, just by moving the cross-border money transfers onto a blockchain system. While that is actually a tiny portion of the overall budget ($6 billion, according to the article), it does buy a lot of food… And it does mean less profit for the banks (although, again, a drop in the ocean…).

However, no details are provided on the type of blockchain to be used (a WFP programme in Jordan launched last year was built on ethereum), nor on timing – it sounds like more wishful thinking than actual plans.

And this quote by one of the directors – “Blockchain helps promote collaboration by providing enormous amounts of data.” – makes no sense whatsoever. Blockchain promotes collaboration by design, not by providing data. And it only provides data if it is programmed to do so. A strange thing to say.

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I’ve mentioned before that I’m a sucker for miniature dioramas… and I get an illicit thrill from dystopian fiction (if there’s a “survivor” theme)… so this made me gasp with delight:

Nix Gerber 1

Nix Gerber 2

Nix Gerber 3

– by Lori Nix and Kathleen Gerber

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Tyler Cowen bucks the trend with a bad review of Black Panther. I haven’t seen it yet, but have heard nothing but rave comments… which always makes me suspicious.

“So many spears and wild animals? How about holding a referendum every now and then?“

I grew up in Africa, and the way western culture attempts to portray what it thinks African culture looks like in a misguided attempt to appear inclusive has always irritated me. That said, I really like the bits of the soundtrack that I’ve heard, so…

“I would say the more you know about actual African cinema, the less you will appreciate this one.”

Then again, no way was this attempt at bridging divides not going to stir up some uncomfortable opinions.

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And speaking of Tyler, he interviewed Matt Levine – the best newsletter creator out there (original, pithy and witty comments on money and economics, for Bloomberg) – on his podcast. They had an interesting chat about cryptocurrencies (no, CryptoKitties are not derivatives), and about Buffy the Vampire Slayer. Definitely worth listening to.

“It’s a perfect example of dealing very intelligently with serious themes in a way that, on its surface, and particularly in its title, is silly and is not presented as serious, which I think is, obviously, something that I often aspire to do.”

(Apropos of absolutely nothing at all, Matt Levine has a much deeper voice than I expected.)

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I’ve just finished “The Defectors”, by Joseph Kanon. It reminded me so much of John Le Carré, only more American. Although it’s actually very Russian – about the lives of US spies who escaped to the Soviet Union. Written with a certain rhythm and poetry, with complicated villains that you can’t hate and heroes that are far from heroic, it zips along with a melancholic yet determined patriotism.

defectors

Bits and stuff – February 11, 2018

On to the media crypto highlights of the week…

Taking a step back, CoinDesk published an original overview of ICO trends, which include continued regulatory pressure, the awakening of traditional tech companies to the potential of tokens, and the increasing sophistication of consumers.

What I didn’t expect was the apparently widespread belief that token funding will continue to grow, while getting more complex. I was also surprised by the revelation that many ICO entrepreneurs have back-up plans in case ethereum’s scaling issues don’t get resolved.

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From VC firm Andreesen Horowitz, a list of cryptocurrency-related readings, well worth bookmarking.

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Pascal Bouvier has the audacity to draw parallels between the evolution of established religion, and that of cryptocurrencies… and pulls it off, with flair. A stirring read:

“Money creation is backstopped by taxes on the people and the state monopoly on violence ensures a more or less orderly collection of taxes. Remove the monopoly over money creation and the nation state starts to vacillate on its pedestal… Many pundits will rightly point out that all cryptocurrencies suffer from congenital malformations… If there is one thing we can count on, it is human ingenuity, and the crypto field will find solutions and solve these defects over time. What we all hear is the sound of inevitability in the form of fitter cryptocurrencies to come.”

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I get a huge kick out of seeing how different media sources report on the same event – it often leaves me wondering how many parallel universes there can be.

On this week’s Senate hearings on cryptocurrency, for instance. At the thoughtful end of the spectrum, you have:

ETHNews: What Was Missing From The Senate Banking Committee’s Hearing On Cryptocurrency?

The report urges greater consideration of volatility and systemic risk, to what extent newer cryptocurrencies are commodities, the self-certification of cryptocurrency derivatives and whether or not all tokens are securities (as Chairman Clayton hinted).

CoinDesk: Crypto Industry Reacts to US Senate Hearing Remarks

“Optimism aside, some market observers said they believe the hearing revealed the need for more clarity on the regulatory front – something that both agency chairs indicated may be necessary in statements that broached possible action from the U.S. Congress.”

TechCrunch: Senate cryptocurrency hearing strikes a cautiously optimistic tone

“In a week of plunging prices and bad news, the hearing struck a tone that coin watchers could reasonably interpret as surprisingly optimistic.”

Reuters: U.S. regulators to back more oversight of virtual currencies

“Both regulators have cracked down aggressively on bad digital currency actors… But the question of who is best placed to oversee the underlying cryptocurrency cash market remains unclear.”

At the other end of the spectrum, you have:

Forbes: Regulators May Need More Power To Control Bitcoin, Senate Banking Chair Says

A confusing, patchwork article that I gave up trying to make sense of. (“Control bitcoin”? C’mon, that is not at all what they said.)

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As cringe-inducing as the above article is, the week’s award for Most Egregious Reporting must go to that fount of financial wisdom, the Daily Express, whose headlines “Cryptocurrency bull run imminent with bitcoin to hit $50,000 in 2018“ and “Cryptocurrency CRACKDOWN: World leaders to plan REGULATION of Bitcoin at G20 meeting” are just plain irresponsible. I’m not going to put links to those articles because they don’t deserve the encouragement.

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If this doesn’t make your mouth water…

lauren-ko-12

lauren-ko-6

lauren-ko-2

By Lauren Ko… check out more of her pastry creations at Colossal

 

Bits and stuff – February 4, 2018

So, after a pretty dire January (my mother passed away), I emerge, blinking, into the crypto light again… Anything interesting happen in my absence? *checks bitcoin price* Oh…

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Have you noticed how bitcoin transaction fees are much lower now than a month ago? The rocketing cost of using bitcoin was the subject of several headlines recently, with fees holding at around $30 per transaction. That makes bitcoin economical only for large transactions (and perhaps not even then) – not exactly the original vision.

Now, however, they appear to have dropped to around $10. This is still too expensive for bitcoin to be useful, but since most of the transactions are from speculators, they don’t seem to mind. For real-world use, it’s a non-starter.

Bear in mind that these fees are on top of the substantial reward that the miners get for processing a block. Wasn’t the idea that fees would remain low as long as miners got paid through new bitcoins?

And, why the drop? Someone on Twitter suggested SegWit. Is that right? Anyone have a grasp on this?

 

bitcoin transaction fees
from bitinfocharts.com

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Good stuff:

Joi Ito’s article on the ICO mania for WIRED:

“Requiring companies to sell tokens only to accredited investors won’t solve the problem, because those investors will later sell them to speculators or, worse, to people who have seen the ads online promising to provide the secret of making a bundle on cryptocurrencies.

A lot of otherwise productive developers are devoting their expertise and attention to working on shallow, quick money ICOs rather than working to sort out the underlying infrastructure and protocols in academic and more open deliberative settings not fueled by warped financial interest.”

Kadhim Shubber’s take on the fundamentals of bitcoin in the FT:

“Someone comes along and tells you to imagine an electronic network, for moving money anywhere in the world, that no-one owns. It’s an intriguing idea. It’s an unprecedented idea. In the entirety of human history such a thing has literally never existed.

Would your response really be: ‘lol the true value of bitcoin is zero’?”

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Daft article of the week:

How to add to the already-high bullshit quotient in crypto Twitter, from WIRED… (I include this cringe-making article here, against my principles – it shouldn’t even exist, I mean, c’mon – to help you spot the fake experts).

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Smart…

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All conferences should have reporting like this:

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And, thanks Vitalik… sending you a hug for this…

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Colour and curves… Say no more…

via Colossal
via Colossal

Bits and stuff – January 7, 2018

After a whirlwind December and a good chunk of time offline, I’ve been trying to remember how to type. And catch up on blockchain news.

With so much to catch up on, I can’t stress enough the value of stepping back every now and then and taking a non-blockchain break. The trope that it helps with perspective turns out to be true. Catching up is tough but interesting, and surprisingly less overwhelming than I expected. And the feeling of loss in missing out on news and ideas is easier to bear when you realise that you’re going to feel that anyway, no matter how much time you put in – there is so much great blockchain-related content these days that it is impossible to read everything.

I’m back at CoinDesk now, working on new projects. More details to follow. There are some interesting things in the pipeline.

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Ripple was a big theme this week, with an excellent deep dive by Michael Castillo and Bailey Reutzel on the relationship between Ripple’s network and its token XRP. It seems that the company has not been as transparent as it could (should?) have been, although it doesn’t seem to have overtly misled anyone.

With Ripple and its token a touchy subject at the moment (exacerbated by its meteoric price increase of 1500% in the past month alone, as of Jan 4), Twitter has been ablaze with controversy and extremism. While some point out the dubious fundamentals behind the valuation, XRP holders scream FUD accusations. Meanwhile, the press tries to make sense of it. The Financial Times, the New York Times and the Wall Street Journal are just some of the big names covering this now. The CoinDesk article was the best I’ve seen. I also recommend Ryan Selkis’ lucid take on Medium.

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Stunning photographs of the neon stillness of Hamburg at night by Mark Broyer (via MyModernMet):

Mark Broyer, via MyModernMet
Mark Broyer, via MyModernMet

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This article highlighted the jurisdictional spaghetti that is US securities regulation: the securities regulator for Texas (not the federal SEC) stopped a token sale due to various infractions.

I confess that I didn’t realise the state authorities had the power to do that. Combine this oversight with that of the SEC, and the outlook becomes more reassuring for those of us concerned about the lack of regulation. Of course, it becomes tougher for would-be token issuers – but I don’t think that’s a bad thing.

And things could be just warming up. According to this article, 94% of state and provincial securities regulators (you mean there’s also provincial ones??) think that cryptocurrencies carry a “high risk of fraud”. Which implies that scrutiny will get tougher. Good.

Breaking rules in the name of innovation is one thing. Breaking laws is another.

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Here’s an intriguing shift: George Soros’ Quantum Fund invested $100 million (through the exercise of a warrant) in retail giant Overstock. According to Overstock’s CEO Patrick Byrne, much of this will be invested in blockchain development.

This is intriguing for two reasons: 1) it’s traditional finance – no digital token shenanigans; and 2) Overstock is an unusual blockchain play.
As well as a successful e-commerce business, Overstock owns Medici Ventures, which oversees the retail giant’s blockchain activities. Many of these are likely to benefit from the funding.

One of those is tZero, which is building a distributed ledger platform for capital markets and which is currently in the pre-sale phase of a token issue. Since my personal thesis is that capital markets will be one of the main areas of focus for blockchain efforts in 2018, this is worth keeping an eye on.

In a further twist, the firm’s CEO recently announced a desire to focus on his “personal mission” of developing blockchain-based property rights. $20 million of the funding will go to DeSoto Inc, a joint venture Byrne set up with Peruvian economist Hernando De Soto to further this end.

Since this is another compelling use case, with the potential to further financial inclusion and unlock value through reliable ownership titles, we could be looking at one of the most high-impact blockchain-related investments of the year. And it’s only the beginning of January…

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Daft story of the week:

You may remember that late last year the Long Island Iced Tea company changed its name to the Long Blockchain Corp., which probably makes sense to someone, somewhere (go figure). It turns out that it wasn’t just a naming exercise – they do actually plan to start mining bitcoin. I mean, it’s gotta be easier than making and selling iced tea, right? Of course, first they need to raise the money. And, no, they have not (yet) mentioned an ICO.

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More to come next week, although not as much as I’d like. All of my non-working time is taken up with physiotherapy – I’m SO looking forward to getting my shoulder back to normal.

I’ll leave you today with a taking-a-break recommendation: the second season of Dirk Gently. (If you haven’t seen the first season, that’s recommendable, too.) Totally weird and strangely enjoyable. One of those series where not understanding what is going on is part of the gleeful charm.

Dirk Gently

Bits and stuff: cathedrals and more… December 10, 2017

If any of you have ever taken a mooc (massive open online course), you’ll know the compelling power of having good quality teaching of a vast range of subjects at just a couple of clicks away. Access to that kind of wealth is intoxicating, and can be the black hole of time management. A couple of years ago I was a total addict, at one point enrolled in about 15, from institutions such as Harvard, Princeton, University of Edinburgh…

Needless to say, I didn’t complete them all, but I did get through a fair number. Most of my choices were in programming, economics and finance, but, surprisingly, the ones I enjoyed the most (and most remember) were the ones from “left field”, nothing to do with my training or profession. I especially recommend “How to Change the World” from Wesleyan, and “Digital Education” from the University of Edinburgh, if they ever put them on again.

I bring this up because today I started a new one, the first mooc I’ve felt brave enough to sign up for since I started work at CoinDesk. By “brave”, I mean willing to struggle with the time management issues – there are only so many hours in the day, and many things take priority over scratching a curiosity itch, however enlightening it may be. In so doing, I realized how much I missed scratching that curiosity itch, and how much more interesting the world is when we have the luxury of doing so. Also, how intertwined different disciplines are, and how big pictures emerge through seemingly unrelated connections.

The course I’ve started is “Cathedrals”, from Yale University, available on Coursera. I’m not religious, I’ve never been particularly fascinated with cathedrals before, but I’m married to someone who is and I’ve wandered around more than I can count.

So why did I sign up? I didn’t know at the time – it just felt like something that I needed to do. But now that I’ve started, I realize why: it’s the desire for context. Just two chapters in, it’s already about engineering, history, religion and philosophy. And already it’s tying in to reading I’ve been doing about economic development and how money evolved.

I’ve also realized that it’s one thing to gape in awe at the beauty and splendour of gothic structures. It’s another to understand how they came to be, what purpose they served and why so many are still standing today, centuries later.

So, while a course on cathedrals may sound fusty, it’s not. It’s modern and eye-opening, and I’m loving it.

notre dame

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The course also taught me a new word: cephalophore. It means “saint carrying his own head”. I challenge you to use that in a sentence.

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Angela Walch (@angela_walch) is serialising an update of The Christmas Carol, faithful to the original style but with modern characters and a moral that is disconcertingly not too different from the original.

Parts 1 & 2 here.

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Sticking with the cathedrals theme, take a look at this installation of stained glass “ribbons” in a San Francisco cathedral… Magical.

stained glass ribbons

(Installation by Anne Patterson, image by Fiestaban Photography, via MyModernMet)

 

Bits and stuff: panels, politics and pastry – December 4, 2017

And so a whirlwind November draws to a close. As predicted, Web Summit was intense – the best part for me was catching up with some great people, making new friends and having many memorable conversations. I thoroughly enjoyed the panels I was on, and hats off to the organizers for coordinating such a massive event.

websummit

Last week I was on a panel (there are soooo many blockchain conferences these days) at The Blockchain Summit in London. Although I lived in London for a few years, I’d never been to the Olympia center before. Big. Packed. I especially enjoyed the round tables, and recommend to all conference organizers that you set some up – small, intimate groups discussing predetermined topics.

blockchain summit panel

As I mentioned before, I no longer do the newsletters for CoinDesk – the Daily has been taken over by editor Pete Rizzo, and the weekly is in the capable hands of managing editor Marc Hochstein. He’s doing a brilliant job, and the takeaway essay in yesterday’s email is excellent – if you don’t get the weekly newsletters (what????), look out for it on the CoinDesk website.

I’m embarking on a month-long sabbatical to finish a research project, focus on reading and catch up on some learning. Already the month is going by too quickly.

In January I re-join CoinDesk to work on new products. It’ll be interesting…

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The Financial Times is upping its blockchain coverage, both in quantity and quality. It used to be just the Alphaville team (specifically Izabella Kaminska) that produced insightful and original comment – but now a slew of sections are casting their gaze on the concept. Unsurprisingly, the focus is on bitcoin, the ingenuous darling of the investment market. And while they lack Izabella’s caustic aspersions on the blockchain hype, they are (in general) doing a fairly good job of conveying the surreal protagonism of cryptoassets.

Gary Silverman, Hannah Murphy and John Authers gave a good overview of bitcoin as an investment, conveying that even professionals don’t seem to understand it.

And capital markets editor Miles Johnson attempted to extract some political meaning from the tea leaves of bitcoin mania.

“Financial professionals who fail to comprehend why someone would risk their wealth investing in bitcoin when it appears to them so obviously to be a bubble can be compared with the political analysts who believed it was impossible the UK would vote to leave the EU.”

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The South China Morning Post, however, misses the point completely by contrasting bitcoin’s “lack of residual value” with the utility inherent in copper, silver and gold.

True, metals can be used for things. But so can bitcoin: it’s a secure means of transferring information without relying on a central authority. That is useful, arguably more so than pretty jewellery (and most industrial uses are being innovated away by new synthetic materials).

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When I head outside for some exercise these days, I’m listening to the audiobook of “Sapiens”, by Yuvah Noah Harari. It’s surprising how different the listening experience is from reading – I’m noticing totally different points. That could, however, just be down to my erratic attention span…

Anyway, last night the following jumped out at me – the conquistadors have just invaded Mexico, and the Aztec natives are perplexed as to why they keep jabbering on about a certain yellow metal:

“What was so important about a metal that could not be eaten, drunk or woven, and was too soft to use for tools or weapons? When the natives questioned Cortés as to why the Spaniards had such a passion for gold, the conquistador answered, ‘Because I and my companions suffer from a disease of the heart which can be cured only with gold.’”

This ties in with my previous point about intrinsic value. Metals have some utility, yes. But most of their market value comes from the fiction (by that I mean “invented reality”) that they’re pretty.

I think gold is pretty. But I think clear water is prettier. A sunset, a butterfly, an orange maple leaf… they’re prettier, also – in my opinion. Beauty is in the eye of the beholder, no?

It could be argued that metals are more durable, therefore they are a much better store of “prettiness”. And that’s a fair point, assuming that durability of “prettiness” warrants such a premium over utility.

But it’s not much different from the rationale that bitcoin’s premium is due to perceived value, not residual usefulness. So, why is one totally rational but the other is “market madness”?

As Harari explains, the Aztecs – who did not see gold as scarce – were puzzled by the aliens’ lust for it. So, while I don’t pretend to be able to justify bitcoin’s current market value, I would like us to stop holding gold up as an asset/safe haven/store of value that “makes sense”.

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Bloomberg is also upping their crypto game, and that’s from an already high level.

As well as an argument for central bank cryptocurrencies and a summary of the positions of the warring bitcoin factions, the Gadfly column gave a good explanation of why the emergence of liquid bitcoin futures markets could explain the price buoyancy.

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From the stratospheric to the sublime, Bloomberg also shows us how a renowned Parisian pastry chef is creating sweet delicacies that look like apples, and taste like apples, too.

image by Céline Clane for Bloomberg (click for link)
image by Céline Clane for Bloomberg (click for link)

I’m all for culinary experimentation, but I can’t help but wonder why, if what we want is something that looks and tastes like an apple, we don’t just eat an apple.

That said, they are gorgeous. I do love the spectacle. And I wouldn’t say no to trying one.

Bits and stuff: talks, takes and transparency – November 1, 2017

You’ll have noticed that there hasn’t been much activity here in October – too much overwhelm from other areas. Priorities are being juggled.

I chaired The Blockchain Summit in London yesterday. The organizers Marketforce did a great job – an excellent event, stimulating and knowledgeable speakers from a wide range of experiences. We had executives, technologists and entrepreneurs talking both big picture and small applications.

blockchain summit

There were a lot of fresh faces up on stage, too, people who know a lot but who I hadn’t heard speak before. I confess that I wasn’t paying full attention to the talks, since the next panel’s questions needed formulating, but there are some presentations that I will be going over again. Vinay Gupta’s opening keynote did not disappoint, and the LSE Group’s David Harris revealed a lot of stuff I didn’t know (and am particularly interested in) – he’s a fun speaker, too. Peter Stephens from UBS gave a thought-provoking talk on identity – I would have like to pay more attention to that. There were many other highlights, too many to mention them all.

The audience seemed to be knowledgeable and focused, and I met some fascinating people from several countries. That’s one of the aspects I most love about these gatherings – meeting smart individuals with smart questions, everyone coming at this from a different angle.

Claudia Coppenolle gave an eye-opening talk on diversity
Claudia Coppenolle gave an eye-opening talk on diversity

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Now I’m off Stockholm for a brief break, then Lisbon for WebSummit (which should be intense).

There’ll be lots to talk about when I get back, that’s for sure. Assuming my brain still works.

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My article on CoinDesk this week, on why banks don’t want to give accounts to cryptocurrency startups:

It’s my last weekly opinion column. And Sunday’s newsletter was my last for CoinDesk. I handed over the daily newsletters to our Editor in Chief Pete Rizzo a while ago. Next week our Managing Editor Marc Hochstein takes over the weekly. It’s in good hands.

My last day at CoinDesk is the end of November. As for what I’m going to do afterwards, I’m not sure yet – plenty of ideas, some interesting options, but no firm decisions yet. I’ve always believed that the big decisions sort of make themselves, so we’ll see where inspiration strikes.

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An interesting take on bitcoin and ethereum from investor Albert Wenger.

“In summary then: for the time being I am cautiously bullish on Bitcoin and at best neutral on Ethereum.”

Obviously, Albert knows much, much more than I do about investments – but why hold on to something when you are “at best” neutral? It doesn’t sound like optimal allocation – even if neutral, shouldn’t the funds be put to better use in an investment with more conviction?

Perhaps ideology is in play…

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… perhaps something along these lines:

“People who are angry and cynical about venture capitalists and the Silicon Valley ecosystem — and I know many — often don’t appreciate the extent to which VCs genuinely believe, in good faith, that what they do makes the world an enormously better place, by nurturing green shoots of innovation into a mighty forest of progress, and are genuinely baffled by the counter-narrative that they reinforce pre-existing social stratification while mostly just helping the rich get richer.”

This is from Jon Evans’ brilliant article “Ether fever dreams” on TechCrunch, about hype and winnowing.

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Venture capitalist Fred Wilson also poked the hype:

“If you read Carlota Perez, you will understand that most important technological revolutions have been fueled by rampant speculation that almost always comes undone right as the sector is moving from the installation phase to the deployment phase.”

Although he takes a more emotional tone:

“So this ugly speculative phase comes with the territory and always has. But that doesn’t mean I have to like it. I hate it.”

So, it seems that the hype-bashing is increasing in volume. Relief, bring it on. And I agree that when we get through to the other side, we’ll realize that some valuable work has been going on amongst the razzle-dazzle.

The next phase is going to be the most interesting.

— x —

This just doesn’t seem right:

photo by Grant Achatz
photo by Grant Achatz, via MyModernMet

A transparent pumpkin pie???? Very pretty, but… Although I work in a sector based on innovation, so of course I would try it. But… (I need to reexamine my open-mindedness.)

By chef Simon Davies, via MyModernMet.

Bits and stuff: incumbents, matching and satire – Oct 16, 2017

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.

For instance:

“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.

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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.

By Frank Kunert, via Colossal.

kunert-7

kunert-2

Bits and stuff: clarity, overviews and deeper questions – Oct 15, 2017

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.

Including bitcoin?

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?

— x —

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.

Josh Nussbaum market map
click to go to original article, with more detail and insightful comment

— x —

This article on Quartz about moral philosophy makes compelling reading.

“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?)

— x —

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.

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Bits and stuff: illumination, finance and Eminem – Oct 12, 2017

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.

— x —

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.

— x —

the mountain version of "the floor is lava"? - photo by Eivor Kuchta, via MyModernMet
the mountain version of “the floor is lava”? – photo by Eivor Kuchta, via MyModernMet

— x —

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.”

Hats off.

Conor Friedersdorf in The Atlantic puts it beautifully:

“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?”

— x —

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.