One of the reasons that I am enjoying The Network State: How To Start a New Country by Balaji Srinivasan is that it focuses on next order effects of crypto. The “easy” stuff is to see how decentralized ledgers make existing processes better, faster, and cheaper. The “moderate” stuff is to see how they will enable new applications and services within the realm of finance, say gifting 10 shares of stock to your Godson as easily as you send a text. But the “hard” stuff is doing the deep thinking...

One of the reasons that I am enjoying The Network State: How To Start a New Country by Balaji Srinivasan is that it focuses on next order effects of crypto. The “easy” stuff is to see how decentralized ledgers make existing processes better, faster, and cheaper. The “moderate” stuff is to see how they will enable new applications and services within the realm of finance, say gifting 10 shares of stock to your Godson as easily as you send a text. But the “hard” stuff is doing the deep thinking...

One of the bigger challenges in crypto is the supposed “blockchain trilemma” which states that like speed, price, and quality, you can have 2 out of the 3 of security, decentralization, and scalability. Various projects take different approaches to addressing the trilemma. Many sacrifice decentralization (at least in the short term, they claim) to focus on security and scalability with the hope that they can figure out the rest later. Some compromise on security. Some compromise on scalabilit...

One of the bigger challenges in crypto is the supposed “blockchain trilemma” which states that like speed, price, and quality, you can have 2 out of the 3 of security, decentralization, and scalability. Various projects take different approaches to addressing the trilemma. Many sacrifice decentralization (at least in the short term, they claim) to focus on security and scalability with the hope that they can figure out the rest later. Some compromise on security. Some compromise on scalabilit...

I've been thinking about decentralized networks as akin to a rainforest. The more species there are, the more diversity there is. This doesn't only refer to animals, but to flora as well. The more of everything there is, the more diversity, which leads to greater "natural experiments" in evolution and opportunities for nature to "innovate." But, what would happen if, for example, all of the apex predators were removed (like they were from Yellowstone)? Or, if a certain type of tree ...

I've been thinking about decentralized networks as akin to a rainforest. The more species there are, the more diversity there is. This doesn't only refer to animals, but to flora as well. The more of everything there is, the more diversity, which leads to greater "natural experiments" in evolution and opportunities for nature to "innovate." But, what would happen if, for example, all of the apex predators were removed (like they were from Yellowstone)? Or, if a certain type of tree ...

I read an article the other day decrying the “value” or lack thereof that holders of Bitcoin have as the new world order of assets is created. The article suggested that, in previous times, value was created by people (like industrialists) being productive and creating something. With Bitcoin, the argument went, there’s nothing being created, therefore, the people who have Bitcoin and may benefit if it does become dominant are not creating anything meaningful. I think the argument misses a cr...

I read an article the other day decrying the “value” or lack thereof that holders of Bitcoin have as the new world order of assets is created. The article suggested that, in previous times, value was created by people (like industrialists) being productive and creating something. With Bitcoin, the argument went, there’s nothing being created, therefore, the people who have Bitcoin and may benefit if it does become dominant are not creating anything meaningful. I think the argument misses a cr...

There was an article in the WSJ last weekend called, Can Central Banks Maintain Their Autonomy? My short answer is: no, I don’t think they can. Eventually, I believe the banks have to get politicized because the debts of the countries behind the central banks are so large that increasing interest rates become an unsustainable burden on the governments. But that’s my personal take. One of the things that really jumped out at me was the fact that the Fed has two primary mandates: inflation and ...

There was an article in the WSJ last weekend called, Can Central Banks Maintain Their Autonomy? My short answer is: no, I don’t think they can. Eventually, I believe the banks have to get politicized because the debts of the countries behind the central banks are so large that increasing interest rates become an unsustainable burden on the governments. But that’s my personal take. One of the things that really jumped out at me was the fact that the Fed has two primary mandates: inflation and ...

I know I’m pretty “pot-committed” to crypto, so naturally I am going to look for things that provide confirmation bias. As I shared yesterday in Charlie Munger on Inflation and Fascism, there’s a lot of data that could be interpreted as we are totally headed in the wrong direction. It makes me wonder if, in 10, 20, 30, or 50 years (assuming we even make it), will cryptoeconomic systems that are actually more fair and more protective of individuals, have arisen as the lifeboat for people tryin...

I know I’m pretty “pot-committed” to crypto, so naturally I am going to look for things that provide confirmation bias. As I shared yesterday in Charlie Munger on Inflation and Fascism, there’s a lot of data that could be interpreted as we are totally headed in the wrong direction. It makes me wonder if, in 10, 20, 30, or 50 years (assuming we even make it), will cryptoeconomic systems that are actually more fair and more protective of individuals, have arisen as the lifeboat for people tryin...

tl;dr: when fixed income comes to crypto (and works), the big money will really start to flow. It’s coming. According to the ICMA Group, the size of the global fixed income market (as of August 2020-so it’s probably bigger now) is more than $128 trillion.From what I understand, and I’m not a fixed income expert, fixed income dwarfs the rest of the market. Intuitively, this makes sense. Most people are risk-averse and like predictability. So it is probably not so surprising at all that the wor...

tl;dr: when fixed income comes to crypto (and works), the big money will really start to flow. It’s coming. According to the ICMA Group, the size of the global fixed income market (as of August 2020-so it’s probably bigger now) is more than $128 trillion.From what I understand, and I’m not a fixed income expert, fixed income dwarfs the rest of the market. Intuitively, this makes sense. Most people are risk-averse and like predictability. So it is probably not so surprising at all that the wor...