The impressionists were born out of frustration with an annual art show, the Salon de Paris. The organization behind the show, the Académie des Beaux-Arts, favored traditional French painting. Because of this, the Salon de Paris routinely rejected the paintings of artists like the impressionists who did not fit the traditional style.

Now the impressionists could have changed their art to match the expectations of the Académie. Or they could have given up on showcasing their art. Instead they decided to make their own small exhibition showcasing their unique artistic vision. The impressionist exhibitions were not as famous or critically acclaimed as the Salon de Paris, but the artists who participated eventually became some of the most beloved artists of France for their unique portrayals of modern life.

When I think of this story it helps me remember that sometimes what is needed to flourish is not to swim in the largest and most impressive pond you can find. Sometimes what is needed is to make your own small pond, and be the biggest fish in it.

Of the two parents in a child's life, mama is the more visible one. The one who birthed them. The one they cling to for comfort. In many families, the ever-present one. Papa is a more distant figure, the one who leaves for work in the morning and comes back in the afternoon tired. The stern one. The one who places kids in time out. Who tries to teach them things they don’t want to learn.

To be a father is to support your children, but to do so in an almost invisible way. To be the steady hand they hold on to while learning to walk. To be the safety net underneath them they cannot see as they climb over bars in the playground. You go out and earn a living for the family so they can live carefree without knowing why you have to leave everyday.

What you try to teach your children is that they can rely on themselves. That they can climb without fear and reach higher than they thought possible. That they don’t need your hand anymore to take their next steps. That they can run without you.

There is an amazing amount of pride in watching your kids run. To be free and wild and not need you anymore. But it is also hard. It is also lonely. Succeeding at Fatherhood is a terribly difficult thing. It is almost as scary as failing at being a good father.

On this father’s day, I just want to say that I see you. I see the invisible work you put in. You are not alone. Even if they can’t see it, be the best father you can be, their lives will be better for it. Let them run, even when it’s hard.

As with any new product, wall street and investment advisors will be trying to separate out crypto as a shiny new alternative asset class, which should be included in a portfolio for diversification. I don’t want to get into whether it makes sense to invest in crypto tokens. I do, but I'm weird. No, what I want to clarify here is that crypto is not a different asset class from what already exists.

There are a few things which i consider true asset classes:

1. Cash/Currencies - the medium of exchange in a localized economy.

2. Equity - a share of ownership in a business. This ownership share usually entitles you to a share of future cash flows from the business.

3. Debt - lending out your cash/currency with the expectation of repayment with interest at a future date.

4. Commodities - raw materials which are produced to meet a market demand.

5. Investment contracts/derivatives - contractual agreements where payment between parties is based on specific market triggers or conditions.

6. Collectables - finished goods with the potential to gain value due to rarity and cultural appeal.

Thats it. The vast majority of investments are just variations of the above. For example “real estate” is often separated out as an assets class, but many real estate investments are actually investments in equity, debt, or collectables associated with physical spaces.

Treasuries, corporate bonds, and peer-to-peer lending are often separated into different asset buckets. But they are all variations of debt investments. They basically only differ in the amount of counterparty risk you are willing to take on.

Crypto confuses people because there exist crypto tokens which look very similar to all of the above asset classes. Bitcoin and ethereum are network currencies. Maker and Uni are a form of equity token. Aave and compound allow you to deposit funds and issue you a debt token which accrues interest. There exist tokens representing gold and other commodities. Pendle, GMX, Ethena and many other crypto trading platforms allow you to enter into investment contracts. And of course there are many nfts issued as collectables available for trading on crypto marketplaces.

This diversity of token types leads many to conclude that crypto is a new asset class. But that is the incorrect conclusion. Crypto is not a single new asset class. Crypto networks are economies which can have all forms of assets types inside of them. Cryptographic networks are really a new form of database. They are ledgers that can record ownership and transfers of any arbitrary asset. With crypto we did not create a new asset class, we only made recording ownership of assets and trading of assets more efficient by putting representative asset tokens on crypto rails.

When you evaluate a crypto token for its investment potential, do not treat it as a separate unique asset class where investing rules don’t apply. Instead evaluate what type of asset the token represents and do your analysis on it under that scheme. Is it an equity token? Evaluate the growth and income potential of the underlying business. Is it a debt token? Consider counterparty risk and interest rate. Is it collectable? Consider its potential for cultural significance and rarity.

Framing the crypto investments in this way will keep you grounded when crypto mania comes roaring back.

Slack (adjective)

Not held tightly in position; loose.

“A slack rope”

We humans have a tendency to over optimize. To choose the straightest and tightest path to a goal. To cut out anything that adds unwanted fluff or slack.

You see this tendency everywhere. From the friend managing 9 credit cards to optimize their card rewards to the couple working 80 hour weeks to optimize their household income to the company that has cut their research team to the bone to maximize their profits.

These optimization can be very enticing. You can indeed reach a goal faster with a tight focus. But like a rope pulled too tight in the wrong place, too much optimizing can also make you fragile and likely to snap.

As I write this I am sitting and drinking a coffee (my preferred plain cappuccino with no added sugar) in the Frankfurt airport in germany. I am on a business trip and I have a 6 hour layover before my connecting flight. You might say that I have chosen an itinerary that is highly inefficient and unoptimized. I could certainly get to my destination much faster if I had chosen a different set of flights with a much tighter layover. If I had pulled in the unnecessary slack. But over the years of my international travels I’ve discovered that this optimization is not optimal for me.

For those of you unfamiliar, Frankfurt is a horrible airport. My least favorite airport by far out of any I have visited (and I've visited quite a few over the years). The Frankfurt airport is a sprawling monstrosity of twisting hallways, multiple security checkpoints, and unhelpful gate desks. As an entry to europe, going through immigration and customs and walking to your gate can take multiple hours on a bad day. And when you make it through this mess and arrive at your gate, there is no guarantee your flight won’t be moved to a different gate at the other end of the airport at the last minute causing you to retrace your steps through security and do the entire exercise all over again.

In contrast to my fellow travelers who are running through the airport in a panic with barely any time to reach their next flight, I much prefer to approach the Frankfurt airport with a relaxed mindset, to sit and drink a coffee, write something on my computer, and make my way in general direction of my flight as needed. The inefficient and un-optimal is optimal in this case for me.

Where do I optimize instead? My luggage. I run a very tight ship when it comes to what I’m carrying. Everything I brought for this international trip fits in a single carryon bag and a backpack. If a flight is cancelled or a connection is too tight, I dont have to worry about a checked bag getting lost in a foreign country. If I have to stay the night in Frankfurt due to a cancelled flight, I have all my toiletries, clothes, and entertainment devices with me. The optimization here is relaxing. It removes stress from my mind rather than adding to it.

The choice of where to add slack and where to pull it in can make a big difference in life and business. Take the example of just-in-time manufacturing. Just-in-time manufacturing is a model where products are created on demand, not in advance. Companies use this approach to optimize costs. Toyota is one of the most well-known examples of companies using this method. When a client places an order, Toyota only receives raw materials in the factory when it is ready to start building the automobile. This minimizes their inventory holding costs. With just-in-time, a company brings in the slack of their supply chain until it is tight and straight with no inefficiency or buffer.

It is brilliantly efficient and many companies try to copy the Toyota approach with their own supply chains. They optimize, drive efficiency, pull in more and more slack, and are rewarded with higher profitability. It is win-win-win… until covid happened in 2020 and the tight global supply chain snapped. Stores couldn’t get toilet paper, car manufacturers couldn’t get electronic boards to finish their cars, grocery stores shelves were left bare. Products across the economy couldn’t be built or delivered at exactly the moment when customer demand jumped, because there was no slack in the system. Companies that had just a little bit of slack in their system, were just a little bit more inefficient with their inventory, end up winning orders on delivery time alone. They were the only companies with products on the shelf to sell. Trading some nearterm efficiency and profit for longterm resiliency and slack was the right call in this case.

On a more micro level, look at how some couples approach their household budget. Where is there slack and where is it tight? I listen to quite a few personal finance podcasts and there are many examples of stressed couples fighting over the cost of an appetizer, hobby, or other small expense, sometimes to the point of near divorce. When you dig deeper, their troubles can often be traced back to a lack of slack. A buildup of quick decisions in pursuit of an efficient life have left them with very high fixed costs (an expensive house, an expensive car, a debt that has grown too large) while leaving zero breathing room for everyday expenses. Even a 5 dollar purchase can send them careening off the financial cliff.

The curious thing about these situations is that couples often made the decisions they did to be efficient. It was more efficient to take out the expensive mortgage on the dream home than to waste money on rent, it was more efficient to put everything on the credit cards to max out the points instead of saving up cash, it was more efficient to buy the expensive timeshare instead of planning out individual vacations over the next 30 years, it was more efficient to buy the new car rather than manage maintenance on the old one. Efficiency, optimization, and quick decisions, made over and over again until the couple couldn’t even breathe anymore from the rope being pulled so tight.

As I’ve gotten older I’ve come to appreciate slack. How sometimes the optimal thing is to be un-optimal, the efficient thing is to be inefficient. There is value in leaving room for coffee and a stroll, to leave time for play and relaxation, and not running directly to the next destination in life. Especially now that I have young children.

Earlier this year my wife left her very lucrative manager position to stay home with our two young kids. Our combined salary dropped in half. From an income perspective we are less optimized, we are less efficient. We cannot save as much money for retirement, we cannot go on as many fancy vacations, we cannot give as many gifts as we did before. But what we’ve lost in economic efficiency, we’ve gained in lifestyle and resilience.

This business trip I am on that is sending me through the Frankfurt airport could have been very hard on my family. In an alternative timeline my wife might have been left alone to juggle sick kids, daycare, and demanding full time work in an office for a week with no reprieve. Even if she had survived the stress of this one trip, it is not clear how many such trips our marriage could have survived in the alternative world where we both worked full time at demanding jobs. Instead we chose to have slack, and it makes all the difference.

Since my wife is full time dedicated to the kids instead of work we were able to pack everyone up and drop her and the kids at the grandparents house for the week I am traveling, something we could never have done if she was full time in the office. She gets to have helping hands, the kids get to see their grandparents, and I get peace of mind to knowing that what could have been a stressful week for the whole family is instead a fun and pleasant one for them.

Are we making as much money as we could be? No. But thats okay. I will defend the choice to build in slack. Life is better and more stress free with a little buffer built-in. In our case, the inefficient and un-optimal is just the thing we needed to live life to the fullest.

P.S.

As for my flight out of Frankfurt. They decided to do the document check in the hallway before the flight. Everyone who was already at the gate waiting had to get up from their seats and leave the boarding area so their passports could be reviewed. Since I was slowly wandering in the hallway I ended up at the front of the line and had my pick of seats in front of the boarding gate. A blog post done and a prime seat in front of the gate, I think this relaxed 6 hour layover has been a success.

The crypto territory which would eventually become the United States of Ethereum was first explored in 2013 by one Vitalik Buterin. After surveying the territory, he enlisted the support of several others, including engineers, land investors, and public planners to develop the region into a habitable settlement.

Under the guidance of these founding fathers, the digital nation of Ethereum was formally established in 2015 on the frontier of the new crypto landscape with the launch of its governing protocol. Following the vision of Buterin, the new nation's constitution and governing protocol was written to emphasize and enforce ideals of decentralized power, freedom of speech, and permissionless innovation. In the time leading up to and shortly following its establishment, the new fledging nation of Ethereum served as a destination for crypto emigrants who left the old world of bitcoin due to a lack of opportunity and stifled prospects for innovation for the new world of Turing complete blockchains.

The new nation established a currency called "ether" or ETH, which it used to pay a mercenary army of Miners for defense against external enemy attack. Within the safe digital boundaries of Ethereum maintained by this mercenary army, citizens with an established Ethereum residency and address could pay with ETH to move goods and develop new services within the Ethereum economy.

Although it strove to maintain the ideals upon which it was established, the young fledging nation was not without troubles. In 2016, a civil war broke out over a theft of funds from "The DAO", a funding collective within the Ethereum nation. The fundamental issue which led to the war was that the "theft" was fully "legal" under the young nation's constitution. On one side of the war were those who wished for the funds to be returned even if the return violated the letter-of-the-law in the governing protocol and on the other side were those who wished for the governing protocol to remain unmodified even if this resulted in a permanent loss of funds for those who had participated in The Dao (at the time a significant portion of Ethereum's settler population). The resulting rift spilt the nation in two: Ethereum (where the affected parties were reimbursed with an alteration of the constitution and governing protocol) and Ethereum Classic (where the funds were allowed to remain stolen in agreement with the original governing protocol).

In the aftermath of its civil war, Ethereum recovered and began to develop a vibrant local economy. Due to its flexible governance protocol and the establishment of token standards for the identification of ownership and funding, Ethereum became a central economic hub for trading and speculation on the crypto frontier. In particular, among the various crypto nation-states Ethereum merchants dominated in the trade of ownership tokens and digital commodities. Alongside the newfound economic wealth and power, Ethereum also developed as a cultural center with a digital goods and digital gaming economy. This lead to Ethereum's first speculative economic bubble period in 2017, where a flood of speculative investment schemes entered the Ethereum economy.

As with all speculative manias, the good times eventually did come to an end for Ethereum when many of the speculative investments advertised during this period were eventually found to be without economic merit. Ethereum then entered it's great depression period of 2018-2020. During this time Ethereum experienced significant economic contraction, inflation of its native currency, and a loss of purchasing power for its local residents. However, all was not lost, from the ashes of the speculative mania sprouted a new generation of entrepreneurs and engineers. This new generation conceived of a number of novel and robust economic protocols.

It was during this period that the Uniswap exchange, a simple yet powerful token marketplace, was established. This period also saw the rise of decentralized lenders like MakerDao, Compound, and Aave which allowed borrowers to stake collateral in exchange for a loan of comparably stable non-native currencies like USDC. The easier access to credit and lax monetary policy of Ethereum governance resulted in an economic boom (the Defi Boom) and Ethereum's second speculative bubble mania in the 2021-2022 period.

During this economic boom period Ethereum also underwent significant governmental changes and reform. The high inflation rates of the nation's early history were deemed excessive and a plan was put in place to put the monetary policy of Ethereum on a more sustainable path. In 2021 Ethereum instituted its first sales tax (nicknamed the burn) on all transaction which occurred within the Ethereum economy. Although initially very controversial, the sales tax was eventually widely praised for its efficient and programmatic implementation which tightened economic conditions (raised taxes) during periods of mania and loosened economic conditions (lowered taxes) during periods of sluggish economic activity. In addition, shortly after the implementation of its national sales taxes, Ethereum reformed its military from an expensive mercenary Miner security model to a more efficient one based on a home-grown and nation aligned military made up of Validators paid for with government bonds. This transition results in a short-lived Miner rebellion in 2022 resulting in the temporary nation of EthereumPOW when military activities was formally transitioned from Miners to Validators.

The economic boom period of 2021-2022 also attracted a large number of new settlers to Ethereum. Although the new population added to Ethereum's economic growth and power, the net migration also led to significant overpopulation, city congestion, and demand based inflation. During this time, significant outward expansion and development of the territories around Ethereum occurred resulting in several newly founded States within the Ethereum Nation. The State of Arbitrum (a financial hub), the State of Optimism (a governance and economic collective), as well as a number of other governance and economic zones within Ethereum were founded starting in this period.

With these new States, the now United States of Ethereum made significant strides towards a more robust federated governance model. At the core, the District of Ethereum would remain the central hub for governance, economic, and military policy, while individual states offered citizens lower cost of living, more localized governance, and specialized services depending on the needs of the local population.

The DeFi boom period ended in 2022 with a great financial crisis caused by lax lending standards of centralized neobanks which served the crypto frontier. The United States of Ethereum entered another period of economic contraction, although this time the contraction was less severe due to the previous governmental reforms as well as the robust decentralized finance infrastructure that had been put in place in the years leading up to the financial crisis. In the years following, Ethereum recovered much of its economic activity and price stability and in 2024 a new wave of investment and mania appears to be just over the horizon.

While still a young nation, the United States of Ethereum has achieved significant progress in terms of a stable governance, economic, and military policy since its founding in 2015. The foresight of it's founding fathers and the robust decentralized governance model they established have placed The United States of Ethereum in a remarkably good position to compete as a nation not just on the crypto frontier but also in the global economy of 2024 and beyond. What heights will Ethereum reach? Only time will tell.

First came the conquerors, unstoppable in war. Then came the administrators, who bound it all together into one apparently unshakable, immortal edifice. Then came the wasters, who knew no responsibility and squandered the capital of their inheritance upon whims and vices. And fell to other conquerors.

- Glenn Cook, The Books of The South

The movie "300" captures some of that military might and glory of Sparta when it describes a small force of 300 Spartans who make a legendary last stand at the Battle of Thermopylae against a massive Persian army of more than 300,000. The military prowess of Sparta rested on a number of cultural and technological pillars: a militant society focused on producing adept warriors, superior weaponry, bronze armor, phalanx fighting strategy, as well as other techniques.

Of the many technologies Sparta leveraged for military might, one technology of particular interest upon which they relied was the scytale. A scytale is a simple rod (more accurately a pair of rods with identical diameters). When a general wished to send a secret message to a commander or envoy, he would wrap a long and narrow bit of parchment around the rod and then write the letters of his message across the winds. Unwinding the parchment would leave an indecipherable list of letters which he could send with a messenger without fear of the message being read or modified. When the parchment reached it's destination, the commander or envoy who had the matched rod of the pair could rewind the parchment to decipher the message.

A scytale is an early form of cryptography (literally: to write secrets) which are techniques to secure communications. As you can probably imagine, cryptography has a long history of use in war. Being able to send messages that your enemies cannot intercept or modify to the far reaches of your army can be the difference between victory and defeat. During times of war, the focus of cryptography and encryption is often about secrets. Spy vs Spy. Keeping the world in the dark about what you plan.

Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”

―Sun Tzu, The Art of War

However, cryptography is not ONLY about secrets. And generals, commanders, spies, and political envoys are not the only people who benefit from cryptography. Cryptography is also about identification and authentication. The benefit of the scytale was not only that it kept the message secret, it was also that it prevented modification of the message and confirmed that the message was from the general and not from an imposter. This function of cryptography, authentication, is less flashy but still incredibly useful, not just in war, but also in peacetime.

One example of a peacetime usage of cryptography is the Automated Teller Machine (ATM). When you go to the ATM to withdraw cash, how does the banker at the other end know that you are who you say you are? After all, you could be an imposter trying to steal funds from the bank. In order to overcome this dilemma, you and the banker simply need an agreed upon mechanism to authenticate that the cash withdrawal request is actually coming from you, the owner of the account.

Enter cryptography and the scytale. The only thing the banker needs to do is send you the digital equivalent of the matching rod of the scytale. If you can encrypt the message of your transfer request, the banker can decrypt the message to authenticate that it is indeed you who made the request. Without forms of encryption ATMs would not function and we would all need to go in person to the bank to withdraw funds. It is this second usage of cryptography, authentication, that "crypto"-currencies rely on and get their name from.

Major blockchains like Ethereum rely on a form of cryptography called public-key cryptography. When you set up an Ethereum wallet to interact with the blockchain, you generate a cryptographic "key" and an "address". Both the key and the address are part of a cryptographic set and can be used to encrypt, decrypt, and verify the authenticity of messages.

For example, Bob can send Alice a secret message by encrypting the message using Alice's public address. Alice can then use her private key to decrypt the secret message from Bob. Alternatively, Alice can "sign" a public message using her private key, and Bob can verify that the public message was indeed from Alice using her public address. One way to think about blockchains is that they are platforms for the transfer of verified messages where every participant has a unique cryptographic address and private key.

Contrary to popular myth, most blockchains are not particularly anonymous or secretive. Quite the opposite, most major blockchains are fully public and the activity on them can be easily viewed with what is called a "blockchain explorer". What you see inside a "Block" of a blockchain is a list of messages initiating certain actions to be performed. Transfer, Approve, Withdraw, Execute, Deposit, Swap, Mint, Claim are just a few examples of the functions you might see locked into a block.

In a very basic blockchain like the Bitcoin network, all of the messages deal only with the transfer of bitcoins between addresses. The bitcoin network has very limited functionality and is basically only designed to handle its own internal accounting ledger. I.e., who owns which bitcoins. In more complex smart contract platform blockchains like Ethereum, the signed messages can be used to trigger or execute any arbitrary action dealing with the accounts on the blockchain.

Another way to think about blockchains then, is that they are a list of accounts (addresses) with an associated list of assets. The owners of those accounts sign messages using their private keys to initiate actions and send these messages to the miners or validators to alter the account balances according to the instructions in the message. When the miners or validators confirm a block, they in essence "lock" the current state of accounts on the blockchain based on the list of requested actions in the block.

As an example, say a foolish gambler would like to purchase the latest dog token fad on his favorite blockchain. Using his private key, he would sign a message saying that he approves a trading contract to spend $1000 of USDC (a digital token representing USD on a blockchain) from his account (address), he might then sign a message saying he would like the trading contract to swap his approved $1000 of USDC for 1000 FancyDog Tokens. These messages would be sent to a validator who would incorporate them into the next block of the blockchain, immortalizing the gamblers purchase forever.

Unfortunately for the foolish gambler, he is quite late to the FancyDog trend and the price immediately drops from $1 per FancyDog token to 1 cent per FancyDog token. The foolish gambler can sign another message approving a trading contract to spend his 1000 FancyDog tokens, and a final message to initiate a swap converting these 1000 FancyDog tokens to $10, realizing a loss of 99% of his funds. Luckily, the remaining $10 is still enough to sign a message to Mint a collectable image of a frog sitting on a golden toilet. The foolish gambler is sure this digital collectable will moon 1000x.

And this is how a spartan general trying to send a secret message thousands of years ago is responsible for the trading of dog tokens on the internet in 2024.

A warm wind blows through an upland wood in east Africa. As the wind passes through the trees, a whistling sound can be heard. The trees are singing today. They raise their leaves to capture the morning sun.

Suddenly and without warning the relaxed mood is cut and a shiver runs through the entire wood. A giraffe is approaching. It is attracted to the whistling sound and to the delicious green leaves it knows it will find.

While the trees look thin and spindly, they are nonetheless prepared for attack. Each and every tree is completely covered in large thorns of a nasty sort. The kind that can punch through a leather shoe without pause.

But even still, it is not enough to deter the giraffe. With its dexterous mouth and long tongue it sidesteps the thorns on the first tree and begins to eat the delicate green leaves. In mere moments the tree is picked clean. The woodland shudders as the giraffe moves on to the next in line.

But at the next tree, the giraffe hesitates. This second tree is different. It stands proudly against the giraffe, whistling a tune of defiance. The giraffe is paralyzed for a moment, unsure of what to do.

Eventually the giraffe’s hunger ends its uncertainty. It pokes its head through the thorns in an attempt to get at the juicy green leaves.

This is a mistake. As the giraffe rustles the branches of the tree the whistling sound stops. Thousands of ants begin to pour out of the holes that cover the tree.

The ants attack the giraffe, biting and stinging its mouth, nose, and eyes. The giraffe pulls away, trying to shake off the ants covering its face.

Eventually the giraffe frees itself from the stinging ants. But with its sore and stung face, the giraffe decides that it has had enough leaves from this wood today. It stalks off to find a different wood. One that is less well defended.

Triumphant, the ants return to their tree home. Filled with gratitude, the tree presents to the returning warriors a feast of delicious nectar. The ants have their fill of the nectar and then return to their holes for a well deserved rest.

The tree stands proudly and begins again to whistle its defiant tune. It is an acacia tree and it is protected by acacia ants.

Whistling thorn acacias and their relationship with acacia ants are a classic example of mutualism, where two species intertwine and work together due to the net benefits each provides to the other.

The whistling thorn acacia tree provides large bulb cavities the ants can live in, and secretes an addictive sugary nectar to attract and feed the ants. In return the ants defend the tree from herbivores and from encroachment by other plants. The wastes the ants generate as they forage for food from the surrounding wood also supply nutrients to the tree and help it grow.

Acacia trees are fascinating, not only for what they are and their unique ecology, but also because they serve as a useful metaphor for the ecology of blockchains.

Blockchains have been widely described as distributed ledgers structured as a lengthening chain of blocks connected by cryptographic hashes. To translate this description: blockchains are databases (ledgers) stored on a network of computers (distributed) that keep track of record changes (blocks) using unique mathematical representations for each dataset (cryptographic hashes). To translate this description even further: A blockchain is a string of data on the internet organized by ID codes.

As a metaphor for the problem with this description, the equivalent description for the acacia tree would be: a woody plant with an elongated stem, branches, and leaves, often having thorns. Or: an acacia tree is a type of thorny tree. While these descriptions are technically correct, they miss the interesting part of the story for both the acacia and the blockchain. It is not surprising that many people who first come across this description of a blockchain wonder what all the excitement is about.

Blockchains are indeed distributed databases, however, what is interesting about them is that they are a special type of database that have established a unique mutualistic relationship with the humans that maintain them.

Similar to how acacia trees secrete an addictive nectar that attracts symbiotic ants, blockchain networks secrete an addictive digital synthetic currency to attract compatible humans. In return their symbiotic human gardeners defend the blockchain from bad actors and from encroachment by other blockchains. As the humans care for their partner blockchain they make investments which sustain and grows the network.

The bitcoin network is not just a distributed database, it is a distributed database which secretes bitcoins (or BTC) in exchange for maintenance of the network by humans running "miners". Famously BTC is issued at a fixed rate per block which halves every 4 years (the halvening) with a hardcap of 21 million bitcoins which will be reached in the year 2140. It is estimated that there are 10s of thousands of active bitcoin miners operating globally in competition for this secretion of bitcoin (much like a mature ant colony can be made up of 100,000 ants).

The Ethereum network is not just a distributed database, it is a distributed database which secretes ether (or ETH) in exchange for maintenance of the network by a set of humans running "validators". Contrary to BTC on the bitcoin network, the supply of ETH on the Ethereum network is not secreted at a fixed rate but rather at a variable rate that changes depending on activity on the Ethereum network. As network activity goes down, the issuance of ether outstrips the consumption of ether and the supply of ether goes up, incentivizing more activity. As network activity goes up, the consumption of ether tokens outstrips the issuance of ether and the supply of ether goes down, disincentivizing activity. In this way the Ethereum network regulates the number of symbiotic humans maintaining and using the network. The Ethereum network is cared for by a network of 100s of thousands of validators.

The crypto ecosystem can be viewed as a forest of blockchain trees maintained by a host of symbiotic human colonies. The blockchains and their human tribe counterparts compete with one another for attention and growth. But when the forest is threatened by a larger animal (like a government or government regulator), the humans swarm and sting attempting to defend their symbiotic partner blockchains.

Blockchains are the first databases in history to incentivize human maintenance, a unique and interesting form of digital symbiosis. They are best understood not as a technological revolution, but as an ecological one.

With those comments out of the way, lets talk about truth, falsehoods, and blockchains.

How old were you when you realized that the stuff you read on the internet could be false or untrue? I don't remember an exact time. But I do remember being in middle school and chasing down links on the internet trying to figure out what was the source of a particular quote or get the original source for an idea. I think for anyone older than that, it quickly becomes obvious that not everything you see on the internet is true.

The internet is permissionless, anyone can post whatever they want. In addition, computers are very powerful nowadays. With some skills, anyone can make a deepfake image of a politician or celebrity. With generative AI, you can make realistic (but completely fake) videos of puppies playing in snow, waves crashing on a coastline, people walking the streets of tokyo, etc.

The internet is awash with entertaining falsehoods. Everywhere and all the time...except…for one small but rapidly growing niche of the internet. There is a place on the internet where what is true is known and verifiable. Where you can check and be certain that this item belongs to this person, this person indeed said this quote, and that this person created this thing. It is a weird and strange part of the internet, which is quite unlike anything else you might have become familiar with. This niche area of the internet is the part governed by blockchains.

What is a blockchain? There is of course a technical description. But this description is a bit boring and unhelpful for understanding why blockchains are interesting. The fascinating thing about blockchains is that they are Truth Machines.

How do you decide if something you see on the internet is true? You might look to see if it was published by an authority figure. You might poll your friends and see how many of them think it is true. You might check the comments section for disagreement, arguments, or counterpoints. You might see how much work someone put into publishing it. You might try to understand the incentives of the poster and see if they are incentivized to publish something false or something true. In essence you run a type of unconscious truth algorithm.

Blockchains make these unconscious truth algorithms explicit and conscious. Every blockchain is governed by a truth algorithm (although you'll typically see websites use the term "consensus algorithm" instead). And the people actually working on blockchain infrastructure are obsessed with how to determine what is true and what is false in a world where anyone can say anything. There are different types of blockchains run with different types of truth algorithms. I'll outline a few common ones here.

• Proof-of-Authority (PoA) chains rely on a set of trusted parties to publish information to the network. Similar to how you might believe an article if it is published by your favorite news source. However, similar to news networks (think MSNBC vs FOX News), not everyone trusts every news network, so these blockchains are limited in use. You really only find them in private use cases. They are mostly uninteresting as they don't scale beyond a few entities in tight agreement of who to trust with authority.

• Proof-of-Work (PoW) is the original formulation of a blockchain truth algorithm. Many older blockchains like Bitcoin and dogecoin run on PoW. In PoW, the group that works the hardest to post data gets to decide what is true. By way of analogy, it is similar to a formalized edit war you might see on wikipedia. The person willing to spend the most energy correcting the page to their "truth" will win. The page (chain) with the most edits (blocks) is considered the one which is most "true". PoW blockchains are interesting, as they can establish a "universal" truth without a trusted authority. However, similar to edit wars, they economically and energy inefficient. The more popular the blockchain becomes and the more value is stored on it the more energy must be expended to make sustainable edits to the blockchain. The "truth" can also never be considered finalized, as someone can come along and do more work to overwrite the previous truth (chain reorg) with what is called a 51% attack.

• Proof-of-Stake (PoS) is a popular type of truth algorithm for newer blockchains. In PoS, in order to propose an edit (block) to the historical record (blockchain), proposers must put up economic collateral (stake). If they are found to have violated the rules of editing the historical record by other participants who have also put up stake (validators), the economic stake put up by the proposer can be destroyed (slashed). If the edit (Block) proposed by the proposer is found to be "truthful" by the validators, the edit (Block) is formally added to the historical record (blockchain) and finalized. To use an analogy, this is similar to scientific publications. In a scientific publication the author of a scientific article (the proposer) will submit it to a journal (chain), the journal will distribute the article to a group of peer-reviewers (validators), who will check its scientific merit. If the article is deemed to have merit (is a valid block), it will be published in the journal (added to the blockchain). The main difference is that in scientific journals, authors and reviewers stake their reputations as scientists instead of something with direct economic value.

  PoS is more efficient than PoW, so many newer blockchains start with a PoS model. The "truth" can also be assured to be “finalized” after a supermajority of the network of validators signs off on the block. Ethereum was a PoW blockchain which switched to PoS to become more economically and energy efficient. The hazards of PoS chains (similar to scientific journals) is that the quality of the chain (journal) is highly dependent on the quality of the validators (peer-reviewers). A chain with many different validators putting up large amounts of stake can be considered more trustworthy than a chain with a few validators of a similar background who are not required to put capital at risk. Especially with newer PoS chains, capital can be highly concentrated in a few early adopters and investors. In worst case, they basically revert to PoA chains.

As you can see, a core component of what defines a blockchain is how it comes to determine the “truth”. If you understand this, many of the quirky things about crypto culture make more sense.

• The almost religious zeal some crypto participants have for their favorite blockchain (their source of “truth”).

• The tribal nature of crypto networks and why different blockchains cannot easily talk to one another or to the outside world (incongruence between my “truth” and your “truth”).

• Why cypto natives want to put literally everything on their preferred blockchain (align the world to their "truth").

When you recognize that a blockchain is primarily a digital record of accepted truths, all sorts of weird and fantastical things start to look possible. Non-state digital money, digital property rights, digital identity, verifiable online governance and voting, and decentralized finance. Even verifiability of AI created content and verifiable video/photos of politicians and celebrities are considered target use cases for blockchains.

You can also start to understand why people believe blockchains have value. Blockchains provide a truth and verification service. Similar to a notary. If you submit something to a blockchain (a transfer of value, an art creation, a message) the blockchain can take it in and spit out a verified record of it for all the world to see. How much would you pay to have an action be certified as true? For some people the answer is "alot".

This also affects why certain blockchains are more valuable than others. At a very high level, the blockchains that are considered the most trustworthy, the most likely to publish the truth by their users, have the most value. High value blockchain's like Bitcoin and Ethereum are considered to be extremely secure, decentralized, and "truthful" about the records posted on them.

There are many other things to learn and understand about crypto and blockchains, but the idea that blockchains are truth machines is one of the most important to understand and internalize. Remember this as we go forward in exploring the sometimes weird, sometimes crazy, always interesting, crypto landscape in future posts.

So the void divided itself into two equal halves: Light and Darkness. Together light and darkness filled the void. Although they could never exist in the same space, for to do so would be to return to the void, light and darkness each took comfort in the presence of the other. They were no longer alone.

Light intermingled with darkness and darkness intermingled with light and from this three children were born: Fire, Earth, and Water.

Fire, the eldest, was the most similar to his parents, with strength to cast both rays of light and shadows. However, where light and darkness were calm and quiet, fire was loud and fierce, crackling with power.

Earth, the second born, was stoic and unyielding. Able to divide light from darkness, he quarreled with fire in most things.

Water, the youngest, was creative and free. She could play with both light and darkness, creating rainbows. She could calm fire and soften earth.

Although fire and earth would fight and bicker with each other, both came to love water and she loved them both. In time fire approached water and together they created Air, who fire adored. Earth also approached water and the two created Life, who proceeded to cover earth and fill water with all manner of living things. Both water and earth delighted in life. For a time there was a happy peace.

However fire eventually became jealous of earth and life for he wanted water to himself. In a fit of jealous rage, he pit himself against earth and life and sought to destroy them both.

Earth sought help from water and with their combined powers they sealed fire deep inside an earthen prison, separating fire from life and air.

Fire pleaded with light and darkness to free him, but they agreed with earth and water that he had gone too far. However light and darkness both took pity on their first born. Each gave him an eye, the sun from light and the moon from darkness, which he could use to look down upon his beloved air, from whom he had been separated.

However, fire could not forget his jealous rage and turned his eyes on the earth and life again, trying to burn them to ash with the gaze from his fiery eyes. Darkness saw this and chastised him, sealing the burning power of the moon she had given him. She also blocked the light from the sun, covering the earth in darkness for a short time.

But still fire would not relent. He raged against his prison, sending up burning lava and shaking the earth. When darkness slept and no longer covered his gaze, he would turn his still burning eye, the sun, onto the earth.

Although air loved fire, she saw that he went too far in his rage. He could no longer see her in his anger. She approached water and together they created storms, which blocked fire’s gaze from the sun while darkness slept and cooled his anger deep within the earth. She also approached life and strengthened life’s creations by giving them breath. In this way they could withstand the burning gaze of fire's eye.

Finally, seeing the disapproval of air and water whom he adored, fire relented and was calmed. In apology he relaxed his burning gaze on the earth and gave a bit of his own fire, under the care of air, to life’s creations to use for their own purposes. Peace descended on the world.

But every so often fire will remember his jealousy. He will turn his burning gaze again towards life and struggle against his prison, sending tremors through the earth. Seeing this, darkness will blind his eyes while air and water will storm to remind him to not turn his anger onto life and earth. It is these seasons of struggle and calm which mark the passage of time for all.

This post isn’t about the Mona Lisa, but if you are curious, $1 billion seems to be as good a guess as any.

Let’s change the question slightly. How much would YOU pay for the Mona Lisa?

This probably depends on how much money you have, your appreciation for art by Da Vinci, how much you love the history around the Mona Lisa, how much you appreciate the painting itself, etc.

Personally I wouldn’t pay very much, for both practical and aesthetic reasons. For a world famous painting, security and insurance wouldn’t be cheap. I don’t know where I would put it. And… maybe worst of all, I don’t find it a particularly interesting painting. The painting directly across from it, Veronese's Wedding Feast at Cana, at 10 m wide, is more impressive. In terms of eye-catching beauty, I can personally vouch that Van Gogh’s Self-Portrait at the Musee d'Orsay across town is far more striking. If you ever have the opportunity, definitely go see it in person. The pictures online do not do it any justice.

But... I assume most people would be willing to pay at least something for the Mona Lisa, if only for the story.

The Mona Lisa is a collectable. And for collectables The Story drives most of their value. The Mona Lisa spent hundreds of years in relative obscurity until it's theft in 1911 and later return. This story was reported worldwide and it became famous to a worldwide audience. It has also been the focus of numerous attacks and protests, which have further driven it's notoriety. That is to say, the painting is famous not because of the quality of the work or the beauty of the painting, but because of The Story of everything it has suffered and yet survived despite of. While the painting arguably does have some intrinsic value as a piece of artwork, and in it's ability to drive revenue to the Louvre, I think The Story of the Mona Lisa is the biggest driver of its value.

Why did I start a post about Bitcoin talking about the Mona Lisa? It is because whenever I try to understand the value of Bitcoin, my mind drifts to the Mona Lisa. Similar to the Mona Lisa, the main value of Bitcoin is in it's Story. Bitcoin is best understood, not as a currency, or a commodity, or a security, but as a famous collectable.

Bitcoin is the first decentralized cryptocurrency. I am not going to dive into what it means to be a "decentralized cryptocurrency". First of all it is too complicated for this short blog post and second I think this description is mostly irrelevant to the value of bitcoin.

Since it's creation in 2009 till today, Bitcoin has been the largest blockchain by market cap (currently at $1.4 trillion dollars). Why? I would argue that it is because it has a great Story. It was born in the depths of the Great Financial Crisis, a non-state issued currency serving as a counter reaction to bank bailouts by an anonymous founder who disappeared without being identified. It has a kind of "immaculate conception" that cannot be duplicated.

Early users of the network added significantly to it's notoriety. Many bitcoin fans celebrate Bitcoin Pizza Day, where an early user spent 10,000 bitcoin on Papa Johns pizzas (an amount currently worth $715 million). Early uses of bitcoin for black markets like silk road on the darkweb and the enforcement actions that followed in the early 2010's only served to increase the profile of Bitcoin worldwide. China has banned bitcoin more times than I can count. These stories are an interesting echo of the Mona Lisa's own connections to theft and political controversy.

Bitcoin has also inspired 1000's of blockchain projects, which take the basic concept of a decentralized cryptoeconomic network and add functionality, performance, and sometimes funny dog memes. If any of these projects achieve success they tend to increase the Story value of Bitcoin as the original blockchain which inspired them. Many Bitcoin enthusiasts will point to Bitcoin's 4 year halving cycle as a key driver for Bitcoin's value. But this ignores the overlap of Bitcoin's price rises with innovative technologies built on blockchains. The development of fungible tokens and initial coin offerings (ICOs), decentralized finance, non-fungible tokens, and other market mania inspiring technologies have often driven bitcoin awareness even when the technologies were not themselves built on the bitcoin network. Another interesting echo of how the image of the Mona Lisa has been replicated and reused in 1000's of art and marketing projects in the past century.

So I will ask then, how much would YOU pay for 1 Bitcoin?

This probably depends on how much money you have, your appreciation for blockchains, how much you love the story around decentralized non-state money, how much you enjoy using the Bitcoin network itself, etc.

Personally I wouldn’t pay very much, for both practical and aesthetic reasons. Managing another crypto wallet for bitcoin is kind of a hassle. Investing in collectables doesn't fit my personality or investment goals. And.. maybe worst of all, I don't find it to be a particularly interesting blockchain.

But... I assume most people would be willing to pay at least something for 1 Bitcoin, if only for the story.

This post is about an investable asset. As of the date of this post's publication I do not own any bitcoin. Nor do I intend to in the future. These are my personal thoughts on bitcoin and should not be taken as advice of any kind, for investment or otherwise.

Jain stood up and looked around the small curtained alcove where he usually slept. To another’s eyes, had they been able to open them, the small space might have appeared dirty and unkempt. A rough brick floor covered in crumpled papers and worn blankets strewn about in a semi-circular shape. But to Jain the alcove fit like a well worn glove. The blankets kept him warm against the winter chill and the brick was unlikely to crumble into the river like the wooden closet he had chosen to rest in years before. A mistake he would not repeat. The papers served as both a comfortable makeshift pillow and a medium to collect his thoughts whenever he experienced the short bursts of wakefulness necessary to write.

He pulled back the curtain and stepped into a corridor filled with 100s of similar alcoves. He could hear snores and mumbled words from behind a few curtains. From others he heard the groans of suffered nightmares. He shuddered and drew a small blessing in the air to ward himself from nightmare fuel.

And then again, he heard them. The whispers. As if a thousand voices were in a quiet discussion right behind his ears. Turning his head left and right he tried to find the source of the sound. The drone of the whispers seemed to be calling him forward, down the corridor.

Jain walked out of the building and into the open air of the slums of Ayyon. He was up on a second story balcony of a dilapidated building shrouded by a sour mist. His balcony was connected to other buildings, similarly dilapidated, by a tangled web of wooden bridges. Looking down he could see the massive wandering river that ran through the slums. The whole neighborhood carried a feeling of fragility. It was if, at any moment, a building could break free from the wooden web and be carried out to sea with the dark water.

Jain crinkled his nose as a foul stench floated up to him from the polluted river below. Turning away, he looked instead towards the Tower of Agreement. The tower at the center of Ayyon was impossibly tall. Covered in giant painted eyes and festooned with streamers of smoke it seemed to lean over you like a giant mechanical bird. One looking for a worm to eat.

The whispers seemed to be emanating from the tower. He could feel the voices like small feathers brushing the skin of his neck and shoulders. Jain shivered and began to cross the wooden bridge away from his home and towards the center of Ayyon.

Jain carefully picked his way through the slums. Avoiding rotted planks and sidestepping the stumbling sleepwalkers on the bridge roads. He passed a few sleepy food stalls. Some bodies were asleep at the counters, mid meal. Occasionally he passed a young vigilant racing through the crowd. Their pace and energy marked them in the quiet drifting mists of the slums. They were as out-of-place as a flare in the night sky.

Jain passed one of the living temples maintained by high ranking sleepers. The gates to the holy space were guarded by those who had completed at least 3 of The Steps. Usually the guards ignored those passing by, but today the guard looked at Jain and… smiled. It unsettled Jain deeply, almost as much as the whispers that pulled him forward.

Finally, walking around one of the massive clear domes that housed one of the oldest oak trees in the city, Jain came to the base of the Tower of Agreement. A large opening framed in red led up into darkness. The whispers called him forward up the steps.

As Jain worked his ways up the steps the darkness closed in on him. Suffocating. Each step got heavier and heavier. He felt the pull of sleep like a weight. But the whispers only got louder, urging him onward. He could hear them now.

…wake… wake up….come…wake…up….

Like whips against his back and legs. The whispers pushed him forward.

After what seemed like an eternity, Jain saw a small light ahead of him, which grew into an opening. The opening turned into a terrace looking down onto the city of Ayyon. Briefly Jain wondered if he had reached the top of the Tower of Agreement, but a quick look upward disabused him of that flight of fancy. The terrace he was on was barely a 10th of the way up.

Looking around the large terrace Jain spotted a figure sitting on the edge and looking out at the city. The man wore a white mask and his arms were covered in open eyes. Not eye tattoos, but real staring-back-at-you red eyes. Although the man’s back was turned, the eyes over his arms and back followed Jain as he walked towards the figure. Recognition settled in.

“First. You called me here.” Jain said aloud.

The First stood and his masked face turned from facing the city below to facing in Jain’s direction. The eyes over the First’s body started to roll in different directions. No longer focused on Jain as they had been before.

“I call all Walkers here. That you heard me means you are ready to wake up.” A gruff voice said from behind the white mask.

“I don’t understand” Jain said in confusion. Aren’t I already awake?

Jain could almost feel the smile on the First’s face behind the white mask.

“You’ve taken your first Step into the dream Walker.” The First said. He reached a hand up to Jain’s face and pressed his thumb firmly against the center of Jain’s forehead. “Now… WAKE UP.”

Jain gasped as his body lurched upward. Blinking his eyes in confusion he tried to make sense of the scene around him. He was sitting in his familiar alcove, nestled between his latest crumpled writings and his blankets. Everything around him seemed to indicate he had been sleeping comfortably until moments before. But the sweat on Jain’s brow and the sore spot on his forehead said something very different.

“It had seemed so real,” he said to himself as he realized what had happened. He hadn’t walked Ayyon, he had Dreamed everything. The newly awakened Dream Walker laid back down on his bed of crumpled paper to consider the implications. What has changed? The sleepiness and mental fog he normally had to fight was still there, but it was lighter and more welcoming. A strange thought entered his mind. Maybe I can control it? He closed his eyes and was surprised how easily he could re-enter the Dream. This felt completely different from the heavy sleeps he had suffered before. A slow smile spread across Jain’s face.

It was time to Walk his Dreams.

As the quarter-penny hit the ground the return of time was harsh and breathtaking. My eyes snapped to my opponent as my weapon flew out of its holster. Sounds, feelings, recognition; these took much longer to enter my consciousness. The sound of shots being fired. A body slumping to the ground. A cacophony of cries and cheers. Slowly the world came into focus around me.

Step by painful step I marched forward to claim my prize from the dirt. As I picked the quarter-penny up from the ground, a wild grin spread across my face. Through the surrounding din I could hear almost maniacal laughter and for a moment I wondered… was it the quarter-penny laughing or was that me?

I have had a breakthrough regarding our previous discussion and I could cannot wait to share my thoughts with you. The immovable stone is just the tip of the iceberg!!! Maybe that does not make sense yet, but let me explain. 

You see, as I made my way on expedition to the Frosted Lands I was forced, or perhaps blessed, to take a detour by ship through the Sea of Posteia. As we navigated the ship through the floating fields of ice, the captain commented that the ice we could see was only a small fraction. According to Captain Lesvoish, more than 90 percent of the ice in an iceberg lies below the surface. 

And then it stuck me, the immovable stones must be the same! The reason they are so difficult to move must be because the vast majority of their mass is hidden under the surface of our world. The small stone we see may only be a 10th or a 100th of the total stone, with the rest of it laying in a different world all together. Maybe in multiple worlds! As you no doubt realize, the implications are enormous. 

Unfortunately I cannot begin any experiments while on expedition, but I hope that you will already procure the necessary materials so that we can begin testing this theory on my return.

Sincerely,

Aurelia

As he stood evaluating his options, he felt a call reverberate through his chest and head. You must go DEEPER into the storm. A voice said into his mind.

Im never gunna get used to that. Recruit thought as he shook his head to clear it of the lingering vibrations. You’d think if they were gunna send me into this cursed snowstorm they’d at least equip me with a good pair of boots.

Resigned to his quest, Recruit pushed onward into the storm. With every step forward the snow fell harder and the wind rose. He hadn’t gone far before he was struggling through buffeting hail and winds that threatened to throw him off his feet.

If I die out here I’m gunna be really pissed.

Suddenly he stepped out of howling winter into a warm spring night. For a moment Recruit’s mind went blank and he just stared at the scene before him. He was in the eye of the storm. The sheer white cliffs of the blizzard’s storm walls framed a clear sky full of twinkling stars. The light from the stars seemed to drift down and swirl around in the center of the calm eye, as if the whole storm was serving to funnel and coalesce the essence of the universe into a single drop of pure magic.

“Essence of Starlight…” breathed Recruit. “Well I’ll be...”

As Recruit walked forward to complete his quest he was struck by the beauty of what was in front of him. If I ever get the feeling back in my toes, I might do this again.

Before we get to our conservative retirement savings goal, we have to start from the expenses we want to plan for in retirement. Let's start from the basic necessities:

Shelter

Everyone needs a place to live right? As you save for your retirement the first thing you'll want to plan for is where you will be living. There are a lot of options for retirees: they can stay in their family home, downsize to an apartment in the city, or move into their older children's guest house. For this calculation, I'll conservatively assume that you want to live in a nicer house at the upper end of the potential range. To be realistic, we will use a property like Antilia in Mubai, India as a conservative benchmark for your potential retirement sanctuary. After all, nothing says golden years like using a golden toilet daily. Properties like these will typically run in the $1 billion range. In the ideal case you could pay for this in cash, but let's assume that you need enough income to finance the purchase in retirement. Assuming a 20% down payment, a competitive 6.67% mortgage rate in todays market, a 30 year fixed loan, and a buffer for property taxes and insurance, a property like this should have a monthly payment of about $6.5 million. This translates to an annual expenditure of about $78 million. Not bad... but don't forget to budget for phantom costs like maintenance and utilities. I'd suggest to budget at least 10% of the home value, or about $8 million annually.

Transportation

While transportation might not be a big deal late in retirement, at least in the early years you'll want to be able to get around town. Running errands, visiting the country club, and showing off your wealth to your poorer-than-you friends is gunna require a suitable vehicle. Luckily there are a lot of choices here for the typical retiree. We will go with something at the upper end of the potential range, just to be conservative. A Rolls-Royce La Rose Noire Droptail would meet most people's needs in retirement. Assuming a 60 month loan term, $10,000 down payment, a 5% interest rate, as well as a healthy margin for taxes and fees rolled into the loan, you will be looking at a payment of about $614,132 per month or about $7 million annually. Of course, if you are married, you'll want to get a matching car for your significant other, so lets assume 2 cars for an annual transportation expense of about $14 million.

Food

As you get older, diet is going to very important. What you ate in your 20's isn't going to cut it anymore for your aging digestive track. As such this is probably an area you are going to want to splurge. Let's assume you are going to treat yourself daily to one of the more expensive Starbuck's coffees (budget $100 per day), have a nice affordable pizza for lunch (budget $12,000), and finish the day off with some healthy tacos and a tasty desert (budget $60,000). Doing this every day all year will set you back about $26 million annually.

If this seems a little bit steep, cutting out the morning coffee will take off about $36,500 of the total (but honestly don't, you deserve it).

Necessary Vacations

In your working years, you might not put vacations in the "necessary" category, but in retirement you are really going to want to get out of your house, no matter how much of a mansion it is, at least a few times a year. So for this calculation I'll include vacations in the "required" expenses column. Again, let's use some conservative numbers for a nicer vacation as the benchmark. For plane tickets, a round trip for two from New York City/JFK to Abu Dhabi on Etihad Airways seems like a reasonable target (budget $264,000). For lodging, you could always book a hotel, but for comfort, nothing is going to beat staying at your own personal vacation home. For simplicities sake, let's assume your home-away-from-home will cost about the same as your regular house (budget $78 million). You'll also want to consider transportation, but since this is for vacation let's skip the cars and assume you have a nice boat to take the kids and grandkids out on the water with. A nice boat can cost the same as a nice house, so we will assume a similar annual cost (budget $78 million).

Now keep in mind that the above budget was for 1 vacation. The typical American will go on about 3 vacations per year, so we will multiply the numbers above by 3 to get a conservative annual required vacation spend of about $470 million in retirement.

Wants and Charity

Alright, so we have calculated our required spending in requirement to be $86 million for shelter, $14 million for transportation, $26 million for food, and $470 million for necessary vacations. This leaves us with a total required annual spend of about $596 million. For ease of calculations in this next bit I'll round that up to $600 million. But how much should we reserve for wants?

Luckily we have the 50/30/20 rule which suggests we should spend about half of our income on needs, while reserving 30% for wants, and 20% for savings. Since we are assuming in this piece that you are already retired, you won't really need to save any further, however you may want to direct that extra 20% of income to good deeds like charity (after all, nothing get's you passed the bouncer and into heaven faster than a good bribe). So we will take our $600 million and multiple it by 2 for a total target spend of $1.2 billion annually on needs, wants, and charity in retirement.

THE NUMBER

"Okay", you might be saying, "that certainly tells me what I want to plan for in terms of spending, but what is THE NUMBER? What do I need to save for retirement?" For this we can turn to the handy 4% rule which says you can live off of 4% of your portfolio value each year adjusted for inflation. To make use of the 4% rule, just multiple your annual spend by 25 to get a total nest egg target of $30 billion. "But wait!", you say, "Can we really expect investment returns to continue into the future like they have in the past? Shouldn't we be a bit more conservative with our retirement nest egg?" No worries, instead of using the 4% rule, we can use the more conservative version, the 2% rule. In the vast majority of cases, you should not run out of money using the 2% rule in retirement. To use the 2% rule you can multiply your annual retirement spend by 50, instead of the 25 we assumed with the 4% rule. Applying the 2% rule leaves us with a total target nest egg of $60 billion ($1.2 billion x 50).

Having $60 billion as a target retirement nest egg might SEEM a little excessive, after all $60 billion would require you to save 100% of the average American's annual salary of $60,000 for 1 million years, however, it is entirely doable. There are at least 15 people in the world who have already met this conservative savings goal and are ready to retire. With some hardwork, a little bit of luck, and a strong focus on savings, you too can reach this conservative retirement target.

Going Beyond THE NUMBER

So we have identified THE NUMBER for a comfortable retirement ($60 billion) however, one thing to keep in mind is that even at this level of savings, you may want to continue working into your golden years. Working through your retirement at a job you love like running an S&P 500 company will give you more flexibility and options in retirement. It also has a number of benefits for your mental and physical health. This is why you see the wealthiest men on the planet continuing to work long after they have hit THE NUMBER. So if you have the health and mental fortitude to continue working past THE NUMBER I highly recommend you consider it for your own health and well being. Your future retired self will thank you.

With that, I hope I have demystified the math behind retirement savings and that you now have the confidence you need to start planning and saving for a comfortable retirement. Good luck! You are going to need it.

However, a little known fact you may not be aware of, my dear readers, is that dragons, yes dragons, also share this peculiar reptilian characteristic. And while it may amuse you to imagine a scaly fire breathing winged monstrosity of legend scurrying under a bush in fright while it leaves its squirming wriggling tail behind, it does leave this particular author with an unsettling thought…

What sort of monster hunts dragons?

“You’re gunna break it that way.”

Ronin felt his heart jump into his throat. “What?” He said as he turned towards the voice.

“That blue rupee, you’re gunna break it that way.”

Ronin found himself staring into the many faceted eyes of a tall figure with a bee’s head, black antlers, and a full mane of yellow bee fuzz. Stifling a shout, he instead asked the first question that came to his mind.

“What are you?”

“… a difficult question… haven’t run into another person like me so far… But I suppose if you had to call me something… Bee Shaman will work. That’s what other people call me anyway.”

It was only then that Ronin noticed the bees buzzing around the stranger. Some were even crawling over the many packs visible under his worn desert coat. More intrigued than frighted now, Ronin studied the stranger. He noticed quite a few Treasures peaking out of the Bee Shaman’s bags, including a rare honeycomb. Ronin had never seen a honeycomb in person before, he had only read about them in the archives.

“What do you mean I’m gunna break it? I’ve meticulously researched this. I’m pretty sure I am following the procedure exactly as it should be performed.”

“Damn scholars. You all read and read and talk and talk and you forget to LISTEN. Your tuning fork is totally wrong for that blue rupee. If you had actually touched them together you would have been one rupee poorer. Or even worse it might have exploded on you.”

Ronin was a bit taken aback. It was not often that anyone lectured him on crafting with Treasures, much less bee headed strangers with rare honeycombs in their bags.

“What do you know about the resonance of blue rupees?”

“I know a lot about vibing with Treasures and Magic. I didn’t always look like this after all. Here, I’ll show you.”

Ronin watched as the Bee Shaman walked over to the blue rupee and studied it for a moment. The shaman flicked the rupee and cocked his head as if listening for a faint sound. The bees around the shaman started to buzz. The shaman seemed to nod in response and grabbed the blue rupee in his clawed hand. He started to hum a single crystal clear note, his black antlers flashing with small electric arcs. Ronin’s mouth fell open as the blue rupee flashed a dazzling blue light and a stream of perfectly formed enchanting stones fell to the floor. As the light faded, the shaman turned back towards Ronin.

“See… now THAT is the correct note. Even my bees know better.” Apparently satisfied, the Bee Shaman turned to leave the crafting space.

“Wait!” Ronin said, grabbing the Bee Shaman’s arm. He had so many questions. It was not everyday you met a master crafter and he was not gunna let this opportunity go to waste.

“The Glow!”

“Yes thank you, Evelin and Gregor. This is the most straightforward way to tell a red rupee from a common ruby. Rupees always carry this distinctive shape which cannot be altered, whereas rubies can be cut and polished into a number of forms. This comes from their material make up. Rubies and their cousins, sapphires, are forms of the mineral Corundum. In contrast, all forms of rupees are actually not minerals at all but rather a very potent form of crystallized Magic. This highly concentrated magic also gives the rupees their red glow. However, these signs are not full proof. A clever artisan could create a false rupee in the correct shape and emitting a similar glow... And in so doing could swindle you out of a great deal of money… I’m not talking from experience of course.”

[giggles and a few laughs]

“So how would you distinguish a red rupee from a fo-rupee?”

[silence]

"Anyone? I'll wait until the thinking starts."

“….the feeling from holding it?”

“That’s very astute Gi-Liu. Are you Magic attuned?”

“Yes Scholar.”

“Very good, yes. For those of you who are Magic attuned you will generally feel a sense of freedom or passion emanating from a red rupee. Similarly, feelings of stillness and calm are generally associated with blue rupees, while a feeling of balance or harmony is commonly associated with green rupees. BUT! It is important to consider that not everyone is so sensitive and even if you are, you could always make a mistake. It is also poor practice to attune your feelings too tightly to a red rupee. In many cases is better to rely on a more quantitative measure. Tell me, what else distinguishes a red rupee from a common ruby?”

[prolonged silence]

“Anyone…? I’ll give you a hint. Why are emeralds and diamonds included among the great Treasures, but not common rubies or sapphires?”

“They react to Magic Scholar.”

“Excellent Ar-thul. They react to Magic! And I might I might add, they also react to other treasures. Devicemeister Kortan has been kind enough to let me borrow one of his devices. Let me just.. get it set up… here.. there we go. This particular device will set up a Magic cross flow across the table top. Let me just…there.”

[oohhs and aahhs]

“Yes! See the red rupee is floating quite nicely on this flow of Magic while the red ruby is sitting their lifelessly. And if I take this emerald…. See. I can direct the movement of the red rupee around the table.”

“Wow.”

“That’s amazing.”

“I encourage you all to think about this interplay between Magic and Treasures. They are intricately connected. Often in fascinating and wondrous ways. A true master of the crafts understands that Treasures are Magic and that Magic is Treasure.”