Bitcoin Black Friday – But Does It Matter?

It’s been an interesting week so far in the cryptocurrency community. At least, if the price of cryptocurrencies counts as one of your interests.

Headlines proclaiming a ‘Bitcoin bloodbath‘ have proliferated and certain websites have been freely updated with tales of impending doom. Meanwhile, the older hands in the Bitcoin (and the wider cryptocurrency) community have taken the downturn in price in exactly the same way as every one of the many (many) previous times – with increasingly vocal exhortations to buckle up and HODL

I headed along to BBC Scotland this morning to give my thoughts on the business section of Good Morning Scotland over breakfast. I hadn’t been on the radio for quite a while and I’m not embarrassed to say that I still get a huge buzz from being on the radio. But, alas, 4 minutes is far too short a time to put across my thoughts coherently in any form of comprehensive response to the current price volatility.

Or at least: it may have sounded coherent – but I always end up thinking about just how many explanations I didn’t have time to go through that I would loved to have put out there to trigger a response (positive or negative) in those otherwise more focused on their daily consumption of cornflakes across the nation.

But let’s sum it up here. I remain hugely bullish about Bitcoin as a technology and as a rapidly accelerating (although not in any way guaranteed) store of value over the next couple of years in particular. It may, of course, fail. But if it does, it will return, in some way, shape or form – because the world now has a mental model for how an independent currency can bootstrap itself in an incredibly fast period of time outside the control of nation states.

As for the thousands of other cryptocurrencies: I’m convinced many of these will also be successful. However, at this early stage, I’m even more convinced that the signs are strong that many will not be.

And if you had to guess which ones fall into the latter camp, it doesn’t take a particularly sharp intellect to suggest that the group is probably going to have more than its fair share of representatives from projects that raised multiple millions of dollar in a 2017 ICO – a result of an almost perfect storm where we’re seeing:

  • a globally-distributed, 24-hour community of increasingly upset and abusive investors in the original ICO for whom delivery delays are unacceptable – with such delays being inevitable due to the vastly complex goals of many projects that in some cases were only imagined a couple of years ago (in which development is only now just starting in earnest);
  • inexperienced teams building crypto startups (traditionally a stage of company growth with a very high failure rate) that are also taking on far more regulatory and legal risk than is normal in the otherwise precarious startup world – (i.e. if you want to try raising the stakes, try messing around with other people’s concept of money before they’ve had the chance to apply their rules to raise any possible barriers to harmful competition against them);
  • founders for whom the incentive to slave away under extreme duress for the next decade or so has been removed – life-changing money has instead landed in their accounts at the start of the journey as opposed to at the end, so no more waiting until after a decade of hard slog to achieve a liquidity event (via an IPO or sale for example).

 

    Now, to be clear, I remain hugely positive about developments, a large number of projects and the general direction of travel. But it’s important that the public aren’t being misled by headlines here that do nothing to change the progress that is being made, by very many teams of individuals, all around the world.

My point here really is the same as it has been for a number of years now – that the money is not the story here. The focus remains as it has always been – on the technology and what it means to us all. The ability to coordinate human activity on a massive, global scale by the evolution of new incentivisation methods that spreads both knowledge and helps with the building of infrastructure that will push society towards a more equitable world of direct, peer-to-peer interactions.

It’s important that we all, each of us, gets involved so that we don’t inadvertently let others create a system in which we lose the power to innovate. And for those whose involvement goes no further than speculation on the price, so be it.

Because price is the best gateway drug there ever was to lead the masses on to the technology that really has a chance of changing many lives around the world – and for more than just those who dreamed they’d make a killing in a bear market.

Taleb & Naval

Just a quick post this evening to recommend a video that’s well worth the time.

Nassim Nicholas Taleb and Naval Ravikant are two of the brightest minds out there at the moment. So you know that when they sit down for a chat at a blockchain conference, things can only be ultra-interesting.

There’s so much in this video I don’t know where to begin. So you should probably just watch it yourself and see if your view changes on any of the many topics that they cover. It’s a common occurrence whenever you hear either one of these guys speak.

Drinking from the Firehose

I heard a comment on a podcast a couple of weeks ago that has really stuck in my head. Seth Godin was asked how he deals with the feeling of being overwhelmed (i.e. with too much work to handle). He put it brilliantly:

“Drinking from a fire hose is a really bad way to get hydration”

In the way that only Seth can, he then sums up precisely how crucial it is to get the signal-to-noise ratio right in your life. He doesn’t spend minutes/hours scrolling through the constant Twitter or Facebook updates; he doesn’t go to meetings if at all possible; nor does he spend time watching TV.

He points out that people tend to go to 3 – 6 meetings a day – so it’s no surprise that they then feel overwhelmed by the work piling up in the background. Whereas the reality is that most meetings aren’t actually necessary – a short email would have the same effect…

In other words, being stressed out from being too busy is a systems problem. Seems related to this point that I retweeted earlier today:

How many of us end up auto-consuming YouTube suggestions for hours on end? Reading through Twitter updates in search of that one golden nugget of a post, seeking knowledge or outrage (or ideally both)? And how much time can we each honestly say that we spend with the levels of concentration that allow us to do deep work?

So if things are a bit hectic, maybe you need to start avoiding those water cannons and start pouring your own drinks.

Surveillance Car Capitalism

Tweet of the day:

If you stop to think for a second about what the most likely future outcome here is on the current trajectory, things get pretty scary, pretty fast. When it comes to data there are very different concerns and goals flying around, caused by the misalignment of incentives between individuals and businesses.

The next decade is going to see a huge acceleration in digital data exhaust trails from each of us and the problem around ownership of data generated from the use of cars alone has the potential to be huge.

Last year, Intel suggested that it would only take one million autonomous cars to generate the same data as three billion people.  In other words, one car generating 4,000GB of data based on just one hour of driving.

The answer certainly doesn’t lie in the hands of the car manufacturers. And it’s hard to believe that the regulators will be able to truly fix the issue directly either. We need to fundamentally reimagine how data is secured and controlled by each individual. And I think I might just know how we can do it

(And here’s something I wrote four years ago about the same thing…progress seems slow – until before you know it, it’s in the rear view mirror and everyone’s made the decisions)

Fast Bach

You’ll often hear people complaining about the pace of modern life and the fact that things just keep getting faster. Turns out that’s true of classical music as well – or at least Bach in a recent survey:-

“The labels found that modern recordings of the work have shaved off one-third of the length of recordings from 50 years ago, quickening by about a minute per decade.”

That certainly backs up the evidence that pop music is getting both shorter and faster as the attention span of the audience continues to shrink.

You might not get a huge amount of leeway when it comes to changing the delivery of the classic pieces of classical music. But it seems as if the same constraints don’t apply with popular music. So if you’re writing disposable pop and want to make your new songs stand out, perhaps what you should actually be doing is thinking about slowing them down.

Is Science Getting Harder?

I came across a fascinating article (‘Science is Getting Less Bang For Its Buck‘) published today by Patrick Collison (Stripe co-founder) and Michael Nielsen (Researcher at Y Combinator).

The suggestion is that despite a constant increase over the past few decades in both the amount of funding and number of career professionals focused on scientific research, the rate of new ground-breaking discoveries is, contrary to popular assumption, in fact slowing down.

I have to admit, I’m not entirely convinced by the method they used – surveying top scientists who were then asked to score the importance of historic scientific discoveries. To be fair, they do point out the limitations of adopting this approach. But the questions that the results raise are particularly interesting, because it makes you think about some follow-up questions, such as:-

  • If many of the most significant discoveries have been made (e.g. Einstein’s general theory of relativity), then is all we’re doing now looking into the details of these previously-discovered ‘lands’ of knowledge?
  • What justification is there for continuing to pour money into scientific research if the results are actually getting worse?
  • Are we actually becoming less productive as humans overall (as espoused by economists such as Tyler Cowen in ‘The Great Stagnation‘)?

My instinct (which could be entirely wrong) is that a lot of this comes down to two things. The first is that with every passing year, the requirements to become truly expert in almost every scientific field becomes that much more onerous. There’s just more information flying around and being layered on top of previous data. Which in turn makes it very hard to assess the true impact of discoveries as and when they’re made.

And my second point is somewhat related (and also hinted at in the article). It is impossible to assess the current state of the art without being subtly influenced by your own approach towards progress. For the pessimists out there, it’s always easier to believe that most of the major discoveries in human existence have been made and we’re more likely to be successful in optimising what we have rather than seeking to make brand new major discoveries.

However, if like me, you are more optimistic about the future, you’re more likely to believe that discoveries are still continually being made on a regular basis but that with so many more potentials combinations of research outcomes throughout our connected, data-swamped society, the time for some of the most impactful discoveries is likely to take longer, as good ideas now may have a longer journey out of the lab before they can bubble through to the popular consciousness.

Take a read through the article and see what you think. I have to say I’ve got no idea how Patrick has time for such things whilst also running a billion-dollar startup…If you’ve not heard much about him before, I definitely recommend following him on Twitter and checking out any of the podcasts where he chats about his influences (the Farnham Street episode is a good starter).

Priorities versus Incentives

I came across this tweet earlier today criticising the state of inequality within the goldfish bowl that is Silicon Valley:

https://twitter.com/realdanlyons/status/1061372069710086150

The older I get, the more I realise that life really isn’t about priorities. Priorities are more of a lagging indicator. In reality, the things you do, the things you wish to do more of and the things that you feel guilty about not doing, can all be explained by one word.

Incentives.

Regardless of your views, marketplaces govern every area of our lives as humans, extending well beyond simple financial transactions. For example, the simple act of spending any time focused on one activity inevitably comes with the opportunity cost of the thing we didn’t have time to do as a result. Each of us takes part in hundreds of transactions every day – and very few of these will ever have a monetary value.

So maybe another way forward is for us to stop thinking about priorities per se. Let’s move away from the wishlist politics which is rolled out with each new election cycle and doomed to fail by virtue of the short-termism of government representation.

Perhaps placing homelessness in the Valley at the top of a list of hard problems that need to be fixed is similarly doomed to fail – because it is little more than an attempt to tackle a very important issue in a back-to-front way. Instead, what’s needed is to focus on defining the incentives. For each of us. And many of them will be different according to each individual.

These incentives don’t have to be financial – and probably won’t be. But we do need to find work at finding those triggers that make us all want to tackle the hard problems that are out there.  Because without that spark from deep within us, we’re going to end up with the best technology shared amongst the fewest in humanity.

Criticism and Progress

A troll is just a critic in charge of a keyboard. Someone who is content to liberally spray criticism across the internet that would otherwise fall on deaf ears in a good old-fashioned face-to-face conversation.

Groundless or not, it’s never pleasant to hear those chirps from the big bad world. But then again, few critics ever create anything of note themselves.

That might make you feel better. But flip it round and the point is much more concerning. If you’re not being criticised, it’s likely that you’re doing nothing of note. And considering just how short time is, unless you plan on living a life of quiet isolation, that is surely far more terrifying than the alternative.

__

I had one quote blu-tacked to my wall for over a decade.  If you’ve never read it, now’s a good time:-

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

(The Man in the Arena speech, Theodore Roosevelt, 1910)

Sugar and the Mythical Hyper Kids

Shocking discovery of the day: finding out that the well-known parenting fact that if you give kids lots of sugar, they become hyperactive turns out to be….well, a myth.

OK, so if you’re reading this and you don’t have kids – or you’ve not spent any time around young kids since you were of a similar vintage –  it’s maybe not quite as surprising to you.  But it appears that ingesting the industrial amounts of sugar doesn’t actually make your descendants go bananas after all

It turns out that it’s a myth that is endorsed by 59 per cent of the public, 50 per cent of teachers and 39 per cent of those with some form of neuroscience training. In other words, even those with specialised education get it wrong…But the real interest for all the parents out there is probably this quote:-

“Some researchers suggest that simply expecting sugar to affect your child can influence how you interpret what you see. A study published in the August 1994 Journal of Abnormal Child Psychology showed that parents who believe a child’s behaviour is affected by sugar are more likely to perceive their children as hyperactive when they’ve been led to believe the child has just had a sugary drink.”

Something to consider the next time you leap to a conclusion about your child’s (or anyone else’s) actions without being aware of the full context.

Story Telling and Conspiracy Theories

I’m fascinated by stories – not so much with the content but with their role in society and the ways in which they bind us together in groups (and, as a result, also divide us).  With the rise of fake news, it’s very easy to put what seems like an unstoppable torrent of conspiracy theories as being peddled by the ignorant few (albeit, in some cases, a huge number in itself).

Yet is that too simplistic?

In ‘The Storytelling Animal: How Stories Make Us Human’, Jonathan Gottschall makes an interesting point which I’ve been thinking about recently:-

“It’s tempting to blame general backwardness or ignorance for this epidemic of conspiracy. Tempting, but wrong. As David Aaronovitch explains in his book ‘Voodoo Histories’,

‘Conspiracy theories originate and are largely circulated among the educated and middle class. The imagined model of an ignorant, priest-ridden peasantry or proletariat, replacing religious and superstitious belief with equally far-fetched notions of how society works, turns out to be completely wrong. It has typically been the professors, the university students, the managers, the journalists, and the civil servants who have concocted and disseminated the conspiracies.’

Conspiracy theories are not, then, the province of a googly-eyed lunatic fringe. Conspiratorial thinking is not limited to the stupid, the ignorant, or the crazy. It is a reflex of the storytelling mind’s compulsive need for meaningful experience”.