Tag: Crypto

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Finance Politics Preparedness

Day 800 and Small Potatoes

It’s nice when a round number crops up in my daily journey of writing every single day. It’s even better when it’s colliding with the wider narratives of humans. If you aren’t paying attention to the news, Silicon Valley bank had a run on Thursday and was taken over by FDIC on Friday. Now the powers that be decide our fates. On day 800 we wait to see if anything has changed about capitalism.

I’m small potatoes so I’m scrambling for survival as much as anyone. But I’ve got a reasonably good head on me and I’ve seen this movie before. Literally. I watched Margin Call a dozen times this year. My family also went bankrupt in the 2001 crash and I was working in startup land during the 2008 crash. So this isn’t exactly my first ride on the roller coaster. I still get sick to my stomach though.

I think we are all about to have a significant conversation in America about trust and who is looking out for whom. I have my theories on how it plays out and over what time horizon. Very few of those scenarios and involves actually letting the american economy implode. But some heads will need to roll it’s just going to depend on the fates.

I really don’t feel like writing through some of this as it’s both personally traumatic because I’m a human being but also because I don’t know where this lands any more than you do. A lot depends on who blinks and who we want to scapegoat and how much we want to tolerate the unpleasant realities of who matters most. Not to be dramatic but every empire rests on a pile of skulls. It’s the degree to which this is literally true that changes over the years.

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Homesteading Politics Preparedness

Day 782 and Vanity Fair

I am extremely proud of being a subject in Jame’s Pogue’s new Vanity Fair piece. It is about managed decline, the death of state capacity, and whispers of a post state world. I’d say it’s a bombshell except I think there are some very sober people discussing how life in a chaotic world filled with distrust might work out. Spoiler alert, not great.

“Preppers, techies, hippies, and yuppies are converging on the American West, the safest place to “exit” a society gone haywire.”

The Dissident Fringe

I worry that the next frontier in American cultural battles will be figuring out how to stay out of our versions of “the troubles.” And I don’t like the sound of that.

I think you may find yourself agreeing with me. I don’t want a culture war and I certainly don’t want it to turn into a hot war. Apparently that makes anyone who agrees with the above premise a dissident fringe. Didn’t realize it was controversial to enjoy civilization. But I am in fact comfortable saying I don’t want any kind of war.

But I’m not sure everyone feels that way. So in a show of our seriousness we’ve decamped to the imagined demilitarized zone of the Rockies. I don’t want any chaos but I am literally betting the house on us having a bumpy ride maintaining course in America as we deal with long delayed issues from infrastructure, education, logistics and supply chains to capital markets and trade. I intend to capitalize on this uncertainty. You can do so with me if you’d like as an LP in chaotic capital.

If you are curious about how it might play out, in this nearly 9,000 word opus, every angle of how to survive in the American West in the near future is captured in empathetic detail by Pogue. It’s almost like reading William Gibson in how it shows a present that feels a bit off. Cyberpunk right before the Jackpot, but make it from a gonzo Hunter S Thompson type. I appreciate it on purely aesthetic grounds. You should read it.

But practically how do we all muddle through a greyzone war that has no agreed upon values, including whether the enlightenment & liberalism are worthwhile?

As we fight it out as a nation, most of us are just going to continue living our lives as crashing stare capacity and war over institutional norms gets in the way of raising a family and doing business. And it’s this scenario—a muddling, unhappy, middle course—that most people in this sphere tend to predict is coming. It’s not fun but it’s not the end of the world.

It is my personal belief that we are struggling to find any alignment because regardless of your personal politics, religion, or even overriding philosophy, your actual physical body is just fucking done with this bullshit. I mean it literally. We feel it in our bodies.

Endocrine systems get fried. There’s too much cortisol, you’ve been running on adrenaline, eventually you tap out. Everyone feels nuts right now,” she said, “because what on earth are we supposed to do with the fact that we’ve had this incredible rate of change for so long.”

Julie Fredrickson – Vanity Fair March 2023

We think we’re keeping up with it, but our bodies are like, ‘Oh, actually no. We have no idea what’s going on.’”

It’s too much stress on the system and something is going to have to change.

If you read the piece you will see just how much trust is lost amongst all parties that make up the American experiment. The cherry on top is that our nation state distrusts our foes & but they also distrust us the citizens and their desire for more freedom. It’s a messy battle for meaning and power.

And as Americans we’ve had the exorbitant burden of the dollar being the global currency. What happens when we no longer trust any actors on the global stage? Distrust our fellow citizens, distrust our currencies, distrust our institutions, distrust our enemies? It sure gets hard to run an economy without trust.

We need to build new systems we can trust or our bodies and minds will give out. Simple as.

I don’t know what systems will evolve. But if we don’t start investing in them now we are in serious trouble. I’ve been investing in solutions that are venture scale for sometime. Ifyou want to join me on this journey, DM me on Twitter or join as an LP.

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Finance

Day 684 and Newcomb’s Paradox

I like mathematics. I’ve got very little talent for arithmetic but formal proofs were something I could feel my way through. I only learned this by failing regular calculus so badly and getting rescued by my roommate who is the scion of a very important family in algebraic topology. Bet you didn’t know that was a thing did you? He showed me that mathematics isn’t about numbers at all but about the logic of the universe. Also he kept me from flunking out. Thanks Tom!

I know the above sounds silly, but in academic circles math is one of those “purest” of institutions where cognitive processing power matters a lot and absolutely nothing else. They are some of the most deeply impractical and removed from reality types of humans you will ever meet.

I’m autistic enough that I found the company of this type of human deeply comforting as they comforted me though my shame based need desire to be normal. Literally no one will make you feel more normal than someone that works in formal logic and it’s adjacent philosophy of decision theory. I bet a lot lot of pretty girls with daddy issues have found this to be true if the LessWrong community is to be believed.

Because of how close I was to my roommate (and still an even though we don’t see each other enough) I got to spend time with a lot of utterly bizarre math people. And it really runs the gamut from those who are functionally pirates who can barely feed themselves to the founders of Renaissance Capital. They are a good time generally speaking. Extremely chaotic people who drink thousand dollar bottles of champagne from solo cups while discussing science fiction are my definition of a good hang.

But they are not what you’d call standard issue humans. If you’d like to know exactly how, ask them to explain how being three standard deviations from the mean has affected them and don’t interrupt them for thirty minutes. I am an outlier in many ways. But I don’t hold a candle to some of the folks I got to meet.

The reason I titled this post Newcomb’s Paradox is because it is thanks to early exposure to mathematics that I got to explore the complete irrationality of rationalism. Newcomb’s Paradox in its simplest format tells us that in an irrational system it is not rational to behave rationally. It is a paradox because this is both true and not true.

If you have some common sense you are not immediately knocked on your ass by this revelation but it turns out to be so unnerving. Unfortunately for some folks at the edge, which is most folks who are mathematicians, it might also break their brain. Effective altruism is now being blamed for its adjacency to the entire Sam Bankman Fried committed fraud at FTX scandal because they took the paradox entirely too literally and not at all seriously.

And given the dangers that can come from extremes perhaps more of us should be spending time with mathematicians. Math pirates when combined with high finance and potent philosophies might need tempering by those of us only two standard deviations out.

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Emotional Work Finance

Day 680 and History Repeating

I found myself crying my eyes out to my therapist this morning. Just full on sobbing. Nothing bad actually even happened to me during this week’s chaos. In fact, I’ve spent the last year or so preparing Alex and I for a downturn. I wouldn’t be much of a doomer if I didn’t swing into this downturn prepared.

It just all felt too familiar. It felt like the worst days of fear and insecurities from my childhood playing out all over again. My family went bankrupt during the great Web 1 unraveling. And I’ve never forgotten it’s lessons.

I remember feeling like I was in a secure situation and then learning in dramatic fashion that it was all gone. That all the hopes, dreams and aspirations that my father had done so much to prepare me to reach for (including a lot of very expensive colleges) would likely be out of reach. We’d be starting from scratch again. I hadn’t really had a lot of time to enjoy being a poor little rich girl. It was over too fast.

My father is a truly entrepreneurial man. When I was born the family lore is that he was pitching a edtech company. We were a startup family. We lived in Fremont which is (was) the shitty poor town. I suspect it was a lot harder than I even remember.

But dad found a way to realize his Silicon Valley dreams. He brought software to millions of people. He really did do the thing. And for a few years during the boom times it felt like we might be wealthy forever.

But finance is tricky. Lock ups can fuck you up. So can leverage. We had both. And then of course regular old fraud happens too. Yay.

But it wasn’t in vain. I learned those lessons well. I swing big and I bet on the future like my dad. I believe in people and in genius. But I also keep a balanced portfolio and back up plans.

I believe in exponential growth. But I also believe in the cost of capital. Sometimes money is cheap. Too cheap. And you need to prepare for when capital is expensive again. Because the laws of physics tell us that energy cannot be created or destroyed. And until someone smarter than me proves the laws of thermodynamics wrong, I will operate based on them.

And I am ready for the dark days. Both because it is literally November but also because I believe we’ve got chaos ahead. And if I’ve learned one thing from my childhood it is that you can survive it. It just takes a little bit of preparation. Which I’ve done. Everything else is just a case of history repeating.

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Finance Internet Culture

Day 678 and Winging It

I went for a haircut today. I’d been riding a haircut since May so it was a little embarrassing. I’d let it go from princess to dirty hippie.

Joking with the hairstylist a bit about being a bit weird we ended up commiserating over how much we enjoyed Twitter. She agreed that Twitter always felt like it was more real. Like people let it all hang out. And recently we all collectively realized that everyone is just winging it.

Nevertheless it can still be kind of a shock when it goes from “oh anyone can become one someone with hard work” to “oh fuck everyone is a fraud.”

I am I’ll admit a little shook about Sam Bankman Fried. I’ve got minimal exposure but I have interests that have been funded by funds that do. And that is really distressing to me. It always feels like at the center of the bullshit in this industry lurks some traditional finance fuckers not doing their math. And I do admit that chaps my ass. Sets us all back.

I do think plenty of the world is just winging it with a good faith and open heart. But for the sliver of sociopaths who know enough about governance and fiduciary duty and still decides that nah I’ll mix up some assets and ownership. Fuck you that’s regular old fraud and it sucks.

And what’s worse is you bring this on to our house. The people who do want to build a Plan B and who sincerely believe that a fairer more open accessible financial system is a global good. The people with shitty passports and communist governments actually need access but go ahead and you do some light self dealing. This isn’t important enough to you. Cool. Whatever. Nothing was riding on this.

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Preparedness

Day 677 and Bad Moon Rising

I got woken up at around 430am this morning by my husband. Now he typically wakes up earlier than me but rarely does he rise before 5am. He got out of bed and I heard one of our doors opening. A few minutes later he was back in bed and I drifted back to sleep.

It turns out he was getting up to see if the lunar eclipse was visible. Much of Southwest Montana got blanketed in a significant snowstorm, so alas cloud cover prevented him from glimpsing the eclipse with the naked eye. The blood moon was hidden behind a white out.

The eclipse was soon forgotten in the excitement of the storm. The snow was so powder fine we immediately suited up to do the adult version of playing outside. We had our first opportunity to hook up the snow blower attachment to our tractor to plow out our very long drive away. I took dozens of videos and Alex absolutely wrecked me by blowing a bunch of snow at me. We captured the comedy on the security camera and it made for a good laugh.

But the day unraveled almost immediately. The blood moon began to feel a bit like a bad moon rising. News of crypto exchange FTX getting “acquired” by Binance after 48 hours of sniping between CZ and Sam Bankman Fried. It’s a complicated story but it basically amounts to a bank run. Crypto was having a JP Morgan moment that appeared to have been manifested as some kind of grudge match on Twitter. The financial markets largely seemed like they didn’t care.

But crypto isn’t even the big story of the day. It’s Election Day in America where the midterms have been hyped up into an existential crisis. Which seems like a stupid thing to do when you are bound to lose just based on past election history (the party is in power tends to lose the midterms) but whatever everything in American life is existential now.

I’ve been on a doomer beat for sometime. Not that I think everything is necessarily getting worse but rather a series of macro level trends are headed in the wrong direction. I’d like to continue to live a nice life. I see the bad moon rising. And I made a set of life choices to get my family to Montana. I’ve got a serious of predictions about what it might take to thrive in harder times. And I’d be lying if I said I didn’t feel a little bit smug about having beat the rush. So stay strapped out there my friends.

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Culture Politics

Day 644 and Status Equivalence and DAO Leadership

Capitalism has largely been a triumph of hierarchy as an organizing mechanism. As we evolved from mercantilism into corporatism, appointing and holding accountable a single point of failure in a chief executive officer has become an effective shortcut for managing complexity when deploying capital. Leadership is responsible for the outcome.

The aphorism “failure is an orphan but success has many fathers” abuts against the reality that while we love to lavish praise upon executives, monarchs and other singular nexuses of responsibility it’s often not reflected in reality. Our bias in the post-industrial revolution has been towards leadership via individual even as post Enlightenment values valorize democracy and community participation. It’s been a tension for since the Industrial Revolution. America exemplifies this as the country most committed to both participatory federalism and corporate capitalism.

I am particularly interested in this tension as I believe we may be on the crux of larger organizational needs and are seeing them begin to coalesce in crypto. As decentralized autonomous organizations, or DAOs, make an attempt to become the new corporate governance structure in Web3, it seems worth studying the question of whether leadership is a singular or collective exercise for humans.

What does the historical and anthropological record have to say about how we organize? What are we evolved to prefer and are we capable of evolving further?

The bias we operate with now is great man theory. But what if that is not just wrong but not even the predominant form of human organization through history? Critics of cooperation might do well to explore this in particular.

I came across a Rob Henderson blog post which is an extended overview of a piece of sociology Hierarchy in the Forest: The Evolution of Egalitarian Behavior by the UCLA anthropologist Christopher Boehm. According to Rob’s post, the main question of this work is whether humans are by nature hierarchical or egalitarian. And it turns out our hunter gatherer forefathers were mostly egalitarian. The bulk of our history is egalitarian.

The anthropological record along with research on extant modern hunter-gatherers suggests that for most of human history we have been egalitarian, defined as “status equivalency among the decision-makers of a group.”

Rob Henderson reviews Hierarchy in the Forest

If you extrapolate this into a modern corporate context, the C-Suite or executive team, or perhaps even the founding team, are roughly the status equivalent decision makers. Maybe there is a first among equals in the CEO or founder but they can, in theory, be replaced by a board. But what if instead of a C-corporation you are managing a cooperative like a DAO? What then?

Apparently we humans are rather good at maintaining status equivalence. Richard Wrangham’s Goodness Paradox discusses how humans have self domesticated to avoid too much resource and power aggregation.

Over time, early humans eliminated those who were overtly aggressive. They killed or ostracized upstarts hungry for power; men with aggressive political ambitions. Other men would quietly organize to commit collective murder of troublesome male

Rob Henderson on Goodness Paradox

Moral communities evolve and punish those who deviate from acceptable standards. If you are too ambitious as an individual we swoop in as a species. It seems a bit miraculous in that light that we live in an era of kleptocracy and power consolidation given our tendency to murder upstarts. Great man theory isn’t all that sustainable. Or is it? Perhaps it’s that we asset influence obliquely. I’d wager any woman would agree.

Oftentimes, headmen display “self-effacing” behavior. Headmen and informal leaders usually obtained their roles through talent in hunting or warfare, storytelling ability, or congeniality. They rarely assert direct authority.

Rob Henderson on Boehm

If indirect authority is a sustainable organizational preference in the anthropological record, perhaps corporations are more amenable to reconstruction as DAOs (decentralized autonomous organizations) through the principle of status equivalence.

The autonomous part seems the trickiest, but decentralized authority inside tribal organizations are at least recognizably human. If as a group we disliked a status or resource hungry “great man” we leaned on the leadership preferences of status equivalent equals and forced you out.

I see no reason we can’t write in similar parameters into a smart contract as an experiment. At the first hint of a rug pull let the burning begin! We are already seeing political battles for resource allocation inside bigger organizations like MakerDAO. Crypto may be a worthy space for experienced leadership to show that figureheads like CEOs or founders are not the crucial lynchpin for progress and stability we believe.

Which would be quite a balm to me personally as I’m deeply skeptical of authoritarianism as a solution for our technical and social problems. I’d much rather we explore the wisdom of past tribal knowledge to guide us than look to a mythical great man to save me.

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Travel

Day 524 and Low Recovery

I’m on my way to Austin Texas today. Most of yesterday got eaten up by various preparations to be on the road. I’m scared for this trip as Texas hasn’t made cannabis legal so a core part of my physical stability regimen from my physician can’t be brought with me if I want to stay on the right side of the law. I’m terrified of Paxton the incredibly corrupt attorney general.

I did a bit too much yesterday in preparation for travel and unsurprisingly my Whoop and Welltory are flashing red warning signs. I struggle to sleep before travel because of the anxiety and no amount of magnesium, melatonin, quiet reading and essential oils was going to get me down. Even Ambien was like yeah girl your heart rate is crazy.

A poor set of recovery metrics from Whoop

I’m hoping the flight is easy and I get a good night sleep once I’m in Texas. I’d like to be in the green for tomorrow as I’ve got a few little things to finish in preparation. But my basics biometrics are still so bad a 45 HRV is considered good as I think I’m still in a long post viral thing from May.

The Texas heat is going to quite extreme unfortunately. I’m skeptical all go outside for any longer than it takes to get a cab. I brought a bathing suit but I am not sure frying by the pool will do me any good.

A weather forecast for Austin Texas showing a string of over 100 degree highs for a week.

I’m much more concerned about Texas’ notoriously unstable power grids. What if it goes down while I’m there? Will my Texas prepper friends take me in? Will the hotel be on a generator? Is downtown Austin likely to be restored quickly? What if it’s a cascade event and nothing can be brought up for days like their last major grid event?

I’ve done my best to set the lowest possible expectations for being able to meet up with me socially. Which is a shame as conferences are for networking. My DMs are packed with excited DAO folks trying to get my attention. Meanwhile I’m not even confident I’ll leave the hotel room for anything but my own talk and one meet up with a long time friend whom I’ve not had the chance to be with IRL.

I’d like to do more but so many factors are combining to make me extra cautious about obligations. There are too many potentials for a cascade failure and I want to give a great talk so I’ve got to save my energy for that. I’m not worried about being good for the talk.

I’ve got an incredible gift where I can muster all my focus and energy even when extremely sick. I’ll use every last drop of it to meet my obligations. No one will be able to tell I’m sick. And then it’s entirely possible I’ll crater for days. My autonomic nervous system is very sensitive. It’s a blessing and a curse.

I’d you absolutely must find a way to meet with me (and sorry pitching me IRL might not be in the cards but DM and we will chat) I may try to host some folks at my hotel suite. If you are an actual friend of mine and can respect the disability situation maybe we can make it work. But no promises. Which of course my actual friends will understand so open invitation and such.

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Internet Culture Startups

Day 509 and History Lesson

I’ve been working on a talk for Coindesk’s Consensus in June. I’m doing a talk for their Big Ideas stage that Alex cleverly named the InDAOstrial Revolution. I’m pretty excited about the topic as it’s science fiction & finance history and social organization. It’s basically all my favorites. A

The invention of corporations was a transformative innovation for human organizing, driving the growth of the industrial revolution. Can DAOs drive an equally explosive innovation cycle? Decentralized autonomous organizations, or DAOs, offer us a shift towards open and inclusionary entities for marshaling resources and energy. This session dives into their potential futures, including open web public goods, the end of doomer capitalism, techno-optimism collectives, and the possibility of a networked nation state. Come for the sci-fi vibes, stay for the boomer neoliberal skepticism and get a pleasant dose of economic history in the process.

I’ve been doing a little bit of deep diving into the history of the corporation and it’s role in American history in particular. And when I was procrastinating during my flu I watched Gilded Age. Just so you’ve got an idea of my mind set. And honestly it’s been a mind fuck.

I’m not a historian but I think you can make the case that America had corporate governance before we had a functional state or federal government. In fact, this History of the Corporate Form from Fordham Law showed me the wildest fact I’ve ever seen. In America the corporation came before the state.

Other notable “joint-stock” companies, such as the Virginia Company, helped expand British control of North America. In fact, the Virginia Company established the General Assembly, which was the first legislature in North America.

The idea that some monarchy set a corporate charter up to extract commodities and that corporate organization led to a three hundred year experiment in self governance is astonishing. You really never can tell about an event’s downstream ripples. Our entire political way of life was downstream of property rights.

Of course, the reason I point this out is that how we organize and govern our resources and at what scale is what defines history. The ability to trust your goals and your investment will be executed, even if you are not personal overseeing it, is as it turns out a key innovation catalyst for all other technologies. The more efficient we are at at marshaling and deploying resources the further we get as a civilization.

The case I would like to make is that DAOs could help us unlock more sophisticated financing that enables ever further scale and coordination. If the corporation created American, can the DAO led other new nation states?

I can imagine a network state made up of sub-DAOs that provide interlocking economies. Some DAOs are responsible for infrastructure. Others are for services. Maybe we share some key responsibilities across one oligopoly for key social services like health care. The more something needs scale to succeed the more large scale collaborative behavior gets rewarded. I don’t doubt we can create some truly dystopian shit but also maybe it finally gets us to Mars.

Categories
Emotional Work Startups

Day 505 and Deadlines

I’m trying to stave off a cortisol spike that my body simply does not need. I’ve got a talk coming up for Consensus in June and I owe an editorial with my main thesis along with any visuals I may need for the talk due next week.

I know the area I plan to speak about quite well. It is titled the InDAOstrial Revolution and I plan to cover some far future possibilities for what the new organizational structure can bring. And I do mean far as I’ll talk about some radical ideas like data collectives for rare diseases and networked nation states. I’m really excited as I think decentralized autonomous organizations offer us a new path for how we can pool different kinds of resources. I think DAOs give humans a chance to build better bigger weirder things on totally radical timelines just like the advent of the corporation did before in the industrial revolution.

I’ve been watching Gilded Age as I’m a sucker for set pieces but also because I love stories of wealth and power and cultural mores being pushed. I think DAOs have the chance to do that for society and the family in a way that is just as unsettling and ultimately wealth creating as anything we saw in the Gilded Age. And the changes we see to cultural norms will be every bit as revolutionary as the ones we see with inventions or investments. When times change, we push all of the ideas we have about how to properly organize individuals and citizens with it.

What I’m saying is I’m obviously passionate about the topic and even when I’m home with the flu I’m thinking about ways to knit together different worlds and metaphors. I might not be the best expert on DAOs nor am I remotely close to being one of the earlier people to get into them, but I’m absolutely an informed and enthusiastic professional with the training to think about this holistically. So I’d listen to me if I had the chance.

Nevertheless I’m worried I’ll botch the talk. My mind wants to worry I’ve run out of time to do a good job (I obviously haven’t) and that even if I put in a lot of hours it could have been more. I could have started sooner.

But honestly I’ve got to let that self defeating talk go. What I bring will be enough. And a deadline looming even with a sickness is no reason to worry when you know and love a topic well. So I’ll trust myself to bring you something good.