Tag: Elite

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Finance Politics

Day 135 and 4 Quadrants of Crypto

I’m on my own this weekend so I had some time to listen to podcasts on my daily walk. I stupidly decided to listen to a podcast entitled “best crypto debate ever” which was vastly overselling both participants capacity to engage in productive debate. Not because either wasn’t smart but simply because they were both approaching the topic from entirely different vantage points. One had reasonably well founded concerns about about the how existing powers will fight to preserve their interests and the other was too fixated on proving that the market was the only player that matters. I am beginning to think that crypto, and in particular Bitcoin, is having a “blind men and the elephant problem” that makes discourse challenging.

I’m not pretending to have a full understanding of the future of cryptocurrencies or Bitcoin, merely articulating to myself as an exercise (it’s my blog after all but maybe my thinking helps you too) the four expertises required to wrap one’s mind around how cryptocurrency will evolve and what consequences we need to consider. Because there are no “right” answers at the moment merely different vantage points to consider as we stumble into the future.

1. Macroeconomic: understanding central banking, treasuries, monetary policy and macroeconomic actors is a specialized skill set. I studied it at arguably the best university on the planet for the subject and I still find the ins and outs to be heady stuff. Who decides what money is worth? When do we change those valuations? How does one country’s currency impact another’s? You hear a lot of buzzwords tossed around like “rules not rulers” but the practicalities of it are in fact hard problems. Just tossing off that you think “fiat currency” is bad isn’t enough.

2. Geopolitical: governments need money to provide services and security which makes them economic actors in addition to being political ones. America’s political ambitions are distinct from China’s. How we make make our money and how we spend it both at home and abroad will affect how we perceive other currencies. You need to understand things like how the dollar’s reserve currency status operates (ideally it’s history) to even begin to understand the geopolitical implications of cryptocurrency. Much hay was made of Peter Thiel suggesting Bitcoin could be weaponized by China against the US. Clearly any currency, especially one not run by Americans, will have geopolitical consequences. That anyone got hysterical about it suggested to me that our understanding of monetary policy and its political implications is limited in the general population. One needs to understand how the many actors on the political stage intersect their interests, political and economic, to even begin to comprehend how a cryptocurrency, particularly a decentralized one like Bitcoin, might evolve. In other words you have to understand how it works before you can do any predictive work.

3. Technical: concepts like distributed ledgers, hash rates, decentralized computing, and cryptographic keys are all crucial subjects for understanding the mechanics of a cryptocurrency, who owns it, and how it’s transacted. The chances that you understand the above geopolitical and macroeconomic problems and also understand how to code say your own token or have the wherewithal to acquire and set up hardware for a mining rig are slim. Maybe you grok it but being an expert in all is vanishingly slim. Computer science, political science and economics are all separate disciplines. Sure Bitcoin mining basically operates like loot crates in a game and who am I to say whether it’s a better system to have dorks with a lot of hardware run our money instead of Steven Mnuchin.

4. Microeconomics: the final area expertise is how markets and all the different players in them will value a currency and use it both as an asset and as a payment system. The elaborate financial systems that exist to determine what you think something is worth versus what someone else does is elaborate. We’ve got Byzantine financial products that decide everything from your mortgage to your salary to the cost of a sandwich. And while it’s not intuitive the folks that work on currencies, monetary policies and macroeconomic issues are not equipped with the same skill sets at all as the folks who trade on financial markets, cut deals between market participants or work out balance sheets. I’m much more studied in the macroeconomic issues than the financial ones and I wish that weren’t true. It’s a lot more lucrative to work in futures, arbitrage and market making.

When it comes down to it these four quadrants all require distinct skills and very different areas of study. Much of the debate and disagreement may simply come about because we are seeing different possibilities. Wrapping your head around the whole is difficult and no matter how brilliant you are having exposure to all areas is a lifetime of work.

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Aesthetics Chronicle Startups

Day 99 and Swag

My favorite item of clothing in the pandemic has been a Facebook hoodie. It’s the perfect garment for long days indoors, not too heavy but not too light. It zips so it’s easy to get on and off. It has pockets for stowing my iPhone. It’s got a snuggly fuzzy inside but a smooth cool texture outside. I’m not sure I’ve been more dedicated to a piece of clothing.

Years of living in New York, where dragging dirt and debris in from the city was a real concern has made me a almost compulsive aficionado of “indoor clothes” which were not besmirched by the grime of subways and pavement. My Facebook hoodie remains my default “indoor clothing” top layer. At night I unzip it and place it carefully beside my bed. In the mornings if it is cold I put it back on before starting my day. The chances are good that if you’ve been on a Zoom call with me I’ve been wearing this hoodie. It’s just on screen and a strange affectation for someone that has literally never been a fan of the traditional Silicon Valley boy wonder aesthetic. The only item I have gotten more wear out of is a pair of Gucci boots I’ve owned for 12 years now.

To say that they are very different garments is an understatement. One is a thousand dollars worth of black Italian leather crafted into the Platonic ideal of day boots. They are feminine with tight knee high lines that maintain the slightly militaristic echo that typify the Italian school of fashion. The other is a baggy slouching genderless sack of blue with an embroidered white logo that splits with a zipper tight down the middle between Face and Book.

You would not imagine the owner of one garment was the owner of the other. Even when the tech plutocracy decided it wanted to play with high fashion status games (thanks Marissa) the two stylistic poles never really gained much common ground. Still tech has inspired a significant portion of modern fashion and fashion craves the semiotic power of Silicon Valley. I’m sure Willian Gibson could explain the common lineage but I doubt I have the chops. Nevertheless I do consider both pieces to be emblematic of my personal style. Something about utility I suspect. The two garments are not from entirely different worlds

Ironically I don’t use Facebook anymore (though I still have an account) and I don’t even support what the company has become. So you might think it’s odd I own a piece of swag from the company. I got the hoodie after I had already given up on the place. But I got it from a Facebook employee who I consider to be one of the best humans I have ever known. His name his Dan.

I didn’t ask him if I could write this little remembrance so I won’t give his full name. Thanks to the efforts of one of my investors he was an advisor and investor to one of my startups and was unfailingly the kindest person I had the privilege of working with. On a trip to visit him in Menlo Park he took me to lunch on the Facebook campus. We had tacos. Afterwards as we were walking we passed the swag store. I said that I thought it was a brilliant bit of marketing that they sold hoodies. Pop culture has long cemented the status of the hoodie with both the company and with founders in general. To have a specific Facebook hoodie seemed a powerful talisman filled with irony and hope. Without missing a beat Dan bought me one.

There was no way of knowing at the time, for either of us, that this garment would end up a significant figure in my daily routine. It remains an emotional link to Dan and the support he always showed for me. He never wavered in his belief in me. This is a trait he has demonstrated consistently with those in his life. One particular example is a dear friend of mine who worked at Facebook thanks to his efforts. She is also brilliant and kind and at the time Dan worked with her the victim of a deeply Silicon Valley crisis. The kind you might even associate with tech bros who wear hoodies with logos on them. An irony that is not lost on me. The tech industry truly contains emotional multitudes.

I’d encourage you to inspect the garment in your life that holds the kind of significance and emotional resonance that this hoodie does for me. Fashion exists in even the places we think are furthest from style. Like corporate swag. Like a Facebook hoodie. There is always a story and a reason behind what we wear. Indeed this was a topic I thought I’d make my life’s work when I first stumbled onto the internet. I kept a fashion blog on WordPress maybe starting in 2004 or so. I didn’t end up being a fashion critic. But I still get to blog about clothing if I feel like it.

Categories
Aesthetics Chronicle Politics

Day 45 & Noblese Oblige

“With great power comes great responsibility” is a comic book classic known as the Peter Parker principle. If you are bestowed with gifts, you must gift them back to your community. Noblese Obliege or “nobility obliges” suggests that nobility comes with a responsibility to fulfill obligations to the people who guarantee your status.

This sounds like a social good, and sure it anchors all the great heroic narratives of our modern age, but it appears to be unraveling in modernity. It used to be that we believed the morally good are the ones with gifts, if you weren’t wealthy it was because you didn’t deserve it. It was a bit of a religious and heroic tautology. But it worked! The nobles and the superheroes felt an obligation to their subjects insofar as publicly demonstrating their inherent goodness was crucial to demonstrating their nobility.

A key component of noblese oblige was showing off moral worth by giving to the people without the insistence that the people be inherently good. The people didn’t need to be worthy to get anything. Being worthy was the job of the nobility not the peasants. Which meant that all gifts from nobility to peasants were inherently gratuitous. No one deserves to be given gifts. Gifts were bestowed at random and in significant largess.

I’d suggest the reason our institutional trust is breaking down is not because we are wising up to inequality, but because the narrative arc of nobility living up to its responsibilities have broken down. America’s first robber baron class understood this with their grand social gifts of libraries, parks and endowments. Some of our Billionaires still do. But we no longer feel the gifts match the obligations. No matter how much this new nobility gifts, the rabble is still pissed.

Maybe it’s the insistence on making charity go to worthy causes. Or welfare go to people that deserve it. That is ass backwards. The nobility are supposed to be good. The peons with outstretched arms never had any worth to begin with. If they did then they would definitionally be noblese oblige too. You can’t ask everyone in the system to be good, moral, and true. That’s fucking exhausting. Even Christianity got that sin was so encompassing that literally only God could be expected to be without it. Probably why we used to let nobility get away with bad behavior. That is fine as long as they did their part. The prodigal son got shit without deserving it. That was the moral of the story.

The trouble with a time that has broken with historical arcs of goodness is that now no one is nobility or peasantry. No one is noble or good. Which means nobody deserves anything they get. Which is about as close to the war of all against all as I can imagine. Hobbes would be pleased.