Links - December 5, 2017
This is another crypto heavy post with plenty of the links in some way discussing crypto assets, but bear with me: there’s other good stuff to read, too.
- Blockchain Governance: Programming Our Future Fred Ehrsam - Medium
This post is full of non-crypto/non-blockchain interesting ideas, from basic coordination and incentives, all the way to full fledged frameworks to replace democracy, like Hanson’s Futarchy (which I had never heard of before, and found super intriguing!). Framing the problem of governance as one of dispersed information in a changing environment is very Hayekian, which lines up nicely with what I’ve been reading recently. Toward the end, Ehrsam suggests players should focus on the metaprogramming of systems (ie, the decision making workflows/processes by which these systems evolve) instead of the systems themselves. I like this view.
- Want to Really Understand What all the Hype of Cryptocurrency is About? Mark Suster - Both Sides of the Table
A good intro, with both the bull and the bear cases well summarized. As usual, Suster does a good job of making complex topics available to non-technical users. This seems especially important these days.
- Bitcoin and Fundamentals Stephen Cecchetti and Kermit Schoenholtz - Money and Banking
In an otherwise boring article, Cecchetti and Schoenholtz wonder whether derivatives markets will negatively affect the valuation of crypto assets. This seems possible, and I think its a prudent point of view. Not much else is new in this post. These two have been skeptical of cryptocurrencies for a long time, and here they take the fundamentals’ “no way to do a DCF on this” side. Specifically, they argue that bitcoin looks like a bubble since “investors buy solely because they see the price rising, without any change in the discount rate, in risk tolerance, or in the projected dividend stream.” As my brother Max mentioned, this one can make the same argument against gold, or as Naval Ravikants keeps repeating “Money is the bubble that never pops.”
- A Simple Fix for Our Massive Inequality Problem Matt Bruenig - The New York Times
A spin on the basic income idea. Having a large sovereign fund that redistributes its profits seems smart at face value, especially if one believes in r > g. However, it brings up second order questions, like how to ensure such fund is properly managed, or whether those same assets could be more productive out of state’s hands. Sam Altman pushes a similar idea in American Equity, expressing the payout as “an annual share of GDP”. Intriguing, but perhaps too simple to actually work without unexpected effects.
- Adam Smith: is democracy always better for the poor? Branko Milanovic - globalinequality
I tweeted this out as an “Interesting argument from Milanovic” and he humbly corrected me, saying the argument really is Smith’s. Discussing interactions between democracy and power distribution during the colonial period, Milanovic summarizes Smith’s view: “More democratically-governed colonies (like the British) treat slaves worse because the elite which, in a system of oligarchic republicanism, controls the levels of power is reluctant to punish its own members who are particularly brutal towards slaves.” An unexpected lesson. It made me think of Roberts and Munger’s discussion about slavery, and how plantation owners argued the slaves were better off as slaves than on their own. The system must be full of perverse incentives if that is an idea put forth with a straight face.
- How Peter Thiel and the Stanford Review Built a Silicon Valley Empire Andrew Granato - Stanford Politics
This investigation of the publication Peter Thiel started while at Stanford was fascinating. Surely, there are other such clubs, at Stanford and elsewhere, with similar outsized influence in the business world. What makes the Stanford Review so interesting is the ideological aspect in this moment in history. I played a bit with the data and built a simple network visualization. As Granato mentions in a different piece, it is strange that by virtue of having been to an elite institution both him and I are just one link away from the people in this group, and of each other.
- Abe Lincoln and Filibuster Fever Tom Chaffin - The New York Times
An odd thing about coming to the US, was realizing that no one here knows about filibusters. In Costa Rica, their existence is a defining chunk of history. The Walker Affair is disproportionately important to Costa Rican identity. There’s a national memorial holiday, parks named for its heroes, and, after some revisionist history, even the main airport in San Jose got its name from it. Reading this, and listening to Nate DiMeo’s Memory Palace episode on the topic made me notice that while we learn of the incident, in Costa Rica we’re never taught about the motivation. The fact that slavery was deemed legal south of the 36°30′ parallel gave people all sorts of messed up incentives.
- A 700-Foot Mountain of Whipped Cream (podcast) 99% Invisible
This guest episode was an odd but awesome mash up of radio advertisments, jingles, and their histories. I still haven’t decided, but I might have to subscribe to The Organist.
- Sex Appeal (podcast) More Perfect
Until I listened to this, I did not know much about Ruth Bader Ginsburg’s origin story. This episode of More Perfect was especially good.
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