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Stephen Diehl Profile picture
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3 May, 5 tweets, 1 min read
The mental gymnastics Facebookers do is incredible and now they have the audacity to say "there's good people here now".

No, literally every day that company tries to create the most optimally evil lines of business in the entire sector. And they're unapologetic about it.
Addicting children under 13 to Instagram.

theguardian.com/technology/202…
Regulatory arbitrage to build a surveillance system on top of their own currency.

foreignpolicy.com/2019/06/24/971…
Emotional manipulation experiments on users without consent.

pnas.org/content/111/24…
You are what you do. And creating a right-wing echo-chamber cess pool to capitalise on hate for ad impressions is not the kind of thing good people do.

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More from @smdiehl

Stephen Diehl Profile picture
4 May
Let's talk about surrogate money scams and how they are used to cover up the liquidity crisis at heart of the global crypto fraud. (1/) 🧵
Contrary to myth, it's actually entirely legal for private companies to issue private money, but with some caveats.

Whenever you buy a Starbucks gift card or top up the mobile app you're effectively trading your dollars or pounds for Starbucks-bucks. (2/)
Starbucks has around $1.6 billion in stored value card liabilities outstanding. This is a great line of business for them because these dollars are locked into being spent at their coffee shops and the company gets a giant pile of actual money they can spend anywhere. (3/)
Read 19 tweets
Stephen Diehl Profile picture
2 May
Let's talk about the moral hazard of crypto and how it incentivizes fraud in tech companies. (1/) 🧵
Term "moral hazard" is financial jargon for an entity that has an incentive to take on greater risk because they don't personally bear the consequences of their actions. (2/)
If you invest other people's money there's a well-known perverse incentive to take on riskier positions because the incentive of your pay is performance-based and tied to outsized returns. And you personally see none of the downside if the positions fail. (3/)
Read 23 tweets
Stephen Diehl Profile picture
22 Apr
I keep using game theory and quantitative finance terms to describe why #bitcoin is a terrible investment. But let me try a different metaphor that might be more relatable. 🧵

Poker. 🃏

(1/)
In a poker game people show up with cash, a buy-in. They convert this money with the house to get tokens which they then use to play. (2/)
If you sum over all players buy-in you get the total possible winnings any one player could possibly win. This is a fixed value that can't increase unless more players are added. (3/)
Read 13 tweets
Stephen Diehl Profile picture
20 Apr
Let's talk about why the #bitcoin narrative is intellectually incoherent and why the emperor has no clothes. 🧵 (1/)
Bitcoiners are deeply confused people. In particular they are duplicitous (or genuinely confused) about the purpose of their allegedly paradigm-shifting technology and whether it is:

A) An Investment
B) A Currency

(2/)
These two classes of financial instruments are complete opposites. The better something is as a speculative investment, the worse it is as an actual currency.

However crypto advocates want to use and refer to the properties of both simultaneously without justifying either.

(3/)
Read 19 tweets
Stephen Diehl Profile picture
19 Apr
When economists describe crypto assets like bitcoin as a "greater fool" investment what do they mean? 🧵 (1/)
It's important to note the actual buying behaviour people have with crypto assets.

People buy them from a service like Robinhood or Coinbase and hold their tokens in hopes that "number go up" so it can be redeemed for dollars. This is effectively 99% of consumer behavior. (2/)
Because there's no utility or cashflow from a bitcoin, they only way one can possibly make money from this scheme is for the exchange who holds your tokens to find someone who will buy your tokens from you for more than you paid. (3/)
Read 15 tweets
Stephen Diehl Profile picture
26 Mar
Let's discuss the nature of 'control fraud' in the corporate world, and how businesses which are legitimate in their individual components can be fraudulent in their overarching structure. 🧵
So say you're an executive at a company (maybe like a bank or a crypto company), and you want to commit some activity that is legally prohibited and/or fraudulent. But you also want to protect yourself against liability from that action.
The absolute best way to do this is not to create a line of business for the fraud, personally profit, and then cover it up; but instead create a sufficiently criminogenic corporate environment in which others do the fraud for you "without" your knowledge while you profit.
Read 18 tweets

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