1/ In the spirit of end-of-year housecleaning, here are some things I believe about the crypto world as we close 2021.
Reasoned disagreements *very* welcome!
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2/ Self-custodying of important things (wallets, etc) is not a viable long-term solution if 100x'ing crypto is a goal.
My mom can't be trusted to have the necessary opsec to handle her $ in irrecoverable ways.
3/ Relatedly, code-is-law also isn't viable long-term. There will need to be mechanisms akin to our legal system to be able to "sue" to get your stuff back, adjudicate disputes, etc.
4/ DAOs are the obvious candidate for this. It seems likely that the DAO with the best "legal system" becomes a piece of infrastructure that everyone else builds their stuff on top of.
5/ 100x'ing the financial side of crypto means getting a lot of very risk-averse $ comfortable transacting in crypto. Crapping on all the olds with trillions of $ on the sidelines isn't helping anyone.
6/ Creating ways to demonstrate that you're getting great execution and custody on your trades as a pension fund, etc, is critical.
Right now a pension fund who wants to buy BTC has no clue where the "best" place to do it is.
7/ Decentralization isn't an end unto itself. There is an optimal amount of centralization in any system and extremes are never correct.
More generally, privileging a political belief (libertarianism, etc) when making tech and business decisions makes you make bad ones.
8/ IP law exists, at least in principle, to protect creators and thereby encourage invention (technological, cultural, etc). One can debate whether the pendulum has swung too far in the wrong direction (Mickey Mouse is ~90 years old and still isn't in the public domain).
9/ But the other extreme (i.e. you put a lot of effort into creating a great smart contract and your reward is for someone with better marketing/deeper pockets to fork it and kill you) is bad too.
10/ You can massively increase the signal-to-noise of what you read simply by ignoring any article that uses the word "Ponzi" to crap on some new crypto tech.
11/ Being a bagholder looking for the next bagholder has a fine and noble tradition. From Treasury bonds to VCs.
Using the term Ponzi is just a cheap attempt to get the reader on your side. Don't fall for it.
There are plenty of well-reasoned critiques of crypto. Read those.
12/ By far the scarcest resource in the Web3 world seems to be competent people to write, read, review, and audit smart contract code.
Why aren't all the whales who want to grow the ecosystem dumping a lot of $ into training new devs?
13/ There should be a hundred Solidity code schools up and running where people get paid to attend. If you truly want to grow the ecosystem instead of making immediate $, put your money where your mouth is.
Letβs start the year off right by trying to improve #fintwit.
My humble contribution today is a small thread on how to identify (and then roundly ignore) finance Twitter griftersβ¦
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2/ 1β£ Grifters talk a lot about specific trades and (post-facto) outcomes.
Good follows talk about process, principles, and about how they might be wrong. Not as sexy but much more useful.
3/ 2β£ Grifters make βpredictionsβ that are hard to falsify. Even worse are the ones that tell you about predictions they made before. Even if accompanied by a timestamp, this is nearly worthless.
1/ So Iβve been thinking a lot recently about arguments we see on the Twitter.
One case in point is the βcrypto is the futureβ people vs the βcrypto is a scamβ people.
But what follows applies broadly. πππ
2/ Yes, there are people out there who just want to argue.
But I assume we all block them already.
I want to talk about (and to) those of us who want honest truth-seeking conversations, but sometimes get bogged down in pointless debates.
3/ I offer a mental model to help frame both our own thoughts and those of others.
This model is mine, but itβs also not mine in the sense that itβs an amalgamation of all the things Iβve learned and read and half-forgotten over the years. Here goesβ¦
1/ A Sunday question thread: why do American parents care so much about their kids' sports?
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2/ Numbers vary but from a cursory look, somewhere between 55% and 65% of American children between 6-17 play some form of organized team sports (i.e. with instructors and coaches).
Add in the tennis, golf, running, and other individual sports and you're surely around 70%.
3/ The time investment is big, and the financial investment too. A lot of high schools are oriented around their sports teams (Friday Night Lights, etc). But why!?!?
I think I've discovered a common cognitive error which I'm going to label the Physical Embodiment Fallacy.
In this and many other superhero movies, the bad guy creates/steals some horrifying new piece of technology which is going to kill millions, enslave the world, etc.
The solution in every movie is simple: kill the bad guy and destroy his evil lair.
I.e. eliminate the physical embodiment of the problem, and the problem is solved.
1/ The key to understanding "news" is to think about probabilities and incentives. A thread... πππ
2/ Let's say you're trying to estimate the chances of some future event happening.
As an example, let's take P(Trump runs for President in 2024).
3/ So you read the news about such an event. CNN, FoxNews, Politico, whatever. And it feels like a steady drip of "news" about tiny events which could affect that probability.
So how do we integrate all these pieces of information into a prediction?
1/ A short thread about the relationship between academic finance and real $ trading. πππ
2/ First of all, I need to get something off my chest. I loved the Asimov Foundation books as a kid.
Much like Paul Krugman, the idea of doing math to understand complex societies, and to predict their evolution, was transfixing. And still is.
3/ I used to do mathematical modeling of complex systems before I even knew it was a thing.
When I was working as an engineer (and running a lot), I spent more time that I'll admit trying to build a model of the human lactate response to exercise. For fun.