Patrick McKenzie Profile picture
I work for the Internet, at @stripe, mostly on accelerating startups. These are my personal opinions unless otherwise noted.
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Nov 29 10 tweets 2 min read
ChargeSpot, which rents batteries in Tokyo (among other places) from kiosks in many convenience stores and cafes, has (finally) released a subscription model here. They’ve had it in their Chinese markets for a while, to my understanding.

Some commentary: So while they’ve had promotional pricing at various times the two anchors you need to know are 330 yen for less than 30 minutes and 480 yen for less than 24 hours, which are approximately $2.50 and $3.50 respectively. (They have a scale going up to five days.)
Nov 29 6 tweets 2 min read
One thing to understand about real estate brokers / agents is that they’re commissioned compensated sales representatives.

One thing to understand about well-paid commissioned sales reps is that they’re project managers in disguise. “How do?”

They need to coordinate a complex interdisciplinary project involving, at a minimum, multiple entities with independent legal representation, assembly of a capital stack (and assorted wrangling), and a half dozen or more professionals plus a larger cast of extras.
Nov 29 5 tweets 2 min read
MyMiniFactory has a ridiculously useful loop for me as a consumer and for artists as business owners: a one-off transaction for e.g. a model of a dragon, found via search, frequently turns into a subscription (over their platform or Patreon) because I love the artist's style. An example: I finally wanted to try my hand at printing a dragon, so I did the obvious search and waded through a few pages of results for one which looked likely to be easy to print.

Found this guy, by Epic Miniatures. Paid $8.82 for file. Had a blast painting it (~80% done). Image
Nov 29 8 tweets 2 min read
An interesting thread about a yeoman constituent of neighborhood-scale capitalism, the humble laundromat.

(One could write a book on why the economics of them have been so important to the lives of many families moving to America, and if that book already exists, I’d buy it.) An extremely interesting sub-phenomenon which rarely makes it into the generalist press or economic journals is the parallel financial system for immigrants, which exists ~everywhere, and how one assembles a capital stack for laundromats while being ~maximally illegible to banks.
Nov 28 5 tweets 2 min read
Matt Levine, inimitably:

> In February, the biggest problem with BlockFi’s interest-bearing crypto accounts was that they were not, technically, legal in the US. Now there are much bigger problems! And yet that problem was not small?

bloomberg.com/opinion/articl… FWIW I'd have said that the biggest problem was that crypto earn products were sold as "deposits." They were actually a redeemable-on-demand interest in a hedge fund, but instead of 80% of the upside and 100% of the downside you just got 8% APY flat and ~100% of the downside.
Nov 23 6 tweets 1 min read
IRS: You owe us 10 cents.
Me: Oh for the love of.
IRS: You are required to use EFTPS to pay for this variety of tax.
Me: EFTPS will not let me pay because...
IRS: Then pay by check; 10% penalty.
Me: To confirm: you want a total of ELEVEN CENTS. BY CHECK.
IRS: Yes and hurry up. There is some uncertainty as to whether, in fact, the entity in question actually owes the ten cents, but I am too busy at this exact moment to argue the point for the relatable business administrative procedures influencer content.
Nov 23 6 tweets 1 min read
I should get together a reading list on financial fraud. It’s one of the subjects I periodically rabbit holes on and then periodically becomes suddenly professionally relevant. Spoiler alert: top of the list is Lying about Money.

Anyhow, some recurring themes:

1) Frauds are obfuscation engines
2) The core actual problem is often strikingly simple
3) Fraudsters frequently have a very high opinion of themselves
Nov 22 9 tweets 2 min read
I would neutrally observe that this is rational adaptation to an environment which has observably happening systemic risks and no lender of last resort. Indeed, a substantial portion of all societal technology built around the financial system is to avoid crises shaped like this. Note that the crisis doesn't have to be purely one of confidence. That can happen, and is a known failure pattern.

But that is not the only pattern.
Nov 21 10 tweets 2 min read
If one, strictly hypothetically, had custodied one’s assets with one’s money launderer, and one’s money launderer (who has a reputation for stealing any money custodied with him) recently became suddenly bankrupt, I think one may not appreciate how comprehensively %]*}^]ed one is “Subtweet rule.”

Darn it. Tether, obviously.

We (as a society) do not yet know where in the U.S. banking perimeter Tether’s money is, but if it is anywhere, it is the hottest money on the face of the planet right now.
Nov 21 11 tweets 2 min read
I think this is commendably epistemically rigorous and, also, part of the way that media sometimes negotiates in real time with itself on which people who are conducting data gathering, cross-referencing, and significant question asking may count as practicing journalism. That has a bunch of knock on effects due to the culture that is journalism, from a perceived obligation to begin sentences with “As first reported by…” to perceived social permission to ask management questions like “It has been reported that … sourced to your statements.”
Nov 20 7 tweets 2 min read
Somebody. Give. This. Man. The. Pulitzer. Yes, he’s an anonymous Twitter troll. Yes, he’s not infrequently off base. Yes, he doesn’t present like a finance professional.

All of these are true.

But why is he *always* the one who has primary source material already archived when it is deleted? And why does he notice?
Nov 19 6 tweets 2 min read
I’ve believed crypto to be in a credit bubble, for years. I think we’re shortly to find that embedded leverage in the sector was far, far higher than anyone, even its most ardent critics, expected.

If this is true… it will not be pretty.
Nov 19 10 tweets 2 min read
I think one of the superpowers of the Internet is creating networks which connect distributed individuals with diverse interests and talents with a much smaller number of nodes who are capable of repackaging their output in a way institutions find legible. Like, nobody can afford to admit how much more competent individual message board nerds were than the public health bureaucracy. It would bring down governments.

But people in the government are allowed to read email.
Nov 18 6 tweets 1 min read
I'm sorry about my output being frequent explanations of crypto-market-structure-and-infrastructure now.

My professional interests, a long-time weird hobby, and a time-bounded opportunity for pro-social behavior suddenly collided recently. That pushes allllll my buttons. “You don’t have to apologize!”

So I appreciate people who think that and yet I both have 100k+ people’s preferences to keep in mind *and also* there is some much smaller subset of people who are sort of friends with me who know me here.
Nov 18 11 tweets 2 min read
So some thinking out loud, and I promise it is actually that.

Suppose one has a token. It trades for a price. It may have some fundamentals but let’s consider the limit case where there will never be any cash flow associated. Now let’s stipulate one more thing about this token: it is accepted as collateral for trades in other tokens that people desire, somewhere in the economy.

In fact, many places.
Nov 18 10 tweets 3 min read
Ah interesting; Tether is now turning on their largest counterparty and claiming they wrecked half the industry. Curious. Alameda used to be their character witness, in e.g. places like Odd Lots appearances by the CEO.

(This is Tether's CTO, who is public face of the company.) Sam Bankman-Fried was on the Odd Lots podcast on crypto market structure in August 2021. He sounded like an extremely intelligent young man. And he discussed Tether probable solvency at some length.

Here is Bloomberg's version: bloomberg.com/news/articles/…
Nov 18 4 tweets 1 min read
Do you know what it reads like to people in tradfi comms departments when you make on the record denials to a question like “I have heard you are no longer a going concern. Is that true?” to a reporter, who then considers your denial newsworthy and reports it? I am confused by this choice of comms strategy, because if one continuing to operate, merely continuing to execute on the business like any other day is generally sufficient to signal that to the market.
Nov 17 10 tweets 2 min read
Crypto, as an ecosystem, is going to be in a much worse state Monday than it is popularly believed to be today. The number of systemically important institutions which have failed is believed to be lower than is true, and the degree to which they have failed is underestimated.

Nov 17 4 tweets 2 min read
It's my general understanding that the deepest pool of liquidity for Tether is 3pool (or, I suppose, the redemption window, if one believes they have a redemption window open).

3pool, interestingly, does not currently price in a prompt calamity for Tether. Image Now often, I am a big fan of the Efficient Markets Hypothesis.

But I have watched this suggest less and less risk to Tether over the last few days. And I have been chastened by the market many times.

But I really, really think people have not played out next few days in heads.
Nov 17 5 tweets 1 min read
I think some of our high-status institutions are beginning to wake up and, though they will not use this phrase, "notice they are confused" by facts which are available to them. There exists a cluster of people for whom saying "I notice I am confused." is something of an important ritual, and while I would not exactly consider myself in that cluster, one of the most useful things I've ever imported from it is this ritual.
Nov 17 5 tweets 1 min read
I am precommiting to not feeling the least bit surprised when Tether implodes and people, including people in positions of power, direct anger and skepticism towards exactly those who have been rightest the longest about Tether.

“Well if you knew why didn’t you tell me?” And when they are pointed at a long stack of attempts to tell them, they will say “Oh, why didn’t you tell me *credibly*. Look at all the errors in this work. Clearly it is nothing like the utterly immaculate investigatory work I usually do.”