In a Bitcoin world, who gets to play the plutocrat?

Chris Dannen

By Chris Dannen

Bitcoin has a way of bringing out strange biases in the form of criticism. In today's top story, an opinion writer at Modern Consensus, an online magazine partial to Ripple, argues that Bitcoin has a "dark side." That is: if it succeeds, it will enrich a small group of people who the author may not like (ie., the current holders of bitcoin). It's not that he's envious of big Bitcoin holders; it's that all hard money currency systems are somehow immoral! "In a world without inflation... those who are wealthy now—'the savers'—could rest assured of remaining so in the future, while those with ambitions of becoming wealthy would largely be out of luck." By savers, he means Bitcoin holders, hardly a demographic that overlaps with the scions of yesteryear. If his argument is that the existing system doesn't benefit the rich first and foremost, then he's due for a reality check, and investor Ray Dalio might agree. (See articles below.)

Crypto’s superhero fixation has a dark side
“Of the 21 million bitcoin that will ever be mined, 17 million have been mined already, and probably 3 million or so have been lost. That means some 80 percent (14 million out of the 18 million bitcoins that will effectively exist) of the bitcoin supply is already being held. And it appears to be quite heavily concentrated, largely in private hands, as could reasonably be expected of what is effectively a collectable asset with a lottery-ticket-like potential payout structure. If it is true that much of the world’s wealth will be held in bitcoin, that means that 80 percent of a large share of the world’s future wealth is held by a relatively small number of people.“

Billionaire Ray Dalio Says “Capitalism Is Not Working” for Most People
"In his speech this week, he cited a Federal Reserve survey statistic that 40% of U.S. households could not raise $400 in case of emergency without selling something.
“We might not have contact with those people, but that is a reality,” Dalio told the crowd, who paid thousands of dollars to sit on the Palace Theater’s velvet seats and hear him speak."

Other News

The future of work won't be about college degrees, it will be about job skills
“The future of work won't be about degrees. More and more, it'll be about skills. And no one school, whether it be Harvard, General Assembly or Udacity, can ever insulate us from the unpredictability of technological progression and disruption. But one thing can: The fastest-growing segment of the workforce — freelancers — have realized more than most that education doesn't stop. It's a lifelong process. Diploma or not, it's a mindset worth embracing.”

SEC Cyber Chief Puts A New Type Of Cryptocurrency Exchange On Notice
“By their very nature, blockchain-based exchanges are nearly impossible to shut down. While online access to centralized servers can revoked, a new wave of decentralized servers, domain providers and more is becoming increasingly popular. Soon, even traditional means of enforcement could become more difficult.”

CEO of Overstock thinks the Govt Should do this for Bitcoin
“Western governments are understanding that it can’t be stopped... in China, they figured out that if they don’t stop it, that within 10 years it would be the end of their regime.”

Chart Of The Week: Equity Risk Premium - EM Is Cheap Again
“The chart actually holds a few key insights worth highlighting. First, the EM equity risk premium is trading slightly higher than where it moved to during the 2015/16 market corrections. So it is currently elevated, by EM standards. Second, in the post-2008 period, it is trading higher than usual against developed markets, which makes it attractive on a relative basis. So it makes EM equities look attractive vs their own history, vs government bonds, and vs their developed market counterparts.”

Foundation and Empire
"Asimov wrote Foundation and Empire in 1952, when America faced a similar temptation to rule the world as a giant protection racket. I’d argue that, for the most part, we denied those temptations then, preferring to establish soft hegemony to a hard rent-seeking empire. Eisenhower doesn’t get enough credit for that whole Pax Americana thing. You know, after winning World War II. If only he had been a hotelier instead, why then maybe we could have accomplished something really great. Ah well, at least we have our opportunity now."

A Response to “Bitcoin’s Existential Crisis”
"The remainder of the article divides perspectives on Bitcoin into various philosophical camps. I actually believe he may have usefully pointed out the ideological differences. However, I see the existence of these different camps as evidence that Bitcoin may never achieve alignment between these different positions, and is likely therefore to continue to fork as various issues arise. Every contentious fork that arises represents an increased difficulty in Bitcoin ever achieving the network effects it requires in order to be effective."

The Experience Economy
"In SAP’s vision, managers can react not simply to events after they show up on the balance sheet, but ideally before they, well, don’t: a constant refrain on the investors call was the important of limiting churn, which makes perfect sense. It is far more expensive to acquire a new customer than it is to retain an old one, and the combination of Qualtrics and SAP, uniquely enabled by the state of technology today, gives businesses an opportunity to do just that."