Top Reads, Listens, Follows & Takeaways of the week
Crypto, Truth, and Basketball
Takeaways from my top three:
-I’ve been trying to learn about crypto since 2017 when my brother told me that he bought Bitcoin at our family Christmas party. Last week Matt Levine released a 40,000 word breakdown of all things crypto titled The Crypto Story. I highly recommend reading all of it. My main takeaway is that the crypto ecosystem seems to have recreated the modern financial system in mostly inferior and confusing ways, but also in some novel ways. The high leverage, speculation, and lack of transparency that caused some to distrust the traditional financial system seems to be just as prevalent, if not greatly magnified, in the crypto ecosystem. Having said that, the time, money, and human capital being dedicated to develop the ecosystem leads me to believe that there is a possibility that something valuable will come from it. Here are some of my favorite quotes from the piece:
On Crypto as money: “If you do good stuff for other people, they give you money, which you can use to buy good stuff for yourself. Another way to think about money is that it’s some sort of external objective fact. If you have money, it’s your money, and society has nothing to say about whether you can keep it or what you can do with it. Crypto starts from the second view: Your Bitcoin are yours immutably; they’re controlled only by your private key, and no government or bank can take them away from you. But the history of crypto since Satoshi has undermined this view. If you got your Bitcoin illegitimately, the government can trace them and stop you from spending them. There are still gatekeepers—crypto exchanges and fiat off-ramps and banks—that decide what you can do with your money. Crypto might be immutable and “censorship-resistant,” but its interactions with the real world are not.”
On trust in Crypto: “Crypto is in a way about rejecting the institutions of society, about being trustless and censorship-resistant. But it quietly free-rides on people’s deep reservoir of trust in those institutions. People are so used to trusting banks that, when Celsius told them not to trust banks, they said, “Ah, yes, OK,” then trusted Celsius to work like a bank, to be regulated like a bank….Crypto, in its origins, was about abandoning the system of social trust that’s been built up over centuries and replacing it with cryptographic proof. And then it got going and rebuilt systems of trust all over again. What a nice vote of confidence in the idea of trust.”
On the value of Crypto: “Socially, cryptocurrency is a coordination game; people want to have the coin that other people want to have, and some sort of abstract technical equivalence doesn’t make one cryptocurrency a good substitute for another. Social acceptance—legitimacy—is what makes a cryptocurrency valuable, and you can’t just copy the code for that.”
-What is true nowadays? I’ve been thinking about this with Midterms coming up. It seems that certain parts of our society have become so tribal that logic, data, and even the rule of law has been almost abandoned. The technology and media that we interact with daily further erodes our idea of what is true. Lee McIntyre, author of the book Post Truth, defines a post-truth world as “the political subordination of reality”. He goes on to say, “It's intended not just to corrupt our belief in some specific thing that's true, but really to undermine the idea that we can know truth outside of political context”. This definition seems correct to me. It’s a common tactic that has been used throughout history. Watching the 60 minutes episodes below left me shocked at how truth has been eroded in some communities. I highly recommend watching.
-Daryl Morey, President of the Philadelphia 76ers, is one of the NBA’s winningest general managers and the pioneer of the analytics movement in basketball. I’ve been a big fan of his since his time as GM of the Houston Rockets when he laid the groundwork for how almost all of basketball is now played by prioritizing efficiency - 3-pointers and pick-and-roll offensive basketball. In his interview with Brian Koppelman he mentions that if you don’t have two players on your team among the top 15 in the league you have no chance to compete in the NBA. Such a glaringly obvious point to NBA fans but so confusing when you observe how GM’s pay players and construct rosters. Daryl also talks about how he actively mitigates cognitive biases in his decision making and how he managed the sunk cost fallacy in managing the Ben Simmons trade. He’s a leader that has clearly thought about all of the processes in his organization, something I think many people take for granted.
Reads:
The Only Crypto Story by Matt Levine (here)
Bridgewater with an update on our progress through the tightening cycle (here)
The Psychology of Extremist Leaders (here)
A Brief History of the Past 10,000 Years of Monetary Policy (here)
Russian Oligarchs use the Isle of Man to obscure their wealth (here)
Financializing Diamonds? (here)
The infighting over prized JPMorgan wealthy clients (here)
Sequoia’s stealthy wealth management fund (here)
Why Lyft is being crushed by Uber (here)
Difficult realities in San Francisco (here)
Listens:
Daryl Morey, Philadelphia 76ers president of basketball ops, on hoops and data (here)
Delivering Alpha conference: Stan Druckenmiller, Jim Chanos, Paul Tudor Jones, Ken Griffin
Has Criminal Justice Reform Made Us Less Safe? A Debate (here)
Oculus & Anduril Founder Palmer Luckey (here)
Follow, Watch & Other great content:
Linsanity: 38 At The Garden - Watch on HBO Max (here)
White Lotus on HBO Max (here)
60 Minutes: The Dominion Voting Systems and the 2020 election (here)
60 Minutes: Election deniers running for office (here)