Thinking of investing as a game

Graham Duncan on thinking about investing as playing a game:

One of the most important things I’ve learned in that process is what separates the great investors from the rest. The great ones view investing as a game, and they know exactly what game they’re playing. It brings to mind an observation from the philosopher Kwame Anthony Appiah: “In life the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.”

One way to relocate your locus of control is to frame investing (and even life more generally) as a game. This allows you to experience luck as luck, to separate the hand you drew from the playing of that hand.

He describes five levels of the game for investors, though it seems more generally applicable:

1. Apprentice — learning the game

2. Expert — mastering the game you were taught

3. Professional — making the game you were taught fit your own strengths and weaknesses

4. Master — changing the game you play as part of your own self-expression and operating at scale

5. Steward — becoming part of the playing field itself and mentoring the next generation

 

Read the full post at The Playing Field on Medium.

Bitcoin has proven a point, even if it fails

Nassim Nicholas Taleb on Bitcoin:

Which is why Bitcoin is an excellent idea. It fulfills the needs of the complex system, not because it is a cryptocurrency, but precisely because it has no owner, no authority that can decide on its fate. It is owned by the crowd, its users. And it has now a track record of several years, enough for it to be an animal in its own right.

He concludes that Bitcoin may fail, but that it’s proven useful regardless.

Finally, Bitcoin will go through hick-ups (hiccups). It may fail; but then it will be easily reinvented as we now know how it works. In its present state, it may not be convenient for transactions, not good enough to buy your decaffeinated expresso macchiato at your local virtue-signaling coffee chain. It may be too volatile to be a currency, for now. But it is the first organic currency.

But its mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly. This gives us, the crowd, an insurance policy against an Orwellian future.

via Bitcoin – Opacity – Medium at Medium

Blockchain’s pendulum of innovation

Crypto expert Jill Carlson on the pendulum of innovation, and where it lies in regards to blockchain currently.

Out of the altcoin wreckage, 2015 saw an awakening to the fact that infrastructure is a critical component of the promise of blockchain technology. While it looks very different this time around, a similar realization is emerging from the token mania of the last year. 2018 is witnessing the pendulum again swing back to innovation in infrastructure.

There is perhaps no better example of rearchitecting infrastructure around assets than the innovation currently happening with decentralized exchange. In the first few weeks of the year, 0x has already achieved more than $10 million worth of transactions in a single day.

Self-custody also looks poised to make huge strides. Private key management by individuals and institutions alike has long been a critical UX issue. Ledger’s fundraising round should position it to bring hardware wallets even more mainstream. Radar Relay’s integration with Ledger takes the market a long way in terms of balancing usability, access to liquidity, and secure self-custody. MobileCoin’s use of SGX and remote attestation, while perhaps not the ideal cypherpunk solution to key management, also marks an important experiment in private key custody.

Brayton Williams on what to expect in crypto in 2018

Boost.vc cofounder Brayton Williams recapped some of teh mindboggling numbers for crypto in 2017 in a recent post:

2017 was certainly the year of cryptocurrencies. No one can doubt that.

  • Crypto market cap (from Coinmarketcap.com) went from $18.2B to $610B (33X).
  • Coinbase reached the #1 app on the IOS appstore.
  • Altcoins flourished as BTC dominance shrunk from 88% to 39%.
  • $3.7B was raised by ICOs.

And goes on to point out how the focus was alll about money.

However 2017 was all about the MONEY (and Cryptokitties). Crypto became a real asset class and money flew in. Why? The economy is strong, people have money and everyone is looking for new yields. Crypto was providing those yields and thus more and more money came flocking in. But the price of these assets has started to massively outgrow their true utility and fundamentals.

He cites Vitalik Buterin’s recent frustration with the fact that the rypto community has not yet produced even close to the value of money that has been poured in the market as a whole. However, he believe 2018 will attract a lot more talent:

The money inflow we saw in 2017 was almost necessary for our next step of fulfilling the real promise of cryptocurrency. People follow money. We are now seeing designers, UX experts and product people joining the space, which is what I think we were really missing. Cryptokitties was the first example of good UI meets blockchain and I think in 2018 that wave will hit us harder.

He then looks at why so many projects and teams are stuck at the building stage, rather than the shipping stage.

This brings up the question: Why aren’t projects shipping? Outside of normal product timelines (most projects are less than 6 months old and things take time), this is what I have come up thus far:

  1. The building blocks of the decentralized web are very new. Teams are building many things from scratch which takes time.
  2. The teams are highly technical but less product oriented. Thus many are building/experimenting with cool tech but these same people aren’t skilled in end user product development.
  3. What is the rush when you have 10+ years of runway.
  4. Token project market caps are EXTREMELY HIGH and are built on hopes and dreams. A mediocre product with minimal traction isn’t as alluring.
  5. Lambo. Scams. No intention from start to deliver.

Read the full post 2018 Crypto: The year of TALENT and SHIPPING – Brayton Williams – Medium at Medium

Highlights from ~95 theses on crypto

95 Theses for 2018On Crypto Prices and “Investing”

1) 2017–2019 will be THE big crypto bubble. Things could get nuttier from here…far nuttier than in the dotcom era. The retail investor base is 10x larger, with 24/7 access to the FOMO and get rich quickism. And we’ve got CNBC to help with the pump!1a) Unbelievably, the institutions will be the last money in this time, with the futures market and custody solutions just coming online, and the mythical ETFs perhaps not too far behind. This has been properly hyped, I think. I could see a Q1-Q2 stampede.

Lots of great ideas in this post from TwoBitIdiot on Medium. Here’s a few more:

3) BTC, ETH, ZEC, and XMR are the main cryptocurrencies. These could still have a LOT of room to run. Money is a reflexive asset where the more people buy it and use it and believe in it, the more valuable it gets. Cryptocurrencies are the ultimate momentum play.

5) Most utility tokens, then, will go to zero, regardless of team quality and execution. You simply don’t need to hold them but for momentum & greater fool investing. When the market lacks “higher order” investors for speculators to flip to, assets will unwind. Viciously.

17) Forks with airdrops will become the preferred alternative to ICOs. You give away free money in order to get people excited about the new and improved project. The only thing they pay is attention. The people who truly buy in become your collaborators

54) Sooner rather than later, the institutions will wise up to the reality that they shouldn’t be paying carry on funds mostly denominated in BTC and ETH. When that happens, you’ll see a massive influx of capital to passive index funds like Bitwise’s HOLD 10.

via 95 Crypto Theses for 2018 – TBI’s Weekly Bits – Medium at Medium