Is Goldman Sachs betting on Bitcoin?

A friend pointed me to this news article about Goldman Sachs’ recent investment in Circle, a Bitcoin startup. So, is Goldman Sachs actually betting on Bitcoin? I don’t think so.

We must differentiate between Bitcoin the currency, and Bitcoin the payment technology. The startup in question, Circle, is quite clearly all about leveraging the payment technology. I think there is a huge opportunity and future for micropayment technology. This part of the financial technology sector has been ripe for disruption since PayPal, Visa et al stopped innovating years ago. GS is clearly betting on that aspect here, not on the future of the currency itself. 

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The Moral Arc

Just started reading this wonderful book by Michael Shermer. It seems to be one of the most important works of moral philosophy I’ve ever read.

The main claims made by the book are that 

  • We live in the most moral period of human existence.
  • The moral progress that began with the Renaissance and has culminated in the present state of morality derives from our advancement in scientific reasoning, as applied to social and moral issues. 

If this book makes its case convincingly enough, I may have to give up my position of moral relativism in favor of a more objective view of right and wrong. 

David Foster Wallace Quotes

These quotes attributed to the late, great David Foster Wallace really spoke to me. Gleaned from Goodreads, emphasis mine.

“It’s not that students don’t “get” Kafka’s humor but that we’ve taught them to see humor as something you get — the same way we’ve taught them that a self is something you just have. No wonder they cannot appreciate the really central Kafka joke — that the horrific struggle to establish a human self results in a self whose humanity is inseparable from that horrific struggle. That our endless and impossible journey toward home is in fact our home. It’s hard to put into words up at the blackboard, believe me. You can tell them that maybe it’s good they don’t “get” Kafka. You can ask them to imagine his art as a kind of door. To envision us readers coming up and pounding on this door, pounding and pounding, not just wanting admission but needing it, we don’t know what it is but we can feel it, this total desperation to enter, pounding and pushing and kicking, etc. That, finally, the door opens…and it opens outward: we’ve been inside what we wanted all along. Das ist komisch.”

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In Defense of Humanities. Or is it?

I came across this interesting article about how the fact that arts and humanities students land up serving coffees should really be seen as a failure of our society and economy to value their skills well. It also offers some prescriptions for rectifying the situation.

The case made in the article is that the arts and humanities offer us guidelines for how to live our lives, and in that sense, may be thought of as a replacement for religions. For instance, literature teaches us how to deal with life and death, and music teaches us how to deal with love and relationships. I am reminded of this wonderful scene from Dead Poets Society where Prof John Keating (played by Robin Williams) makes essentially the same point, but more eloquently.

If we accept that the works of arts and literature are valuable, then how do we explain the unemployment and underemployment of the graduates who have spent years analyzing and mastering them? One diagnosis is that the economy does not value this pursuit as highly as it should; i.e. it is a case of market failure. Another possibility is that the students are not taught how to transfer their knowledge of the works and the themes laid out therein to the commercial realities of the economy. In either case, what is warranted is a redesign of the curriculum, and possibly even a reorganization of the schools and departments, to emphasize both the potential value of these pursuits and how to unleash it. An interesting excerpt from the original article:

One would still study novels, histories, plays, psychoanalysis and paintings, but one would do so for explicitly therapeutic ends. So Anna Karenina and Madame Bovary would be assigned in a course on ‘How to manage the tensions of marriage’ instead of belonging in a course on ‘Trends in nineteenth-century fiction’, just as the works of Epicurus and Seneca would appear in a course on ‘How to Die’ rather than in one on ‘Hellenistic philosophy’.

That was a refreshing perspective on this dilemma. The question that is left unanswered, however, is how the insights from these works can be brought into the mainstream consciousness. How they can be “commercialized”, if you will. Should we expect to see legions of arts school graduates write self-help books?
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Unknown, Unknowable and the All-knowing

I’m sure you’re familiar with the sobering, yet inspirational words of Carl Sagan about the simultaneous significance and insignificance of the pale blue dot we call home. I was somewhat surprised to see this excerpt from Pascal’s Pensées, in which he seems to be echoing a similar emotion from centuries ago.

Let man contemplate Nature in its entirety, high and majestic; let him expand his gaze from the lowly objects which surround him. Let him look on this blazing light, placed like an eternal lamp in order to light up the universe; let him see that this earth is but a point compared to the vast circle which this star describes and let him marvel at the fact that this vast orbit itself is merely a tiny point compared to the stars which roll through the firmament.

But if our gaze stops there, let the imagination pass beyond this point; it will grow tired of conceiving of things before nature tires of producing them. The entire visible world is only an imperceptible speck in the ample bosom of nature. No idea can come close to imagining it. We might inflate our concepts to the most unimaginable expanses: we only produce atoms in relation to the reality of things. Nature is an infinite sphere in which the center is everywhere, the circumference is nowhere. Finally, it is the greatest sensible mark of God’s omnipotence, that our imagination loses itself in that thought.

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Reddit Gets Drawn

Here’s a beautiful album from this Reddit thread, made up of photos of Redditors and drawings of them by other Redditors. It’s amazing how a drawing can sometimes capture the essence of a person or emotion better than a photograph, by embellishing certain aspects: hyper-realism?

Take this drawing, for instance. Why do the eyes haunt me so? Why is it even more melancholy than the original photograph?

Decision Making Under Poverty

Understanding how the poor make their decisions is important for many reasons. It allows us to better target our economic policies such as poverty alleviation, social welfare, literacy etc. Since poverty (and income inequality) is such a large part of our society, it also helps us better understand our society and its values.

There are three different narratives about the link between decision making and poverty.

  1. Low intelligence leads to poor decision making, causing poverty. This is arguably the most comforting view, from the perspective of the well-to-do. There is an assumed correlation between low IQ and poverty. It is easy to see this as being a causal relationship: poor intelligence leads to poor poverty.
  2. Poverty leads to low intelligence, causing poor decision making. Certainly, there is a known causal link between parental poverty and childhood malnutrition, leading to lower IQ scores for the children, which translates into lower incomes in their adulthood. There is also evidence to suggest that poverty has an impact on social relationships, which could also affect a child’s development and therefore future economic prospects. It is also an unfortunate fact that poverty has a significant impact on people’s IQ (13 points), attributable to a cognitive burden of working with their limited resources.
  3. Independent of intelligence, poverty can lead to poor decision making. This is the rather surprising narrative that is best illustrated by the quote in this post in the Atlantic. The limited resources and bleak prospects mean that the poor may disregard their long-term interests in favor of short-term interests. This was also the case made in the wonderful Poor Economics by Duflo and Banerjee. In randomized trials, they observed behavior that we would classify as irrational. For instance, when the poor in Maharashtra, India as well as in Philippines, were given a food subsidy, they chose to spend the extra income on sweets and other “luxury” food items, rather than more nutritious alternatives that would have been more beneficial in the long term. Similarly, they found poor, unemployed men in a village in Africa who had televisions at home, even though their primary concern “ought” to have been feeding the family. What we must understand is that in the context of sustained poverty, the long-term becomes irrelevant, and the rational decision is in fact a short-term focused one.

All of these narratives have some merit, and are probably at play to different extents. This is one of the things that makes development economics so difficult.

Notes or Blogging?

I’m sure you feel the need to put down your thoughts from time to time, aggregating facts and opinions you read/watch/learn and chronicling your changing perceptions to them. I can see two ways of doing this, either maintaining personal notes, or publishing them to some sharing platform (blogs, Facebook). I have tried note-taking with the likes of Evernote, Catch, Emacs Org mode etc. But I haven’t had much success with any of them. I’m wondering if blogging is a better option.

Maintaining notes allows you to constantly append/edit these thoughts, essentially treating the notes as scratchpads. It allows you to leave your thoughts in an unfinished state, without exposing them to public scrutiny till you’re done with them.

On the other hand, there is an element of finality to pushing the publish button. The extra effort it takes to dot the ‘i’s and cross the ‘t’s hones your thought process. There is also something to be said about maintaining a web presence in today’s economy. It also encourages feedback in the form of comments, allowing you to have a conversation around the topic. From the point of view of clarifying my thoughts to myself, the only thing better than writing them up is having a conversation with someone about them.

The social networks today (Facebook, Google+) are certainly biased towards brevity. They are full of short snippets of random thoughts, often with no original intellectual contribution from the author.

I just noticed that WordPress allows you to “publish” a blog with Private visibility. I guess that could be the best of both worlds, allowing a smooth transition from an incoherent personal note to a publicly visible post.

What would make it all right?

I’m greatly offended by the massive surveillance of our digital lives by the NSA, GCHQ and probably other intelligence agencies, as exposed by the Snowden leaks, all in the name of security. Who better to make the case against such power-grab than Obama himself, from 2007 (emphasis mine).

“This administration also puts forward a false choice between the liberties we cherish and the security we provide. I will provide our intelligence and law enforcement agencies with the tools they need to track and take out the terrorists without undermining our Constitution and our freedom. That means no more illegal wiretapping of American citizens. No more national security letters to spy on citizens who are not suspected of a crime. No more tracking citizens who do nothing more than protest a misguided war. No more ignoring the law when it is inconvenient. That is not who we are. And it is not what is necessary to defeat the terrorists. The FISA court works. The separation of powers works. Our Constitution works. We will again set an example for the world that the law is not subject to the whims of stubborn rulers, and that justice is not arbitrary.”

Let us also look at how he justified the surveillance in June this year, long before more widespread violations were exposed, including blanket surveillance of private communications of American citizens and foreign leaders (emphasis mine).

But I think it’s important for everybody to understand — and I think the American people understand — that there are some tradeoffs involved.  I came in with a healthy skepticism about these programs.  My team evaluated them.  We scrubbed them thoroughly.  We actually expanded some of the oversight, increased some of safeguards.  But my assessment and my team’s assessment was that they help us prevent terrorist attacks.  And the modest encroachments on the privacy that are involved in getting phone numbers or duration without a name attached and not looking at content, that on net, it was worth us doing.  Some other folks may have a different assessment on that.
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Mundane Adventures of a Curious Mind