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Bitcoin Buzz: How Does It Actually Affect the Price?

The following is an article about cryptocurrencies that I wrote back in February, intended for Mattermark. Right around the same time, Inc. hired me and my editor Alex Wilhelm left Mattermark, so the story got swallowed in the upheaval. I think it’s a decent fit for Exolymph, although the tone is much more impersonal and newsy than my usual dispatches. Anyway, I hope you enjoy this or find it thought-provoking.

Let’s say there’s a cryptocurrency called ExampleCoin, abbreviated as EXC. What would you expect to happen when stories about EXC are published in Coinbase and the mainstream financial press? You might say it depends on the tenor of the stories — are they positive or negative? That should determine how the publicity affects EXC’s price. Or you might say that raising awareness of EXC will be good for the price regardless, because some people who didn’t know it existed will find out, or some people who weren’t paying attention will start.

The influence that media attention has on real cryptocurrencies is less straightforward, regardless of which EXC hypothesis you find most convincing, according to a recent study of five cryptocurrencies. Authors Jean-Philippe Vergne and Sha Wang are associated with the Ivey Business School and economics department at Ontario’s Western University, respectively. Their research was supported by the Scotiabank Digital Banking Lab. Vergne and Wang suggest that media hype may depress the price of Bitcoin and the four other cryptocurrencies they examined.

The researchers explain, “While it has often been assumed that greater visibility in the public sphere, including in the media, would create a buzz affecting cryptocurrency prices positively, our models do not support this idea. To the contrary, we find that a one [standard deviation] increase in public interest […] corresponds to a 10% decrease in returns” (the term “public interest” is quantified in the study). This finding emerged when the researchers controlled for other variables, namely supply growth and liquidity, in an attempt to isolate the effect of media attention. Furthermore, Vergne and Shaw write, “[W]e do not find any evidence that bad press affects price.”

By contrast, Vergne and Wang found that ongoing technological development positively correlates with cryptocurrency returns. The authors hypothesize that greater security, new features, and evidence of a robust technical community that will continue to add to both, are the factors that actually increase the expected practical value of a given cryptocurrency — and thus drive up its price. Vergne and Wang summarize thus:

[T]he innovation potential embedded in technological upgrades is the most important factor associated (positively) with cryptocurrency returns. By contrast, we find that, after controlling for a variety of factors, such as supply growth and liquidity, the buzz surrounding cryptocurrencies is negatively associated with weekly returns.

In a phone interview, Jean-Philippe Vergne pointed out that it doesn’t make sense to expect a cryptocurrency to be valued in the same way as a fiat currency or a commodity like gold. What the US dollar does, in a concrete sense, hasn’t changed in a very long time, and there’s no reason to expect the dollar to develop more “features,” so to speak. Similarly, gold is gold — we can figure out new ways to use it as a material, but the substance itself remains the same. Not so with cryptocurrencies, the structural capabilities of which are always being extended by dedicated development teams.

Vergne acknowledged that this paradigm would lead us to predict that newer cryptocurrencies, with innovative technical approaches and new features, will eventually outpace Bitcoin. He pointed to Ethereum’s trajectory as an example. “People were saying, ‘Okay, in a few months the price of Ethereum will be higher than the price of Bitcoin,’ in terms of the total market cap. A lot of people started to believe that Bitcoin was dead and Ethereum was gonna be the new Bitcoin. Because of its more advanced technology team, it had more potential for future improvement.”

But then a high-profile project called The DAO got hacked, exposing Ethereum’s fundamental technical weaknesses, and the dream came crashing down. (It took a year for Ethereum to reclaim the highs it climbed to in early 2016, which it has now exceeded.) “The code underlying Ethereum was so complex that it had many more flaws than what people imagined, and it was not ready yet for large-scale implementation,” Vergne explained.

Presumably a new cryptocurrency that can excite investors and prove out its potential will not be subject to the same boom-bust oscillation, although Bitcoin’s first-mover advantage is formidable. Bitcoin has the largest number of miners and developers, providing improved cybersecurity and greater liquidity. Its name recognition also far-and-away outstrips the competitors. Up-and-coming cryptocurrencies will be hard-pressed to battle that reputation.

Tony Arcieri, a software engineer at the blockchain network company Chain, discussed the study via Twitter DM. He hopes that Bitcoin and blockchain buzzwords “are past the peak of the media hype cycle.” If so, “true technical merit should hopefully start dominating the reasoning and conversation.” Arcieri emphasized that Bitcoin’s stability, both technically and as a community, will be key to its longterm success, alluding to recent contention over a large technical update.

Joon Ian Wong, a reporter for Quartz who formerly worked at Coinbase, was a little more skeptical of Vergne and Wang’s conclusions. “I think it is accurate to say technical developments increase the value of a crypto in the long run — but its price is still driven by speculators, and media buzz plays a big part in that,” he said in an email.

“It’s analogous to the fundamentals of say a publicly traded company. Ultimately if a company has for instance a strong balance sheet, good cash flows, and strict cost controls of course it’s worth more in the long run. But its stock price is still determined by the vagaries of market rumours, trends among hedge fund managers, and the news cycle.”

In their paper, Vergne and Wang propose that the perception that publicity encourages speculators may actually be what drives reduced returns, writing, “[A] sudden increase in the ‘buzz’ surrounding a cryptocurrency could be interpreted as a signal of increasing volatility. If market participants are risk-averse, given the same expected mean returns, they would be less willing to hold the cryptocurrency if future volatility increases, which would drive prices down and affect returns negatively.”

Angel List partner Parker Thompson remarked on the state of various non-Bitcoin blockchain projects, such as Ethereum and Zcash, “These use cases are still very speculative, and these projects don’t have the maturity of Bitcoin, but my belief is that the market cap of BTC is small enough that it could be wiped out in six months by a true consumer-facing killer app built on top of one of the blockchains I mentioned, or one that does not yet exist.”

Gwern Branwen, an eclectic researcher who has studied Bitcoin in the past, was unimpressed by Vergne and Wang’s study. Branwen responded to a request for comment via Reddit comment:

[T]o sum up my problems with this analysis, the big ones are that it uses an unrepresentative and redundant set of cryptocurrencies, over a short and unrepresentative time period, to investigate a model which ignores all feedbacks and interactions between variables and returns […] to make causal claims which are not and cannot be supported by the model and data, in support of an interpretation […] which lack[s] any face validity[.] Maybe buzz and hype and the media matter a lot less than most people think to Bitcoin’s growth. But this paper doesn’t affect my beliefs on the matter one bit.

Regardless of whether you agree with how Vergne and Wang have manipulated and interpreted the data, it’s important to remember that Bitcoin and its ilk are in fact technologies. Cryptocurrencies resemble standard money — “currency” is right there in the name! — but there’s a lot going on in the code itself, and the community developing that code, that influences how the market will behave.

Header photo by BTC Keychain.

The Staid Side of Money

I interviewed my Twitter friend Marc Hochstein, who is the editor-in-chief at American Banker, about finance and technology. (He didn’t speak with me in a professional capacity, but I think his workplace is helpful context.)

Hochstein started his career as a wire service reporter at Dow Jones. He called it a “character-building experience” that involved a lot of cold-calling day traders. The upshot is that Hochstein has been reporting on banks and finance for decades, so his perspective on recent industry developments is interesting.

(Why you should care about this: Our world runs on money. The financial-services industry is hyper-entwined with government, and together they’re the base-level system that everything else is built on top of. That’s actually a simplification since “everything else” and “finance” developed concurrently, but you get the idea.)

I think this quote sums up a lot:

In the last two years — maybe three or four years — there’s been a lot more interest in technology as a potentially transformational force, than there has been in a very long time. You could argue that banking was always, in a way, a technological industry, or always a data industry. There’s a quote from Walter Wriston, who was the chairman of Citicorp back in the ’80s and ’90s. I forget the exact verbatim quote, but it’s something like, “A bank is nothing but a data warehouse, that’s always what it’s been.”

But the banks — financial institutions in general — have been slow to upgrade their core technology, and for some understandable reasons. Changing the core of the bank is a hard thing to do. […] When times are good, when they’re making a lot of money, there’s no real impetus to change anything. And then when times are bad, they don’t have the resources to do anything. Or resources are scarce, I should say.

Hochstein pointed out that the “Uber narrative” hasn’t played out in finance like it has in other industries. He told me, “The barriers to entry are higher. The stakes are higher, because you’re talking about people’s money.” Fintech startups can’t afford to beg forgiveness instead of asking permission. Regulators don’t take kindly to that, and users don’t either.

Technology hasn’t shaken up finance as much as people in Silicon Valley might have expected. Over the last few years, Hochstein explained, “The rhetoric changed from ‘fintech is going to eat the banks’ lunch’ to ‘fintech is going to make banking better at what they do’.” Still, “it’s a little early to say” whether fintech is actually improving banking, or what the degree of change will be. “I wouldn’t say it’s been a profound effect, but it’s there.”

On the bright side, “Transferring money is slowly getting faster.” The Automated Clearing House is finally moving to same-day settlement. “Part of the reason why they did that, why they finally had an impetus to go there,” Hochstein said, “is because of things like Ripple, and bitcoin, and cryptocurrency, as well as real-time payment systems that you see in a lot of other countries.” Hochstein noted that regulators and the Fed have also been pushing in this direction.

I find this slightly mind-boggling. It’s a big deal that ACH is moving to same-day settlement — not real-time, just same-day. In the year 2017.

I asked Hochstein which issues are going to dominate a lot of attention going forward, and he mentioned “open banking” and data portability. Basically, banks have a tremendous amount of lock-in because of all the information they’ve collected and stored about your identity and your account activity.

There’s some talk of forcing banks to provide this information to competitors — or whoever else might be authorized by individuals, e.g. money-management apps like Mint — via API. Guess whether the banks want to do that!

In conclusion, finance gonna finance. Big companies gonna rent-seek. They change when they’re forced to, either by regulation (Dodd-Frank Act, for example) or by the competitive environment. In general, these institutions move slowly. On balance that’s actually a good thing, considering how much havoc they could potentially wreak.

Thank you to Marc Hochstein for talking to me — follow him on Twitter or read his articles.

Photo of the Wall Street bull by Sam Valadi.

The Downsides of Femme Finance

Yesterday a friend showed me Ellevest, which bills itself as an investing service for women. Their tagline:

Ellevest tagline

Thank goodness! The scourge of mansplaining in automated investing will be vanquished!

I find this extremely disturbing, because it’s pure pandering. As far as I can tell, Ellevest is just a fee-charging software layer on top of a basket of Vanguard ETFs. The terms and conditions explain that Ellevest pulls their recommendations from Morningstar. I’m sure Ellevest itself does something, but I’m very skeptical of whether the something it does is valuable.

They claim on the homepage, “We’re not just ‘shrinking and pinking’ an old investment model. We’ve built a whole new approach.” No, you haven’t! You’re just Vanguard with better UX and cynical marketing!

Look, I’m a woman. I believe misogyny exists and I agree that it’s fucked up for finance to be overwhelmingly dominated by men. I consider myself a feminist. I could get behind an investing service that was ethically women-oriented, like a version of faith-based investing.

But that’s not what Ellevest is. Ellevest is normal investing with a ladylike veneer. (Notice all the curly fonts?) Sure, I bet they employ more women than the average fintech company. But they also exploit a historically disadvantaged group, one that’s low on financial literacy, in order to offer a return to their own VCs.

I’ve talked before about how I love the internet’s ability to serve every niche. This is not what I meant.

Neural Fintech x2

“Neural Fintech” got more responses than anything else I’ve ever asked you all about, so it’s back *TV infomercial voice* by popular demand! If you missed the beginning you don’t strictly need to read it, but you can if you want to.

In the examination room there was machine that looked like an old-school MRI unit — Sasha remembered them from the hospital shows her grandma used to watch, 2D video of handsome doctors clumsily enhanced for her parents’ RoomView.

Next to the machine stood a beaming nurse with sleek brown hair. Everyone working for Centripath seemed to smile all the time, Sasha thought.

Jake the recruiter exclaimed, “Becky! Help me welcome our newest participant!”

“It’s a pleasure to meet you, Sasha,” the nurse said in a warm voice. On the machine’s side screen, Sasha could see the permission form that she had signed with Jake a few minutes ago.

“You’re in Becky’s hands from here,” Jake said, winking at Sasha as he slipped back out through the door.

The next few hours were busy and regimented. Multiple tests, the first inside that big machine, and then more forms. Sasha was glad that she hadn’t made plans for the rest of the day, but a little annoyed that no one had told her how long it would take.

She found out from Becky that she had “stellar capacity” for a crypto mine. Sasha tried to ask again how much they would pay, but Becky said she’d have to find out from her case manager. “That’s your next stop!” she told Sasha brightly. “Then installation!”

The case manager’s office was like Jake’s, and he even looked a bit like Jake. The nose and chin were different, but much the same smile. “Sasha, right?” he asked, half-rising from his desk.

“Hi,” she answered. Sasha could hear that she was tired.

“Would you like a drink of water?”

“Yes, thanks.” He handed it to her, and Sasha sat down.

“I really want to know how much this will pay. No one will tell me so far.”

“Of course, of course! You get a percentage of the yield from the mine. It can vary depending on your physical state, since all the energy is sourced from your body.”

Sasha didn’t say anything, just kept looking at him.

The case manager paused, waiting for her to acknowledge what he said. When she stayed silent, he continued. “It’s usually 5%, but that fluctuates based on the price of the cryptocurrency at hand, the daily processing efficiency, and so on.”

“Please estimate, in real money, how much I can earn from this.”

“Well, Sasha, I can’t promise anything. I can’t make a guarantee. But I can tell you that you’ll be able to pay half of the monthly fees for a nice PodNiche.”

She sighed. “Okay. I hoped it would be more. But okay, what the fuck. Let’s do the installation.”

Header image by Liz West.

Neural Fintech

“See, it’s a simple program.” The recruiter had very white teeth, Sasha noticed. He was wearing a navy blue suit and smiling big. The identity module said his name was Jake.

“A very simple program,” he repeated. “You know that old expression — humans only use 10% of our brain power? That other 90% is an opportunity, and we at Centripath have the software to take advantage of that opportunity.”

Sasha nodded. “Yeah.” She knew all of this from the promos she had watched. The exact figures weren’t true and Sasha knew that also, but it didn’t matter as long as they paid enough.

“Ae you familiar with cryptocurrencies?” Jake asked. “The one you’ve probably heard of is called bitcoin.”

“Uh-huh, I know bitcoin,” Sasha told him. “That’s why I’m here.”

“Wonderful!” Jake exclaimed. “Well, what this program does is harness your brain’s under-utilized processing power. The technical details aren’t important, but basically all that extra energy runs a cryptocurrency mine. Not always bitcoin, but that’s certainly one of the assets we harvest.”

Sasha was sitting forward on her armchair, leaning toward the recruiter with her elbows on her knees. “So you pay me rent for that. For using my brain. It doesn’t say on your website, so I wanted to ask how much you pay.”

“Ahhh, yes,” Jake answered, still smiling. “We have to analyze the capacity you have available, of course, and then we’ll give you a quote.”

“And this crypto mine won’t interfere with my daily life? I’ll still be able to think, like, normally? I watched the testimonials, but…”

“Then you know that you won’t feel a thing! It’ll be like nothing happened. Everything about the Centripath program is perfectly safe. All of this equipment has gone through rigorous testing. Really, you’re signing up for free money.”

Sasha bit her lip, thinking for a moment. “Okay, I want to take the scan. Or however you test people’s brains.”

Jake clapped his hands together. “Sasha, I am so glad to hear that! First let’s go over this paperwork — it should show up momentarily…”

Sasha felt the ping. “Got it.”

“Alright. I need to you read this and add your bioprint here… Here also…”

They sped through the details, then Jake led Sasha into the examination room.

Let me know if you want me to continue this. Otherwise I’ll leave it as microfiction. I owe the idea to my boyfriend, Alex Irwin. Header photo by Pantelis Roussakis.


Imagining a Cyberpunk Social Safety Net

I’m still thinking about how to structure the rewards for readers who financially support Exolymph. But one of the current ones is that people who contribute $10 via Patreon can choose a topic for me to write about. Beau Gunderson posed the question, “What would a cyberpunk social safety net look like?”

A social safety net is a formalized way of catching people when they fall. Traditionally, the government pays for a few survival-level services, like food stamps and homeless shelters in the United States, or healthcare in more civilized countries. (Sure do love our privatized medical system that totally doesn’t punish the poor!)

But a cyberpunk future-present is dominated by corporations rather than the state — would they be inclined to pick up the slack?

In a way, the ideal version of a cyberpunk social safety net would be a bit like how things used to function for the middle class. You had a decades-long career at a big company; in exchange for your labor and loyalty, they provided your family’s healthcare and a pension. The Baby Boomers are the last generation to participate in this scheme.

1950s motivational posters. Image compilation via Kevin Dooley.

Image compilation via Kevin Dooley.

I don’t mean to romanticize the past — a lot of things about the 1950s through ’90s were awful, especially if you were a person of color, a woman, LGBTQIA, or any combination of the above. Even if you were a straight white man, striking out on your own, whether as an entrepreneur or a societal dropout, was pretty risky. (It’s still pretty risky.)

Regardless, the “work for BigCorp until you turn sixty-five and eat cake at your going-away party” paradigm is being dismantled by the twenty-first century. “Precariat” is a hot buzzword; labor is contingent and people hop from gig to gig.

Workers get shafted unless they have particular scarce skills (like programming or deceiving the public). Broadly speaking, the causes are globalization and technological advances. No need to pay for benefits in [rich country] when workers in [poor country] don’t expect them!

At this point I’m just reviewing things you already know.

One vision of ultra-capitalist social services comes from radical libertarian David Friedman (as quoted by Slate Star Codex):

[A]t some future time there are no government police, but instead private protection agencies. These agencies sell the service of protecting their clients against crime. Perhaps they also guarantee performance by insuring their clients against losses resulting from criminal acts.

How might such protection agencies protect? That would be an economic decision, depending on the costs and effectiveness of different alternatives. On the one extreme, they might limit themselves to passive defenses, installing elaborate locks and alarms. Or they might take no preventive action at all, but make great efforts to hunt down criminals guilty of crimes against their clients. They might maintain foot patrols or squad cars, like our present government police, or they might rely on electronic substitutes. In any case, they would be selling a service to their customers and would have a strong incentive to provide as high a quality of service as possible, at the lowest possible cost. It is reasonable to suppose that the quality of service would be higher and the cost lower than with the present governmental system.

If you want a LOT more speculative detail about edge cases and such, read the SSC review (or Friedman’s book itself). To be clear, I don’t think privatized protection agencies are a good idea.

The cyberpunk social safety net that would be easiest to implement is a sort of collectivized insurance, modeled on Latinx tandas — lending circles. You could probably even incorporate a blockchain to make it trendy — or possibly to make it scale better? I am not a software engineer. Anyway, imagine this:

Every month, fifteen friends put money into a pot, which is kept by a mutually trusted member or a trusted third party (e.g. church pastor or bank safe). Whenever one of the friends has a crisis, like losing their job and needing to cover rent, the necessary funds are dispensed to them.

Before you email me, yes, there are a million ways this would be complex and difficult in practice. What if someone tries to claim something that a third of the group thinks is a illegitimate expense? Okay, majority rules. What about vote brigading? How do you vet people who want to join?

Mixing social relationships and money tends to be tricky.

That doesn’t even address the problem that arises when someone undergoes a real catastrophe and needs hundreds of thousands of dollars to start resolving their issue. But hey, it might be better than nothing. It might help the half of the American population who can’t come up with $400 in an emergency.

If that’s not pessimistic enough for you… I asked members of the chat group to weigh in, and @aboniks elaborated at length:

If this is a cyberpunk vision where people can be digitized, social security is basically a programming exercise, right? The safety net is actually a safety network. Contractors design theme parks for our digitized psyches and call it a day. Or people each get X amount of storage space and X number of processing cycles to run their own virtual retirement. AIs sell them experience-design services. People duplicate themselves with falsified credentials to engage in benefit fraud and increase their storage space.

Political arguments over meatspace benefit levels and healthcare could translate into arguments about involuntarily putting people into hibernation mode. Article 12 of the Digital Rights Act ensures equal access to services, but people with certain neurological conditions are being discriminated against when they apply for control of real-world mobile camera platforms; rich meatspace Thiels find the erratic movement of their drones to be unsightly.

Anyway, however you pitch it in the end, keep in mind that social security is fundamentally about having and not having. It’s going to be the believability of the conflict between the service users and the service providers that makes your vision work. Or not work.

More realistically, I expect we’ll see something like the private prison industry being broken up and reforming as a service provider for social security beneficiaries. The idea that we’re all going to have a 1/1 bungalow with a garden and an aging Labrador in front of a crackling fire… no. Looking at how people with only SS income are living these days, even an institutional housing project with razor-thin profit margins would be a quality-of-life improvement for a lot of urbanites. The extended family is largely a thing of the past unless you go out of your way to make it happen, and the nuclear family is headed the same way. Lots of poverty-line “senior singles” in our future.

I’m still looking into incorporating my family though. The future I’m likely to live through is much more friendly to corporations than it is to humans.

(Lightly edited for style consistency.)

So, what do you think?

Easily the best response, from reader Brett:

Maybe in a cyberpunk social safety net, there would be a (computer) program that would calculate and dictate when volunteers should steal a roll of toilet paper from their work. The toilet paper would be hoarded and then sent along to those who need it. The computer program would subtly manage the rate of stealing across its networks of humans so the thievery is distributed across many different corporations and never detected by competing algorithms looking for “leakage” in their expenses.

Cryptocurrencies Aren’t Fake, They’re Just Libertarian

Bitcoin-themed coaster. Photo by pinguino k.

Bitcoin-themed coaster. Photo by pinguino k.

A headline from the Miami Herald: “Bitcoin not money, Miami judge rules in dismissing laundering charges” — c’mon! Bitcoin is clearly money. I have mixed feelings about how cryptocurrencies should be regulated, but they are obviously currencies. The judge’s rubric for this question was weird and ahistorical:

“Miami-Dade Circuit Judge Teresa Mary Pooler ruled that Bitcoin was not backed by any government or bank, and was not ‘tangible wealth’ and ‘cannot be hidden under a mattress like cash and gold bars.’

‘The court is not an expert in economics; however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money,’ Pooler wrote in an eight-page order.”

Most mainstream currencies are backed by governments, but that’s not an inherent feature of money, just a modern quirk. How do people think money got started? It grew out of bartering, and for a very long time it wasn’t regulated or centrally controlled at all. [Edited to add: David Graeber’s Debt asserts that money actually emerged before bartering. Does not change my larger point. See the note at the end.] Just as an example, per the Federal Reserve Bank of San Francisco:

“Between 1837 and 1866, a period known as the ‘Free Banking Era,’ lax federal and state banking laws permitted virtually anyone to open a bank and issue currency. Paper money was issued by states, cities, counties, private banks, railroads, stores, churches, and individuals.”

And that’s relatively recent! John Lanchester wrote a truly excellent overview of what money actually is and how it functions for the London Review of Books, and I wish I could make this judge read it.

Granted, legal definitions exist in a parallel reality, so maybe there’s some legislative reason why the US government can’t bestow official currency status on non-state-sponsored currencies. They’d certainly have to step up their game when it comes to regulating them, which would be a lot of work since so far their game has been practically nonexistent.

Just to top off the ridiculousness, Tim Maly drew my attention to this bit from the Miami Herald article: “‘Basically, it’s poker chips that people are willing to buy from you,’ said Evans, a virtual-currency expert who was paid $3,000 in Bitcoins for his defense testimony.”

As Maly quipped on Twitter, “Bitcoin isn’t money laundering because bitcoin isn’t money says bitcoin expert paid in bitcoin.”

Is this merely a question of semantics? Yes. But I’ve always come down on the side that language is important — it’s both my first love and my livelihood, after all — and it bothers me to see foundational economic concepts misapplied. Let’s at least describe our brave new world accurately.

Note on the origins of money: Facebook commenter Greg Shuflin mentioned David Graeber’s book Debt: The First 5,000 Years and its assertion that bartering came after money. It doesn’t change my larger point, but here’s the relevant Wikipedia passage:

“The author claims that debt and credit historically appeared before money, which itself appeared before barter. This is the opposite of the narrative given in standard economics texts dating back to Adam Smith. To support this, he cites numerous historical, ethnographic and archaeological studies. He also claims that the standard economics texts cite no evidence for suggesting that barter came before money, credit and debt, and he has seen no credible reports suggesting such. […] He argues that credit systems originally developed as means of account long before the advent of coinage, which appeared around 600 BC. Credit can still be seen operating in non-monetary economies. Barter, on the other hand, seems primarily to have been used for limited exchanges between different societies that had infrequent contact and often were in a context of ritualized warfare.”

Sounds like an interesting book!

Exporting Japanese Currency & Culture

Sponsor: Bret Bernhoft

I’m thrilled to announce Exolymph’s first sponsor! Bret Bernhoft is creating an experimental futuristic character called Ruby Leander:

“In 2034 (age 18), Ruby decided to have transhuman implants ‘installed’ into her physiology. Devices/technologies that will follow her throughout the rest of her life. […] She was hired into a new policing program/effort dedicated to sniffing out impurities, forgeries and/or attempts at sabotaging/misusing modern technologies.”

Read the first installment of Ruby’s story and learn more about Bret on his website.

Exporting Japanese Currency & Culture

Artwork by ThvnderKat.

Artwork by ThvnderKat.

Thomas Vallance of Virtual Mech (website currently under maintenance) emailed me the following contribution. Lightly edited for this venue.

While the information is flowing I would contend that the gatekeeper is merely a man. Matt Pearce hasn’t spent a considerable enough time sitting by Satan’s eye to say such things. [Vallance is referencing Pearce’s comment about the Panama Papers — “Nobody loves a gatekeeper” — which I quoted in a previous dispatch.]

The euro continues to subdue smaller state currencies — this is true for most except Japan, who has a more powerful running economy than its larger counterpart China. In fact, they contend with economic giants like the United States, Britain, and Europe. This leads one to question; how is it that a nation so small outweighs those with populaces and landmass well beyond their own? Asia in general should be posting a considerable yield, yet we turn to little Tokyo for our Eastern trade opportunities. And that’s the kicker, the yen clocks in so high that unless you speak their language you won’t get a foot in the door.

Not surprisingly, the yen is growing more powerful. Where is China’s great and powerful yuan; is it just another case of outsourcing? An example: when I spoke to my local paper about advertising the comic I am currently writing, they didn’t respond. When I dropped into their office to ask why I hadn’t received a reply, I was referred to an advertising group in Malaysia (they don’t even have the same first language). This off-handing of all queries to Asia, specifically in Japan, seems a common trend, if not an absurd one. You want to ask questions? Just translate them into an Asian language.

Yoshide Suga reported on emergency call numbers as they currently experience 7.3 earthquakes in Kumamoto. Sendai Nuclear Power Plant has reported “no irregularities” — meanwhile US markets will eventually crash under the pressure from China.

I am presently reading the Japanese version of The Godfather, Yakuza — it details their overarching presence in Japan, one that has seemingly spread well beyond their border. I find it interesting that the Yakuza is quite well known while the Triad hardly appears on our radar, apart from niche features.

Back to Sonya again. The Triad is actually pretty well-known in the Bay Area due to its influence on San Francisco’s Chinatown.

I can’t speak for Vallance directly, but I think he’s reflecting on some of the oddities of globalization. The interactions between various national economies are exceedingly complex, but fundamentally human-defined, whereas the natural disasters capable of disrupting everyday life come from deeper powers.

The unleashed energy of nature, pressure built up over centuries — it’s easy to liken it to rage, but an earthquake is more like a cat stretching. Just instinct, just built-up tension following the path of least resistance.

Don’t Show Up If You Won’t Cash Out

Stanford historian Leslie Berlin wrote an homage to Silicon Valley’s success that you may have seen linked around. It’s a good essay, but I was irked by a particular passage about Silicon Valley’s tradition of mentoring and reinvestment:

“This model of one generation succeeding and then turning around to offer the next generation of entrepreneurs financial support and managerial expertise is one of the most important and under-recognized secrets to Silicon Valley’s ongoing success.”

Berlin’s observation is true, but it’s phrased to make the phenomenon sound altruistic. Like I said on Twitter, the last round of entrepreneurs support the rising stars because they’ll get richer by doing it. There’s nothing wrong with that, and I don’t begrudge Marc Andreessen or Peter Thiel their fortunes.

However, I always feel slimy when self-interested profit-seeking is dressed as friendship and fatherly good feeling. Not that they can’t coexist, but no one amasses billions by only funding their friends and nephews (or nieces, theoretically). I’m reminded of Facebook’s Free Basics (née, which is a marketing initiative passed off as philanthropy.

Stanford Theatre in Palo Alto. Photo by Franco Folini.

Stanford Theatre in Palo Alto. Photo by Franco Folini.

Language is important. Stories are important. The cultural memes that we absorb and the words we use to express them have real-world ramifications. (I know I’m either preaching to the choir or wasting my time, because those are the only two options on the internet…)

Maybe I shouldn’t worry about anyone else’s capitalist instincts, but it’s easy to be exploited when you’re convinced that everyone who helps you is doing it out of the goodness of their heart. If you feel like your business partner or your employer is granting you a favor, you’re less likely to stand up for your own end of the bargain.

inb4 someone calling me paranoid or cynical 😉