Category Archives: Politics and Economics

Up, Up, and Away! Cryptocurrency Optimism Files High

Shaking off an endless stream of frauds, thefts, arrests, and convictions; ignoring warnings and regulatory stop signs; and even blowing through the minor glitch of a catastrophic and fatal fatal fork of Bitcoin; the cryptocurrenty community cruises to new heights of techno-optimism.

Even supposedly rational capitalists seem to be carried away.


For examplet, NVIDIA corporation is have another good year, driven by the sales of GPUs. (All alums of Illinois are proud to see how important these descendants of the much laughed at Illiac IV have become.)

Jen-Hsun Huang, the CEO of NVIDIA, recently expressed glowing optimism that GPUs will continue to grow not only for graphics but also for cryptography and cryptocurrency mining.

It’s hard to say what fraction of the $1.9 billion income is attributed to cryptocurrency, though the total amount of Bitcoin mined in a year is less than $200 million. No matter how you slice it, cryptocurrency alone cannot really support a billion dollar hardware industry.

Nevertheless, these results do show that, while cryptocurrency may not be benefitting the world or disrupting money quite yet, it certainly is sucking down computing resources and the requisite electricity to run them.

Overall, the huge GPU industry is sustained by completely imaginary and economically inexplicable activities—such as video games, digital television (including porn), and, evidently, the scratch-off lottery of cryptocurrency mining.

NVIDIA’s Jen-Hsun Huang believes that cryptocurrency and blockchain are “here to stay” and will continue to be an important market for GPUs.  I have to wonder about this prediction. It’s far from clear that the current exuberance is rational, and with the catastrophic forking and reforking of Bitcoin, one wonders when the bottom will drop out.

We also should note that much of the market for cryptocurrency equipment is driven by and dark markets. These folks may remain a robust consumer base for NVIDIA, but it’s hard to see that as a great thing for the world.

Even more important, as quantum computing comes online in the next decade, GPUs will no longer be the top of the line. QC will be overwhelmingly faster, and GPUs will be next to useless for cryptography or cryptocurrency. That means that even if cryptography and cryptocurrency continue to grow, they will no longer be using GPUs, and certainly will not pay premium prices for them.


On another front, the Blockstream company has literally left the planet, with the launch of the first of many satellites designed to make Bitcoin available everywhere. The stated use case is Africa and other places with poor Internet access. In particular, you can’t run a full node (let along a mining operation) without significant network bandwidth, so Bitcoin isn’t fully available in many places.

I think the idea of this scheme is to provide a dedicated satellite network that connects Bitcoin nodes into the global net with relatively low cost ground equipment. This base station would be pretty much dedicated to Bitcoin, and connected to nothing except other Bitcoin nodes.

I have to wonder what use such a node would be to anyone, especially if the ‘last kilometer’ is marginal. I also have to wonder how this could possibly be financially viable. Space programs are obscenely expensive, so this doesn’t seem like the path to low cost connectivity on its face. We’ll see.

I will note that the general scenario would be that with this inexpensive ground station, “you could be transacting globally with bitcoin”. “Transaction globally” means “moving money offshore”, which is probably of interest to some people in Africa, but may or may not be a positive for the local economy and society. Again, we’ll see.


  1. Alyssa Hertig, Blockstream Is Using Satellites to Beam Bitcoin Down to Earth Coindesk.August 15 2017, https://www.coindesk.com/blockstream-using-satellites-beam-bitcoin-earth/
  2. Stan Higgins, Nvidia CEO: Cryptocurrencies Are ‘Here to Stay’ Coindesk.August 11 2017, https://www.coindesk.com/nvidia-ceo-cryptocurrencies-stay/

 

Cryptocurrenty Thursday

Seldon on Love and Freelancing

Sensei Tyra Seldon asks, “Can love be the guiding force of your business?” [1]

She had me at “love”.

When we think of passion, compassion, and even love, we may associate these words with romantic or familial relationships. Rarely do we link these terms to business.

The problem is, of course, that we “want to be profitable, but we also want compassion to be a cornerstone of what we do”. This almost always leads to choices, often tough choices.

Practically anybody can make money, but how you make your money and what you compromise to do it are equally as important.

Writing for the Freelancers Union Blog, she points out that this is particularly tough for independent workers, who may not have a business degree or classwork in business ethics for guidance. A gig worker who is learning as she goes has to “be careful because unethical business practices can be subtle.” As she says, a business opportunity, any business opportunity, may be “incongruent” with your own values.

The good news is that an independent worker can walk away. It’s not so easy to quit a job and walk away from a career when a large organization chooses a problematic business. But a freelancer can say “no, thanks” to any job.

The bad news is that not only could you starve to death trying to be ethical, but you are on your own. Working for a large organization is easy, because you can delegate ethics to others. A freelancer has no choice but to choose for himself.

I will say that I consider not having an MBA and training in “business ethics” to actually be beneficial. The very fact that business schools feel a need for a specific course in “ethics” tells you that the rest of the curriculum is not about ethics. As far as I can tell, business school is all about teaching people to ignore normal human ethics in favor of some kind of economic rationalism.

My own view is that there is no such thing as “business ethics”. There are only personal ethics. You have to know your own values, and make your business conform to you. This is not what they teach at business school.

As Sensei Seldon points out,  one of the real advantages of freelancing is that you can say things like:

  • I am in love with my company.
  • I am passionate about sharing my goods and services with the world.
  • I demonstrate compassion when interfacing with my clients.

(See other posts by Seldon on Freelancing here.)


  1. Tyra Seldon, Can love be the guiding force of your business?, in Frrelancers Union – Blog. 2017. https://blog.freelancersunion.org/2017/07/31/can-love-be-the-guiding-force-of-your-business-2/

Shock Report: “Smart Contracts” Are Subject To Interpretation

To hear enthusiasts for “Smart Contracts”, they are magic. The meaning of the contract is enshrined in code, and executed by computers. Cryptographic signatures and blockchain protocols assure that the contract is executed correctly and honestly. Once written, no human intervention is needed or, indeed, possible.

Entire businesses are created on this basis, so called Distributed Autonomous Organizations. Once created, these DAOs chunk along mechanically, executing business “autonomously”. No one disagrees about the results, mistakes and conflict are not possible.

This is better than magic. It’s the magic of capitalism raised to the power of magic!

What could possibly go wrong?

In the very drafty basement of this castle in the air lies the claim that these executable contracts are not only always and completely correct, but also accurately and unambiguously express the intentions of the humans involved.

The former would be an historic first in the history of software, and the latter would be an historic first in the history of human thought.

You don’t have to take my word for it.

This month, the International Swaps and Derivatives Association (ISDA) issued a whitepaper, “Smart Contracts and Distributed Ledger – A Legal Perspective” [1]

The ISDA is a group that publishes standards for contract language for derivative contracts. These people define what “is” is, and what “means” means.

With all the nitter-natter about doing derivatives trading using executable “contracts” on a blockchain, the ISDA has taken up the question of just hos “contract-y” these so-called contracts may be.

The report is rather long and dry, and generally extremely well thought out.

The key point probably is:

Certain operational clauses within legal contracts lend themselves to being automated. Other non-operational clauses – for instance, the governing law of a contract – are less susceptible to being expressed in machine-readable code. Some legal clauses are subjective or require interpretation, which also creates challenges.” (p. 3)

Basically, some “smart contracts” are simple bits of code that do something. But an actual derivative contract has a lot more in it that “operational” clauses, and you can’t leave them out. Furthermore, it’s those “non-operational” parts that are the subject of interpretation and dispute. Very few law suits are about account numbers or dollar amounts, they are always about whether and how rules apply.

The bottom line is that “smart contracts” will be subject to interpretation and dispute, period. The question is how to make them work well.

It is important to note that the ISDA report is talking about contracts in the legal sense of the word, an agreement recognized by law. While enthusiastic techies may imagine that they can declare their code to be outside any conventional legal system, it is generally the case that judges will decide what they have jurisdiction over. Code that isn’t recognized in a jurisdiction is probably not a contract in that jurisdiction, no matter how cunning it is.

Which means that the ISDA’s opinion is relevant, to say the least.

The “non-operational” language includes common phrases such as “good faith”, and “ordinary practice”. The report points out that these terms are intended to be subject to interpretation, if only because it is never possible to state all possible future conditions. They also point out that these terms may be interpreted differently by different authorities, which is why it is important to specify which authority will rule.

The report suggests hybrid contracts, part of which are machine executable, and part of which are interpreted by humans. This will require standardization of executable contract code, so the contracts will work everywhere. In short, the report concludes that ISDA has a critical role to play.


  1. International Swaps and Derivatives Association, Smart Contracts and Distributed Ledger – A Legal Perspective. 2017. http://www2.isda.org/attachment/OTU3MQ==/Smart%20Contracts%20and%20Distributed%20Ledger%20%20A%20Legal%20Perspective.pdf

 

Cryptocurrency Thursday

A Map of the Gig Economy

Speaking of the Gig Economy….

The iLabour Project (“Investigating the Construction of Labour Markets, Institutions and Movements on the Internet”) [3] has begun to try to track workers and work using online job and task services. This isn’t the whole of the Gig Economy, but it certainly is an important sector. Indeed, their data showed a 26% increase between 2015 and 2016—this is why we’re all interested in it!

What does that headline number mean? The data is amassed by retrieving “vacancies” from the most used online job markets. (This is done via a web crawl, so it is snapshots.) When possible, they record the type of work (‘occupation”) and the country where the worker resides. The gigs are “different market mechanisms and contracting styles, from online piecework to hourly freelancing.” [2].

One wonders if Uber and is included in this index? It’s not an open market, but it sure as heck is at the dark heart of the gig economy.

This index is an “indicator”, not an absolute measure. The year to year growth is a growth in…this index. Mainly, this means more “vacancies”, and presumably, more vacancies filled. Given the nature of these platfoms, that could mean more workers, or more work per worker, or both.

The iLabor project produced a supplement that describes the geographic location of the gig workers sampled, and the type of work.

Online Labour Index top occupation by country, 1-6 July 2017

The data confirms our expectations that India and Bangladesh are large sources of labor in these services, though US and UK also supply labor in certain specializations.

This index seems very limited to me. It has nothing to say about many vital aspects of this job market.

There is very little about the employers. There is nothing about outcome: productivity, satisfaction, value added.

As noted, there is little information about the number of workers, the hours per workers, and the income of workers. We are all concerned about the widespread trend toward very low wage piece work, that cannot support the workers.


The Oxford group makes their data available for others to use, which enabled Andrew Karpie to add his own analysis [1].  His analysis shows that “the U.S. and Canada account for over 50% of the global total projects requested”, with the overall finding that “it is clear that online work exchange activity today is largely between the U.S. and certain less-developed Asian countries.

Well duh!

He concludes that “this is likely true for three main reasons: (1) wage arbitrage (frequently), (2) lower transaction costs and (3) supply of skilled labor/talent (with shortages in the U.S.).”

No kidding?

This is not a pretty picture, and I’m always surprised by people who think this “innovation” is even remotely a good idea.

But it’s very good to see some actual data about the gig economy, even if it is limited in so many ways.


  1. Andrew Karpie, Where Are Online Workers Located? — Oxford Internet Institute Tool Breaks it Down, in Spend Matters Network. 2017. https://spendmatters.com/2017/07/13/online-workers-located-oxford-internet-institute-tool-breaks/
  2. Otto Kassi, How the Online Labour Index is constructed, Oxford International Institute, 2016. http://ilabour.oii.ox.ac.uk/how-the-online-labour-index-is-constructed/
  3. Oxford International Institute, Introducing the iLabour Project. 2016. http://ilabour.oii.ox.ac.uk/
  4. Kevin Stark, Oxford Internet Institute Launches Interactive Map of the Global Gig Economy. Sharable.July 27 2017, http://www.shareable.net/blog/oxford-internet-institute-launches-interactive-map-of-the-global-gig-economy

 

 

Freelancer’s Toolkits?

The members who are “managed” by cool coworking software are mainly freelancers and independent contractors. These workers rent their workplace, and bring their own tools. So what is in their tool box?


Michael Katz has some suggestions for what you should have [1] .

Actually, his list are pretty simple, and mostly about being organized, getting “more efficient we can get managing repeatable, often mundane aspects of our work”.

  • Directions to my office
  • Standardized cards (e.g., “Thank you for the referral”)
  • Service descriptions (i.e., what you do)
  • New client questionnaire
  • Newsletter sign-up form

I note that all of these things are non-digital though all of them can be implemented in digital forms. In fact, every one of these ideas predate the ubiquitous internet.  They are about good business practices and relationships, not about technology.


Jeriann Ireland offers another take on this question, suggesting “The essential toolkit for minimalist (or broke) freelancers[2].

  • A Ready-to-Go Resume Template (and use LinkedIn to get it out there
  • A Decent Phone Plan (with call waiting)
  • A Dedicated Work Space (and separate computers and accounts)

This is a good list, and definitely a sound foundation.

His discussion of the “dedicated” workspace captures the essential psychology “Whether it’s a home office, a shared office space, or even a corner in your home, have a place where you only store work-related paperwork and itemsNaturally, “a dedicated workspace” might be membership in a local coworking space.

(I did raise an eyebrow at the comment that this is “the same concept as not spending non-sleeping time in your bed.”  Hmm.  I should never do anything in bed except sleep?)


Anyway, together these articles make clear that much of the challenge of freelancing is to be well organized, and to have a clear understanding of your own work processes.

“Templates” seem to be an important thing.  Basically, a template represents your understanding of how you work, and, as Katz puts it, the mundane and repeatable aspects.

I think this is a good point. Furthermore, the templates these guys mention most prominently are the “scripts” used for finding gigs and making contracts. There are other repeatable processes, such as billing, but connecting with new clients needs to be personal—so you need customized conversations.  

All this sounds like work!

Worse, it sounds exactly like “looking for a job”—which it is.  Gig workers have to really, really good at job hunting because they have to do it all the time. 

(Yet another reason I’ll never be a good Freelancer:  I absolutely hate, hate, hate job hunting.)


1. Jeriann Ireland, The essential toolkit for minimalist (or broke) freelancers, in Freelancers Union Blog. 2017. https://blog.freelancersunion.org/2017/07/07/are-you-a-freelancer-or-entrepreneur-2/

2. Michael Katz,, What’s in your tool chest?, in Freelancers Union Blog. 2017. https://blog.freelancersunion.org/2017/07/13/whats-in-your-tool-chest-2/

Blockchain for Local Identity?

As soon as I declare that blockchain technology is unsuited for two use cases, Identity and local currency , Wolfie Zhao reports in Coindesk that the Swiss city of Zug is going to have a local ID service using a blockchain.

Oops. These use cases are still open, or at least not as dead as I said.

Of course, there is a difference between a local currency and a local ID service. The former needs to interact with conventional financial systems, the latter needs to interact with conventional ID systems. The press release indicates that digital IDs are not well developed in Switzerland, though I’m sure that digital banking works great.

Similarly, there is a difference between a global ID system, with secure digital passports for everyone including refugees and repressed populations, and a digital ID issued by a city. For that matter, the city is Swiss, which means it already has a well developed national ID system to build on.

So this isn’t quite the use cases I considered earlier.

What it is, is an intersection of them, a simpler problem and a well organized local government. Perhaps this is a favorable “corner” of the use cases, where blockchain will work well.


So far as I can tell, the rationale for this system is that Switzerland has a personal ID system (which I’m sure is quite rigorous and efficient), but digital versions of the IDs have not been successful. Blockchain technology is a way to securely associate a cryptokey with a particular ID. The blockchain is intended to make it possible for digital apps to quickly and cheaply confirm IDs.

Sure. This can work.

We’ll see how well it works. Is there enough need for this sort of crypto ID, and does it work well enough to be useful?   I don’t know, we’ll find out.


I note that blockchain is being used for a tiny part of the problem. As the press release makes clear, citizens must go to a city office to prove their identity and then are issues a digital key. This process is the hard part, and blockchain does nothing to support this service.

We want a single electronic identity – a kind of digital passport – for all possible applications. And we do not want this digital ID to be centralized at the city, but on the blockchain.” (Dolfi Müller, quoted in [2])

It is ironic to see the proponents of this system talk about how this is a “decentralized” solution. What they mean by that is that the part of the process where digital IDs are looked up is “decentralized”, particularly compared to previous systems that have attempted to implement the service with a database.

Essentially, the city doesn’t want to run a database with a secure public interface. Fair enough.

To a certain extent, they are also boasting about the local city’s initiative, too, though IDs issued by one city may have limited use elsewhere. Ethereum runs everywhere, but Zug IDs may not be trusted anywhere outside Zug.

I suspect, though, that Zug is issuing IDs based on Swiss national credentials. In that case, IDs issued in Zug are great throughout Switzerland. These are, of course, centralized IDs in that case.

Looking up IDs is a decentralized problem, but issuing IDs demands trust, and a web of trust between authorities. If every city in Switzerland issues its own crypto IDs, even using the same Federal ID, it will be chaos.


Finally, I have to say, “Ethereum? Really?”

I’m rather surprised that anyone would try to build a trusted system using the catastrophically messed up Ethereum technology. But they probably use Microsoft Windows, too. Massively clever cryptography running on wobbly, hackable software infrastructure.

Anyway, we’ll see how this works out.


  1. Stadtverwaltung Zug. Blockchain-Identität für alle Einwohner. 2017, http://www.stadtzug.ch/de/ueberzug/ueberzugrubrik/aktuelles/aktuellesinformationen/?action=showinfo&info_id=383355.
  2. Wolfie Zhao, Swiss City Announces Plan to Verify IDs Using Ethereum Coindesk.July 7 2017, http://www.coindesk.com/swiss-city-verify-id-ethereum/

 

Cryptocurrency Thursday

Just How Complicated is Freelancing, anyway?

The new way of work is a gig economy of growing legions of freelancers and independent contractors. Far from having no job, these self-employed workers actually have to perform many jobs, implementing everything necessary to operate a small business.

As I have said, this stuff is not really my thing, and I will probably never be a successful gig worker.

If there was even the smallest shred of doubt about that conclusion, it was dispelled by Josh Hoffman’s two-part article, “82 rules for all freelancers to live by”.

Eighty two!

Anything with that many rules is w-a-a-y too complicated for my puny mind to handle!

Actually, his collection is more of a play list than an original essay. Most of these points appear elsewhere, which is clear because he links to the sources.


It’s a lifestyle

His list includes a variety of topics. Item 1 is probably the most important:

Freelancing isn’t a job or career. It’s a lifestyle choice.”

Heck, it’s a lifestyle just to learn his 82 rules. : – )

It’s not only a lifestyle, it’s a personal lifestyle. He offers a lot of new age-y advice.

Do it your way.

Keep trying,

If it makes you happy, do it. If it doesn’t, then don’t.”

Channel your inner epic.”

Embrace your weirdness ”


It’s a business

As he says, “Speaking of business, you are one”.

Most of his rules apply to any small business, not just freelancing.

Many of the  rules are about how to run a small business (which I’m pretty sure is a lifestyle choice no matter what business you choose). This includes a bunch of stuff about:

customer/client relations,

marketing,

branding.

Network, network, network.


The problem with having so many rules

…is that they start contradicting each other.

For instance, he is very confusing about selfishness.

He’s advises other-oriented attitudes, if not actual altruism.

You can’t do anything great alone.”

Always lead with an unconditional willingness and readiness to help.

Gratitude is instant medicine.

But then, it’s about you.

Be selfish. That’s what freelancing is all about. It’s about you,

If it makes you happy, do it. If it doesn’t, then don’t.

Channel your inner epic.

Embrace your weirdness ”

These attitudes seem contradictory to me.


And there are some real stinkers in here

Some of his items are weirdly obnoxious and assert values I simply can’t agree with.

He endorses a really racist analogy about, “are you a Cowboy or an Indian”. I wont’ dignify this with an explanation of his point. It’s just icky.

He has a very specific idea about what kind of business you are in.

Clients care about two things: how to make more money, and how to save more money. Everything else is noise. Eliminate the noise from your sales pitch.

Huh. That’s not the only things my clients worry about.

He endorses the notion that freelancers are rootless.

The world is your office. If you’re unhappy with where you are, move. You’re not a tree.”

Um. Don’t workers have a home, a family, to a community?


Overall, this list seems way, way to long for me, and not especially well organized.

However, it does really make the point that a freelancer has to run a business, and also has to self-motivate.

I think this is why there is the striking incongruity of his bloodthirsty “it’s about the money” and the touchy-feely “channel your own epic.”  A freelancer has to figure out how to do both–and get both work and life done, too.

I note in passing that one of the reasons why many freelancers like coworking is that the coworking community is people who face the same challenges, and they can face it together.

As I have said, I don’t think I’ll ever be able to do it myself.


  1. Josh Hoffman , 82 rules for all freelancers to live by, Part 1, in Freelancers Union Blog. 2017. https://blog.freelancersunion.org/2017/06/26/82-rules-for-all-freelancers-to-live-by-part-1/
  2. Josh Hoffman, 82 rules for all freelancers to live by, Part 2, in Freelancers Union Blog. 2017. https://blog.freelancersunion.org/2017/06/27/82-rules-for-all-freelancers-to-live-by-part-2/