Category Archives: Politics and Economics

Coworking Researchers Meet In Warsaw [repost]

[This was posted earlier here]

The Coworking Library held a “meetup” in Warsaw in November [1].  The speakers discussed their current research on coworking in Europe.  I’m very glad to see that coworking is (finally) attracting attention of social scientists.  I’ve been saying for a long time that there is a lot of interest here, and these investigators are taking interest.

This particular meetup was fairly informal, a sort of “what have you been working on” session, rather than refereed papers.  (There are papers associated with the research, but those are reported elsewhere.)

So what have these folks been working on?

The overall impression is that the big picture hasn’t changed.  Coworking is still about “community, community, community”.  And the reported benefits are about the same as reported many times before, including in my book.

One of the speakers (Marko Orel) discusses a taxonomy of coworking, i.e., what do people mean by the term?  As he points out, the terminology has been evolving and mutation rapidly.  And, I would add, the terms were never sharply defined in the first place.  While creative ambiguity is beneficial for marketing and Internet yapping, it is problematic for academic research.  It’s not clear that any two studies are even talking about the same thing.  I look forward to his result in the future.

Another speaker (Viktoria Heinzel) is looking at “rural” coworking, which I’ve written about.  It’s not clear from the slides how this concept is defined or which specific “rural” areas were studied.  The summary of points seems consistent with other work on the topic, including the potential for ”recruitment & return of skilled workers/ young talents”.

Anita Füzi examined what attracts workers to a specific space.  The basic finding is that social factors; i.e., “community, community, community”; are what matters most.  And she points out that “One space is not better than the other”.  As I have said many times, there is no one right way to do it.

The fourth speaker (Miryana Stancheva) explores the idea of looking at coworking spaces as “a living organism”, specifically, through the ideas or Erik Erikson.  I’ve never studied Erikson in any detail, though I am familiar with the general topic.  This approach requires applying concepts such as “ego development” to coworking.  She seems to be trying to create improved coworking communities through this analysis.

I strongly agree with the importance of a developmental model.  She also considers the development of satisfaction and happiness, not just numbers and revenue.  But, I’ll have to reserve judgement as to whether this particular interpretive framework works well.

I mean, maybe a coworking community is like a child or a family, in some ways.  But maybe not in others.  For one thing, coworkers can walk away at any time.  For another, there is usually very little hierarchy.  And for another thing, the community is usually largely self-selected.  These features probably have a major impact on both happiness and the development over time.

Overall, it is useful to have this kind of academic exchange.  Too much of the discussion of coworking is Internet-grade natter, with little attempt at academic rigor or clarity.  Me, I like footnotes.

It is unfortunate that there isn’t an equivalent effort on this side of the Atlantic.  Perhaps it would be possible to add a virtual component, for those who don’t mind video-ing in from far away.

  1. Coworking Library. Researchers Meetup Warsaw November 13 2019. 2019,

(For much more on the Future of Work, see the book “What is Coworking?”)

What is Coworking?

Stablecoins Are Going To Be Regulated

There has been a lot of excitement and nonsense this year about “stablecoins” – crypto tokens that are (supposedly) backed by other assets.  Facebook’s Libra is promised to be the stablecoin to end all stablecoins.

Bitcoin is worth whatever people think it is worth, and the exchange rates with dollars, euros, gold, etc. fluctuate day to day, minute to minute.  (All the noise about the “value” of Bitcoin is mostly nattering about exchange rates against the dollar et al.  Ironic, considering that Bitcoin is supposed to “disrupt” and make fiat currencies obsolete.)

In contrast, a “stablecoin” is supposed to be something like a bank note or a CD:  guaranteed to be tradable for a specified amount of some other asset.  How is this different from conventional financial instruments?  It really isn’t, except for the technology.

Now, conventional money markets are highly regulated, to maintain safe and sane economies.  Among other things, transactions are monitored in detail, to detect and prevent criminal activity.  Money handlers are also monitored to assure that they maintain sufficient reserves to cover their obligations.

Apparently, some people believe that if it uses a blockchain, then it doesn’t need to follow the same rules as other systems that do the same thing.

News Flash:  The financial gendarmes insist that the rules apply.

Danny Nelson reports on comments from US regulators that make it clear that “Stablecoin Issuers Are Money Transmitters, No Matter What.” [1]

He quotes Kenneth Blanco of U.S. Financial Crimes Enforcement Network (FinCEN) to say tha, the same rules apply to  “any activity that provides the same functionality at the same level or risk, regardless of its label.

“It is not what you label it, it’s the activity you actually do that counts.”

In general, this means that these crypto systems must have requisite licenses, must identify the source and destinations of transactions, and generally must do whatever governments say.

I’ll note that this is not just the law, it is the only way that these systems can work.  Without adequate regulation, they will explode in a shower of fraud, mismanagement, and debt.

So good.

Maybe blockchain-based stablecoins will be useful, maybe not.  But they have a better chance of being useful if they are properly regulated by the same rules as everything else.

  1. Danny Nelson (2019) FinCEN: Stablecoin Issuers Are Money Transmitters, No Matter What. Coindesk,


Cryptocurrency Thursday

What is Coworking? Goodman on “The Coworking Canvas” [repost]

[This was posted earlier here]

Cleo Goodman writes for the Coworking Accelerator about “The Coworking Canvas”—a descriptive framework for the things you need to do to develop “a thriving coworking community” [1].

(The Coworking Accelerator aims to help coworking leaders lead coworking communities.  One of their products is “Coworking In A Box”.)

From [1].
This “Coworking Canvas” has six main areas (links to blog entries):

For readings of my book and this blog, these topics are not new.  In this case, Goodman explains these topics from the perspective of the community of workers and community leaders.

Notably, she breaks out the benefits (to workers) of peer support, networking, learning, and co-location from the “space”.  In fact, the main things she emphasizes about space is really “first impressions”, and appearances in general. If you have co-location, networking, etc. going on, the community will be strong in any space.

A community leader has a role to facilitate all these facets, though “hosting” is all about the specific activities of the community leader—introductions, connections, promulgating the “culture” of the community.

Goodman offers a sort of theoretical description of how “vibrant” coworking communities work.

  • “Belonging: People unleash their potential and become resilient when they develop a true sense of belonging.

  • “Nurturing: People and businesses grow and endure when talent, relationships and opportunities are nurtured.

  • “Place-making: Place-making happens and communities thrive when people, spaces and places create a joined-up ecosystem.”

    (From [1])

This seems to me to be a good summary of the key benefits of a coworking community.  “Belonging” plus “Nurturing” is the opposite of “loneliness and isolation”.   “Place-making” is precisely and exactly what a coworking operation is all about.

These blog entries don’t have footnotes or anything like that, I assume these are based on experience.

I’d say they have their heads screwed on the right way.  This is certainly the right stuff to worry about.

I’m not sure how you put this “in a box”! : – )  I guess you just have to check out their products to see.

  1. Cleo Goodman, What is the Coworking Canvas? 2019.

(For much more on the Future of Work, see the book “What is Coworking?”)

What is Coworking?

Cryptocurrency Winter Follies, Bitcoin-Cash Edition

One of the innovations of Emperor Nakamoto’s Bitcoin is the “consensus” mechanism, which let’s everybody do whatever they want, ultimately settling on the most agreed version of reality to be the consensus reality [2].

This mechanism makes updating the software a weird and wacky process.  A proposed new version is completely implemented and deployed, and then users either use it or not.  If enough people pick up the new code, it becomes the official version.  But people can continue to use the old version, effectively “forking” off an alterative version of the currency, and a new branch of alternative history.

What a way to run a railroad!

In the Bitcoin world, one of the most notorious “splitters” is Bitcoin Cash (a deliberately confusing name), which split from the original Bitcoin circa 2017, implementing larger block sizes.  There has been a second split, driven by perennial pest Craig Wright, to create Bitcoin SV. (“SV” stands for “Satoshi’s Vision”—Wright himself claims to be Satoshi, so you can parse that how you want.).  And, to boot,  earlier this year the BCash people fixed an oopsie by deliberately subverting the consensus protocol to rewrite history.  (That is not supposed to be possible.)

These earlier splits were deliberate, driven by disagreements among developers and users.

This month Bitcoin Cash experienced an unexplained fork.

There was a scheduled software upgrade which was not backward compatible.  Most of the users picked up the change as expected, but at least one large mining operation did not upgrade.  This means that the mystery miners are crunching away, still adding records to the old branch instead of the new, creating a new fork of Bitcoin Cash, and generally sowing confusion.


It isn’t clear who is doing this or why.  As William Foxley puts it “Unknown Mining Pool Continues Old Chain” [1].  This could be an accident.  It could be deliberate.  Who knows?

Whatever the reason, this fork is a hazard for users who might accidentally use the old branch instead of the new. And it is a pain for developers who might have to support both versions, adding to the confusion of the crypto world.  On the other hand, so far as we know, the old branch isn’t being maintained anymore, so bugs are not being fixed, ports aren’t being kept up, and the two branches will soon diverge even farther as changes are made to one and not the other.

This definitely is not the way to run a railroad!

Bcash and its dysfunctional family are certainly in the running for the 2019 CryptoTulip of the Year, though Libra may stomp everybody.

  1. William Foxley (2019) As Bitcoin Cash Hard Forks, Unknown Mining Pool Continues Old Chain. Coindesk,
  2. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009.


Cryptocurrency Thursday

Byzantine agreement algorithm for a Better Bitcoin?

One of the few actual innovations in Nakamotoan cryptocurrencies is the “consensus protocol”, which is a fully distributed algorithm to solve the classic Byzantine agreement problem [3].  The challenge is to reach agreement, or at least consensus, when there are many messages and it is impossible to know which messengers are honest and which are dishonest.

Emperor Nakamoto’s new clothes involve broadcasting proposed updates to all participating nodes. Each node checks the validity (using checksums), and accepts an update that agrees with its own history.  Basically, all participating nodes “vote” on the results, and in the event of alternative proposals, the one with the most votes is taken as the consensus of the network.

It should be clear that this simple protocol is also extremely conservative with a small ‘c’.  Any record that is accepted by this consensus protocol is surely well supported. I will have been confirmed thousands of times over, eventually, by all nodes.  (This is a fine semantic point, because the definition of “participating” is that you accept the consensus up to now, which is somewhat circular logic.  Everyone who counts is in agreement because only those who agree really count.)

It should also be clear that Nakamoto’s approach does not scale well.  The number of messages and decisions is linear with the size of the network, and the network is intended to be very large to make cheating difficult.  (To dictate the result you need 51% of the votes—which is more difficult when there are a large number of votes.)

The upshot is that classic Nakamotoan consensus is very expensive and takes a long time, and becomes more expensive and slower as the network grows. In short, Bitcoin is isn’t scalable, and probably isn’t sustainable.

(This result is no surprise to anyone who has studied computer science.  As a matter of fact, you can learn a lot in college, if you stick with it and take it seriously.)

This summer researchers at Ecole polytechnique fédérale de Lausanne (EPFL) report a suite of probabilistic algorithms that could replace Nakamotoan consensus [2].  The basic idea is to use a probabilistic sample of nodes, rather than all of them.  Just as probability sampling can reliably get very near the result of a complete canvas, these algorithms make it possible to achieve confidence in a blockchain from only a fraction of the whole network each vote.

These Byzantine algorithms scale as the square root of the number of nodes, and use negligible computation and power resources [1]. <<link>>  Clearly, you could make a better Bitcoin with these algorithms.  It would be just as secure, just as decentralized, and way more sustainable, with way less latency.  So, as Charles Q. Cho and others imply, this could be a “new alternative to Bitcoin”.

This technology joins many other variations on Nakamoto’s ideas, including permissioned blockchains, zero-knowledge blockchains, and zillions of alt-coins.

The question is, would this new thing be “Bitcoin”, or something else?  It would do the same thing, just as the plethora of cryptocoins and blockchains do.  But could you still call it “bitcoin”?

Some enthusiasts might well want a better engineered Bitcoin.  We’ve seen many proposals for “2.0”. But experience has shown that something this basic would not be supported by many Nakamotoans (e.g., this, this, this, this).

There are many reasons for this resistance, most of them non-technical.

First, Nakamoto (2009) [3] is scripture, it is the very definition of what Bitcoin is.  Whatever these Byzantine protocols are, they simply aren’t Nakamotoan.  (Though, Nakamoto’s protocol is probably a degenerate case of the general Byzantine Reliable Broadcast family.)

Second, the probabilistic protocols are complicated and require a certain level of “trust” in the mathematics and the laws of chance.  Nakamoto’s simple, brute force approach is easy to understand and requires little math to believe in its correctness.  For those concerned with “trust”, it may be difficult to lean on such relatively difficult math.  (What if those sneaky Swiss guys are pulling a fast one, and there is a back door for “the man” to secretly control the results?)

Third, this protocol would surely scramble the mining economy, at least in the short run.  I think it would come out with similar results for everyone, but a lot of current investments would probably be misplaced, and current business models upset.  There is little chance that miners would agree to such a radical reworking of Bitcoin, even though it would probably benefit everyone in the long run.

And finally, there is an intangible value in the inefficiency of Bitcoin.  For those who view Bitcoin as “virtual gold”, it is psychologically good for Bitcoin to be expensive and inconvenient, just like gold is expensive and inconvenient.  For that matter, gold bugs are happy with poor scaling and long latency.  This keeps Bitcoin “scarce” and therefore, in this mindset, “valuable”.

So this Swiss study joins many other schemes for how you might redo Bitcoin to get a better system.  However, it is much more likely to become a competitor to Bitcoin than to be incorporated into the Nakamotoan Empire.

  1. Charles Q. Choi, New Alternative to Bitcoin Uses Negligible Energy, in IEEE Spectrum – Energywise. 2019.
  2. Rachid Guerraoui, Petr Kuznetsov, Matteo Monti, Matej Pavlovic, and Dragos-Adrian Seredinschi, Scalable Byzantine Reliable Broadcast (Extended Version). arXiv arXiv:1908.01738 2019.
  3. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009.


Cryptocurrency Thursday

Making It As A Freelancer [repost]

[This was posted earlier here]

The Freelancers Union and GCUC report that one reason that people like freelancing is because you get to work on what you want to work on, when you want, how you want.  Gig workers are free to pick their gigs, and coworkers pick their own work environments.

But gigging is hard, and, frankly, even the glass-half-full surveys of freelancers and coworkers show that the pay is short, and the hours may be long (assuming you can get the work).

Looking closely at the surveys over the years, it is clear that many of the respondents were enthusiastic newbies, happy with their first experiences. (We were all rookies once! : – ))

But I have long questioned how viable gig working will be for the long run, for a whole working lifetime.  (I discuss this in my book, “What is Coworking?“)

For this reason, I was interested to see several posts from experienced freelancers, who have rather more sanguine view of gig working.  It’s not all roses and unicorns.

To be sure, these senseis want people to freelance.  But…they have some important things to tell you.

First of all, Hannah Edmonds posts yet another discussion of time management.  (This is a perennial topic for freelancers and coworkers.)

Everyone has trouble managing their time.  One good thing about working for an organization and having a boss is that these things provide structure and other people to help enforce the structure. However, an independent gig worker is on her own [1].  Edmonds points out the need to structure your gig work, and offers tips on how to do it. This takes self-discipline, which I, for one, am not that good at.

Sensei Tyra Seldon has more tough advice:  freelancing isn’t meant to be free  [3].  In particular, gig workers need to know the value of their work, and need to charge appropriately.  Anyone who has worked with Sensei Seldon knows that she is very clear about terms of payment, and demands appropriate professional levels of compensation.

She tells us that this is “what 10 years of freelancing taught” her:  talk about money clearly and demand to be paid.  Say “no” if necessary.

I’ll note that this is another good thing about working for a conventional organization:  someone else sets the terms and compensation, and there is a contract that defines it.  There is no need to negotiate every piece of work separately, so there isn’t a need to explicitly worry about the value of each piece.

Gig workers have to make demands and get paid.  That’s not all that fun, but it is for sure necessary.

What does this mean?

Sensei Naomi Nakashima tells us that she had to learn “that it’s not enough to love what you do” [2]

It no longer felt like I was getting paid to do something I loved, it felt like I was barely scraping by. I felt underpaid and undervalued (because I was).” (From [2])

What she found is that, however much she liked what she was doing, it was necessary to earn enough to actually live.  She recounts how one of her clients refused a patently absurd low bid from her, and told her “no matter how much you love what you do, if you’re not making enough to live on it, you will end up resenting it.”

Think carefully about this.  She is telling you that getting paid isn’t just necessary for survival, it is necessary for your sanity and morale.

Sensei Nakashima’s suggestions are good advice for any job, freelance or other. I can testify that poor pay and lousy work will definitely make you hate any job, no matter how cool it might seem on paper.

She elaborates:

1) It’s not enough to enjoy what you do – you also have to enjoy the project you’re working on.

2) It needs to do more than just pay you – it needs to be worth your time.

3) It’s not enough to simply work on clients’ projects that you love – they need to help further your career in some way. (summarized from  [2])

I would say that #2 is the crux of all of this.  Freelancing might seem like a great thing, but it really must be worth your time or you’ll never survive.  This isn’t even a matter of money (though Sensei Seldon is right that you need to be paid), it’s a matter of life and death.  You only have so much time, you can’t really throw it away doing things you hate.

I would add a further bit of advice.  My own experience has shown me that the most important thing is who you are working with.  Working with good people is generally worth your time, even if it might not be perfect for other reasons.  (For example, I’ve been very happy doing unpleasant (but important) work with people I really care about.  I’ve also been happy working with good people, even when it didn’t particularly advance my career.)

I think this is one of the reasons why coworking is so valuable to many freelancers.  If you find a good coworking community, everything will be so much better because just showing up and doing your work with good people will be worth your time.

Gig working isn’t easy, and it’s not guaranteed to make you happy.  I doubt that you will get rich (at least not from the gigs).

But these experienced freelancers are here to tell you that it can be a good life, if you are disciplined and take care to do work that is worth your time.

What is Coworking?  It can be an opportunity to work with good people all the time.  And that’s a really good thing.

  1. Hannah Edmonds, How to keep freelance work from eating up your life, in Freelancers Union Blog. 2019.
  2. Naomi Nakashima, How one freelance writer figured out that it’s not enough to love what you do, in Freelancers Union Blog. 2019.
  3. Tyra Seldon, Pay now or pay later: what 10 years of freelancing taught me, in Freelancers Union Blog. 2019.


(For much more on the Future of Work, see the book “What is Coworking?”)


What is Coworking?

CryptoTulips Grow in Sand

Nakamotoan cryptocurrencies are built on economic foundations, foundations that were never actually tested before the edifice was constructed.  They are now enshrined in code and in the unshakable faith of Nakamotoans everywhere.

One of the more interesting economic policies is the availability of transaction fees.  In the beginning, processing transactions was incentivized by minting new Bitcoins, “mining” in the parlance.  By design, the payouts will slow and ultimately end when 21 million Bitcoins have been minted.  This deflationary policy is intended to sustain the value of Bitcoins, as per Nakamoto’s own gold buggy ideology.  Other Nakamotoan currencies have different caps and policies, but most have some variation of this concept.

As payouts decrease, it is expected that the network will be sustained by transaction fees paid by users.  This hope was stated in the sacred text:

“Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” ([2], p. 4).

In recent years, as traffic has increased, processing delays have ballooned.  You would think this is a pretty standard system problem, to say the least, but engineering solutions remain elusive for Bitcoin.  In the mean time, many operators routinely charge fees to jump the queue.  (Cynics may recall that one of the problems that Bitcoin originally intended to solve was high transaction costs ([2], p. 1).)

So–Bitcoin has this unregulated market in access fees baked into the fundamental design. As with much of the Nakamotoan universe, these cunning ideas were not empirically investigated or even modeled before they were implemented.

This winter, the Grinches at Cornell’s Initiative for Crypto Currencies and Contracts report a detailed study of Bitcoin transaction fees that answers in some of the unasked questions [1].

It’s a very interesting piece of work.

One critical finding is “higher transactions fees are being driven by queuing problems facing users, not by reductions in bitcoin-denominated block rewards” ([1], p. 92). In other words, Emperor Nakamoto was basically wrong:  there is no relationship between mining payouts and transaction fees.  And, by the way, they find that latency and congestion matter a lot, a possibility that notably was not discussed in Nakamoto (2009) [2].

This research applies to much of the dysfunctional cryptocurrency family, because these flaws have been passed down from the patriarch, Bitcoin, to the vast array of derivative currencies.  Most cryptocurrencies are seeing rapid increases in transaction fees (as well as latency), which they say reflect “the interaction of increasing demand and fixed blockchain protocols”. ([1], p. 94)

“For [Nakamotoan] cryptocurrencies, a fundamental challenge is whether a static rules-based protocol can remain a single entity or whether the disparate needs of users result in fragmentation into multiple coin-based currencies.”  ([1], p. 94)

It is interesting to notice how the “decentralized” protocol and data structures of a Nakamotoan blockchain are actually a choke point for the system.  A single, global ledger is, in fact, a centralized point of failure–even when (or especially when) it is widely distributed.

For that matter, a single global ledger is the ultimate “one size fits all” solution, which is bound to be imperfect for most uses.  In this light, it is no wonder that cryptocurrencies are proliferating.

“Another, and perhaps more fundamental, problem is that different clienteles have different needs of, uses for, and even philosophies regarding bitcoin and a blockchain.” ([1], p. 107)

The Cornell research indicates that in the long run congestion will limit access to the blockchain, regardless of mining or transaction fees.  When it becomes impossible to get transactions recorded promptly, users will have to stop using the systems.

“even with trans- actions fees, an upper bound exists on the size of the blockchain imposed by the waiting time confronting users” ([1], p. 106)

This study is certainly food for thought.

My own view is that Nakamoto’s intuitions about the economics of Bitcoin were more than a little shaky, and these shortcomings have been propagated to the entire cryptocurrency world. I don’t know how long Bitcoin will continue, but it looks like there is essentially zero chance that it will replace money overall.

Certain blockchains might become important in specific niches, although most will have non-Nakamotoan features (such as permissioned blockchains or proof-of-stake protocals).

But it is clear that these CryptoTulips are growing in very sandy soil indeed!  They probably can’t and won’t grow very tall, if they grow at all.

  1. David Easley, Maureen O’Hara, and Soumya Basu, From mining to markets: The evolution of bitcoin transaction fees. Journal of Financial Economics, 134 (1):91-109, 2019/10/01/ 2019.
  2. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009.


Cryptocurrency Thursday