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Bitcoin is Trust
Last week, I invited a few friends to come together and talk about Bitcoin. The conversation was wide ranging (read: ill-organized), but interesting.
Three key topics emerged out of the djin:
Here is my summary of our discussion of each:
There are a lot of interesting analogous examples to bitcoin as a virtual store of value / currency. E-gold and m-pesa are examples of two digital currencies backed by tangible value - they are different than bitcoin, but offer interesting lessons.
We explored two historical examples that map closely to how bitcoin is used: Rai Stones and Wampum. Rai Stones are very large limestone petrospheres used on the island of Yap as a form of trade currency. The importance of Rai Stones is that they are recognized by the entire culture as valuable and that transactions and ownership are public; because of this, actual physical ownership is unnecessary (a Rai Stone, irrevocably lost at sea, was even used in the abstract as valid currency).
Our discussion around Wampum offered another interesting lesson; that the value of something can reflect a recognition from both parties of the fact that it took lots of human effort to create.
Moving from Wampum back to the digital world, we discussed the example of virtual currency (Facebook Credits, Linden Dollars, QQ Coins, etc.). Each of these have been used as a store of value for a group. Some of these have even built large transaction volumes, but have been backed by a key central actor and are generally used only in the context of that actor's primary service. That said, It's worth noting that QQ Coins became so popular outside of QQ's primary service, that it was banned for use buying physical goods and services in China. Bitcoin is being used in China today in similar ways, and much of its growth in value over the last 6 weeks has been in response to Chinese activity (and American speculation about Chinese activity).
So we've seen small communities, online and off, trust a new store of value. Creating systems in some cases that thrived for 1000+ years. An open question remains with bitcoin -- can we establish that level of trust on a global scale with a diverse network of actors providing the credibility and liquidity?
So far bitcoin has done this, but there are some key challenges to keeping it legitimate with a number of diverse actors. You can see why, when asked to define bitcoin, the best response was "bitcoin is trust."
Making BTC Legitimate
For it to be an actual currency, there is a need to "think in BTC first." The volatility of BTC makes this really difficult. While A consultant may be willing to peg her consulting rate to BTC, it's unlikely her clients will be interested in stomaching the current volatility of BTC as anything other than a favor to that consultant.
Even current examples of merchants accepting BTC today are usually not holding bitcoin. These merchants use an intermediary to price all transactions in BTC based on an up-to-date exchange rate with US Dollars (or Canadian Dollars, Euros, etc.). The merchant only rarely chooses to ever hold BTC, instead getting daily deposits in their preferred currency. For the average business, cash flow management trumps speculation.
Regardless of any structural issues it may or may not have (e.g. being a deflationary currency), bitcoin today is too volatile to be a legitimate currency. This volatility is encouraging new bitcoin owners and the maturation of an ecosystem around bitcoin. It may be preferable that during the "growth phase" the market is volatile and speculative, but bitcoin's value will have to stabilize before we can start to think of it as a legitimate currency.
If it legitimizes at all, bitcoin is likely to slowly become a robust currency in places where using it to transact is preferable to the pre-existing options (or where there are no pre-existing options). International transactions, online transactions, and unstable countries were brought up as potential proving grounds for bitcoin as a legitimate currency.
At some point, miners will make less mining new coins from the coinbase than they will from transaction fees. When this is true, all miners will have to standardize on charging some sort of fee. Market forces will drive consolidation of miners, which is a serious threat to the stability and viability of the bitcoin ecosystem. The system needs some competition between miners.
We may have to create additional incentives for miners. It's possible transaction fees will cover this, but it's also possible that other incentives could be thought of. We floated the idea of whether the aggregate compute power could be sold to be used for something else. Unfortunately, ASICs have very limited use and do the vast majority of mining. Primecoin is an alternative crypto-currency that offers a different way of submitting proof-of-work that is intrinsically valuable (and therefore could be used to additionally subsidize mining).
There was an entertaining suggested use for all the pooled compute resources of ASIC bitcoin miners: try to crack the security of wallets holding lots of BTC and steal their money. Impressively, someone in the group had already done the math on whether this was feasible -- at the current global hashrate, it would take 2 million years to break the encryption of a wallet.
We didn't dive deeply on alternative coins, other than to note that the people interested in these coins as vehicles of value creation are driven almost exclusively by speculation, not by belief that it will be a better currency, and that the markets are less liquid and far more volatile. Alt-coins are where the technical community tries new types of features and works out philosophical disagreements on how crypto-currencies work best.
What Does Bitcoin Allow You to Do?
Going back to our examples of Rai and Wampum from before, the most interesting aspect of each is that they served as both a currency and a way to encode key information - specifically being used as a record of critical events. Rai stones are used to mark social transactions (e.g. marriages, treaties and alliances) and Wampum belts are woven into patterns that represent ideas - allowing them to be used for keeping records, acknowledging treaties, and passing down stories to the next generation.
Bitcoin offers us the same ability to encode many types of financial transactions (experiments already exist to use the block chain to automate Notaries, DNS, and Stock Exchanges) and could easily be used for other types of trustable information storage.
At it's core, bitcoin allows you to automate much of the infrastructure around financial transactions and cut out billions of dollars worth of unnecessary fees and middlemen. Automation is going to remove lots of humans from our global financial systems.
The financial services layer that gets built up around Bitcoin will be really interesting; to quote Naval Ravikant "any competent programmer has an API to cash, payments, escrow, wills, notaries, lotteries, dividends, micropayments, subscriptions, crowdfunding, and more."
Jason noted that we are in the infancy of these services, but that over time new services will grow up to make dealing in bitcoin easier to understand and safer for the average citizen. A good early example of this is the Bitcoin Investment Trust which is basically SecondMarket trading expertise in procurement and safekeeping in return for a fee.
Aside from just automating human to human financial services, Bitcoin also enables us to create narrow-AI autonomous agents -- basically, programs that offer some type of service that they are paid for in BTC, which the program uses to pay for it's own costs. These programs could operate as autonomous businesses with no human oversight.
As an example of a type of business that could run this way, take a piece of ransomware called Cryptolocker, which encrypts critical files on your computer and requires that you to send them bitcoin to get the key to decrypt your files. This business could amass hundreds of millions of dollars worth of BTC without any additional human intervention (and in the near future, the program could actually be taught to clone itself and test new types of mutations in how it runs the business to optimize for profitability). Another example of this is the thought-experiment StorJ.
If you're interested in this and like fiction, read Accelerando, which features sentient corporations as a key sub-plot, or Daemon which has a computer program that takes over hundreds of corporations and terrorizes the world.
The rest of these points didn't fit into the themes above, but I thought were worth sharing:
Here was the reading list I sent around prior to the event (with a few new additions):
The COVID-19 pandemic is making health disparities in the United States crystal clear. It is a clarion call for health care systems to double their efforts in vulnerable communities.
- The COVID-19 pandemic has exacerbated America's health disparities, widening the divide between the haves and have nots.
- Studies show disparities in wealth, race, and online access have disproportionately harmed underserved U.S. communities during the pandemic.
- To begin curing this social aliment, health systems like Northwell Health are establishing relationships of trust in these communities so that the post-COVID world looks different than the pre-COVID one.
COVID-19 deepens U.S. health disparities<p>Communities on the pernicious side of America's health disparities have their unique histories, environments, and social structures. They are spread across the United States, but they all have one thing in common.</p><p>"There is one common divide in American communities, and that is poverty," said <a href="https://www.northwell.edu/about/leadership/debbie-salas-lopez" target="_blank">Debbie Salas-Lopez, MD, MPH</a>, senior vice president of community and population health at Northwell Health. "That is the undercurrent that manifests poor health, poor health outcomes, or poor health prognoses for future wellbeing."</p><p>Social determinants have far-reaching effects on health, and poor communities have unfavorable social determinants. To pick one of many examples, <a href="https://www.npr.org/2020/09/27/913612554/a-crisis-within-a-crisis-food-insecurity-and-covid-19" target="_blank" rel="noopener noreferrer">food insecurity</a> reduces access to quality food, leading to poor health and communal endemics of chronic medical conditions. The U.S. Centers for Disease Control and Prevention has identified some of these conditions, such as obesity and Type 2 diabetes, as increasing the risk of developing a severe case of coronavirus.</p><p>The pandemic didn't create poverty or food insecurity, but it exacerbated both, and the results have been catastrophic. A study published this summer in the <em><a href="https://link.springer.com/article/10.1007/s11606-020-05971-3" target="_blank">Journal of General Internal Medicine</a></em> suggested that "social factors such as income inequality may explain why some parts of the USA are hit harder by the COVID-19 pandemic than others."</p><p>That's not to say better-off families in the U.S. weren't harmed. A <a href="https://voxeu.org/article/poverty-inequality-and-covid-19-us" target="_blank" rel="noopener noreferrer">paper from the Centre for Economic Policy Research</a> noted that families in counties with a higher median income experienced adjustment costs associated with the pandemic—for example, lowering income-earning interactions to align with social distancing policies. However, the paper found that the costs of social distancing were much greater for poorer families, who cannot easily alter their living circumstances, which often include more individuals living in one home and a reliance on mass transit to reach work and grocery stores. They are also disproportionately represented in essential jobs, such as retail, transportation, and health care, where maintaining physical distance can be all but impossible.</p><p>The paper also cited a positive correlation between higher income inequality and higher rates of coronavirus infection. "Our interpretation is that poorer people are less able to protect themselves, which leads them to different choices—they face a steeper trade-off between their health and their economic welfare in the context of the threats posed by COVID-19," the authors wrote.</p><p>"There are so many pandemics that this pandemic has exacerbated," Dr. Salas-Lopez noted.</p><p>One example is the health-wealth gap. The mental stressors of maintaining a low socioeconomic status, especially in the face of extreme affluence, can have a physically degrading impact on health. <a href="https://www.scientificamerican.com/index.cfm/_api/render/file/?method=inline&fileID=123ECD96-EF81-46F6-983D2AE9A45FA354" target="_blank" rel="noopener noreferrer">Writing on this gap</a>, Robert Sapolsky, professor of biology and neurology at Stanford University, notes that socioeconomic stressors can increase blood pressure, reduce insulin response, increase chronic inflammation, and impair the prefrontal cortex and other brain functions through anxiety, depression, and cognitive load. </p><p>"Thus, from the macro level of entire body systems to the micro level of individual chromosomes, poverty finds a way to produce wear and tear," Sapolsky writes. "It is outrageous that if children are born into the wrong family, they will be predisposed toward poor health by the time they start to learn the alphabet."</p>Research on the economic and mental health fallout of COVID-19 is showing two things: That unemployment is hitting <a href="https://www.pewsocialtrends.org/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/" target="_blank" rel="noopener noreferrer">low-income and young Americans</a> most during the pandemic, potentially widening the health-wealth gap further; and that the pandemic not only exacerbates mental health stressors, but is doing so at clinically relevant levels. As <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7413844/" target="_blank" rel="noopener noreferrer">the authors of one review</a> wrote, the pandemic's effects on mental health is itself an international public health priority.
Working to close the health gap<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDc5MDk1MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNTYyMzQzMn0.KSFpXH7yHYrfVPtfgcxZqAHHYzCnC2bFxwSrJqBbH4I/img.jpg?width=980" id="b40e2" class="rm-shortcode" data-rm-shortcode-id="1b9035370ab7b02a0dc00758e494412b" data-rm-shortcode-name="rebelmouse-image" />
Northwell Health coronavirus testing center at Greater Springfield Community Church.
Credit: Northwell Health<p>Novel coronavirus may spread and infect indiscriminately, but pre-existing conditions, environmental stressors, and a lack of access to care and resources increase the risk of infection. These social determinants make the pandemic more dangerous, and erode communities' and families' abilities to heal from health crises that pre-date the pandemic.</p><p>How do we eliminate these divides? Dr. Salas-Lopez says the first step is recognition. "We have to open our eyes to see the suffering around us," she said. "Northwell has not shied away from that."</p><p>"We are steadfast in improving health outcomes for our vulnerable and underrepresented communities that have suffered because of the prevalence of chronic disease, a problem that led to the disproportionately higher death rate among African-Americans and Latinos during the COVID-19 pandemic," said Michael Dowling, Northwell's president and CEO. "We are committed to using every tool at our disposal—as a provider of health care, employer, purchaser and investor—to combat disparities and ensure the <a href="https://www.northwell.edu/education-and-resources/community-engagement/center-for-equity-of-care" target="_blank" rel="noopener noreferrer">equity of care</a> that everyone deserves." </p><p>With the need recognized, Dr. Salas-Lopez calls for health care systems to travel upstream and be proactive in those hard-hit communities. This requires health care systems to play a strong role, but not a unilateral one. They must build <a href="https://www.northwell.edu/news/insights/faith-based-leaders-are-the-key-to-improving-community-health" target="_blank" rel="noopener noreferrer">partnerships with leaders in those communities</a> and utilize those to ensure relationships last beyond the current crisis. </p><p>"We must meet with community leaders and talk to them to get their perspective on what they believe the community needs are and should be for the future. Together, we can co-create a plan to measurably improve [community] health and also to be ready for whatever comes next," she said.</p><p>Northwell has built relationships with local faith-based and community organizations in underserved communities of color. Those partnerships enabled Northwell to test more than 65,000 people across the metro New York region. The health system also offered education on coronavirus and precautions to curb its spread.</p><p>These initiatives began the process of building trust—trust that Northwell has counted on to return to these communities to administer flu vaccines to prepare for what experts fear may be a difficult flu season.</p><p>While Northwell has begun building bridges across the divides of the New York area, much will still need to be done to cure U.S. health care overall. There is hope that the COVID pandemic will awaken us to the deep disparities in the US.</p><p>"COVID has changed our world. We have to seize this opportunity, this pandemic, this crisis to do better," Dr. Salas-Lopez said. "Provide better care. Provide better health. Be better partners. Be better community citizens. And treat each other with respect and dignity.</p><p>"We need to find ways to unify this country because we're all human beings. We're all created equal, and we believe that health is one of those important rights."</p>
What’s Eminem doing in Missouri? Kanye West in Georgia? And Wiz Khalifa in, of all places, North Dakota?
This is a mysterious map. Obviously about music, or more precisely musicians. But what’s Eminem doing in Missouri? Kanye West in Georgia? And Wiz Khalifa in, of all places, North Dakota? None of these musicians are from those states! Everyone knows that! Is this map that stupid, or just looking for a fight? Let’s pause a moment and consider our attention spans, shrinking faster than polar ice caps.
Can passenger airships make a triumphantly 'green' comeback?
Large airships were too sensitive to wind gusts and too sluggish to win against aeroplanes. But today, they have a chance to make a spectacular return.
Vegans and vegetarians often have nutrient deficiencies and lower BMI, which can increase the risk of fractures.
- The study found that vegans were 43% more likely to suffer fractures than meat eaters.
- Similar results were observed for vegetarians and fish eaters, though to a lesser extent.
- It's possible to be healthy on a vegan diet, though it takes some strategic planning to compensate for the nutrients that a plant-based diet can't easily provide.
Comparison of fracture cases by diet group
Credit: Tong et al.<p>The results showed that vegans were especially vulnerable to hip fractures, suffering 2.3 times more cases than meat-eaters. Vegetarians and pescatarians were also more likely to suffer hip fractures, though to a lesser extent.</p><p>One explanation may be that non-meat eaters consume less calcium and protein. Calcium helps the body build strong bones, particularly before age 30, after which the body begins to lose bone mineral density (though consuming enough calcium through diet or supplement can <a href="https://ods.od.nih.gov/factsheets/Calcium-Consumer/" target="_blank">help offset losses</a>). Lower bone mineral density means higher risk of fracture.</p><p>Protein seems to help the body absorb calcium, <a href="https://www.bonejoint.net/blog/did-you-know-that-certain-foods-block-calcium-absorption/#:~:text=Historically%2C%20nutritionists%20have%20warned%20that,may%20increase%20intestinal%20calcium%20absorption." target="_blank" rel="noopener noreferrer">when consumed in normal levels</a>. The recent study, along with past research, shows that people who don't eat meat tend to have lower levels of both protein and calcium. When the researchers accounted for non-meat eaters who supplemented their diets with calcium and protein, fracture risk decreased, but still remained significant.</p>
Credit: Pixabay<p>Another explanation is body mass index (BMI). Non-meat eaters tend to have a lower BMI, which is associated with higher fracture risk, particularly hip fractures. In the new study, vegans with a low BMI were especially likely to suffer hip fractures. That might be because having more body mass provides a cushioning effect when people fall.</p><p>Still, the study has some limitations. For one, White European women were overrepresented in the sample. The researchers also didn't collect precise data on the type of calcium or protein supplementation, diet quality or causes of fractures.</p><p>Another complicating factor: Producers of vegan products, such as plant-based milk, are increasingly fortifying foods with nutrients like calcium and protein, so modern vegans are potentially at lower risk of deficiency.</p><p>The researchers wrote that their findings "suggest that bone health in vegans requires further research."</p>