GNOwing the Risks

Gnosis is the Greek word for knowledge. You may have heard of the Gnostics, an early Christian sect that focused on mystical practices to help them know God.

The root of Gnosis, Gno, means to know in Latin. To not know combines the Latin in, meaning not, and gno, to yield words like ignore and, yes, even ignorant.

In Impossible Logic, we examined the heart of the argument behind the Efficient Market Hypothesis (EMH) — which ultimately gave rise to passive investing.

Tempted by Passivistas

I suppose if all investors were rational, the passivistas’ hypothesis could at least get upgraded to a theory…


The Core Fallacy of Passive Investing

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In May, 1896, Charles Dow and Edward Jones put their heads together and created the Dow Jones Industrial Average. A stock market index comprised of twelve industrial stocks, this scion of indexes was first published on the 26th day of that month and “The Dow” was born.

Charles Dow, editor of The Wall Street Journal at the time, could now give his readers an easy to reference sense of how the stock market performed.

Essentially, they made a ruler for the stock market.

In 1923, Standard & Poor’s created its own index of a small number of stocks. By 1957…


A year ago I took a hard right with my career and dove fully into the blockchain space. After months of networking and MeetUps — hoofing it an hour-and-a-half to some and starting my own in part to get something closer— I was fortunate to find myself in a position to think critically about cryptocurrencies and what factors drive value in permissionless blockchain systems.

That lead to other opportunities to think big about incentive systems and now I find myself in the happy position of talking to founders of start-ups in all types of industries looking to apply this technology…


This is an article I wrote way back in 2009…and it’s still relevant. The last paragraph is particularly interesting relative to Bitcoin and cryptocurrencies in general, which I first heard about a few months later. Value is a function of trust and the concept of store of value is relative. Food for thought...

Imagine, for a moment, a penny’s worth of pure gold[1]. Do you suppose anyone would leave said penny in the ubiquitous “Leave a Penny, Take a Penny” trays at convenience stores? Would people accidentally drop gold pennies and not bother to pick them up? A rationalist view…


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The Inspiration

In November of last year, FundStrat co-founder Tom Lee announced a pricing model for Bitcoin[1]. The model explained 94% of the variability of Bitcoin’s price with a high degree of confidence around the variables. It was based on Metcalf’s law, which states that the value of a network is the square of the number of users on the network[2]. As the internet has grown over the last three decades, this law has been applied to many fields beyond telecommunications and especially to social networks.

Many in the cryptoasset space have discussed applying network valuation techniques to cryptocurrencies. After all, money…


Money is What We Say it Is

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Money, as common as it is, is not an easy thing to understand. We all take it for granted and isn’t something to which most of us give much thought. The dollar bills in our pocket, checks that we write and bank balances instantaneously changed by credit and debit charges don’t demand much contemplation. But, Bitcoin, and the subsequent rise of cryptocurrencies, has forced many of us to reconsider our notions about money.

There wasn’t a whole lot of fanfare or press when Bitcoin was born. Someone simply built the Bitcoin system and, on January 3rd, 2009 at 6:15:05 P.M…


If you’ve read The Hitchhiker’s Guide to the Galaxy, then you are a fan. I’m working my way through this series of books and currently on the third book in the trilogy of five (no, that’s not a typo and, yes, you read that right).

The main characters, Arthur Dent and Ford Prefect, just rode a couch through an intertemporal disturbance from earth, two-million years in the past, and seem to be caught up in some sort of intergalactic cricket war.

They ended up on two-million-year-old Earth in the first place by catching a ride on Golgafrinchan Ark Fleet Ship…


CoinScore Report

All the promise cryptoassets hold to redefine business as usual does not mean that basic business practices get thrown out the window. If certain checks and balances are not inherent to the blockchain solution, then one must fall back on traditional means to provide that accountability.

A good cryptoasset whitepaper acknowledges when this is the case. It illustrates how the team behind the blockchain solution proposes to be held accountable for delivering on their solution. In other words, a good whitepaper braids a long enough rope for the team to hang themselves if they fail to deliver. …


An Analysis of the cryptocurrency. Graphic and edits by Mitchell Opatowsky

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“Greater Fools” refers to the notion that you can be fooled into buying something of little to no value and still profit from it, provided you can sell it to a greater fool for a higher price. This term is often applied to asset bubbles where a greater fool dynamic pushes prices ever higher. No one is concerned about value as they are confident they can quickly flip the asset for a gain to a greater fool. When it comes to Ponzi schemes, this dynamic is doubly true.

In…

Outis

Who I am doesn’t matter. A well-reasoned perspective stands on its own. But it’s worth noting that the notion of radical self-determination is a thing with me.

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