Satoshi Nakamoto and the invention of a new currency

Satoshi Nakamoto drew from the history of cryptocurrencies since David Chaum’s seminal blinding formula in the 1980s.  He postulated that the flaw with existing approaches to cryptocurrencies was that a single powerful attacker could undermine and destroy the system.  In order to to defeat the powerful attacker, Satoshi decentralised the control of the cryptocurrency over an open set of participants, designed a consensus algorithm to align the interests of the majority to find agreement, and thus overcome byzantine actions by minority parties.

Source: What Satoshi Did | Coinscrum

 

These series of blog posts are worth reading in their entirety.

 

Photo by Thought Catalog on Unsplash

Ratan Tata gets it

MUMBAI, INDIA - MARCH 23:  Ratan Naval Tata Ch...
Image by Getty Images via Daylife

For all the buzz that Tata’s release of the Nano received last year,  the long term impact of the company’s new venture may be even greater.  The sprawling Tata empire, loosely held together by Ratan Tata, recently announced a plan to build affordable housing for India’s burgeoning middle class.  Here’s an excerpt from BusinessWeek:

Tata’s Nano Home: Company behind world’s cheapest car to sell $7,800 apartments – BusinessWeek

Tata, the Indian company that made worldwide headlines with its $2,000 Nano car, now plans to build 1,000 tiny apartments outside Mumbai that will sell for $7,800 to $13,400 each. The company plans to roll out low-cost projects outside other major cities.

Tata’s housing division is targeting a segment of the market that was largely overlooked during the housing boom. India’s builders were concentrating on building shiny new high rises and mansions on golf courses. Builders were after profits, but they were also trying to justify their fast-accelerating land costs, especially in and around Mumbai (formerly known as Bombay) and other major cities.

As a Cornell trained architect, Ratan Tata clearly understands the value of creating spaces that foster a sense of being and community.  Like the Nano, the Shubh Griha community probably won’t attract the well connected, wealthy Indian, rather it is meant to serve as another building block for the rising Indian middle class.  This is the real growth market in India, this is the market that will truly shape the India of tomorrow.  Ratan Tata gets it.

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Who says banks aren’t lending?

Here’s a picture of the three envelopes I received in the mail from PNC yesterday:

PNC's pick an envelope campaign
PNC's pick an envelope campaign

If you can’t tell from the small picture, one envelope says I qualify for an introductory APR of 0.99%, another says 1.99%, and a third was blank on the cover, but opening it revealed a surprise – only 4.99%!

Last week PNC called me to see if I was interested in a home equity line of credit.  Well, I might have been, you know, if I actually owned a home!

I’m not sure if this is poor customer data management or just a bank that is trying to show congress that it’s eager to lend.

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Intel Capital continues to search for opportunities despite downturn

Image representing Intel as depicted in CrunchBase
Image via CrunchBase

Sodhani’s multi-billion dollar investments include major positions in Clearwire (recently announced) and over 400 other early stage startups.  Below is a brief excerpt from the interview:

Interview with Arvind Sodhani: Intel Capital isn’t backing off on venture » VentureBeat

VB: How is the downturn changing what Intel Capital does?

AS: Not much has changed on our side. We will continue to invest. My belief, shared by the CEO of Intel, is that you continue to innovate in a downturn, and innovation doesn’t stop because of slowdowns. We’ll continue to invest in technology innovation. The good news is valuations will be more attractive. I think other investors will pull back. We have heard a lot of stories about the venture capital community pulling back. Depending on the life-stage of the fund, VCs are not funding existing companies or new companies.

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Taleb on the financial markets

IMG_4281
Image by eirikso via Flickr

Nassim Taleb was on Charlie Rose this past Wednesday, and I just got around watching the interview. I wish Charlie had scheduled Taleb for the entire hour. Last week I wrote about the current financial crisis being an opportunity to learn about how financial markets function, and I referred to the fact that I’d been lucky in dodging the major collapse of the past few months. Not all of it was luck, much had to do with Taleb’s thinking as revealed in his book ‘The Black Swan‘. If you haven’t read it yet, add this book to the top of your list. And, if you can stomach a sobering reality check, watch the interview here:

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Citibank CEO Vikram Pandit on Charlie Rose last night

Journalist and TV talk show host Charlie Rose ...

Image via Wikipedia

Yesterday I posted about how the current financial crisis was an opportunity to learn about how the global financial markets function. Another great resource for digging deeper is Charlie Rose‘s show on PBS. Last night he had Citibank CEO Vikram Pandit on for the hour.  As one would expect from a CEO of a major financial institution, Pandit doesn’t offer much of a mea culpa, however he does offer some insight into the causes of the current crisis.  Pandit arrived at Citi a about a year ago, and began to deal with a mess that had been created when Citi merged with the Travelers Group.  It’s an excellent interview:

SAJAforum has a full transcript of the interview.

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Consider this an opportunity to learn about the world of finance

Panic room.

Image by LunaDiRimmel via Flickr

Over the last few months, we’ve seen a roller coaster ride of unequaled magnitude in the financial markets.  Having been in the institutional banking world myself, I’ve had many friends and colleagues ask me if I can make sense of what is going on out there.  Many are just worn out from the gyrations in the stock market, others are in utter panic about the collapse of their life savings.  I’m no stock picker – never have been – but I did get lucky about a year ago when I decided to pull almost all of our personal wealth out of the equity markets and put it into cash or government securities.  Basically, from a net worth perspective, we haven’t been hurt…yet.  While that won’t help those who were deeply invested in the equity markets, I have advised them to follow the broad trends in the news, and not worry so much about the day to day, hour to hour hysteria that grips Wall Street.  The problem in trying to do this, however, is that the main stream media (MSM) doesn’t provide a sober analysis of events of the day.  Instead, MSM focuses on the latest crisis, or the political angle of the events as they unfold.  Now, I have some opinions on the political angle, but that won’t help me (or my friends) ride through the storm.  What I have suggested is to augment the daily hype that MSM dishes out with some thoughtful blogging that is going on out there.  Not all blogs offer quality insight and most have a particular political-economic bent that may not be the same as yours.  But, there are many that offer a good set of lessons on what has happened, and possibly on what will happen next.  Here are two that are on my daily radar:

naked capitalism
– This blog offers opinionated, but well thought out analysis of the nature of modern finance.  From a recent post:

naked capitalism: Finance Has Lost Sight of Its Role

In 1980, financial firms accounted for 8% of S&P earnings. During the peak of our last stock market cycle, their profits were over 40% of the total.

Now consider: finance is a necessary function, but is represents a tax, a drain on the productive economy, just as defense and lawyers do (aside: I had a lawyer from an entrepreneurial family who was refreshingly aware of that issue, and would write off hours before sending bills to clients, recognizing that the amount of time her firm had spent on certain matters simply wasn’t worth it from an economic standpoint to the client). It is ironic that free market fundamentalists have so vociferously argued for unfettered markets, without understanding (or perhaps understanding all too well) that the house always wins.

Read the entire post, in fact add naked capitalism to your daily RSS feed.  I don’t totally agree with the sentiments in this post, or others from this blog, but this analysis is more thoughtful – and thought provoking – then any of the crap that is pushed out in MSM.

Another blog that is worth following on a regular basis:

Paul Kedrosky’s Infectious Greed – Kedrosky often offers the best near real time analysis of events in the financial markets.  Take this post about the deal that Citibank secured to save itself:

Paul Kedrosky: Good Bank, Bad Bank, and F**ked Bank

To be clear, this is not a “bad bank” model. Assets are not, apparently, being taken off the Citi balance sheet and put into another entity walled off from the Citi biological host. Instead, they are being left on the Citi balance sheet, but tagged and bagged for eventual disposal via taxpayers. In other words, we are, given the size and nature of the maneuver, creating a new variant on the good/bad bank model that I hereby christen “fucked” bank. You do that, of course, when removing all the toxic assets from a “good” bank’s balance sheet would leave no bank behind at all.

[Side note, as a former banker at Mellon, the good bank, bad bank structure that saved Mellon in the 1980’s was stuff of legend when I was there.]

So, while times may be tough and you may have successfully avoided boring subjects like finance and political economy in college, make it a point to spend some time every day to learn about what is actually going on out there.  We are all participants in this market, and it is time to understand capital flows and how they will shape your future.

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TiVo and Domino’s: The question is ‘Why?!?!’

Domino's Pizza, LLC

Image via Wikipedia

Jerry Yang is stepping down, as we all know, but the most important tech news has to do with pizza.  Perhaps customer service does have its natural limits…and I believe this has crossed that boundary:

TIVO ADDS DOMINO’S PIZZA TO ITS MENU – TiVo

Karen Bressner, Senior Vice President of Advertising Sales, TiVo Inc said, “Joining forces with Domino’s Pizza creates an effective marketing and commerce tool for Domino’s while enhancing and further distinguishing TiVo as the ultimate way to watch TV with a closed-loop advertising experience. This exciting new partnership offers yet another advertising solution as commercial avoidance continues to increase. With just a few clicks of the remote, TiVo users can pause their program, order a pizza, and then sit back, relax, and return to their favorite show without missing a single second. Now, TiVo delivers the absolute best television viewing experience…and a pizza.”

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Mark Cuban’s message to the President-Elect

Mark Cuban

Image via Wikipedia

Mark Cuban‘s blog is always a good read.  He doesn’t hold back on opinions, and often times he nails it.  As I was working through my RSS feeds, I came across Cuban’s latest post.  His point is spot on.  The “who’s who” that the President-Elect has brought together to build an economic plan has a missing person, the entrepreneur:

PE Obama’s 1st Big Mistake « blog maverick

Notice anything missing ?

Not a single entrepreneur. Yes Warren Buffett started a business, but he will be the first to tell you that he “doesn’t do start ups”. Which means there isn’t a single person advising PE Obama that we know of that knows that its like to start and run a business in this or any economic climate. That’s a huge problem.

If we are going to solve our current economic problems, our President needs to get first hand information on the impact his proposed policies will have on real Joe the Plumbers. People who are 1 person companies living job to job, hoping they get paid on time. We need to know what the impact of his policies will be on the individually owned Chrysler Dealership in Iowa. The bodego in Manhattan. The mobile phone software startup out of Carnegie Mellon. The event planner in Dallas. The barbershop in LA. The restaurant in Boston.

There is no doubt that those who have established themselves in their respective fields can offer important advice, but I think Cuban is absolutely correct in asking for strong representation from those that are on the way to doing good things. It’s the later group that will truly shape the future.

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