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@oliverbeige
Tweeted about Bayesian Belief Propagation in Heterogeneous Networks before it was cool.
Sep 21, 2018 β€’ 14 tweets β€’ 3 min read
To assess the relevance of blockchain to economics, it might be useful to sidestep the politically charged topics for the moment, to postpone judgment on the feasibility of any currently proposed solutions, and to focus entirely on the problem it tries to tackle. We can, if we want, divide the "machine age" into five phases that align with the automation of particular enterprise functions: production, administration, supply, demand. The function that is still largely resisting automation is governance.
Sep 13, 2018 β€’ 6 tweets β€’ 3 min read
From my own experience: There is no job market for economists* in German tech companies. One of the reason why the German big players missed the move from business processes to business models.
*Economics = VWL
H/t @abhishekn
papers.ssrn.com/sol3/papers.cf… "Business process" is about optimizing the enterprise as a production function. "Business model" is about optimizing the enterprise as a market participant. Germany as a tech economy is really good at the former, and has created a specialized labor market around it.
Aug 21, 2018 β€’ 4 tweets β€’ 1 min read
In a B2B context (i.e. "enterprise blockchains" aka "DLT") speed is indeed the main driver for any kind of research into blockchain. The two main areas of research, settlement automation and supply chain traceability, are driven by expected speed advantages over current tech. Which shouldn't come as a surprise to anyone knowledgeable in enterprise systems. These processes are notoriously difficult to implement in an enterprise-centric systems landscape. Settlement takes days, establishing provenance can take weeks.
Jul 28, 2018 β€’ 14 tweets β€’ 2 min read
Hey, we sure like Uncle Bert, but we could do without his political rants on FB. This problem that connectivity clashes with preferences gave rise to websites like Flickr or LastFm where we can match preference and connectivity. One of the key shortcomings of network theory is that it's still largely a theoretical construct, with weak empirical support. Most of our understanding is anecdotal, which is subject to ex post rationalization (like almost everything else in innovation econ).
Jul 28, 2018 β€’ 18 tweets β€’ 3 min read
Let's talk a bit about what @VitalikButerin called "anti-network effects". TLDR: There is no empirical basis for the notion that network effects inevitably lead to a winner-takes-all outcome. In most cases, such a conclusion is simply a matter of framing. One of the iffy folk tales in network economics emerged when Brian Arthur didn't get his papers on increasing returns published in 1985/6 and opined that this must be that this must be bc his ideas were too radical and thus rejected by mainstream economists.
Jul 22, 2018 β€’ 36 tweets β€’ 7 min read
I've seen quite a bit of "fishing for truth" about the interlocking topics of network effects, technology standards, platforms/two-sided markets, and blockchains recently, so it might be worthwhile untangling the lot. TLDR: There's still a massive amount of confusion reverberating through the field, with sloppy definitions and the penchant to peddle old and largely false folk tales taking the brunt of the blame. Kinda ironic bc "path dependency" is a core concept.
Jul 19, 2018 β€’ 15 tweets β€’ 3 min read
Seeing yet another big player getting pegcoin confused with stablecoin, it might be time for a "why pegcoins aren't stablecoins" thread, in three parts:
1. What "stablecoin" actually means
2. How pegcoin is at best a simulated stablecoin
3. How to stabilize coins. 1. The "stable" in stable coin refers to price stability, i.e. the extent to which price changes signal changes in the competitive environment of the priced commodity rather than changes in the underlying currency. The "marvel of the price system" relies on price stability.
Jul 6, 2018 β€’ 11 tweets β€’ 2 min read
A simple "Is code law? Nah, it's more complicated" governance model... Let's start with the most layer-neutral expression of a transaction as an exchange of objects of value (a.k.a. assets) as the building block of economic interaction. Each of the four layers has subtly reinterpreted this definition to suit their own objectives.
May 10, 2018 β€’ 20 tweets β€’ 4 min read
Very interesting argument in favor of using blockchains to "decentralize" (actually, to privatize) land registries. I have a whole bunch of comments regarding title registries in general, and land registries in particular. Blockchains have this popular appeal as shared, transparent databases that use a participatory consensus-finding process to resolve conflicts. As such, land registries and similar registries (e.g. for music, trademarks, patents, vehicle...) sound like attractive use cases.
May 4, 2018 β€’ 12 tweets β€’ 2 min read
I guess another thread on "why Walmart, Maersk, etc. looking into blockchain isn't just smoke and mirrors" is in order. To get this out of the way: enterprise blockchains aren't Satoshi blockchains. Typically in enterprise: no tokens, no PoW, throughput and restrictive data access are still paramount. (Some people call these things DLT. I don't.)
Mar 1, 2018 β€’ 14 tweets β€’ 3 min read
The crying of the Walrasian almost-auctioneer: Part 2 of my inquiry into how blockchain could fundamentally alter economic thinking. Part 1 here:
The Walrasian auctioneer is a figure of momentous importance in economics, as it’s he who helps price-taking buyers and sellers grope towards a market-clearing equilibrium in a perfectly competitive market. Except he never existed.
Feb 17, 2018 β€’ 12 tweets β€’ 2 min read
Let's talk gun ownership and statistics. More precisely: the unseen power of very small probabilities. Every gun in circulation has a small probability to be used in a situation where one side believes bolstering the argument with the threat of violence gives him (sic) the upper hand.
Feb 15, 2018 β€’ 29 tweets β€’ 5 min read
That thing about "Y no real blockchain use cases yet tho?" popping up again. A blockchain is an accounting database that sits between accounting entities. Let me walk through this quickly. A firm is an accounting entity. I call them accounting entities bc I want to stress that firms are accountable for things. Loans, equity investments, work done but not yet paid for, etc. Accounting does the accounting for such things. The thing between firms is called the market.
Feb 9, 2018 β€’ 29 tweets β€’ 6 min read
One of the momentous things in dot-com history we are, uhh, "privileged" to witness in real time is Facebook's shift from Schumpeterian monopoly to Ricardian monopoly. In ten years, business school cases will be written about this stuff... This isn't the first of course. Microsoft maneuvered itself into the same position ca. 1999, and the verdict back then was MS is irrelevant now that it missed the whole internet thing and is just flailing around, but MS never stopped being a hugely profitable key player.
Feb 6, 2018 β€’ 6 tweets β€’ 2 min read
Let's talk PENGUINS!
The penguin dilemma: the most important and least recognized model in innovation and technology choice...
The setup: a colony of penguins perched on an ice float. All the penguins want to jump into the water, but nobody wants to go first. Sebastiao Salgado: Genesis
Feb 4, 2018 β€’ 16 tweets β€’ 4 min read
Let me just write another footnote on Team Krugman, Team Satoshi, the hunt for the epsilon, and why having these two camps of zealots dominate the discussion is so detrimental to the cryptosphere. "epsilon", as I posted before, is a very small but nonzero probability of something very big and very profitable happening. Iow, it's like a lottery ticket, except we don't know the chances of a big payday, the payoff value, or even the exact date of the big payday.
Feb 3, 2018 β€’ 16 tweets β€’ 3 min read
What's the optimal range for a microcurrency?
1. a market
2. a P2P network
3. an enterprise (ongoing production function)
4. an entrepreneurial venture (investment proposal)
5. a product or service
6. all of the above, some of the above, or something else entirely... One of the potential advantages of microcurrencies (ignoring the transactional stuff for now) is that given the right technology you can provide two price signals at once: comparative performance within (price), and comparative performance across (currency).
Jan 31, 2018 β€’ 14 tweets β€’ 3 min read
The "4 P's" of Silicon Valley Risk Capital:
1. Parent shopping
2. Power laws
3. Poker rounds
4. Pension funds People who complain about how badly something is run often simply miss how unlikely it was that this thing came together in the first place, and how many things have to fit together to make it work. There's been dozens of attempts to copy the SV model, with modest success.
Jan 30, 2018 β€’ 9 tweets β€’ 2 min read
After boring accounting stuff yesterday, let's do another exercise in "trivial self-observation" which is hopefully more entertaining. Let's talk about semi-privacy: the littoral between public and private spheres.
#TuesdayThoughts Sunday was #DataPrivacyDay and private vs public matters *a lot* in law, economics, sociology, cryptosecurity of course, but how much time have you spent recently choosing semi-privacy over real privacy?
Jan 29, 2018 β€’ 16 tweets β€’ 3 min read
As of now there is no "cryptocurrency" that is more online payment than online gambling. I'd say at best 10% make even a, hmm, token effort to become a payment system. About half are, well, hodling on to the belief that their coin provides a non-payment service. The rest has basically said fuck it, let's keep plausible deniability and focus on the gambling. About 10% are straight-out scams.
Jan 24, 2018 β€’ 35 tweets β€’ 7 min read
The Buttonwood Agreement established the New York Stock Exchange as a P2P network between brokers by cutting out the auctioneer middlemen. It also set a 0.25% fee. Today the NYSE is a subsidiary an Atlanta-based IT company which runs exchanges. Let me use this example as an anchor to discuss the contested boundary of markets vs enterprises (hierarchies), and the role of processes vs mechanisms in that contest.