Confidence in institutions has been collapsing since the 1970’s. What happened?

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Photo by Cristina Gottardi on Unsplash

“Uncertainty is an acid, corrosive to authority. Once the monopoly on information is lost, so too is our trust. Every presidential statement, every CIA assessment, every investigative report by a great newspaper, suddenly acquired an arbitrary aspect, and seemed grounded in moral predilection rather than intellectual rigor.”

-Martin Gurri, Revolt of the Public

The world has changed drastically since the 1970’s. New information is no longer scarce, it is overwhelmingly abundant. Anyone can be a political pundit or an investigative journalist with a smartphone and a Facebook account. …


Global uncertainty, partisanship, and the volatility index

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Photo via John Cameron

How do you measure fear itself? Fear is a powerful market force. If one could somehow quantitatively measure fear itself, one could theoretically gain an advantage over the market’s cycles. As Warren Buffett once wrote in a 1986 shareholder letter:

What we do know, however, is that occasional outbreaks of
those two super-contagious diseases, fear and greed, will forever
occur in the investment community…Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: we simply
attempt to be fearful when others are greedy and to be greedy
only when others are fearful.

As the world experiences a literal super-contagion in 2020, fear has become more dominant than ever in markets. In fact, the notorious “Fear Index” also known as the Volatility Index (VIX) has reached historic highs following the lockdowns in March. …


Debunking sensational scientists amid unprecedented temperature, sea level, and atmospheric CO2

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Image via USGS

2020 has brought fires, floods and hurricanes across the world alongside novel forms of climate change denialism. Consider Patrick Moore, a so-called scientist with a significant Twitter following who claims:

“Any effect of CO2 on temperature could easily be overridden by other factors. The long historical record does not support CO2 as some kind of control knob as NASA claims. They’re not in sync.”

To support his contrarian claim, Moore posts a compelling visual of CO2 levels vs. global temperature, albeit without citation. …


Population, real estate, subway traffic, unemployment, and more

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Image by Mike C. Valdivia on Unsplash

As of 2019, the Census Bureau recorded a population of 8.3 million for New York City. Compared to the populations of the top ten cities in the United States, New York City is by far the largest.

Considering the population rate from 2010–2019 however, growth has been modest. Compared to other large U.S. cities, New York City’s rate of population growth has been relatively meager.

From 2016 to 2019, New York City’s population has been decreasing. While 2020 Census numbers are not yet published, NYC’s population has likely suffered a drastic decrease after the coronavirus shock. …


Analyzing the electricity it takes to mine digital gold

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Photo by Dmitri Demidko on Unsplash

Bitcoin cannot be created on a whim, unlike dollars, yen, euros, etc. Similar to gold, creating new bitcoins takes work.

Instead of relying on central bankers to determine money supply, Bitcoin is decentralized. Miners record transactions that are verified by a global network of nodes¹ enforcing Bitcoin’s protocol. As of writing, 18.5 million bitcoins are in circulation, having been “mined” as a reward for computational power securing the network.

Only 21 million Bitcoin will ever exist.

After its initial creation on January 3rd, 2009, anyone with a basic computer can participate in Bitcoin’s democratic network. As outlined in the Bitcoin white paper, mining “is essentially one-CPU-one-vote.” While all computers possess a CPU that is technically capable of mining, network competition quickly began to heat up as Bitcoin’s popularity surged. …


Decrypting the most powerful trends in crypto

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Photo by Dmitri Demidko on Unsplash

Bitcoin is the monetary base of the Internet. Unlike national currencies, new bitcoins are created by a fixed and finite supply.¹ In an era of unprecedented monetary expansion Bitcoin’s value proposition is unique. There will only be 21 million bitcoins amid increasing trillions of dollars, pesos, yuans, etc.

Instead of relying on central bankers to determine money supply, Bitcoin is decentralized. Global miners timestamp blocks of transactions² that are verified by a global network of nodes³ for a protocol maintained by hundreds of developers⁴ worldwide. Bitcoin’s first block was mined with the following cryptographic message in 2009:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for…


Since the 2008 Financial Crisis, global central banks have “printed” extraordinary amounts of fiat money

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Photo: Eric Prouzet/Unsplash

According to USA Today, “With a few strokes on a computer, the Federal Reserve can create dollars out of nothing, virtually ‘printing’ money and injecting it into the commercial banking system, much like an electronic deposit.” To provide stimulus after the 2008 Financial Crisis and now the coronavirus shock, global central banks such as the Federal Reserve have been printing unprecedented amounts of money.

Known by such terms as money printing, monetary expansion, quantitative easing, etc., central banks issue new money in exchange for assets such as government bonds, mortgage backed securities, and now corporate debt. As a result trillions of new dollars, euros, yen, yuan, etc., …


The 2020 Index of Economic Freedom, published by the Wall Street Journal and Heritage Foundation “measures the degree to which a country’s laws protect private property rights and the degree to which its government enforces those laws.” Countries like Singapore that score highly on the Property Rights Index have greater GDP per capita on average, and vice versa.

In practice, would you be motivated to work hard if your savings could be unjustly confiscated at any moment? In many developed countries like the United States, democratic rule of law protects against such scenarios. …


How accurate is the term anyways?

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Source: QuiverQuant from PredictIt

Democrats have taken a significant lead in the PredictIt prediction market for the first time. Biden is currently priced to win the 2020 election with ~59% probability. The Democrats’ odds shifted at the beginning of June, catalyzed bya resurgence of coronavirus cases in the U.S. Conventional polling averages from FiveThirtyEight also affirm a Biden lead since March.

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Source: FiveThirtyEight

Which is a more reliable forecast: prediction markets or conventional polls? In 2016, faith in traditional polling was shaken as the historically accurate FiveThirtyEight failed. Only a year prior, a considerable alternative poll emerged: PredictIt. Also known as a prediction market, others may know it by a less prophetic term: a betting market. …


Bitcoin is renowned for its predictable supply and auditable record of transactions. How do lost coins affect Bitcoin’s monetary supply?

Bitcoin is renowned for its high-conviction, long-term holders. As an asset with a finite and predictable supply, Bitcoin is designed to be increasingly scarce over time. Approximately every four years, Bitcoin supply issuance rate cuts in half in an event called the Halving (or Halvening). Today, approximately 18 million bitcoins are in circulation, inching toward the ultimate limit of 21 million.

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Revolving around this fact, a narrative has developed in the Bitcoin community that is along the lines of: Fiat money is for spending, Bitcoin is for saving. Further in contrast to traditional money, Bitcoin transactions are publicly recorded and independently verifiable on a globally distributed ledger. …

About

Mike Co

Charting the digital sea — Capitalism, data, and democracy.

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