Back and forth we go 🔁
The potential aftermath of the pandemic, Bitcoin's true purpose, Dogecoin's confounding growth, and humanity's life upgrade. This is Issue #014 of Forward.
History repeats itself.
A simple statement, one you’ve probably heard before. While often true, it fails to take into account one important little detail — human progress.
Even as we see a pandemic rage across the world in waves, and financial systems teeter dangerously, humanity’s own advancements change the dynamics of the fallout.
In some ways, we are impervious to the shock.
In others, we’re more susceptible than ever before.
In today’s issue, we’re on a pendulum — swinging between eras and stages of progress as we seek a sense of equilibrium in chaos.
Before we begin…
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All right, back to business. 👇
An idling rocket
This pandemic bears the characteristics of many before it. Household savings in affected areas are on the rise, likely signaling a strong bounce back in spending once the crisis abates, pushing GDPs higher. On the other hand, past data indicates that besides giving economies a boost, post-pandemic years can also lead to public outpourings of suppressed anger. Like post-Cholera France in the early 19th century, the gap between the affluent who could safely wait out the pandemic and the more marginalized who could not, is rather wide. Data suggests that, unlike the immediate boom, such unrest usually bubbles over in socio-political ways about 2 years after normalcy is restored. Something to think about.
A swing to the left
In one of his recent posts, Ray Dalio analyses Joe Biden’s most recent economic stimulus announcement with the timeline zoomed way out, identifying cycles in economic policy decisions going back almost a century. In this illuminating piece, Dalio showcases how the Republicans and Democrats have alternated between boosting capitalism and creating debt and wealth gaps, and redistributing wealth by increasing taxes and devaluing dollars.
The immediate effect? A significant tax increase among the uber-wealthy.
An ‘oily marriage
Ever wonder why the US Dollar is the world’s reserve currency? Or how it’s managed to stay that way? If you have any interest in finance and economic policy, this fascinating read on the US Dollar’s links to Saudi Arabia and the global oil trade is a must-read. Some say the USA’s arrangement with Saudi Arabia to make the dollar the global currency to purchase oil is of little importance. Other’s argue that the ‘petrodollar’ is the fundamental unit behind America’s sustained financial and political influence on the globe.
Has Bitcoin finally come of age?
Bitcoin’s had a wild ride. Over a decade, it’s been hailed as the holy grail, debunked, rallied, toppled, and been called everything from tomorrow’s currency to a PayPal alternative.
Somehow, Bitcoin has soldiered along. And over 10 years of speculation, hysteria, and mudslinging, actually gained in relevance.
As more and more people understand Bitcoin — its unique strengths and obvious weaknesses — the belief is getting stronger that Bitcoin would never work as a conventional medium of exchange. The network isn’t very fast, and it uses enormous amounts of processing power inefficiently, leading to high fees and environmental impact.
But as Dan Held points out, it might just be the best alternative to the dollar as a reserve currency.
Is Big Tech invulnerable now?
It’s safe to say that COVID19 wreaked havoc on businesses and economies. In the midst of the madness, however, the world’s biggest tech companies… well… prospered.
Not to say that they hadn’t been doing well before. Just look at this image presented at Berkshire Hathaway’s annual meeting:
Fun fact: 25% of the companies on the recent list didn’t even exist in 1989.
But that’s not the main point. The main point is that the pandemic, while weakening economies, has allowed Big Tech to get stronger. These companies are now leaner, more efficient, and raking in more profit than ever before.
In the last year, the five tech superpowers — Amazon, Apple, Google, Microsoft and Facebook — had combined revenue of more than $1.2 trillion.
It doesn’t look like these companies are in any danger of replicating what happened to their predecessors on this illustrious list, giving how they’re going from strength to strength.
Unless, they fail to capitalize on Web 3.0, that is.
Here’s an interesting piece by Packy McCormick, distilling the multiple takes on what the future might hold for tech’s famous ‘disruptors’
The Dark Doge Rises
Dogecoin started as a joke. Even as the whole crypto discussion flared and fizzled and flared again, everyone (including its creators) didn’t really take it seriously. That is until Elon Musk started pushing it over the past few months, sending it skyrocketing.
As institutions and Elon’s own company Tesla begin to embrace Bitcoin, Musk himself has become a staunch advocate of Doge, buying in his personal capacity and using his reach to amplify the goofy altcoin.
Now, speculation has started that he’s onto something, and it might be $DOGE, not $BTC, that becomes the widely popular decentralized token of choice in the future.
With Elon, who knows? 🤷♀️
“I find that often times, the most ironic or entertaining outcome is the most likely”
— Elon Musk
The perils of inheritance
The banks they bailout are too big to fail, and the shoes they inherit are too big to fill.
We all ‘inherit’ things. Sometimes it’s a language and a culture, sometimes a company and a legacy. Balaji Srinivasan argues that merely inheriting something does not immediately bestow the inheritor with the qualities that created it. Generations may understand the language and culture of their parents but never add to or advance it. Heirs of legacy establishments (or even political seats) may inherit and in fair weather competently run them, but lack the drive and nimbleness of those who founded it.
Inheriting, Balaji says, is far removed from founding.
Heirs Failed, Founders Succeeded
That older, institutional ideology is now failing. Over the course of 2020, public health failed, public schools failed, fire departments failed, and police departments failed. National, state, and local governments failed. Media corporations failed and even the US military failed. Just about every Western institution run by a political heir failed, because it was presented with the unanticipated shock of COVID-19. The widgets these heirs' factories were cranking out were no longer suited for the occasion. And their failure has caused a crisis of faith in American institutions specifically, and in the postwar order more broadly.
Where heirs failed, founders succeeded. The internet stayed up. The state couldn't deliver checks, but Amazon could deliver packages. The legacy universities were closed but the MOOC platforms were open. The restaurants were shuttered by the state but the delivery apps were shipping. The media corporations reported that the virus was at best a remote threat while the tech companies prepared for remote work. And the billions spent on military biodefense didn't do much, but the millions invested in Moderna did.
“We faced it and did not resist. The storm passed through us and around us. It's gone, but we remain.”
― Frank Herbert, Dune
Stuff we loved this week
Making tough life decisions of late? Can’t blame you, but we can point to a few resources that can help you take better decisions. First, read up on the ‘inner crowd’ and the power of picking an average from diverse opinions. Then, follow it up with this helpful list of mental frameworks to guide decision-making.
Last year, the Netflix documentary My Octopus Teacher was a delightful ray of sunshine in an otherwise bleak time. In this interview, co-director and co-editor Pippa Ehrlich describes her experience making the film.
Food for thought
Did you know that the average human today lives almost twice the average lifespan from just 100 years ago? Read this fascinatingly detailed deep dive into how pasteurized milk, chlorinated water, and a handful of other advancements collectively gave humanity extended life.
Writer Alice Walker on the discomfort of growth:
“Some periods of our growth are so confusing that we don’t even recognize that growth is happening. We may feel hostile or angry or weepy and hysterical, or we may feel depressed. It would never occur to us, unless we stumbled on a book or a person who explained to us, that we were in fact in the process of change, of actually becoming larger than we were before.
Whenever we grow, we tend to feel it, as a young seed must feel the weight and inertia of the earth as it seeks to break out of its shell on its way to becoming a plant. Often the feeling is anything but pleasant.
But what is most unpleasant is not knowing what is happening. Those long periods when something inside ourselves seems to be waiting, holding its breath, unsure about what the next step should be… for it is in those periods that we realize that we are being prepared for the next phase of our life and that, in all probability, a new level of the personality is about to be revealed.”
Ever think about how, despite all we can do as a species, we’ve basically only explored the equivalent of our backyard when it comes to the relative size of the universe? If you, like us, have turned to cosmic studies to distract yourself from the happenings within this planet, you’ll be delighted to know we’ve just discovered the closest black hole to Earth yet, and it’s… pretty tiny.
If you think this newsletter made your Sunday morning a little better, please spread the love and send it to your friends. We’ll see you again in two weeks.
Until next time,
Your friends at NEO