The times, they're a changing 🚀
A digital dollar, a democratised future. A little bit of despair, a little bit of hope. An exploration of wealth and the future of humankind. This is Issue #011 of Forward.
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.
Bob Dylan penned these lyrics over half a century ago, but they ring eerily true today, as we navigate turbulent times times not just from a finance, health, and technology perspective, but also as a species.
Even as vaccine distribution races to catch up with spiking COVID-19 cases, the public scanner has shifted back to fundamental questions we were asking a year ago.
How accurate is the data presented to us?
And perhaps more importantly, how accurate is the data governments are using to calibrate their pandemic response?
In this illuminating piece, The Atlantic analyses how difficult it is to collect and present reliable data when the timelines for gathering and confirming individual parameters that make up the numbers vary wildly.
Data are a photograph, not a window.
Leave us a piece of the pie… 🍰
Is what banks, card companies and pretty much everyone in the business of finance is signalling to the US Federal Reserve, as the United States prepares to follow the lead of other countries across the globe and release their research into a ‘digital dollar’.
While the research conducted by the Federal Reserve Bank of Boston and MIT is being kept under wraps for the time being, the fears harboured by banks and payment processing companies that the new platform may leave them in the lurch are not completely unfounded.
The other group that might be adversely affected are the hopefuls holding out for Bitcoin to become a legally recognised tender. If this unofficially named ‘FedCoin’ does indeed come to be, it might just be the end of the Bitcoin community’s ambitions to use their highly volatile funds to participate in the larger economic system.
(Teslas are still fair game though). 👇
Stay poor, billionaire! 👋
The actions of governments around the world against adopting Bitcoin have not deterred the community however. ‘Bitcoiners’, as proponents of the cryptocurrency have come to be called, are on a content generation blitzkrieg on the Internet. Millennials and Gen Z are using memes and the Internet’s unique meta subculture as weapons against institutions and naysayers, fighting back with a casual irreverence that, if nothing else, is drawing attention to the argument that a decentralised medium of exchange is the need of the hour.
What is the Federal Reserve going to do? Start firing off memes, gifs, and ALL CAPS BULLISH USD TWEETS??
Clearly the sentiment of the global financial community on the existing fiat currencies has dwindled drastically. For the time being at least, a mature Bitcoin is heralded as the best alternative, as the host of The Investor’s Podcast Preston Pysh elaborates in this episode of Bitcoin Audible.
A decentralised, democratised future 🙌
And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'
Imagine a world that recognises wealth as value created in society, not as an arbitrary sum based on individual contribution. What if everyone in a country could benefit from the growth of the nation’s biggest companies, receiving a share of value they create? What if every programmer could be adequately compensated for the number of commits they made to a technologically relevant project, earning lifelong ‘royalties’ as their work gains significance in future projects?
As a species, the goal now is to bring equality and opportunity for everyone, and the answer might just lie with technology.
The remote work revolution following the ongoing pandemic has changed how people work, and the relationships they share with employers. While this is effectively a backlogged narrative playing out, the future is also taking shape with smart contracts and NFTs, which are being viewed as the final pieces of a machine that can compensate everyone fairly for the value they create in society.
(You can read more about NFTs in the last couple of issues of Forward. Find our archives here).
What’s going on with your wealth? 🤔
Ray Dalio knows a thing or two about money. In his series of posts on the ‘Changing World Order’ he has articulated the flows, cycles, and eras born out of finance better than most. Here’s a telling excerpt from one of them:
Most people don’t pay enough attention to their currency risks. Most worry about whether their assets are going up or down in value; they rarely worry about whether their currency is going up or down.
It’s a sobering question. Even when you’re doing everything right, and investing in assets that increase in value, what good is any of it if the money those assets return has been devalued to a near unusable extent, or worse, gone extinct?
Of the roughly 750 currencies that have existed since 1700, only about 20% remain, and of those that remain all have been devalued.
As a result, Dalio argues that holding cash as a store of wealth is an exercise in futility, as the current methods used to service national debt pretty much ensure negligible returns.
In US, European, Japanese, and Chinese bonds an investor has to wait roughly 42 years, 450 years, 150 years, and 25 years[1] respectively to get one’s money back and then one gets low or nil nominal returns.
Money — ever changing, ever constant 💰
As the present now
Will later be past
The order is rapidly fadin'
And the first one now
Will later be last
British philosopher Alan Watts once delivered a profound talk on the nature of money. His simple analogies boiled down the complex concept of credit to bookkeeping, and money as an accounting of economic energy.
In the talk, he even touched upon the importance of technology to solve the problems humanity faces, and interestingly, how money might actually be holding technology back instead of fuelling its capabilities.
Seem like logical arguments shared via a Twitter thread or LinkedIn post right?
Except Watts gave this talk 50 years ago. 🤯
"All growth is a leap in the dark, a spontaneous unpremeditated act without the benefit of experience."
—Henry Miller
Stuff we loved this week
What has the Internet done to culture? Has it really eroded it, or has it undergone an apotheosis to the Cloud? Tiago Forte argues that the Internet has actually led to a second Renaissance, just that its fruits and the discourse around it are now free of geography and spread across the length and breadth of the Web.
Everyone brags about their credit score, but few understand how it is calculated. In this deep dive, Maia Bittner — who founded credit building entity Pinch — decodes the nuances behind what many consider ‘the GPA of the adult world’.
Food for thought
Our explorations into money sometimes lead us down deeply philosophical paths. While these are necessary journeys, sometimes its good to step back, and reflect on the little things.
Things get tough. Things break.
Things get better.
In these tough times, all of us need a reminder that our greatest feats stem from understanding that tough times often lead to extraordinary feats, and surviving them is an exercise in being optimistic — and daring to dream a little.
We started this issue on Forward with a note on COVID-19, and as fans of bringing things neatly full circle, it seems fitting that we turn to Yuval Noah Harari for lessons from a pandemic — complete with the pitfalls and swells of mortal frailty and ingenuity.
This issue of Forward has been a reflection of dire times and silver linings of hope, much like the world we live in. We hope you’re staying safe, and being optimistic about the future. If you found knowledge (or solace) in the past few minutes of reading, do share it with others who might as well.
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Until next time,
Your friends at NEO