Brad DeLong's Grasping Reality
Hexapodia Is the Key Insight! By Noah Smith & Brad DeLong
PODCAST: "Hexapodia" is þe Key Insight! XXXVIII: Crypto & "Web3"
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PODCAST: "Hexapodia" is þe Key Insight! XXXVIII: Crypto & "Web3"

Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Pseudo-...Sp,eto,e; Aspirationally Less than 60 Minutes.
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Key Insights:

  1. The most recent round of Tech elephants, rhinoceroses, unicorns, and spiny lizards—Netflix, Shopify, etc.—are very unlikely to payoff for those investors who stay on the ride to the very end.

  2. That said, they were very much worth doing even if they never make their shareholders any money. The growth of communities of engineering, entrepreneurial, and organizational practice is a huge benefit for innovation and growth—and the overwhelming bulk of that becomes non-rival public knowledge, that nobody can make scarce and hence charge people through the nose for.

  3. Having your rich and your superrich fund R&D for little return is not the worst thing to have happen.

  4. The ideas behind “Web3”—an end to the walled-garden Web2 internet, with the useful parts of the social graph trustable and publicly accessible to anyone who wants to communicate—are great ones.

  5. The ideas behind “Web2”—the clickbait-ad walled-gardens—are horrible. And it is not just Facebook and Twitter. Google and Amazon are manifestly less useful than they were a decade and a half ago. Why? Because using pixels to inform is less profitable than using them for selling ads, and the companies have decided to be evil.

  6. Code is fundamental: a tech-finance drought is no reason not to learn to code. It is a reason to get a job working for a company that already has a real product, and, you know, profits.

  7. At bottom, all of “crypto” is very familiar. It is taking out a map, drawing property lots boundaries on them, and then trying to sell those lots to people by telling them that the railroad is coming through. And in the end everyone will be very happy If the railroad does come through, and does not decide to build its river-crossing bridge ten miles north.

  8. Hexapodia!

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References:

Brad DeLong's Grasping Reality
Tesla’s Valuation(s), &
FIRST: Tesla’s Valuation(s) There I was, noodling around, sitting outside in the morning California sunshine (66F, going up to 80F at 5 PM), picking up scraps of information for tonight’s “Hexapodia Podcast” taping with Noah Smith on “crypto”. I found myself looking at Tesla’s stock price: after all, “crypto” today appears highly correlated in its stock market valuation with “tech”, and Tesla is now looking like a tech-factor stock rather than a manufacturing-factor stock. That is, Tesla is trading as if it is constructing a walled garden within which it will then leverage a piece of software written once that runs everywhere and harvests the activity of its users for some chain of actions vague in the middle that ends with “PROFITS LARGE FOREVER!”. It is not trading like a company whose profits depend on large-scale efficient execution of manufacturing processes—a company that makes large things out of metal using technologies for which the knowledge is widely distributed…
Read more
  • Brad DeLong: Wonders of þe Invisible Crypto World

Brad DeLong's Grasping Reality
Wonders of þe Invisible Crypto World, &
FIRST: Matt Levine on Wonders of the Invisible Crypto World: The South Sea Company at least had a business plan: Matt Levine: Another Algorithmic Stablecoin Isn’t: ‘Terra…an algorithmic stablecoin…. One UST can always be exchanged for a floating quantity of Luna with a market value of $1…. On first principles this is insane…. If Luna trades at $0.01, you can print 10 million of them and buy 100,000 Terra and push the price up. But if Luna trades at $0.00… it cannot be used to support the price of Terra. And because you just made it up, there is no particular reason for [Luna] to be worth anything, so there is no particular reason for [Terra] to be worth a dollar…
Read more
  • Adam Ozimek: Think Bigger About Remote Work

Noahpinion
Think Bigger About Remote Work
I’ve written — and I still believe — that the rise of remote work triggered by the Covid pandemic will end up changing the way we produce things in the modern world. It has the potential to do for white-collar industries what electricity did for factory jobs — to distribute production to less costly places and allow more flexibility in job tasks. But fo…
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  • Noah Smith: Meme Stocks & Bitcoin Will Not Redistribute Wealth: Financio-Populism Is Built on Dreams & Smoke

Noahpinion
Meme stocks and Bitcoin will not redistribute wealth
“The percentage you're paying is too high priced/ While you're living beyond all your means/ And the man in the suit has just bought a new car/ From the profit he's made on your dreams” — Traffic I’m trying to resist the urge to keep blogging obsessively about the Ukraine war. So instead today I thought I’d talk about something that’s been nagging at me for a while — the rise of what I call “financio-populism…
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  • Noah Smith: Suddenly Startups Are Having Trouble Raising Money. Why?: ‘A Few Reasons for the Big VC Funding Crunch

Noahpinion
Suddenly startups are having trouble raising money. Why?
About a month and a half ago, I started noticing my friends in the tech startup world getting grumpier. Founders were suddenly saying that they were having trouble raising money, and VCs were grumbling that they couldn’t find good deals. That got my attention, because for over a year the story had been the exact opposite. If you don’t know a lot of people in startup-world, it’s hard to imagine just how flush with cash the whole sector has been since late 2020. Random people you sort-of know became billionaires overnight. People who used to talk about raising millions of dollars now talked about raising hundreds of millions of dollars. And so on. The word “unicorn” — a startup worth over a billion dollars — was no longer particularly impressive. Instead you heard words like “decacorn…
Read more
  • Noah Smith: What Kind of Financial Asset Is Bitcoin?: Is It Money? Digital Gold? A Tech Stock? Recent Events Shed Some Light on The Question

Noahpinion
What kind of financial asset is Bitcoin?
A lot of interesting things have been happening in crypto-world recently, mostly bad for crypto investors but interesting from a financial perspective. The whole asset class has fallen a lot recently, so that now all of crypto combined is estimated to be worth…
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