Bitcoin and Blockchain: Why Bother?

Picture of a question mark

In my first post in this series on Bitcoin and blockchains, I described how hard I worked to ignore this thing that didn’t make sense. In this post I’ll cover why I am spending 2017 becoming a blockchain expert.

Spoiler alert: the reasons are the usual suspects—pride and money.

Pride

The descriptions of blockchain are full of how they would change the world. (I even heard that Vint Cerf had said that blockchain would be “bigger than the internet.”) I had been present at the beginning of the World Wide Web and yet had entirely missed the importance of it. Failing to capitalize on the birth of a new age of technology and has haunted me for years.

If there was going to be something bigger than the internet, I couldn’t miss it…again. And if the blockchains do become bigger than the internet, won’t it be cool to be able to explain them to clueless friends and strangers.

And to laugh at people who don’t get it.

Money

When I first heard of Bitcoin, it was trading at $22 and in December 2016, when I decided to become a blockchain expert, it was at around $800. Clearly there was money being left on the table here…and I was leaving it.

More importantly, if blockchains were going to change the world, there would be lots opportunities to make a bunch of money?

So, What’s the Truth?

Pride and money are all well and good, but how much of this is true and how much is hype? Is there a lot of money in Bitcoin and will blockchains change the world?

Yes.

As I write this, the market cap of Bitcoin is over $4.6 billion. The market cap of the second largest cryptocurreny, Ethereum, is over $38 billion. Here’s a fun fact, if I had bought $100 of Ethereum on the day I decided to become a blockchain expert, it would now (just six months later) be worth over $4700.

Actually, this fact is not fun.

Blockchain disruption is well underway. Companies like Abra is disrupting the world of cross border money transactions currently dominated by Western Union. Companies like Augur makes it possible to crowdsource all kinds of forecasting. Blockstack is taking control of the internet away from central authorities and creating alternate trusted identities. Storj is disrupting cloud storage.

Giant players including Microsoft, Citibank, Mastercard, IBM, Visa, Samsung, and Overstock are investing significant amounts of money in blockchains. Why? Because there is money to be made and who doesn’t want to come out of the coming blockchain scrum with the ball?

Money and pride.

In my next post, I’ll talk about what I’ve learned about the relationship between Bitcoin and blockchain and recommend some resources. Click here to get my blockchain learnings by email.

Bitcoin Makes No Sense

Picture of statue that doesn't make senseIgnorance is bliss, but staying ignorant can also take an awful lot of work. Take, for instance, myself and the Bitcoin Blockchain.

I first became aware of Bitcoin in a 2011 podcast that described the currency as a “coin” that didn’t exist actually exist but that was worth $22. My response: “Bitcoin makes no sense.”

Later that year, I encountered the currency again and heard that it was now trading at $2. My response: “Well of course it went down; Bitcoin made no sense.” 

I began actively ignoring Bitcoin and was so successful that it didn’t enter my consciousness again until in 2013 when descriptions of the Silk Road dark marketplace taught us that Bitcoin was the currency of this underworld. My response: “Oh, this totally makes sense—Bitcoin is for drug dealers.” I congratulated myself for having made sense of Bitcoin and on not being associated with it. I knew this nonsense would now disappear.

But…

2014 and 2015 happened, and Bitcoin kept not disappearing. Plus, this other word began to come up: blockchain. My response: “Bitcoin and blockchain make no sense.” But ignoring Bitcoin was getting harder as mentions of blockchain became more intriguing and non-drug dealers I knew started working with the currency.

Finally in December 2016, I heard this excellent podcast where Adam Robinson tells the story of a great investor whose chief strategy is to invest in things that “don’t make sense.” I was working on my 2017 goals at the time and added to my worksheet a note to make sense of blockchain.

“Become a Bitcoin/Blockchain Expert in 2017”

In 1995, I stumbled onto the World Wide Web, and built one of the first 20,000 sites on the web, thus becoming an expert on html. But the first Bitcoin was created in January of 2009; was 2017 too late to become an expert in blockchain?

Apparently not. Some of the smartest people I know had not yet heard of blockchain. And while a lot of brainpower and at least hundreds of millions of dollars have already flowed into the blockchain space, there is still a lot to learn.

My goal is to become a blockchain expert in 2017. Since a lot of people I have talked to are as confused about blockchain and Bitcoins as I am, I’ll recount what I’m learning here. Follow along if you wish (or click here to get my blockchain learing by email). If you have a question you’d like answered, send it to blockchain@kwinpeterson.com. I’ll find the answer.

Another Way the Internet Makes Art Possible

By now, we are all familiar with Kevin Kelly’s 1000 True Fans and how the internet allows us to find financial support for our art. But there is another benefit to having fans: recruiting people to you help you create that work in the first place.

Check out this art project by Chris Martin and Larkin Poynton.

Many, if not all of us, have created something with a group for the sheer joy of creating and spending time with friends. But these projects, while memorable and fun, rarely rise to the level of art. That’s because art requires the harnessing of talent, it requires editing and rehearsal and dedication. Those are really hard to do without the potential payoff of an audience to appreciate our work.

Some individuals can pull off art for art’s sake—Vincent Van Gogh, Emily Dickenson, for instance—but group projects are almost never done in a vacuum. To create this video above, Martin and Poynton had to enlist dancers, video people, sound people, lighting people, and others.

Artist: come work on my project, it is going to be really cool and take hours of rehearsal.
Potential collaborator: Who’s going to see it?
Artist: I’m gonna send a copy to my mom.
Potential collaborator: I already made plans that day.
Artist: Um…I didn’t tell you the day.

And this is another way the internet allows art to happen. It’s not just the finances, it’s the enthusiasm.

Artist: come work on my project, it is going to be really cool and take hours of rehearsal.
Potential collaborator: Who’s going to see it?
Artist: 313,000 from all over the world.
Potential collaborator: I’m in.

Rules are Bad

“Cool is a rule, but sometimes bad is bad.” — Huey Lewis

In my junior high days of desperately trying to figure out this language thing, the word “bad” started being by many tastemakers (I’m talking to you Michael Jackson) to mean “not bad.” I had no idea why this was happening, but it was a cause of consternation. So Huey Lewis’ rule provided great relief: I could use “cool” for good things and “sucks” for not good things.

Have you ever watched a toddler testing limits, constantly turning back to mom to see where the rule begins? We want rules, but rules are bad (see what I did there?).

Rules are bad (in the sense of not bad) because they give us structure and certainty. When a rule is in place, we can count on others to act a certain way and to understand our intent. Rules give us security. They also take some of the cognitive burden, allowing us to make decisions once and use categories to apply rules to similar decisions.

Rules are bad (in the sense of actually bad) when they are based on whim, or vengeance, or fear, or don’t reflect reality—all desks must be empty at the end of the workday; 10% of employees must be annually judged as incompetent, etc.

Bureaucrats and HR departments and MBAs love rules because they make the world predictable and manageable. When rules are in place, you can make decisions based on a flowchart, machinelike. But the day is fast coming when anything that can be done in a machinelike way will be done by a machine.

The next time you decide to make a rule remember, being replaced by a machine is bad.

Batching and Bingeing

Doing a certain thing exclusively for a set period of time or until a certain point is reached is called batching.

Or it’s called bingeing.

Batching has a positive connotations:

  • We batch our email to increase productivity.
  • We batch certain tasks to off peak hours to better utilize computing resources.
  • Grandma’s cookies come in batches.

Bingeing has negative connotations:

  • College students binge drink.
  • Cheat days turn into carb binges.
  • We shyly admit to co-workers that we spent the weekend binge watching The Great British Baking Show.

There’s a reason for these connotations. Batching takes self-control—requiring focus, and (it sometimes seems) superhuman willpower to keep going. Bingeing is all about self-indulgence, and once you start a binge it doesn’t end until the package of Oreos is gone.

Success requires that we batch more than we binge and that we recognize the difference between the two.

Three Ways Daily Blogging has Changed Me

Two and a half weeks ago, I heard Seth Godin offer what, to me, sounded like a challenge: blog publicly for two weeks; it will change your life. 14 posts later I can report that he was right. Here are the top three ways my life has changed over the last two weeks.

1. My days are profoundly more productive

Prior to starting the challenge, I had a morning routine that began at 5:30 and was intended to be completed by the time I left the house. But it rarely was. Knowing that I had only about 45 minutes at a certain time each morning to accomplish my writing instilled an urgency and purpose to my morning that had been lacking. The momentum and the early morning win carried me through the day in an astonishing way. The last two weeks have been remarkably productive, especially the Saturdays, which had languished under the lack of demands.

2. I am way more thoughtful

Knowing that I am going to have to wrangle some electrons into a cohesive set of words has really turned me on to noticing and thinking more deeply about the stuff going on around me. My morning commutes have been much richer, my conversations have had more depth, and even TV commercials have become fodder for philosophic discussions.

3. I am more trusting

There have been a few days over the last two weeks, when I either didn’t know what I was going to write until five minutes before I began or I began one thing and ended up with something much better. Two weeks I ago, I would not have believed that there were 14 topics I could even BS verbally on, much less write about. I now believe that I can trust the universe to help me find something interesting if I’m willing to do something with it.

This has been a fascinating exercise, but I’m struggling with the application of the results. Clearly daily blogging has been good, but is it good enough or good for anything? Looking back over the posts, there is nothing I’m particularly proud of. I enjoy the writing on this one, and I think there are the seeds of something interesting here, but it’s not quality work.

And I want quality.

For the next two weeks, I’m going to maintain the discipline of spending the first hour of my day writing, but I’m going to attempt something better by turning that daily writing into something I can be proud of. Without the public accountability piece, it may all fall apart. I’ll know in two weeks, if not sooner.

Advertising as Distraction

Ad agencies tout their awards: “Look at all the Addys and Clios we picked up this year.” Awards are their accreditation; their mark of quality. Having been raised around advertising agencies, I accepted this as gospel truth.

Until I noticed that the campaigns getting the awards and accolades were for products that I don’t actually use: beer, soft drinks, lottery tickets, etc.

Lottery ads always show people doing ridiculous things with ridiculous amounts of money. The reality of using the product is going to a dingy convenience store for a cheap piece of paper and then disappointedly throwing that paper in the garbage on Saturday night. Beer ads show beautiful people in exciting places, but the reality is that most beer is drunk on a couch.

I pointed this out to an ad exec once, and to his credit, he admitted the truth: Sometimes we have to distract people from the product.

Rule of thumb: the better a product’s creative, the less remarkable the product actually is.

The Work

Six days shalt thou labor and do all thy work – Exodus 20:9

And so we work, six, seven, or—if you’re the Beatles—eight days a week. But what does it mean? Is “work” a word in such common usage that we don’t think about a definition?

Consider the following definitions:

Work in Physics

The transfer of energy from one object to another, especially to make the second object move.

Work as Noun

The exertion or effort directed to accomplish something. It can also mean the place where we do this exerting, or the actual material we are exerting effort on. This allows sentences like, “I went to work to work on my work of art.”

Work as Verb

To manage, operate, or make as in, “This camera is easy to work, allowing me to work with images of social injustice so that I can work a change in the world.”

Work as Adjective

Describing objects related to work. “I put on my work clothes and break out my woodworking tools.”

Each definition merits further study and consideration, but I have two more definitions:

work (with a lowercase w): This is the busy work of life; the things that contribute to the economic, social, or leisure bottom line of life. It’s the grocery shopping, and the post office, the obligatory dinners, the email, and so forth. This is the work that dominates our lives six or seven days a week.

Work (with an uppercase W): This is effort we put into our purpose or calling. Most of us don’t do it often enough and many of us don’t even know what this work is but there are some ways I’ve learned to recognize it:

  • It is not assigned to you by anyone
  • Doing it makes to less tired rather than more
  • It elicits a powerful, almost supernatural opposition called resistance

The second hardest work out their is simply to distinguish between work and Work. The hardest Work is to do the Work…everyday…eight days a week.

Being an Example

Every man is a diary in which he writes one story while intending to write another. His humblest moment is when he compares the two.
— Hugh B. Brown

My task list is loaded today with things that are urgent, things that are commitments, things that required by my employer, etc. But two particular entries loom large. They were not assigned; I chose them, and I’m not going to get fired if they don’t get done. They are not conventionally urgent. They are not part of my job. They are really hard, I’m not entirely sure how they will turn out, and my time is really limited today.

But these two are the most important tasks I will do this week because:

  • I have been working for five months very openly to get to the point where I can do these tasks,
  • Getting these two things done right has the potential to fundamentally change my life,
  • I made a commitment to an old friend that I would do one of them, and most importantly,
  • My son is watching me.

I have been telling my son that the future looks very different than the present and that a lot of what he is hearing about living in the future may be wrong. I have been telling him that the actions I have how people of the future will act. In his eyes, my action on these two tasks will determine whether I am a man of the past or a man of the future; whether I believe what I’m saying or not.

Today, I will compare the stories I am writing. By the end of the week, so will he.

Every action we take sets an example for people who are watching (and people are always watching). The question is whether we will be a role model or a cautionary tale.