McNuggets, Bitcoin, & Gold Oh My!

Crypto

Paxos has launched a token redeemable for gold This is a big step in the right direction for crypto. Many people may ask “why does this matter?” It’s simple. You can now buy and distribute small units of gold ANYWHERE without permission from a broker/government/regulators. Let’s say your country is having inflation issues, or the central bank/govt is shady. In these situations you can transfer your wealth to PAXG (gold tokens) and be able to retain some wealth. Traditionally you would need to buy gold via the commodities markets -if you could get access. Or you would need to buy physical gold and store it. PAXG simplifies this quite a bit.

Some people think lending DAI isn’t a safe bet Last week I mentioned how you could lend a stablecoin (eg a token that doesn’t change from its USD value) called DAI and make >10% using a set of Ethereum smart contracts that make up the “Compound Protocol”. There is lots of criticism out there surrounding DAI / Compound and this post outlines a few of the big ones. One of the biggest concerns is that there could be a “bank run” on the contract. This would leave note holders in a situation where there won’t be the liquidity available to get back the stablecoins. My rebuttal: Usually when people borrow capital they want to use it. So there isn’t anywhere you will be able to lend but get liquidity instantly. This is true inside and outside of the cryproverse. After call, “bank runs” are called “bank runs” because banks (non crypto ones) can have liquidity issues.

Someone moved $1b USD using BTC, it took 20 minutes I’m hard pressed to find a better example of crypto’s value prop. Someone recently sent 1b using Bitcoin to someone else after US banking hours. This settled in a bout 20 minutes and costed the sender $600 in fees. No need for government involvement, and no need to call anyone. Just a person in front of a computer and a couple of clicks. Amazing.

*Note about the fees on the BTC transaction: The sender broadcasted the transaction with a fee ~1900% higher then the standard network fee at the time. This was done on purpose, probably to make sure that the transaction settled to the blockchain quickly. Since the fee is setup by the sender, they could have easily set a fee for $0.10, and the transaction would have taken a bit of time to settle. If this is confusing to you, shoot me an email and I’ll walk you through it.

Data / Machine Learning

A guy figures out how to make a billion dollars racing horses This is a fascinating long read on applied mathematics. In this case college dropout turned professional gambler Bill Benter built a team of people who cracked the horse racing code in Hong Kong. Take the time to read this one, you won’t be sorry.

Fraudsters used AI to fake the voice of a CEO and steal $243,000 I’ve been thinking for awhile about how deepfakes (using deep learning to create fake videos, photos, or audio) will change how we will consume content and communicate. Very soon it will be impossible to determine the authenticity of video and audio from looking/listening. Something like PGP could be used to cryptographicaly “sign” content so you will always know the author of the original content. The issue is that signing wouldn’t work on transcoded media. I’m still thinking about this a bit so if you have any thoughts I welcome them.

Deepfacelab lets you put your face in videos If you want to give making deepfakes a shot, checkout this open source project for Windows.

Life

There would be no McNugget without chicken feed futures (Oldie) Warren Buffett has famously called derivatives “weapons of mass distraction” but I’m leaning that they are also amazing tools that can be used to minimize risk. This is an amazing story about how Ray Dalio worked with McDonalds to do the latter. The result: Chicken McNuggets

Replace the phone by your nightstand with a clock and be less stressed So simple, but also so hard to do.

A portable bede raised $1m No comment needed….


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