Connecting the dots on the self

Over the past few years, I have been fortunate to read a good number of books, and sometimes to connect the dots among some of them, as much as they came from different writers, experiences, and historical periods. Here are three that, I believe, are about essentially the same central idea:

  • René Guénon, Man and his Becoming according to the Vedanta (originally published in 1925);
  • Alan Watts, The Book: On the Taboo Against Knowing Who You Are (1966);
  • Sam Harris, Waking Up: A Guide to Spirituality Without Religion (2014).

The central concept is perhaps most vividly expressed in the Alan Watts book (see a good Brainpickings summary here):

We suffer from a hallucination, from a false and distorted sensation of our own existence as living organisms. Most of us have the sensation that “I myself” is a separate center of feeling and action, living inside and bounded by the physical body — a center which “confronts” an “external” world of people and things, making contact through the senses with a universe both alien and strange. Everyday figures of speech reflect this illusion. “I came into this world.” “You must face reality.” “The conquest of nature.”

This feeling of being lonely and very temporary visitors in the universe is in flat contradiction to everything known about man (and all other living organisms) in the sciences. We do not “come into” this world; we come out of it, as leaves from a tree. As the ocean “waves,” the universe “peoples.” Every individual is an expression of the whole realm of nature, a unique action of the total universe. This fact is rarely, if ever, experienced by most individuals. Even those who know it to be true in theory do not sense or feel it, but continue to be aware of themselves as isolated “egos” inside bags of skin.

Alan Watts, a Brit, was a lapsed Episcopal priest and lifelong student of Zen Buddhism who transplanted himself to California in the 1950s. He wrote one of the first bestselling books on Buddhism, The Way of Zen (1957), but was also influenced by Hindu scriptures, especially Vedanta, and Chinese philosophy. He came in contact with many figures in the Human Potential movement and earned a large followership through a weekly program on a Berkeley radio station. He lived his later years between a houseboat in Sausalito and a cabin on Mt. Tamalpais.

René Guénon, born in central France, became acquainted with Hinduism and Taoism in his student days in Paris; in the early 1910s he embraced Islam and was initiated into Islamic esoterism, taking the name Sheikh ‘Abd al-Wahid Yahya. He researched and published extensively on Eastern doctrines, becoming one of the first Westerners to popularize the darshanas, or “visions”, of Hindu philosophy and devoting a seminal text to Vedanta darshana, the most metaphysical of them all. In 1930 Guénon moved to Cairo, where he joined a Sufi order and lived for the rest of his life.

Sam Harris is a living author from California, so I’ll leave it to his publisher: Sam Harris is the author of five New York Times bestsellers […]. The End of Faith won the 2005 PEN Award for Nonfiction. His writing and public lectures cover a wide range of topics—neuroscience, moral philosophy, religion, spirituality, violence, human reasoning—but generally focus on how a growing understanding of ourselves and the world is changing our sense of how we should live. 

The Book, by Alan Watts, is challenging and accessible at the same time, and I highly recommend it. It is a delight to read and poses a true conundrum to the reader, especially at a time – like today; I am writing barely two weeks after the terrorists attacks in Paris – when separateness spikes up, and none of us can imagine being leaves from the same tree as the perpetrators. And yet it offers me a lesson – the self is illusory – so important, and so radically different from everything else I might think about what I am, that, if I could learn it, it would provide me with all the empathy and the humility that no worldly doctrine or practice has yet been able to teach me.

Guénon’s book on Vedanta is dense, obscure and technical; I only recommend it if you’ve had at least a crash course in traditional Indian philosophies, as his attempt to decipher the Upanishads and the Brahma Sutras relies on the reader mastering at least their basic vocabulary. Nevertheless, if you find an edition with good explanatory notes, it can be deeply rewarding – and it is plausible to me that at the core of Guénon’s reading of Vedanta there is the same insight that, forty years later, compelled Watts’s book.

Harris’s Waking up suffers from a few idiosyncrasies (for example, he seems to have quite enjoyed a number of brain-damaging drugs in verifying that they would indeed open the doors of perception) and spends too many pages quibbling with phenomena of marginal interest, such as near-death experiences. The author acknowledges his debt to Advaita Vedanta and to Poonja-ji, the teacher he practiced with. But the spiritual path he has found most rewarding is a different one, which is little known in the West, and seems irresistibly seductive. Dzogchen, a stream of Tibetan Buddhism, offers – in contrast to the many “paths of gradual ascent”, whereby a student adopts a practice like meditation for years or decades – a “path of sudden realization”, where a qualified teacher may precipitate an insight such that the pupil may “take the goal as the path”, experiencing the intrinsic selflessness of awareness in every moment: “the freedom from self that one might otherwise seek is the very thing that one practices.” No wonder our Western minds struggle. The author himself admits that, at his level of practice, the freedom from suffering allowed by the sudden insight of non-duality lasts only a few moments, although these moments can be repeated, and “punctuating ordinary experience in this way makes all the difference”. If you are a seeker, this may not be the solution for you or even your cup of tea (to the extent that “you” perceive yourself as a separate self). Still, Waking up is a worthwhile read if you are willing to be open-minded, to challenge your view of the world, and to glimpse what a different experience of reality might feel like.


Business Reading: Exponential Organizations and The Hard Thing About Hard Things

What’s true in literary fiction is also true for business books, I believe: if readers still say good things about something about a year after it came out, then it’s probably good, and not just the flavor of the month. This summer I read two 2014 titles I had had on my wish list for a while, and figured were ripe enough for picking.

2_d51b386d7c928e25_1280boxExponential Organizations, by Salim Ismail, Yuri van Geest and Michael S. Malone, is a well-researched outline of the key characteristics of a new generation of companies – the Ubers, the AirBnBs, the GitHubs of this world -, and of how they have come to disrupt markets, invent them them, or challenge longstanding business models in the space of just a few short years, by virtue of their exponential growth. These companies, which others often call Unicorns, have been extensively chronicled elsewhere, so the framework that the book lays out to identify them is useful, but not transformative; and the proposed scoring approach to rank Exponential Organizations (to be an Exponential Organization, you have to have a Massive Transformative Purpose plus at least 4 out of a list of 10 attributes that these tend to have in common) may appear a bit formulaic.

ExO AttributesIf one were to nitpick, such concepts as Holacracy – one of the more untraditional organizational philosophies adopted by some of the companies in the sample, covered in the book under the Autonomy attribute – seem to have had a bit of a rough time since the book was written. The authors, to be fair, don’t claim that any of these practices or characteristics would necessarily be needed for you to have an Exponential Organization; and it is perhaps inevitable that the riskiest management innovations are also the ones most at risk of being misunderstood, falling out of fashion, or simply failing. After all, in the words of my favorite business authors Pfeffer and Sutton, you should always “treat your organization as a prototype”.

The more valuable content in Exponential Organizations – at least for the vast majority of potential readers – comes in the second half, where the authors address what to do if you work in a traditional organization, one that thinks of itself as a well-fed turkey and may not realize that Thanksgiving is drawing near. A highlight of the work is in Chapter 8, which describes a few potential avenues to choose from, possibly in combination:

  1. Transform leadership; this includes training your Board of Directors to be aware of exponential technologies and the resulting disruption;
  2. Partner with, invest in, or acquire Exponential Organizations;
  3. Disrupt[X]: create an “edge Exponential Organization” at your boundaries, hire a “black ops” team to hack your business model for you, copy the Google[X] Lab, partner with accelerators, incubators and hackerspaces;
  4. Try “ExO Lite”, applying some of the ten attributes, even if in a diluted form, to your core business processes.

Chapter 10 is also worthwhile, as it tells you what’s in store for you if you are a CEO, CMO, CTO, CIO, CFO, Chief Legal Officer, Chief HR Officer and so on: you want your company to start pursuing this path, but you also need your colleagues to share your vision, and not think that you’ve lost your marbles.

Overall, this book pays homage to the classics in the field (Christensen, Collins), builds on non-traditional thinkers about human affairs (Taleb), adds to the mix a number of recent business concepts (Ries, Hoffman, Thiel) and earns its place on the shelf as a strong contender for a short list of must-read business books today. As a personal note, I am generally a fan of the Singularity University thinking that the book is grounded in, even if some of its more extreme fringes are somewhat crackpot (immortality? please), and technology isn’t yet keeping all of its promises.

After Exponential Organizations, I dove into my second business book for the summer: and I felt I had crashed down from the ethereal halls of academia into the brutal trenches of corporate warfare.

The Hard Thing about Hard ThingsThe book is The Hard Thing About Hard Things, by Ben Horowitz of Andreessen Horowitz fame. It is less a manual about how to build companies (that material is largely adapted from the author’s blog), and more a CEO memoir from Horowitz’s life before becoming a venture capitalist. As business books go, it is gutwrenching. It reminds you that business will be sometimes about things like letting people go when you should not have hired them (or even when you should have); demoting your friend, even if he is your cofounder; or moving ahead when you feel like hiding, throwing up and quitting. In fact, the ability to “focus and make the best move when there are no good moves” is, according to the author, the core skill of a successful CEO. Especially a wartime CEO – and there is no guarantee that a successful peacetime CEO will be able to turn into a wartime CEO when the company goes to war.

One particularly harrowing war story is, believe it or not, about the interpretation of accounting principles: revenue recognition is always a big deal for software companies, and a difference in interpretation arose – as Horowitz tells the story – while he was going through the due diligence process to sell Opsware to either BMC or HP in 2007. It turns out that his auditors Ernst & Young had adhered to one interpretation of a contractual clause about software upgrades, while BMC’s auditors – also Ernst & Young – stood for the opposite interpretation, and required either restating revenues (which would have killed the deal) or amending three contracts with large banks in the space of 24 hours. Both bidders were informed of the situation; amazingly, in less than 24 hours, Horowitz and his team pulled off the contract amendments with the clients. Still, BMC pulled back, and the deal was done with HP, where Horowitz then spent the following year as VP and General Manager of Business Technology Optimization for Software.

Even scarier, the following happened to Horowitz as he was leading Loudcloud towards is IPO (in March 2001 – a stressful time if there ever was one for tech startups). Three days into the roadshow, he got a call about his wife from his father-in-law, saying that she had had an allergic reaction to some medicine: “Felicia stopped breathing, but she is not going to die.” When he was able to speak with her on the phone, she told him to continue focusing on the IPO and not come home from the roadshow. The IPO was finally done, Felicia got better, and life went on: but the Loudcloud business was not yet out of the woods, and indeed – in the meantime, Sept. 11 had happened – it was sold to EDS a little over a year after IPOing.

The Hard Thing About Hard Things has a lot of strong and useful nuggets about hiring, training, and building a corporate culture. Even the most uplifting chapters, though, are tinged by some existential bleakness from the trenches that Horowitz has fought in. I recommend this book to everybody whose business is not doing well, and to everybody whose business is doing well, too, because, in the author’s words:

  • Being a good company doesn’t matter when things go well, but it can be the difference between life and death when things go wrong.
  • Things always go wrong.
  • Being a good company is itself an end.

Recent Science Fiction. With Women

The_Martian_2014Two books I read in the last few months had me thinking not just about how science fiction is changing as a genre, but also how we as a society must be making some sort of improvement after all, if even male science fiction writers recognize their fellow geeks who happen to be women to the point of giving them lead roles in their stories.

The Martian by Andy Weir is a gripping survival story set on Mars, where astronaut Mark Watney has been stranded after a sandstorm has forced the rest of his mission to leave the planet without him. Mars, as you know, is a pretty cold and unhospitable place; Watney is there alone, with limited supplies and no communication system, and needs to hack what little he has in order to breathe, eat, and let the rest of the world know he is alive. At times most of the book is taken up with his calculations about oxygen, fuel, caloric intake needs and data transmission rates: math matters, and making a simple mistake could mean the difference between life and death. If you’re into such things as telecom engineering, extraterrestrial botanics, or space archaeology, you will enjoy this a lot.

So, Watney is a man; but the mission commander who decides to ignore higher orders and use her authority to go and rescue him, Melissa Lewis, is a woman. Originally a self-published work, the book was picked up by a publisher and is being adapted into a movie starring Matt Damon as Watney and Jessica Chastain as Lewis. I’ll be first in line for the ticket. (In the meantime, did I tell you how cool Sandra Bullock was in Gravity? no? did you miss it? go watch it).
Seveneves_Book_CoverNeal Stephenson‘s Seveneves is more than science fiction – it plots a future for humans in space after a cosmic catastrophe that spells the end of life on Earth. You already know I am a fan of what I call the end-of-civilization genre; I also was a fan of Stephenson’s after reading Snow Crash and Cryptonomicon, two brilliant books ahead of their time, but I lost patience with Quicksilver and I found Anathem a bit of a dud. With Seveneves, Stephenson fully returns in my good graces. Other than chronicling rocket launches, the plot does not spend a lot of time spelling out the mayhem that happens on Earth in the two short years between the initial, inexplicable disaster – an explosion of the moon – and the meteorite shower that makes the Earth inhabitable for the next five thousand years, give or take. Most of Stephenson’s action takes place on the safest outpost in those circumstances: the International Space Station, suddenly loaded with as many people as it can drag along with itself in space, as well as with tools, microchips, spare parts for robots, genetic code records, and anything else that can be shipped there to help those humans survive and figure out how to rebuild a self-sustaining civilization. In the early days the commander of the ISS, Ivy Xiao, is a woman, although political maneuvers on Earth quickly replace her with a man; her second-in-command, roboticist Dinah MacQuarie, is another woman. Women’s resilience, strength, and adaptability is indeed key to survival, when everything seems to go wrong and the last few men in the human race, instead of cooperating, focus on killing each other. Two of the bad guys in the story, US President Julia Bliss Flaherty and Italian rebel leader Aida Ferrari, are women, too. The rebuilt civilization will indeed include men; but the descendants of the survivors, five thousand years later, will all be shaped by the personalities and skills of the women who were there at that decisive time. This book is for you if you like orbital mechanics, meteorites, comets, robots, and grand plans for staying away five years but eventually returning home.

Effective altruism: Peter Singer, The Most Good You Can Do

SingerI like philosophy that engages with the world it lives in, and that has impact not just on academia but on institutions, corporations and public discourse. Philosophers such as Luciano Floridi (an information theorist and ethicist, who has served in an advisory council to Google) and Nick Bostrom (who also earned a PhD in Economics, and whose book Superintelligence was a New York Times bestseller) are redefining what it means to practice philosophy outside the ivory tower.

Lat week I finished reading The Most Good You Can Do, a book by Peter Singer that supports the “effective altruism” movement, a highly utilitarian approach to maximizing the total amount of good in the world and minimizing needless suffering and deaths by sentient beings. In a nutshell, the book argues that if you have a choice between (1) becoming a charity worker and going to a poor and war-torn country to save lives, and (2) becoming an investment banker, saving a substantial part of your income, and giving it to a charity that will use it to send many people to poor and war-torn countries to save lives, then it is the ethical thing to choose the latter, because it is the choice that maximizes total good. The book also highlights a number of resources in the field of charity evaluation, including the Centre for Effective Altruism, an umbrella organization for an evidence-based, analytical approach to philanthropic giving. You have read me quoting Singer before in the context of vegetarianism, or at least decreased meat consumption, to reduce animal suffering (here and here); the scope of this book, however, is much broader and I believe it will appeal to the many more people – hopefully – who care about human suffering. It will also challenge those of us who are proud of their support for museums, for the performing arts, and for other institutions whose funding issues can be called “first-world problems”: a new wing in a museum is extremely poor value, in the effective altruism framework, compared to an intervention that uses the same money to prevent malaria or cure trachoma.

The book gets even more intellectually challenging in the final chapter, “Preventing Human Extinction”, which calculates that – considering not just present lives on Earth, but all future lives that would be annihilated by an asteroid collision with Earth – we as a society should find it very good value to give NASA or some other organization funding ranging anywhere between $100 billion and $100 trillion to be spent on a system able to prevent a catastrophic hit by an extinction-sized asteroid. Here, Singer quotes Bostrom’s definition of existential risk, a situation in which “an adverse outcome would either annihilate Earth-originating intelligent life or permanently and drastically curtail its potential.” There are many existential risks, such as nuclear war, pandemics, global warming, and malevolent artificial superintelligence. Singer’s somewhat surprising conclusion is that “it seems that reducing existential risk should take precedence over doing other good things”, including helping people in extreme poverty today, but he argues that causes such as reducing extreme poverty are more likely to attract people to effective altruism than the more abstract cause of reducing existential risk.

The book ends with a counterintuitive – but surprisingly optimistic – point of view on artificial intelligence and its perceived dangers:

Some effective altruists have shown special interest in the dangers inherent in the development of artificial intelligence (AI). They see the problem as one of ensuring that AI will be friendly, by which they mean, friendly to humans […] The replacement of our species by some other form of conscious intelligence life is not in itself, impartially considered, catastrophic […] The risk posed by the development of AI […] is not so much whether it is friendly to us, but whether it is friendly to the idea of promoting well-being in general for all sentient beings it encounters, itself included […] There is some reason to believe that, even without any special effort on our part, superintelligent beings, whether biological or mechanical, will do the most good they possibly can.

Technology, women, choice, and nudge: a rant about female ambition

Holmes Theranos

This woman is Elizabeth Holmes, 30 years old, founder of Theranos, a medical technology company valued at over nine billion dollars, in which she owns more than fifty per cent of the shares.

Keep Elizabeth Holmes in mind. Keep her in mind, women entrepreneurs, the next time you pitch me. Because you ought to decide how big your ambitions should be, but I am going to think of Elizabeth and I am not going to be satisfied if your pitch says your startup is going to solve a small problem, serve a handful of customers, employ a few people, distribute through niche channels, raise a little capital, produce some revenues, break even, and not scale. If you’re not aiming to change the world in some significant way, you’re the one putting yourself at a disadvantage towards the other startups, the ones that plan to do exactly that. Investors like to bet their money on people who dream big and want to change the world. They are not going to bet on you if you nurture small, local, provincial ambitions.

Nudge-coverThere is a great concept in behavioral science called “nudge“. A nudge is “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing economic incentives”. Most of you were not nudged, I assume, towards choosing STEM disciplines in school. But today, I believe, the ethical thing to do in our families and in our education systems is to nudge today’s girls and young women towards STEM disciplines.

Because if we don’t, this happens: only four out of 81 “unicorn” companies – private companies valued at over one billion dollars – have a woman CEO. These companies are technology companies and are overwhelmingly founded and led by technologists. Elizabeth Holmes is a technologist. But she is one of just four women CEOs in that list. The rest are all men.

And if we don’t, that’s not the only thing that happens. What also happens – and drives me crazy – is the mansplaining about choice, as in “young women are not interested in tech because they choose not to be”. But how can you be interested in something you know nothing about and have had no exposure to?

Exposure is the primal nudge here. Then we have hands-on learning, networking, coaching, mentoring, sponsoring. Getting the Inspiring Fifty group together – at 10 Downing Street, of all places – and speed-mentoring a number of Girls in Tech was a great moment. Let us commit to creating more and more moments like that. And to offer our girls a nudge, in their own best interest, at every opportunity we get.

Artificial superintelligence without the body


It has not been the case before in the history of humanity that we have stood on the brink, scientists say, of creating artificial intelligence that, by working on itself, can become vastly superior to the intelligence that designed it, meaning ours. If we are on that brink today, as some say (for reference in non-technical language: Part 1, Part 2), it is certainly time for humanity to take stock of the immense opportunities and threats for the human race that our choices will determine – or maybe, cynics will say, is it not too late already to have the debate once the danger makes it to Newsweek?

Anyway, that’s not my topic today. My topic is the decoupling of intelligence from the body. So far, living beings have always developed an intelligence that was rooted in the body: predator or prey, fight or flight, the amygdala a barely differentiated lump of tissue; then the neocortex, tools, language, agriculture, architecture, civilization, Mozart, Tolstoy, Lost. Our intelligence grows out of the senses in our body. We feel hunger, recognize the smell of a loved one’s skin, sink our feet in the sand, rejoice in a dance step. Sensory deprivation results in cognitive impairments. Also, biology has endowed us with wetware that runs efficiently, consumes very little energy, is capable of amazing feats and cannot be replicated other than by making babies. On the hypothesis that the brain learns through the body, we have built AI robots endowed with senses, proprioception, and the ability to learn from their environment: and yet, the intellectual abilities of our best humanoids today lie somewhere between those of a very smart fly and those of a rather dumb rat. So, this avenue may teach us a lot about certain things such as rehabilitative medicine, or preventing loneliness in old people, but it is not designed to move us closer to Singularity-type intelligence.

That intelligence, or Superintelligence, will be different and alien. It won’t miss the body, its pleasures and constraints, because it will only have a functional notion of what it means to have a body, and will make for itself as many types of bodies as needed, most likely single-purpose ones: a swarm of dust to survey the Earth, machines to mine it, fabs to print out hardware, A/C systems to cool down the circuits, nanomachines to swim in our blood (assuming we’re still around). There won’t be a need for a general-purpose body, and maybe even for what we call personal identity. Just like a jellyfish cannot comprehend the human experience, we will not be able to comprehend the Superintelligence experience. Because we have a body, and bodies will be out of fashion, a happy evolutionary detour but not a final destination. Whether this means human immortality or human extinction, I do not know, but I lean towards calling it extinction: just like we have no memory of our jellyfish days, the Superintelligence may well no longer need to remember its human roots, and may discard the very memory of humanity on the way to its own realization, and perhaps demise. Bodies, life, intelligence itself might be over and done with well before the heat death of the universe, or any other ultimate fate.

So enjoy your body, because you’d be far less intelligent without it. Nourish it, keep it healthy, listen to it, forgive it. Whatever comes after us, and however we may fail, biological bodies will have been our own special learning tool, our delight, our strength. Whoever comes next, they can’t take that away from us.

Image credits: At the Mountain of Madness 2, Howard Lovecraft, by ivany86 over at deviantart.

Bitcoin and beyond: a few thoughts


Much ink has been spilled on Bitcoin and its smaller cryptocurrency siblings. I’ve recently thought a lot about the impact of cryptocurrencies on financial systems and on the world at large. While I do not expect that any conclusions may stand for long, I’ve tried to sum up what I understood so far and digest it for my readers here. Apologies for any technical inaccuracies – please highlight them in comments.

First, a few thoughts on what’s new and different about Bitcoin:

  • The intellectual and technical work that Bitcoin stands on, my geekier friends agree, is an astonishing leap forward from everything we’ve seen before. Satoshi Nakamoto is not one person, as multiple disciplines from cryptography to software engineering were involved in its conception, but may have been a small group of people with the extraordinary discipline to publish some brilliant open source code and yet not to come forward and reveal themselves, at least so far. Code that is an achievement in that it is not just smart, but also amazingly robust. If Satoshi Nakamoto were one person, his achievements would be on par with those of Sir Tim Berners-Lee.
  • The main reason why it’s difficult to explain Bitcoin to people is that it’s a system where flows, not stocks, are certified. If I start with $100 in my bank account, I deposit $50, and then I take out $30, my bank knows what I did, knows that I have a new balance of $120, and can print me a statement with that balance. If I do the same with Bitcoin, all that’s monitored is the flow: “in 50” and “out 30” are recorded on a ledger replicated on thousands of servers all over the world, but my new balance of 120 – just like my old balance – is strictly my information, and nobody else has it. The Bitcoin community validates the flows; the algorithm cares not one bit about stocks.
  • The total quantity of Bitcoin in the Bitcoin system is algorithmically predetermined, and in that sense is the only stock that matters to the system. This also means that, at some point (roughly around the year 2140), mining will stop and the quantity of Bitcoin will be fixed. No central bank, commercial bank or other authority will be able to print more. As we’ll see below, this has important macroeconomic implications.
  • Other things that strike people as weird are that Bitcoin is strictly a bearer instrument (you lose it, you have no recourse) and that transactions, once validated, are irreversible – unlike with your credit card or your PayPal account, there is no chargeback mechanism. Transactions are final.
  • Most importantly, a “trustless” network that keeps working with no central authority and never collapses – because trust is distributed and resides in the consensus mechanisms that enables the endless replication of the blockchain – is in itself a concept that takes a bit of time getting used to.
  • Volatility? Oh yes, plenty. Don’t stash your mom’s retirement nest egg in a Bitcoin wallet. That’s not what it’s for, really.

Where different players stand:

  • Economists are intrigued, but do not believe that at a macro level Bitcoin can power a sophisticated economy. While the developer community is working to overcome this limitation, for example, Bitcoin as it stands today can carry out only a limited number of transactions: 7 transactions per second. (Visa, depending on which source you believe, is said to support 10,000-50,000 per second).
  • Also, there is not enough Bitcoin in the system, and there never will be enough for a significant world economy to adopt it to the exclusion of other currencies. If output is to grow and the quantity of money cannot grow, deflation wreaks havoc because the debt in the system becomes unsustainable. And “debt is to capitalism that which Hell is to Christianity: seriously unpleasant but absolutely necessary”, claims economist Yanis Varoufakis (yes, he who just became Finance Minister of Greece).
  • Regulators are walking a fine line. Err on the side of protecting consumers from risk, and you stifle innovation; err on the side of fostering innovation, and a lot of people will go bust. Not because the Bitcoin technology per se is unsafe, but because issues come up at the edge, in the wallets and exchanges that sit at the crossroads of Bitcoin and fiat currencies. The blockchain is resilient and continues to function when mayhem happens, but people get burned.
  • London is trying to ride the Bitcoin wave, with a light regulatory touch and a Chancellor of the Exchequer who has voiced support for cryptocurrencies as an enabler of financial innovation – although the Treasury review he commissioned is taking longer than expected. New York State is working on a “BitLicense” regulatory framework, although critics say it is too restrictive for New York to become a Bitcoin hub. The US Commodities Futures and Trading Commission says Bitcoin is a commodity, not a currency, and falls under its remit. The European Central Bank and the European Banking Authority have highlighted risks for consumers, recommended that banks refrain from buying or holding bitcoin, and then mostly kept silent: one gets the feeling that they would really rather see the whole headache go away. But Bitcoin has no borders, does not reside anywhere and recognizes no nations: shouldn’t we aim for a global framework, instead of burdening the ecosystem with incompatible rules, lack of interoperability, and unsustainable compliance costs?
  • Financial institutions, though listening to regulators out of one ear, are eager to become players in the Bitcoin economy, or at least to be seen as such. See the recent investment by, among others, BBVA and the NYSE in Coinbase.
  • There already are better ways than Bitcoin to implement an alternative and decentralized payment network. Ripple, although not perfect, is said to be one. Stellar is another one.

What’s next?

  • Expecting that Bitcoin will be a major world currency five or ten years from now would be a bit like betting in 1995 that AOL would be the dominant Internet service in 2015. It’s still very early days. The entire Bitcoin system is barely six years old. We haven’t seen anything yet, really.
  • In addition to finance, there are a lot of things you can do with a system that decentralizes the hard work of certifying a transaction between two parties. Indeed, some go so far as to say that Bitcoin isn’t the point of the Bitcoin technology: “Bitcoin as a currency has been a red herring driven by speculative investment, but that’s not the ultimate potential or the most exciting thing about it” (Coinbase CEO Brian Armstrong, quoted in Quartz). In other words, a virtual currency is just one application enabled by the blockchain: it has been and is important as an incentive to participants (miners) and to create liquidity in the system, but it won’t be the only use of the technology in the future.
  • Sidechains – ledgers that experiment with features that might be added the Bitcoin core, or might serve some entirely new purpose, without actually jeopardizing the stability of the blockchain – will be big. See Austin Hill and Adam Back’s Blockstream, which is now backed by Reid Hoffman.
  • Under so-called “Bitcoin 2.0” frameworks, you can make money programmable, for example tag a certain bitcoin for spending only with certain counterparts. You can also have a bitcoin represent other types of assets than money, such as a car, a company share, a vote in an election (video).
  • The most ambitious project inspired by the Bitcoin blockchain (but entirely separate from it) seems to be Vitalik Buterin’s Ethereum, not just a platform allowing for contracts written as computer code, but an entire scripting language and programming environment to create an ecosystem with self-enforcing contracts, distributed autonomous corporations, and perhaps entirely novel models for political organizations.
  • Would a software-based societal model be resilient enough to cope with the real world, or would it be too brittle to withstand shocks by reacting intelligently? Would the utopistic libertarians willing to delegate a part of their life to a blockchain risk waking up in a dystopia of inequality, polarization and control? Hard to say. What we can say is that as a society we need to understand the technology, weigh the upside potential against the risks, and make collective choices that will serve us well for the future.


Images credits (and recommended article): Quartz. Thank you to some of the smartest among my friends and colleagues, who helped me clarify my thoughts on the topic: Giovanni Daprà, Vincenzo Di Nicola, Raffaele Mauro and Stefano Quintarelli.