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Requiring proof is an enemy of progress. This is why companies like Amazon use a principle of disagree and commit. As Jeff Bezos explained it in an annual shareholder letter, instead of demanding convincing results, experiments start with asking people to make bets. “Look, I know we disagree on this but will you gamble with me on it?” The goal in a learning culture is to welcome these kinds of experiments, to make rethinking so familiar that it becomes routine. Process accountability isn’t just a matter of rewards and punishments. It’s also about who has decision authority. In a study of California banks, executives often kept approving additional loans to customers who’d already defaulted on a previous one. Since the bankers had signed off on the first loan, they were motivated to justify their initial decision. Interestingly, banks were more likely to identify and write off problem loans when they had high rates of executive turnover. If you’re not the person who greenlit the initial loan, you have every incentive to rethink the previous assessment of that customer. If they’ve defaulted on the past nineteen loans, it’s probably time to adjust. Rethinking is more likely when we separate the initial decision makers from the later decision evaluators.

I’ve been in situations where you’ve needed to have “data” or “proof” for any suggestion that you raise. While being empirically driven makes sense on the surface, taking it to the extreme and using it as a “weapon” against people that you might not like doesn’t really lend towards a learning culture. After all, it is easy to cherry pick “data” to support your arguments and if one requires proof for everything, being data-driven might actually  be the enemy of innovation.

Ultimately, you don’t want to have a team where the best debaters make all the decisions. It is not always the case that the best debaters have the best judgement. Sometimes, it is better to take a step back and give someone time to formulate their arguments whenever you find some level of resistance to your suggestions. Usually, there are some tacit concerns that cannot be verbalised at that moment in time.

We can also convey complexity by highlighting contingencies. Every empirical finding raises unanswered questions about when and where results will be replicated, nullified, or reversed. Contingencies are all the places and populations where an effect may change. Consider diversity: although headlines often say “Diversity is good,” the evidence is full of contingencies. Although diversity of background and thought has the potential to help groups think more broadly and process information more deeply, that potential is realized in some situations but not others. New research reveals that people are more likely to promote diversity and inclusion when the message is more nuanced (and more accurate): “Diversity is good, but it isn’t easy.”* Acknowledging complexity doesn’t make speakers and writers less convincing; it makes them more credible. It doesn’t lose viewers and readers; it maintains their engagement while stoking their curiosity. In social science, rather than cherry-picking information to fit our existing narratives, we’re trained to ask whether we should rethink and revise those narratives. When we find evidence that doesn’t fit neatly into our belief systems, we’re expected to share it anyway.* In some of my past writing for the public, though, I regret not having done enough to emphasize areas where evidence was incomplete or conflicting. I sometimes shied away from discussing mixed results because I didn’t want to leave readers confused. Research suggests that many writers fall into the same trap, caught up in trying to “maintain a consistent narrative rather than an accurate record.”

Its a fine balance between trying to deliver a simple, consistent narrative versus acknowledging complexity to make it more palatable for people whom might be opposed to your views. On one hand, simplifying matters to drive your narrative clearly, and not mentioning any of the contingencies seem to work better in getting people interested in your work. After all, it is very natural for people to try to find narratives that conform to what they think. I generally find that for many of the content creators out there, being nuanced is probably not the best way to garner initial eyeballs and attention to your product.

On the other hand, it does help with convincing people whom might already be opposed to your central idea if you could acknowledge contingencies and provide a much more accurate message. So if its not a popularity contest where you are trying to garner views or likes, and more of you having to genuinely to convince someone at say a work setting. You could try acknowledging ways that your proposal could fail while still driving your overall principle or point across. It addresses some of the concerns the other party might have, but also could help you form a more complete opinion that might actually help you execute your plan better.

In a classic paper, sociologist Murray Davis argued that when ideas survive, it’s not because they’re true—it’s because they’re interesting. What makes an idea interesting is that it challenges our weakly held opinions. Did you know that the moon might originally have formed inside a vaporous Earth out of magma rain? That a narwhal’s tusk is actually a tooth? When an idea or assumption doesn’t matter deeply to us, we’re often excited to question it. The natural sequence of emotions is surprise (“Really?”) followed by curiosity (“Tell me more!”) and thrill (“Whoa!”). To paraphrase a line attributed to Isaac Asimov, great discoveries often begin not with “Eureka!” but with “That’s funny . . .” When a core belief is questioned, though, we tend to shut down rather than open up. It’s as if there’s a miniature dictator living inside our heads, controlling the flow of facts to our minds, much like Kim Jong-un controls the press in North Korea. The technical term for this in psychology is the totalitarian ego, and its job is to keep out threatening information. It’s easy to see how an inner dictator comes in handy when someone attacks our character or intelligence. Those kinds of personal affronts threaten to shatter aspects of our identities that are important to us and might be difficult to change. The totalitarian ego steps in like a bodyguard for our minds, protecting our self-image by feeding us comforting lies. They’re all just jealous. You’re really, really, ridiculously good-looking. You’re on the verge of inventing the next Pet Rock. As physicist Richard Feynman quipped, “You must not fool yourself—and you are the easiest person to fool.”

I find that the hardest people to communicate differing ideas to are those who tether their beliefs really closely to their identity. At the risk of sounding a little too “self-helpish”, it really helps to never get too attached to any of your beliefs or thoughts and tie them too closely to your identity. I’ve met many who might have formed certain beliefs as part of their personal  journey and “narrative” and it always becomes difficult to convince such people of other contradicting beliefs or path.

To quote another part of the book that’s too short to be covered, we got to unlock the “joy of being wrong”, and the only way we can do so is “detaching your present from your past and detaching your opinions from your identity. “

Proponents of Bitcoin and other cryptocurrencies of its ilk seem to view its limited supply as the key to its long-term value. This is a thin reed to hang valuation on—especially for a virtual object that has no intrinsic use. Remarkably, and in sharp contrast, money issued by the world’s major central banks seems to have value precisely because its supply is infinitely elastic. More simply, this means that a central bank such as the Fed can print as much of its money as it feels is required to prop up the economy and financial system. Rather than destroying its value, such elasticity in its supply seems to anchor that value. The central bank’s ability to provide such money easily and in massive quantities when the chips are down makes businesses and financial institutions more eager to transact in that money even in normal times, knowing that their counterparts will accept it as well. This is another reason that private currencies, which rely on limited supplies to retain confidence, are unlikely to seriously rival fiat currencies. Another irony is that the origin of cryptocurrencies can be traced to a desire to demonstrate that a trusted authority is not needed to accomplish payment clearing and settlement and also to limit government intrusion into private transactions. Instead, the proliferation of these currencies is goading central banks into issuing digital versions of their own currencies, which might end up putting the privacy of even basic transactions all the more at risk of government surveillance. Even cryptocurrencies seem unable to flourish without the trust embedded in institutional frameworks. A government’s recognition of crypto-assets as genuine financial assets, even if that stops well short of any sort of endorsement, seems to strengthen investors’ faith in those assets. Furthermore, digital trails of asset transfers and ownership do not obviate the need for effective enforcement of contractual and property rights. An enforcement mechanism, which only a government (or some other institution with a real-world footprint backed up by the government’s monopoly on the legitimate use of force) can reliably provide, is particularly important when physical possession of tangible assets is involved. No purely digital mechanism can help the buyer of a car if the seller refuses to turn over physical possession after obtaining payment and handing over the digital keys. In short, decentralized trust mechanisms in commerce and finance cannot entirely displace a trusted government.

I feel like sometimes the conversation around crypto tends to revolve too much around completely subverting the government and inflation. To me,  it should never be seen as such a binary thing though. There are still some elements of crypto that can benefit from having a trusted authority, especially in the cases of scams, rugpulls or not delivering of services after payment has been made. There is room for legal authorities to step in and help enforce these actions and prevent bad actors. Further growth in Crypto is also probably highly dependent on government support and approval. However, like the previous passage states, it is probably more likely for us to see governments planning to develop their own form of digital cash.

The general consensus always seems to be that any form of inflation is bad too, which isn’t necessarily the case. One of the biggest selling points of Dogecoin is that it is inflationary, and be virtue of that, be more stable and can be used as a form of digital currency for tipping and stuff. If a currency has to be used for transactions, then extremely high appreciation wouldn’t necessarily be a good thing as it disincentivise people from using it as a form of payment and incentivise holding. That kinda goes against one of the main use cases of cryptocurrencies in the first place, which is being a secure and rapid form of payment.

Overall, honestly, I don’t remember anything too significant from this book, but i think it is a really great book for someone that dosen’t know too much (like me) and wants to get a good cursory overview of the latest developments in the financial world, such as digital banks, payment systems and cryptocurrencies.

A benevolent government’s good intentions can sometimes create more problems than they solve and can be subverted by human actions. When I was a young boy, my middle-class family, and others like it in India, received ration cards for rice and sugar. This was the government’s way of providing essentials to its population at a subsidized price. Keeping the price for any product low, however, reduces producers’ incentive to supply it. The government would try to fix this problem it had created by guaranteeing a minimum price to producers for those essentials that it then supplied to consumers at a lower price. This policy, intended to help the poor and middle class, was great for attracting votes but ate into government finances. Moreover, it bred all sorts of corruption—government officials in charge of handing out ration cards had to be bribed, workers for the parties in power obtained cards more easily, and merchants would hoard some of the supply and sell it off in the open market at higher prices. Such “leakage” from corruption meant that the cost of these programs to support the poor was far greater than the benefits received by the intended recipients. To fix some of these problems, the Indian government has switched to cash transfers. Using national identification numbers and bank accounts attached to those numbers, the government simply doles out cash rather than subsidizing specific products. This turns out to be cheaper for the government, more beneficial for the recipients, and less harmful to the efficient operation of product markets. There is one catch—the need to ensure that a household head does not use the payments to go on a drinking binge rather than feeding their family. If cash can be withdrawn from a bank account with no limitations, this would be difficult to monitor. It is not just developing countries that face this problem. One of the programs in the United States designed to support those living below the poverty line is the Food Stamp Program. The government prevents its misuse by prohibiting the use of food stamps for other expenditures. Retailers can accept the food stamps as payment only for authorized food products. Digital smart money could solve many of these problems. The government could simply designate certain units of money that it provides to low-income individuals as usable only for products with specific product codes and only at approved merchants. This feature is easy to embed in digital money and can be modified in real time if necessary. For instance, individuals living in a particular zip code could be permitted to use their allocations for cleaning supplies, in addition to food, in the aftermath of a hurricane. Other features could make central bank money more effective in achieving monetary policy objectives. Helicopter drops of money into CBDC accounts could conceivably carry spending conditions that permit only certain classes of expenditure. To amplify their effect in stimulating economic activity, transfers into CBDC accounts might, for example, carry the requirement that they be spent on durable goods, as such spending has been shown to demonstrate limited responsiveness to traditional forms of economic stimulus (including low interest rates) during recessions. Moreover, these transfers of money could also be embedded with expiration dates, encouraging consumption rather than saving. This is all very well from a policy standpoint but also highlights a major risk. Digital money could one day be used for social engineering that has nothing to do with economic outcomes. It is one thing to mandate that economic support payments conferred in the form of digital money cannot be used to purchase alcohol or drugs. It is quite another to proscribe the use of official digital money to purchase ammunition, contraception, or pornography. Benevolence is in the eye of the policymaker, and smart money can easily be subverted to promote specific social and political objectives rather than serving as a neutral medium of exchange. This concern is particularly relevant for countries with authoritarian governments.

Central Bank Digital Currencies (CDBCs) is one of the latest innovation that we might begin hearing more about as a government alternative against the decentralised nature of cryptocurrencies. What this ensures is that it retains all the benefits of cryptocurrencies (ease of transaction, low payment fees) while retaining a centralised authority to manage to alleviate issues such as illegal transactions or money laundering.

If money eventually becomes fully digital and centralised, then it becomes ever more susceptible towards corruption from not just authoritarian governments, but even political risks from well meaning policy makers who think that whatever they are pushing for is a net benefit to society. While cryptocurrencies in their present state do not provide great privacy and much utility, keeping them rather decentralised seems a lot more appealing than having a central authority that will be able to control how you spend your money, especially if we no longer have any physical form of cash.

Power usually corrupts, and i just can’t imagine having a system without physical cash where the government can instantly dictate what anyone can use their own money for in literally just a few clicks.

The suitable role the government ought to play is indeed a complex matter. In some advanced countries, including the United States, regulation has tended to protect incumbents and limit competition in various parts of the economy. Network effects and outdated antitrust regulations enabled the ascendancy of the Big Tech firms—Amazon, Apple, Facebook, Google—that dominate their respective spaces and gobble up any competitors they cannot squash. The US financial sector does not suffer from such extreme concentration, although the United States certainly has a handful of major banks and payment providers. They do not exert the same degree of dominance as the Big Tech firms; still, stringent regulatory requirements have created barriers to entry in financial markets and kept competition in check. By contrast, lax regulation in some countries has created room for the unfettered entry of firms with innovative financial products and services that serve as a boon to households and businesses. But, as we saw in the case of China, network effects can then create titans that hinder newer entrants. India appears to have struck a salutary balance by recognizing that the public sector’s optimal role is to provide a sound foundation for market forces to build on rather than intruding directly in areas where the private sector has a clear advantage. India’s government has created an important public good—a technical and regulatory infrastructure that allows innovation by large and small firms, with a level playing field for incumbents and prospective entrants as well as protection for customers’ rights. Both advanced and developing economies face the challenge of ensuring that households and small-scale businesses are educated about the benefits and risks of financial innovations. Access to such innovations without a clear understanding and appreciation of the risks can be dangerous. Greater and easier credit availability is a boon to low-income households, but they can just as well find themselves over their heads, as happened in the United States in the subprime lending boom of the mid-2000s that presaged the housing market meltdown. Even a platform that offers supposedly low-cost investment opportunities to the masses can do as much harm as good. In December 2020, Robinhood paid a $65 million fine to the SEC for steering its customers’ “commission-free” trades to brokers who paid the company higher fees and executed the trades at unfavorable prices that caused customers to lose tens of millions of dollars. Around the same time, the Massachusetts securities regulator launched a legal action against Robinhood, accusing it of encouraging inexperienced investors to trade excessively using “gamification” strategies—online rewards for trading activity and other forms of engagement with the platform—and not putting in place safeguards to protect such investors. Sure enough, in early 2021, Robinhood became embroiled in the speculative frenzy around the shares of GameStop, a video game and electronics retailer, that eventually left many inexperienced investors on the platform nursing losses. Clearly, the structures of financial supervisory and regulatory frameworks will need to adapt and evolve quickly to manage risks that shift to new and underregulated parts of the financial system.

This is a book that does a pretty good cursory overview of all the new developments in finance and how money can look like in the future. If you’re looking for a book that just touches on several broad topics such as crypto, fintech and digital currencies, then this one is a good one.

With how rapidly fintech is growing with digital banks, BNPL, crypto and digital payments, one of the major trends is how these Fintech firms are able to provide competition to the conventional banks in certain services. While financial services are now more accessible to a wider group of people, it doesn’t necessarily mean that this is an innovation that benefits everyone. Services such as Buy Now Pay Later (BPNL) might allow for more users to have access to easy cash flow, but might also increase credit risks for groups of people who live from pay cheque to pay cheque.

Not every innovation is necessarily good, and this is something that we’ll all have to wait and see.

“If you take baseline energy usage today, compound it at just a few percent a year for just a few hundred years and you have to cover the entire Earth’s surface with solar cells” to keep up with demand, he said. “You either go out into space or you need to control population on Earth. You need to control energy usage on Earth. These things are totally at odds with a free society. And it’s going to be dull. I want my great-great-grandchildren to be using more energy per capita than I do. And the only way they can be using more energy per capita than me is if we expand out into the solar system. And then we can really keep Earth as this incredible gem that it is.” Blue Origin’s oft-repeated goal was “millions of people living and working in space.” But over the long term, it was even more ambitious than that. “If we want, we could have a trillion human beings living in the solar system,” he said during an awards ceremony in Washington. “And then we’ll have a thousand Einsteins, and a thousand Mozarts. What a cool civilization that would be.” When he started Amazon, the infrastructure was already in place so that a startup Internet company, even in 1995, could be successful. Now he wanted to start building the transportation network to space. While he had been inspired by the achievements during the Apollo era, the country’s human spaceflight program had “been treading water for a long time,” he said. And during an interview at the Vanity Fair “New Establishment Summit,” he sounded very much like Musk, speaking about creating a “cargo route” to space that would be similar to the railroads that opened up the West. “What I want to achieve with Blue Origin is to build the heavy-lifting infrastructure that allows for the kind of dynamic, entrepreneurial explosion of thousands of companies in space that I have witnessed over the last twenty-one years on the Internet,” he said. Amazon had its path laid out for it. Cables for the Internet had been laid. The postal service delivered packages to his customers. “There was already a payment system; we didn’t have to do that,” he said. “It was called the credit card, and it had been initially put in place for travelers.” All Amazon had to do then was “take that infrastructure and kind of reassemble it in a new way, and do something new and inventive with it.… In space today, that is impossible. On the Internet today, two kids in their dorm room can reinvent an industry, because the heavy-lifting infrastructure is in place for that. Two kids in their dorm room can’t do anything interesting in space.” He wanted, then, to use his vast fortune to lay the foundation of that infrastructure into space. To make that part of his legacy. “If I’m 80 years old and I’m looking back on my life,” he said during an awards ceremony, “and I can say that I put in place, with the help of the teammates at Blue Origin, the heavy-lifting infrastructure that made access to space cheap and inexpensive so that the next generation could have the entrepreneurial explosion like I saw on the Internet, I’ll be a very happy 80-year old.”

We’re at the forefront of witnessing the early development of infrastructure for the space industry. I find this really exciting and can’t wait to see how it goes.

I also begin to think about the flip side perspective that I have sometimes seen from social media comments. Why should we even bother with space when we can’t even get things right in our own planet. And while some elements of that is true, in that we can definitely do better in solving shit in our very own planet, its becomes dangerous whenever we begin to view things in binary terms and as a zero sum game.

It doesn’t mean that we shouldn’t embark on endeavours that cannot yield direct, obvious benefits. Many times, the we can’t foresee how innovation and development and they can come from various angles and it usually makes sense to decentralise things a little and allow for people to pursue a wide range of objectives. And interestingly enough, a quick Wikipedia search shows that LASIK technology came from NASA’s efforts in the 1980s for autonomous rendezvous and docking of space vehicles to service satellites.

My friend, the advertising expert Anthony Tasgal, coined the term ‘the arithmocracy’ to describe a new class of influential people who believe that their superior level of education qualifies them to make economic and political decisions. It includes economists, politicians of all types, management consultants, think tanks, civil servants and people much like me. I do not believe that these people form a conspiracy and I think most of what they do is intended for the common good. However, they’re dangerous because their worship of reason leaves them unable to imagine improvements to life, outside a narrow range of measures. Writing about such people in The Thing (1929), G.K. Chesterton explained: ‘In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”’ A huge cast of well-paid people, from management consultants to economic advisors, earn their entire salaries by ripping out ‘Chesterton’s fences’. Technology companies have partly wrecked the advertising industry and journalism by starving the press of revenue – all under the guise of efficiency. However, they fail to understand that advertising is not really about efficiency – as one expert has put it, ‘The part you think is wasted is the part that actually works.’ Billions of dollars is now spent on digital advertising because it is assumed to be more efficient – you can target people more accurately and the cost of transmission of each message to a pair of appropriate eyeballs is lower – without it being clear that it is more effective. Procter & Gamble recently claimed to have reduced their digital ad spend by $150 million without noticing any reduction in sales – is it possible that digital advertising is actually strangely ineffectual? Advertising clearly has a persuasive power that derives from more than just the information it imparts – but where does its power reside, and what makes a television commercial different from a banner? I can think of four things: We know that a television commercial is expensive to make and the airtime is costly to buy. We know that the television commercial is being broadcast to a large number of people, and that those other people are watching the commercial at the same time we are. We know that the advertiser has limited control over who gets to see that message – in other words, that he doesn’t choose who he gets to make his promise to. If the act of advertising generates any of its persuasion through these three mechanisms, it is plausible that digital advertising may appear efficient but in reality be surprisingly ineffective. Remember my argument against Silicon Valley: an automatic door does not replace a doorman. In recent years, advertising could be seen to follow the same pattern: Define advertising as targeted information transmission. Install technology that optimises this narrow function. Declare success, using metrics based on your original definition of function. Capture cost savings for yourself and walk away. The overly simplistic model of advertising assumes that we ask ‘What is the advertisement saying?’ rather than ‘What does it mean that the advertiser is spending money to promote his wares?’, even though we clearly use social intelligence to decode the advertising we see.

I have heard ad nauseam from many people about how marketing is now a “science”, and no longer an art. That you’ll do better hiring a mathematician to run your marketing department than the traditional marketer.

While it would certainly do good to be able to enforce some efficiency metrics in running your digital marketing, relying purely on measured metrics can be misleading and lead you down a wrong path. You can never consistently measure everything, adopting a different time-frame severely skew your results, and most importantly, this disregards a lot of the human element. Like what the passages says, it definitely doesn’t pay off if one narrows down on certain metrics and forget about the meaning of the act of advertisement.

Pure logic and reason naturally compels you to to narrow down to a few narrow paths of reasoning, and limits the factors that one can consider. Its not a bad thing that we now have all these new ways of measuring the results of digital marketing, that we can adopt certain methodologies and reasoning behind it, but we definitely cannot be logic ideologues as that ends up limiting our minds. If so, we then end up disregarding the many irrational things that make humans the way we are.