#20 - The Blockchain Hype
On cultivating good judgment, tribal identity and the case for a Chief Fun Officer
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Hello,
Greetings from the Curious Cat.
We would like to apologize for the irregularity in sending out the weekly newsletter in the past couple of weeks. Going forward, we would try to stick to our weekly format of interesting articles, few summaries and ideas along with a set of interesting reads for the week.
In today’s edition, we look at -
Blockchain - The Hype Around It
Tribal Identity
Why Every Company Needs A Chief Fun Officer
Exercising Sound Judgment
Happy Reading.
Blockchain, The Amazing Solution For Almost Nothing
Read the article here (Read Time ~ 15 mins)
Blockchain has been very widely regarded as the most disruptive technology around with many applications across several fields ranging from financial services to healthcare to government to anything that needs data to be stored and processed securely. In this piece, the author questions whether we have had anything to show on that front. Indeed, the author shows why even Bitcoin, the most celebrated application of Blockchain, isn’t particularly the most efficient.
The author writes that it’s a bizarre journey to nowhere. Blockchain generalises the bitcoin pitch: let’s not just get rid of banks, but also the land registry, voting machines, insurance companies, Facebook, Uber, Amazon, the Lung Foundation, the porn industry and government and businesses in general. They are superfluous, thanks to the blockchain. Bloomberg estimates the worldwide blockchain industry at around $700m. Large companies like IBM, Microsoft and Accenture have entire divisions dedicated to this revolutionary technology. The only thing is that there’s a huge gap between promise and reality. The Honduran land registry was going to use blockchain. That plan has been shelved. The Nasdaq was also going to do something with blockchain. Not happening. The Dutch Central Bank then? Nope.
Out of over 86,000 blockchain projects that had been launched, 92% had been abandoned by the end of 2017, according to consultancy firm Deloitte. Why are they deciding to stop?
Firstly: the technology is at loggerheads with European privacy legislation, specifically the right to be forgotten. Once something is in the blockchain, it cannot be removed. For instance, hundreds of links to child abuse material and revenge porn were placed in the bitcoin blockchain by malicious users. It’s impossible to remove those. Also, in a blockchain you aren’t anonymous, but “pseudonymous”: your identity is linked to a number, and if someone can link your name to that number, you’re screwed. Everything you got up to on that blockchain is visible to everyone. The fact that no one is in charge and nothing can be modified also means that mistakes cannot be corrected. A bank can reverse a payment request. This is impossible for bitcoin and other cryptocurrencies. So anything that has been stolen will stay stolen. There is a continuous stream of hackers targeting bitcoin exchanges and users, and fraudsters launching investment vehicles that are in fact pyramid schemes.
And blockchains are energy intensive too: Bitcoin and Ethereum – are now using up the same amount of electricity as the whole of Austria. Carrying out a payment with Visa requires about 0.002 kilowatt-hours; the same payment with bitcoin uses up 906 kilowatt-hours, more than half a million times as much, and enough to power a two-person household for about three months.
This article puts the flaws of blockchain in perspective as many technology enthusiasts continue to bloviate about how blockchain would replace governments.
Tribal World - Group Identity Is Everything
Read the article here (Read Time ~ 17 mins)
Amy Chua makes three distinct points:
a) American politicians have for generations failed to understand how tribal identity works. This failure has hobbled US foreign policy for generations. Iraq, Afghanistan, Vietnam, etc are, according to Chua, debacles driven by American failure to understand the tribal politics of these countries. In Vietnam, for example, the Americans were completely ignorant of the hatred the Vietnamese had for the Chinese who lived in Vietnam, who dominated 80% of the business interests in that country and to whom the Americans were giving business.
b) Research conducted by psychologists show that children as young as four demonstrate these tribal instincts. So Jewish kids have little sympathy for Arab kids and vice versa. Research also shows that if kids don’t have such instincts, they can be very easily trained to harbour such instincts.
c) As economic life in America polarises between the “haves” on the coast and the “have nots” everywhere else, the have nots are behaving exactly as you would expect a tribe under pressure to behave. They are electing someone who behaves like them – Trump – to lead them. They are ostracising the “have nots”. They are supporting measures to crush other tribes eg. immigrants.
Unless the elites in America wake up the tribal instincts that people display – in America and elsewhere – they will continue to suffer reverses at home and abroad.
Why Every Company Needs A Chief Fun Officer
Read the article here ( Read Time ~ 4 mins)
The author says that until the 1990s the dominant paradigm in the office or the factory was the maxim laid down by Henry Ford: “Men work for two reasons. One is for wages, and one is for fear of losing their jobs”.
All of that changed when Silicon Valley giants like Google realized that they could make more money if their workers were more creative: “But the script for the workplace as a fun environment was rewritten by numerous Silicon Valley start-ups during the dot-com boom. They are now epitomized by the office perks that come with tech companies like Google. These encompass, variously: music and art studios, mini-golf courses, ping pong tables, foosball, climbing walls and even nap pods.”.
The authors have identified a range of factors that affect the way people judge events to be fun or not.
1. Make fun voluntary: The more voluntary an activity, the more likely it is people will see it as fun and enjoy participating
2. Fun from the top: Workers are also likely to value fun in the workplace more highly if managers and leaders are supportive of fun. In simple terms, it is the difference between a manager who, as everyone runs to the break room to have birthday cake, signals “great, let’s all go and celebrate and then we will get back to work”, and one that mutters “here we go again, people are going to get distracted and we will lose 30 minutes of work time”
3. Recognize different personalities: Personality traits are important. Optimistic people with a positive approach to life are more likely to treat fun activities favorably. Organisations that have a strong culture of fun and believe in the benefits of hiring people that fit the culture of their organisation are more likely to have employees who share fun as a common value.
4. Types of fun: The type of activity makes a difference. The research I’ve mentioned suggest events involving food, celebrations of personal milestones and workplace outings are best received. Avoid events where people risk making a fool of themselves in front of their co-workers
It is worth ignoring the juvenile title and focusing on the more substantive point made by the piece: “Besides making working lives more enjoyable, there is strong evidence that fun in the workplace packs a powerful punch in terms of organisational benefits.
A Question of Judgment
Read the article here ( Read Time ~ 3 mins)
Good judgment is a quality everyone would like to have. But it is remarkably difficult to define precisely, and many people are not sure whether they personally possess it. Sir Andrew Likierman of the London Business School has spent a long time talking to leaders in a wide range of fields, from business and the army to the law and medicine, in an effort to create a framework for understanding judgment.
So what exactly is Sir Andrew’s framework for assess judgement? He suggests that judgment is the combination of personal qualities with relevant knowledge and experience to form opinions and take decisions. And he argues that, judgment involves a process—taking in information, deciding whom and what to trust, summarizing one’s personal knowledge, checking any prior beliefs or feelings, summarizing the available choices and then making the decision. At each stage, decision-makers must ask themselves questions, such as whether they have the relevant experience and expertise to make their choice, and whether the option they favour is practical.
Academics have expertise, they don’t necessarily have judgment. People with judgment know when they are out of their depth in making a decision and typically then seek the advice of someone who has the right background and knowledge. While good judgment is important to success, success is not a signal that there has been good judgment.
Some individuals are born with the ability to listen, be self-aware and better understand other people: all qualities that make good judgment easier. People with good judgment tend to have a breadth of experiences and relationships that enables them to recognize parallels or analogies that others miss. The ability to be detached, both intellectually and emotionally, is also a vital component.
Others may have the wrong sort of characteristics; a tendency to ignore others, stick to rules irrespective of context, rush into action without reflection and struggle to make up their minds. Many leaders make bad judgments because they unconsciously filter the information they receive or are not sufficiently critical of what they hear or read. The danger is that people ignore insights that they don’t want to hear, a tendency that can increase with age.
(Note: We will be back with the summary of Warren Buffett’s 1984 letter to shareholders in the next edition)
Interesting Reads For The Week
We decided to publish few links to interesting articles that we have found across the Internet. We hope you find them interesting.
How China Controlled The Coronavirus? [The New Yorker]
How Does Science Really Work? [The New Yorker]
The Value Of Uncertainty [Aeon]
The Anatomy Of Assholes [Scott Kaufman]
How Philanthropy Benefits The Super-rich [The Guardian]
What Is Conservatism? [American Affairs Journal]
The Evolution Of Divorce [National Affairs]
What Fans of Herd Immunity Don't Tell You [The New York Times]
How Coronavirus Changed Consumer Behavior and Company Valuations [Morningstar]
The Tragedy of the ‘Tragedy of the Commons’ [Scientific American]
Afterthought
“Goals + Determination + Reality = Success”
-Ray Dalio
And that is a wrap for the week. We hope you enjoyed binge reading this edition. If you found this newsletter useful and worth your time, do share it with your friends.
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Take care, stay safe and have a nice weekend. We shall see you next Saturday