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I did a long-form interview on Medium’s Defiant of my run for California Governor. It covers many subjects (Trump, gene editing, basic income), as well as why I think technology is ready to change politics and governance forever:

By AJAI RAJ

Stop me if you’ve heard this one before. It’s 2015, and the ever-humming machinery of American presidential politics is picking up steam. The American political machine runs on steam, okay? It’s very old.

Out of the predictable, claustrophobic sameness of the political duopoly — with naked oligarchy on one side and an ostensibly friendlier, more diverse oligarchy on the other — emerges a candidate with some new ideas. Oh, maybe not completely new ideas, but wild ideas, fresh ideas, ideas long thought to be unpalatable to the American political mainstream.

Ideas like free college for everybody, a universal basic income, or UBI … and abolishing death once and for all.

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If you follow Bitcoin at all, then you know that its value is spiking. It has already surpassed a massive spike on Thanksgiving night 2013, and it has just surpassed the cost of an ounce of gold. [continue below image]

Like any commodity, the exchange value of Bitcoin is driven by supply and demand. But, unlike most commodities, including the US Dollar, the Euro or even gold, the eventual supply is capped. It is a mathematical certainty. Yet, demand is affected by many factors: Adoption as a payment instrument, early signs that it is being considered as a reserve currency, fascination by Geeks and early adopters and its use as a preferred tool by some criminals.

But chief among reasons for acquiring Bitcoin is speculation. Whether it is buy-and-hold or day trading, speculators still outnumber those who use Bitcoin to settle debts or to buy and sell other products and services. (Earlier this week, I argued that speculation is responsible for 85% of demand and of transactions—but that’s another story).

It’s a bit ironic that speculation—in the early days of a new market—retards organic adoption. It contributes to uncertainty and volatility, and it reduces the fraction available to the markets that make it both useful and liquid. Yet, in free markets, speculation is a necessary and critical antecedent to adoption.

This week, short term speculators have an unusually keen opportunity to profit, especially if they know how to buy a ‘put’ or sell a ‘call’ (i.e. to leverage a bet for or against the direction of Bitcoin, without actually acquiring any). For example, you can bet that an exchange-traded stock will fall, because there is a market for puts & calls. But it’s not as easy to bet against commodities that are not yet listed for options trading.

I am not going to give advice in this article. I am not a licensed investment professional and although I am bullish on long term, organic adoption of Bitcoin, I really don’t have an opinion on the current news or the short term prospects for a pull back. But, if you have an opinion on a current news event, then there is an immediate opportunity for you to make (or lose) a significantly leveraged sum in the next few days…

SEC and ETFs (Alphabet soup of investment banks)

Next weekend, on Saturday March 11, the United States Securities and Exchange Commission (SEC) will approve or deny an application for the first regulated, recognized and significantly backed Bitcoin Exchange Traded Fund (ETF). Why is this significant? Because most investments are not hand picked by individual investors. Investors choose the level of risk or diversification that seems reasonable for their life stage and then leave stock-picking decisions to a formula, a market sector basket, or a fund manager. That is, invest or park their money in a fund rather than betting on Space-X, PayPal or the local electric company. [continue below image]

If approved, an ETF potentially adds massive new demand for a commodity, by offering a financial instrument than can be subscribed by the vast fraction of funds, investors, pensioners and speculators who prefer to leave asset management to an organization, outside broker or formula.

The first ETF application is created and backed by the Winkelvoss Twins. They were Olympic rowers, but found fame & fortune by contracting Marc Zuckerberg to create an early design for Facebook. If their application is approved, a dozen more investment banks, brokers and hedge funds are standing by to jump in with both feet.

This morning, Cointelegraph put the odds that the ETF will be approved at 50%. Some analysts place the chances even higher. But consider that Bitcoin has already spiked dramatically in the past few weeks. The excitement is already reflected in the price. So, where is the opportunity?

The opportunity, as with any speculative decision, is in the dissonance between your research and hunch compared with the overall market expectation reflected in the current price. So, for example, if Bitcoin is accepted as the basis for an ETF (and if it continues to grow in more fundamental adoption), the current price is actually remarkably low. Under these assumptions, it hasn’t even begun its period of rapid ascent. Perhaps more obviously (and even more short-term), if you believe that an ETF will be blocked by regulators, then the recent rise is likely to be reversed quickly, at least in the minutes after the March 11 decision is announced.

So how can you profit from your belief that a commodity will drop in value? I leave that to your personal investment knowledge and research or your financial advisor. My purpose is not to advise, nor even to teach about puts and calls. It is to point out that a few people will win or lose a lot of real money this coming weekend—at least on paper. And it all hinges on whether they can correctly predict the outcome of a regulatory decision process.

Again, Bitcoin is a very limited commodity, There are only 15.2 million coins today, and there will never be more than 21 million coins. This does not present an obstacle to adoption, because the coins can be sliced smaller and smaller as needed. In a noteworthy demonstration of ‘good deflation’, there will always be enough units for everyone—even if the entire world adopts it for every transaction under the sun.

Philip Raymond co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

Blue Origin’s New Shepard Team is the winner of Aviation Week’s 60th Annual Space Laureate. New Shepard is only the first step in fulfilling Blue Origin owner Jeff Bezos’ vision of using ever larger reusable rockets to send an entire economy into Earth orbit and beyond. Following the Laureate Award presentations held at Washington’s National Building Museum on March 2, Bezos talked to Aviation Week and Space Technology Editor-in-Chief Joe Anselmo and the audience at the awards dinner about the importance of expanding into the solar system.

* we need to expand into the solar system. The choice is between stasis on earth or expansion and dynamism in space.

* Cost of space is too high so that thousands of companies can get into space and do interesting things, this will unleash creativity and experimentation that we see on the internet.

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I use to hate it when my dad insisted that I read something longer than 2 paragraphs. (Something related to his interests, but not to my school work, his career or our family). That’s because it shouldn’t require a 30 minute read to determine if it piques my interest, as it does his.

But I am asking Lifeboat readers to invest 37 minutes in the video linked below. Even if you give it just 5 minutes, it will provide sufficient motive for you to stick around until the end. [continue below video]

I want you view it because we are on the threshold of something bigger than many people realize. Bitcoin and the blockchain is not just a new currency or a way of distributing books among network users. We are becoming involved with a radical experiment in applied game theory that is shockingly simple, but nascent. Opportunities abound, and the individuals who recognize those opportunities or learn to exploit them will benefit themselves as they benefit the global community. Because it is so radical (and because it clashes with deeply ingrained beliefs about authority, control mechanisms, democracy and money), it seems complex and risky—but it’s really not.

I am a Bitcoin educator and columnist. I have taught college seminars in Bitcoin and I will be keynote speaker at the 2017 Digital Currency Summit in Johannesburg. I design online courses for the most popular cryptocurrency self-learning groups. But Antonopolous runs circles around me. He is a Bitcoin evangelist extraordinaire. All of his presentations are superb, but this one provides context. It conveys an understanding that Bitcoin novices and professionals equally appreciate. It answers questions the viewer hadn’t asked, but would have.

There are hundreds of videos and PowerPoint presentations that explain how Bitcoin works. But they rarely provide context. Few of them convey why it is such an important development and why it has overtaken biotech & pharmaceuticals as the focus of VCs . Few can explain why an ethereal Bitcoin (a unit that you cannot hold) has just surpassed the value of a unit of gold. And few people realize that volatility has been abating as the increase in value and adoption is surging.

As you watch Antonopolous, you are certain to think about things that you did not previously know—or at least, that you did not reflect upon. My purpose in asking you to view it, is not to sell you on Bitcoin or the blockchain, but to provide the context that may help you to code, consult, write articles, teach, begin trading, start saving, and more.

Philip Raymond co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

The Libertarian Republic covering my libertarian run for California Governor:

By Kody Fairfield

After realizing his chances to be President were over, Zoltan Istvan of the Transhumanist Party, has decided to take his platform and run for another elected office, and under a different political party.

Istvan didn’t have much of a chance at being president, but that didn’t stop him from campaigning as the Transhumanist Party’s candidate to promote his pro-technology and science positions. Now, he’s setting his sights a bit lower, and with a different party. Istvan announced this morning that he plans to run for governor of California in 2018 under the Libertarian Party, explains Engadet.com.

In a Newsweek article Istvan wrote, “We need leadership that is willing to use radical science, technology, and innovation—what California is famous for–to benefit us all. We need someone with the nerve to risk the tremendous possibilities to save the environment through bioengineering, to end cancer by seeking a vaccine or a gene-editing solution for it, to embrace startups that will take California from the world’s 7th largest economy to maybe even the largest economy–bigger than the rest of America altogether.”

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While there are different flavors of the UBI, the basic concept is that everyone just gets money for existing—this, in theory, would help keep the economy running smoothly even as people are working less.

“Sounds like a communist scheme” jokes Pethokoukis. But he explains how this is actually a very old idea that has its roots on the political right as a way to simplify the welfare state. It’s an idea that’s really taken off among the libertarian-leaning luminaries of the tech world in recent years.

“Silicon Valley has sort of latched on to this idea. They have the most aggressive timetable as far as when we will actually see all these jobs hemorrhage,” explains Pethokoukis.

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At Quora, I occasionally play, “Ask the expert”. Several hundred of my Quora answers are linked here. Today, I was asked “How much of Bitcoin’s value is driven by speculation”. This is my answer…

This is a great question! While the value of any commodity is determined by supply and demand, speculation is one component of demand. Another is the unique utility value inherent in a product or process. This is sometimes called ‘intrinsic value’.

It’s ironic that when a high fraction of value is driven by speculation, short-term value becomes volatile and long-term value becomes less certain—and less likely to produce returns for those same speculators.

Editor’s Note: In the past few weeks, a significant spike in Bitcoin’s value and trading volume relates to a pending regulatory decision expected at the end of next week. This activity is certainly driven by speculation. But for this article, I am considering periods in which the demands of individual events are less clear.

The value of Bitcoin is influenced by:

  • Day traders who buy and churn
  • Long-term speculators who buy and hold. This includes me.
  • Criminals who hope that cryptocurrency transactions can be more easily hidden than government backed currencies
  • Early adopters who use Bitcoin as a payment instrument or to send money
  • Vendors who accept the coin in exchange for products and services
  • Vendors who retain a fraction of revenue in Bitcoin (rather than exchanging to Fiat). To avoid a round trip exchange, they seek to purchase materials or pay staff with the Bitcoin they earned.

Here’s the rub: Bitcoin will not become a store of value unto itself (i.e. a currency), and it will not gain a significant fraction of the payment instrument market until the transaction volume of the first to user categories in the above list are overtaken by the the ones further down. Likewise, Bitcoin will not enter its biggest growth spurt until the last two items swamps the others as the largest motive for acceptance and use.

Put another way: Long term value must ultimately be driven by organic adoption from actual users (people who are buying and spending Bitcoin on other things.

In another article, I expand on the sequence of events that must take place before Bitcoin grows into its potential. But make no mistake. These things will happen. In tribute to the brilliance of Satoshi, the dominoes are already falling.

In response to the question, I estimate that at the beginning of 2017, 85% of Bitcoin value is still driven by speculators. I have not analyzed wallet holding periods compared against the addresses of known vendors. Furthermore, it would be difficult to understand the relationship between the number of speculative transactions and the overall effect on value. Therefore, my figure is more of a WAG than an calculated estimate. But it’s an educated WAG.

The fraction of speculative transactions will drop significantly in the coming months—even as late speculators jump on board. That’s because uptake from consumers and businesses is already taking off. The series of reactions that lead toward ubiquitous, utilitarian applications has begun. Bitcoin’s value will ultimately be driven by use as a payment instrument and in commerce.

Because it is a pure supply-demand instrument, Bitcoin will eventually be recognized as currency itself. That is, it needn’t be backed by precious metal, pegged convertibility or a redemption promise. When that happens, you will no longer ask about Bitcoin’s value. That would be a circular question, since its value will be intrinsic. Instead, you will wonder about the value of the US dollar, the Euro and the Yen.

As a growing fraction of groceries, gasoline and computers that you buy are quoted in BTC, you will begin to think of it as a rock, rather than a moving target. One day in the future, there will be a sudden spike or drop in the exchange rate with your national currency. At that time, you won’t ask “What happened to Bitcoin today? Why did it rise in value by 5% this morning?” Instead, you will wonder “What happened to the US dollar today? Why did it drop in value by 5%?”

Philip Raymond co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

One thing is clear: the way in which we organize the economy and society will change fundamentally. We are experiencing the largest transformation since the end of the Second World War; after the automation of production and the creation of self-driving cars the automation of society is next. With this, society is at a crossroads, which promises great opportunities, but also considerable risks. If we take the wrong decisions it could threaten our greatest historical achievements.

We are in the middle of a technological upheaval that will transform the way society is organized. We must make the right decisions now.

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Gets too advanced for me, but still interesting.

As the world transitions to a low-carbon energy future, near-term, large-scale deployment of solar power will be critical to mitigating climate change by midcentury. Climate scientists estimate that the world will need 10 terawatts (TW) or more of solar power by 2030—at least 50 times the level deployed today. At the MIT Photovoltaics Research Laboratory (PVLab), teams are working both to define what’s needed to get there and to help make it happen. “Our job is to figure out how to reach a minimum of 10 TW in an economically and environmentally sustainable way through technology innovation,” says Tonio Buonassisi, associate professor of mechanical engineering and lab director.

Their analyses outline a daunting challenge. First they calculated the growth rate of solar required to achieve 10 TW by 2030 and the minimum sustainable price that would elicit that growth without help from subsidies. Current technology is clearly not up to the task. “It would take between $1 trillion and $4 trillion of additional debt to just push current technology into the marketplace to do the job, and that’d be hard,” says Buonassisi. So what needs to change?

Using models that combine technological and economic variables, the researchers determined that three changes are required: reduce the cost of modules by 50 percent, increase the conversion efficiency of modules (the fraction of solar energy they convert into electricity) by 50 percent, and decrease the cost of building new factories by 70 percent. Getting all of that to happen quickly enough—within five years—will require near-term policies to incentivize deployment plus a major push on technological innovation to reduce costs so that government support can decrease over time.

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