Here's a snippet from Andreessen-Horowitz's 16 Things: Insurance:
...How about an insurance company that empowers you to make smart lifestyle decisions? Examples: the car insurance company that routes you around dangerous intersections; the home insurance company that automatically summons a plumber when it detects water on the floor near the water heater; or the health insurance company that connects you with friends that are also trying to lose weight?...Of course the wasp's sting is in the tail:
...Yes, some of these will require changes to existing regulations. But some of the regulations were designed for a different era. The world has changed. Let’s help the stodgy insurance ecosystem change with it.Yikes.
It's always about who gets to write the laws.
Always.
Handy reference link after the jump.
For more on the Bitcoin/Andreessen connection see yesterday's "Climateer Line of the Day: Uh Oh Andreessen Edition".
From
Regular readers of this blog will know that I have an unhealthy fascination with things like artificial intelligence, information asymmetry, monetary systems, bitcoin and Sci-fi. And that I like to speculate wildly.
So come with me now on a little journey. A journey to a distant point in time when the world has grown a nervous system and thinks for itself. A point in time Sarah Connor once called Judgment Day.
Because what I discovered this month is that even as I write and speculate about these things in a semi-whimsical fashion, there are others out there — with not insignificant amounts of capital — preparing to forward this agenda very seriously.
This, I have realised, is the true era of *cult markets, and by that I mean it’s not just greed and money driving advances in the fintech space anymore. In the bitcoin world especially there is — among certain groups at least — something akin to religious fanaticism driving things forward.
Now, I realise that exposing bitconers as cultists is hardly an innovative observation. But there is, I think, a subtle difference between the tendency for absolutist libertarian thinking in this space — something we’ve always seen in the gold market, for example — and the true out-of-this world ambitions of those attempting to coordinate and direct that religious fervour into promoting their agendas.
Because when you unpack the true motives of the core instigators, you discover an absolutely incredible belief system. (* consider this a curtain raiser for my upcoming book: Cult Markets).
The following will, I’m sure, sound a bit crazy. But I, like Herodotus, simply tell the story as I see it unfold in front of me or as I come to learn about. And I think this is a story that is worth telling, no matter how crazy it sounds.
Artificial Intelligence
A while ago I attended a talk by a prominent artificial intelligence developer and scientist. This particular AI developer was working on a so-called brute force learning system, which as far as I understand from people in this space is a fairly common approach to AI learning and neural path development. This AI expert revealed in passing, very much off the record, that he was already working/talking with hedge funds about deploying the AI on markets, and that his current best guest about the sort of returns that could be achieved was about 40 per cent.
Later I came across a different AI team which took a very different approach to the whole thing. Their AI wasn’t going to be a brute force trial and error type. It was going figure out what to do next with the help of an imagination. This would be achieved with the use of modelling techniques, which would — as I understood it — help the AI 3D-map the world around it so that extrapolations and intuitive guesses could be made about how and where to take further action. I found all this fascinating. And while I desperately wanted to write about it — (Intuitive AIs are out there!) — I couldn’t think of a way to link it in a serious fashion to finance or markets.
But I now finally do have an excuse.
A couple of weeks ago I met up with an incredibly insightful hedgie who I hadn’t heard from for a long time. He explained to me that one of the reasons he had gone “dark” and wasn’t sharing insights with the public and the media as he once did, was because gaining a proprietary advantage in the market based on insight had become increasingly momentary. Nowadays, with his fund fully established, there wasn’t any reason to give away insight for free to the media. Fair enough.
Nevertheless, we got to chatting about the themes he was exploring anyway. And one thing that did come out was his belief that it wasn’t classic HFTs — which apparently are fairly dumb and only as good as the ideas of the hedgie who programmed them — that the likes of Michael Lewis should be worried about, but rather algorithms that adapt and learn as and when they encounter diminishing returns, externalities or other unexpected events.
My source added that he himself had hired a number of AI experts to help develop precisely such algorithms. At this point — and please remember I had’t seen or spoken to him for years — we turned to the topic of the prisoner’s dilemma. We soon realised we had arrived at fairly similar opinions about how the marketplace might evolve next quite independently.
For example, I had proposed just a few weeks ago that perfect competition and smart algorithms probably would in the long-time lead to the outbreak of a spontaneous algorithmic consensus.
Self-adjusting algorithms, I proposed, would eventually figure out that a race to the bottom was against all their interests, and that sharing information — whether wittingly or unwittingly — to establish a de facto rent-extracting cartel system made much more sense. This, I then proposed, might be the moment that markets become self-aware.
Bitcoiners and the Mark of the B
This brings me to the latest Bitcoin panel I attended. The panel started as they always do: wildly over enthusiastic claims about bitcoin’s potential, profound disrespect for the social bit of society and reflections that proved a generally poor understanding of how the financial system works.
But there was one guy — who used to own a mining business — who intrigued me a lot. He will remain nameless (for now)....MUCH MORE ending with:For which the reddit r/bitcoin had an answer a couple years ago:
P.s. I’m pretty sure you can extract a meaningful satanic anagram out of the name Satoshi Nakamoto as well.
if you rearrange the letters in satoshi nakamoto you get...Here are the first thousand results from Wordsmith's anagram generator.
