#12 - Howey test and new game plan

Untethered.email - capturing the uncaptured

2 links that I enjoyed the most this week

  • The SEC Launched a Fake ICO Website to Educate Investors - howeycoins.com.

  • Winners & Losers - Scott and NYU finance professor David Yermack discuss tethered coins and the cryptocurrency landscape.


Untethered.email is shifting to a monthly publication.

I’ve been sending untethered.email every Sunday (Singapore Time SGT), it does take time to create a summary note, and it is just great to share all these uncaptured insights with you.

After this change, I hope that I will have more time to better understand this landscape, to focus on the complex interplay among players, and its rationales, dynamics and outcomes.

I hope you enjoyed it as much as I did. My goal is helping you to capture the un-captured, it will remain the same.

At the same time, I’m planning to launch another newsletter that focusing on blockchain and crypto investment framework, and investment thesis from leading investors, VCs and funds.

Paid subscribers will automatically upgrade to this new email newsletter. If you have any questions or comments, please feel free to email me.

  • Untethered.email will be a free email newsletter

  • The next Untethered.email podcast summary will be published in June

If you have any questions, feedback, or ideas for making untethered.email more useful for you, please contact me at kevinjx.liu [@] gmail.com

I’d love to hear from you.

Onward, Upward and Untethered,
Untethered.email by Kevin Liu

#11 - Bitcoin's true potential, with Andreas M. Antonopoulos [Part 2]

From The Kevin Rose Show & Summarised by Untethered.email - capturing the uncaptured

This is part 2 of Kevin Rose’s great interview with Andreas M. Antonopoulos on the “The Kevin Rose Show” You can find [Part 1] Here

TL; DL (Too Long; Didn't Listen)

“The innovation is happening in a completely distributed way so that people who are not part of that cohort can build the applications that serve their needs without asking for anybody’s permission.” -Andreas M. Antonopoulus

“The day we achieve transaction parity with Visa, and we will, will be six months before we achieve TenX Visa and two years before we achieve a HundredX Visa.” -Andreas M. Antonopoulus

“We have to get used in a world in which there are now thousands of currencies, there will be tens of thousands, then hundreds of thousands, then millions, then billions of digital currencies.” -Andreas M. Antonopoulus

“Cryptographic Algorithms are actually the ones that secure our banks so all of the concerns one may have about Quantum Computing on cryptocurrency apply equally to banking.” -Andreas M. Antonopoulus


The tipping point that could make bitcoin a national currency?

  • Having this decision on a per country basis is not the right way of looking at it.

  • The right way at this is if this becomes an individual choice for each and every individual.

  • A little percentage of the global population is already opting out of traditional banking systems and exiting that system.

Use Bitcoin as a day to day currency?

  • While there are people who looks at Bitcoin as an investment where they hold and wait for it to grow in value in a certain amount of time, there are people like him who use and spend Bitcoin on a day to day basis.

  • Most of the payments he makes are in Bitcoin.

  • While some might argue that it’s not the smart way to do because those who hold into Bitcoin probably already made millions behind it while he didn’t.

  • He was able to build an interesting business around it.

  • If you don’t engage in economic activity with this, you don’t fully experience the power of digital currency.

Will Bitcoin market cap reach trillions?

  • there is a distinction between the Bitcoin that we have today and the broader concept which is one or more completely decentralized open, borderless, censorship resistance digital currencies that exist on the internet in whatever form.

  • We may end up with the same technology with the same name or the same technology with a completely different branding.

  • The idea of network-based open and decentralized currency and all of the other applications that has happened.

  • It is needed so much that he has no doubts in his mind that it will be wildly successful and that it will completely transform the way we do commerce in the next twenty years.

Issues with clearing time?

  • Clearing time

    • It is the 10-minute time for a Bitcoin confirmation.

    • It is the time it takes to clear the transaction and settle it.

  • How do we fix the delay in clearing time?

    • By comparing the clearing time of Bitcoin to the Visa Network where the clearing time is 30 days.

    • In which case, there isn’t really a problem in Bitcoin’s clearing time.

The two completely different development curves that is being followed by Visa and Bitcoin

  • Visa has grown its transaction per second in a linear fashion for the last fifty years while Bitcoin is growing in an exponential.

How many hedge funds and day traders are out there?

  • The simple answer is it is impossible to tell.

  • The interesting things happens when you are able to open up new levels of scale which creates a possibility for new types of applications.

What is re-decentralized web

  • It is the idea that payments systems themselves have become the nexus for centralization around web services.

Where do Andreas buy his Bitcoin and where does he recommend for people to go and buy Bitcoin

  • Andreas haven’t bought Bitcoin since 2013 but he hasn’t been holding on his Bitcoin, he’s been earning it.

  • Most of the people right now will just go and buy their Bitcoin and consider it an investment, by buying Bitcoin, you’re only getting a part of the Bitcoin experience.

  • Also, there is a lot of additional risk involved with approaching Bitcoin from the perspective of buying because you have to worry about the timing, the market, and how you’re going to hold and not to panic.

  • You should also consider that when you buy Bitcoin from these third parties, you are doing it with a lot of privacy invading involved.

By the way , there is a story on $1.5 million donations for the dedicated Bitcoin advocate and most eloquent speaker.
Roger Ver@rogerkver

Andreas is one of the most eloquent speakers on the topic of Bitcoin, but if he had invested even $300 in bitcoin back in 2012, he’d be a millionaire today. https://t.co/GU8mW8FpTe

December 5, 2017
Andreas M. Antonopoulos@aantonop

I did invest, Roger. Then I sold in 2013 to pay my rent. I didn't have disposable income to work for two years without pay and invest at the same time. I should've gone into more debt, but that would have been irresponsible towards my family who I supported

December 5, 2017
Practical advice in obtaining Bitcoin

  • Earn it!

  • Start advertising that you accept Bitcoin in exchange of services.

  • You can also go through the exchange, jump thru all the hoops, get verified and start buying.

  • Buy Bitcoins from ATMs or in-person transactions.

Advice on wallets

  • While he recommends the wallets listed below, you still shouldn’t trust the software and you create a backup of your keys which you do by writing down some english words (seeds) and you keep it somewhere safe.

  • This is a precautionary measure for when you lose your phone or when your phone gets corrupted.

    • Jaxx

    • Copay

    • Mycelium

    • Bread wallet

    • Airbits

    • Samurai

Why you can’t buy Bitcoin almost anywhere with a Credit Card or Paypal

  • The reason for that is Paypal deposits or credit cards are very easily reversible and as of now, the banks cannot deliver that a certain amount of money is definitely yours.

  • For example, they can easily come back to you and say there’s been a fraud report which will then give them the capability to freeze your money.

  • Paypal and credit cards only delivers a soft promise for your ownership of a certain amount of money while Bitcoin delivers a hard promise.

A need for decentralized exchange

  • There is an absolute need for a decentralized exchange.

  • Part of the reason is you can do decentralized exchange between digital currencies quite easily.

  • However, doing decentralized exchange to fiat is almost impossible because this means you have to somehow hook into the existing banking system and that’s a single point of failure, it is not a decentralized exchange anymore.

What are Andreas’ thoughts on Ethereum

  • He’s been interested in Ethereum for quite some time now and he’s actually writing a book which is called Mastering Ethereum.

  • It’s a book that tackles almost everything about the Ethereum platform.

  • There is a lot of things happening across the entire ecosystem and he thinks that part of the adaptation that we’re having is the idea that we’ve grown up having monopoly currencies that are national flag currencies that exist in a zero sum due to political chess game where one only wins if it beats all the other.

The strong parallel between browsers and Bitcoin wallets

  • Bitcoin wallets are essentially the browsers of the Bitcoin network.

  • They are the protocol end-point in user interface, the node and they interpret the network protocol presented to the user in an easy to understand way and convert the user’s desires into protocol activity.

  • The first step on this technology is the multi-currency wallets.

The features that Andreas’ pays the most attention to in this technology

  • Smart Contracts - the idea of a general purpose programmable blockchain

  • Privacy, Anonymity, Fungibility - stronger implementation of these features across all cryptocurrencies

  • Resource Utilization / Markets for Resources - the idea that your hard drive, laptop, CPUs, and your bandwidth are all massively under utilized resources.

  • Charitable use Bitgive Foundation

How do you create decentralized storage

  • Cloud storage which is peer to peer entirely with no central point of failure -- that creates uncensorable storage which is very interesting with the propagation of ideas on the internet.

What are Andreas’ thoughts on Quantum Computing

  • It is going to be a reality and it’s not only going to be a reality for cryptocurrencies.

  • Cryptographic Algorithms are actually the ones that secure our banks so all of the concerns one may have about Quantum Computing on cryptocurrency apply equally to banking.

  • Cryptographic Algorithms are the ones that secure nuclear weapons, it also secures access and communications in militaries so it pretty much is the one that secures everything in the world.

  • With that said, cryptocurrencies may even be the least of our worries when it comes unequal availability of quantum computing.

  • Don’t worry about quantum computing at all, it is not a relevant issue in this currency.

Books written by Andreas

  • Mastering Bitcoin

  • The Internet of Money

  • Mastering Ethereum

Links/resources mentioned in the show:

Connect with Andreas:

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#10 - Bitcoin's true potential, with Andreas M. Antonopoulos [Part 1]

From The Kevin Rose Show & Summarised by Untethered.email - capturing the uncaptured


I’m reading “The Lessons of History” by Ariel Durant and Will Durant. Don’t underestimate this 100 pages opinionated book on History.

Here is what I got in Chapter X. “Government and History”

The only real revolution is in the enlightenment of the mind and the improvement of character, the only real emancipation is individual, and the only real revolutionaries are philosophers and saints.

In this edition, I’d like to bring you a conversation between Kevin Rose and Andreas M. Antonopoulos. Andreas is a true Bitcoin believer and has educated a lot of people a ton when it comes to cryptocurrency and the technology that enables the existence of cryptocurrency - Blockchain. He will explain that why Bitcoin and Cryptocurrencies are so disruptive but not in ways that you might think.

TL; DL (Too Long; Didn't Listen)

“Financial service providers fulfill a feature of money that isn’t quite clearly discussed, which is using money as a system of control, a system of law enforcement whereby all financial service providers are basically deputized into law enforcement without due process.” - Andreas M. Antonopoulus

“The dream that the government had in the 1970s that they could reach a point of total control over financial flows where every end point is known, every transaction is logged, recorded and surveilled. That dream has now ended and I think that’s a good thing.” - Andreas M. Antonopoulus

“A society in which a financial system is completely controlled is a society where democracy cannot exist.” - Andreas M. Antonopoulus


Bitcoin v.s Paypal

  • Bitcoin is a combination of different technologies that for the first time ever allows us to implement trust as an internet protocol

  • Paypal and Venmo are just services.

  • There’s a very big difference between those two because Bitcoin allows you to do trusted transactions between people you don’t trust and to independently verify the authority of those transactions without trusting anybody else.

  • The magic behind Bitcoin is turning money and other trusted transactions into an internet protocol that opens the door for all of the internet-related goodies that happen like innovation of the edge, innovation without permission, open access, borderless and global operations, and inter-pairability -- none of which you could get with any of the other systems.

On Trust

  • Every other system we have and most of finance with a few exceptions requires trust in a third party and it’s built as a system of checks and balances, and oversight modern finances.

  • In such a way, that trust can be protected with multiple layers of oversight but the fundamental problem with all of that is the fact that you have to trust the third party, and that third party is motivated by a lot of things that has nothing to do with your particular security, or your freedom, your self-expression, or any other things that you care about.

  • e.g. when you trust Paypal, you’re not just trusting Paypal, you’re also trusting the American Justice systems, the US government, and all the other factors that can put pressure over Paypal.

Trust - case in point

  • This was probably most clearly demonstrated in the unlawful and extra-judicial blockade of Wikileaks in 2013 whereby the US government basically coursed every single payment provider to embargo and cut off Wikileaks without any due process, prosecution, or conviction.

  • They just cut them off the international financial system which forces Wikileaks to go into a neutral protocol which is Bitcoin that cannot be censored and does not require you to trust the third party that can be coursed.

  • Ironically, Wikileaks has now made 50,000% return on their Bitcoin from 2013.

The separation of State and Money

  • Money is used as a tool for exercising power which leads to corruption, money and state should be separated or that money should at least be a neutral system of commerce that obeys mathematics and neutral roles that have nothing to do with politics.

  • This is actually what Bitcoin delivers effectively at a very basic level -- it is a simple global protocol that simply doesn’t care about that stuff.

  • It operates on the same predictable rules and serves purely the role of commerce and not the role of surveillance or control.

A truly decentralized world, traceability and tax

  • The fear of government towards lack of control is directly proportionate to their level of freedom and their respect to human rights, self expression, and individual freedoms.

  • While the government may freak out about this but Andreas thinks that it is a mistake to assume that this scenario is something new.

  • For thousands of years, money has been untraceable -- we call that cash and it worked very well.

What is totalitarianism

  • The dream that the government had in the 1970s that they could reach a point of total control over financial flows where every end point is known, every transaction is logged, recorded and surveilled.

  • It is the government’s dream of total control.

How did Bitcoin become fully decentralized

  • Ideally, it is controlled by a balance between participation and competition by all the participants that keeps the systems honest by rewarding those who play by the rules and essentially punishing those who don’t play by the rules by making them loose the investments that they’ve made in security.

  • Bitcoin has a built-in market based competitive system in it that ensures security by requiring the participants in that consensys systems to put money down.

  • That money is almost like a bond that says ‘I will follow the rules and do the security and validate transactions correctly”.

  • If they follow the rules, they earn a reward but if they don’t then they will lose their bond.

Is buying Bitcoin like keeping cash under your mattress?

  • We need to add two perspectives and add it to this mix

  • First is to consider the idea that because it’s a system of programmable money, you can do many interesting things with Bitcoin that you can’t do with cash.

    • He said we really need to really think about this because a lot of conversations happens for and from the perspective of middle class americans and that is entirely the wrong perspective to use because americans only represent only less than 5% of the global population, the most privileged 5% with greatest access to banking and financial services with the least amount of constraints and controls with among the least corrupt government in the world and most of the banks except for the few are not downright organized criminals.

  • Second is to consider who the average consumer is - average consumer in a planetary perspective

    • The average consumer in a planetary perspective is a 23 year old Chinese male who lives within a thousand miles in the Southeast Asia who is facing a corrupt governments, dictators, and corrupt banks to say the least.

The Broader perspective on Bitcoin

  • Andreas mentioned that the broader perspective is a world in which two and a half billion people have no access to banking and are purely unbanked who lives in cash and barter societies.

  • A good number of four billion people are severely underbanked and less than a billion and a half of people have the kind of banking that is similar to what he enjoys where he can go and open a brokerage account online without the need to show anybody anything.

  • In which case he has access to ample liquidity, he emphasized how that reality doesn’t exist for most people.

To be continued in Part 2 …

Untethered.email is still beta.

If you have any questions, feedback, or ideas for making untethered.email more useful for you, please contact me at @untetheredemail

I’d love to hear from you.

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Untethered.email by Kevin Liu

# 9 - The Future of Tech |AI |Cryptocurrencies |New computing platforms

From Invest Like the Best & Summarised by Untethered.email - capturing the uncaptured

TL; DL (Too Long; Didn't Listen)

In this edition, you will learn 3 Megatrends for the next 5 to 10 years (again, 5-10 years horizon) from Chris Dixon on Invest Like the Best

  1. Artificial intelligence

  2. Cryptocurrencies

  3. New computing platforms

    • Self-driving Cars

    • Drones

    • Virtual reality/augmented reality

Find out what smart people are working on during the weekend, and you’ll know what other will be doing years in the future. - Chris Dixon

“There’s simplification in cryptocurrency industry than any other big companies so people will invest on them more.” - Chris Dixon

“If you want more jobs, give the guy spoons instead of shovel.” - Milton Freeman

“Technology is a lever for doing more with less.” - Patrick O’Shaughnessy


Technology’s driving force

  • We mistakenly feel that the deep satisfaction feeling we get, when we achieve things in our little ways makes us happy.

  • The idea of engineering or creating what’s already been used by the society seems to be more helpful in most people’s perspective.

  • The decision now is about how useful it will be for most people.

Will automation kill all of the jobs?

  • Having a conversation about automation is essential as it will determine how it will affect one’s life.

  • History of technology has caused some displacements but over the time, is has created more jobs, and has improved the overall quality of life.

  • With the new technology, it’s just easier to imagine the jobs that will go away, but not the jobs that will be created.

    • Like 20 years ago, we will imagine that Photoshop will destroy print and graphic design industry, but we failed to imagine web developing jobs, and mobile application designers.

    • Other job opportunities materialized with designing industry. With common goals to increase welfare and well-being.

History in networks and network design

  • Algorithms in Network Design should be the title of the Computer Science’s field. It’s dealing with abstract mathematical thing rather than the use of computer.

  • Software differs from hardware wherein software is literally encoding of human ideas.

“If you can think of it, you can write a software that embodies it.”- Chris Dixon

  • Internet for me is a plastic, malleable, form of media. Unlike hardware-based of network like television and radio.

Software and hardware companies

  • It’s the degrees of freedom with software and hardware differs from each other.

  • Hardware, you’re fundamentally limited with physics

  • Software, the degree of freedom is literally the limit of human thoughts.

  • Thus, software companies commoditized much slower than hardware companies.

Features of proprietary centralized networks and open networks

  • Proprietary centralized networks have this analogy of having a super box of computer that accessed human information.

  • Though no one predicted the internet in science fiction that you can have access to it in your pocket like the miracle I’m referring to which are Google, Facebook that were for free and the outsourced encyclopaedia, Wikipedia.

Why internet beat AOL

  • There are great million software developers in the world

“No matter how many smart people you have working for you, the smartest people don’t work for you as much as it works for somebody else.” - Billy Joel

  • The reason why internet beat AOL is that they captured the hearts and minds of massive community since internet is set of decentralized protocols that you can change.

Centralized vs decentralized

  • It is like Google versus Wikipedia.

    • Google has centralized information though has been run by ads and profits

    • Wikipedia is a non-profit outsourced search engine that only ask for money once or twice a year because their mode of getting information is not expensive.

  • This is the reason all platform now of companies trying to expand their market by creating things that will likely be used by everybody such as all applications now have voice assistants.

  • Decentralized systems, on the other hand, has this benefit that users, developers, and people participating in a specific platform, can feel that they can build on the platform and not having rules of the game change.

Concerns on protocols and centralization of the system problems

  • Giving a history that cryptocurrency started in 2009 with publication of bitcoins. It grows with miners being the main platform.

  • It sky-rocketed by 2013 since the prices of services and products went up though it crashed because there’s an argument among developers about bitcoin protocol over how much memory to offer on each block lowering the amount of investments.

  • So, there were developers wanting to change protocols focusing on computation of how much should be paid how powerful your computer software are assisting you to mine with arbitrary computer codes served as contracts.

What major trends is Chris passionately pursuing

  • Chris wanted to remind everyone that it takes a whole lot of investment in this platform.

  • He made this prediction, same with all of his other prediction, with 5 to 10-year horizon and not 2 to 3 years. A very long-term horizon is required when trying to build fundamentally new business models on new technologies.

  • It’s one of the best-presented platform or technology.

Other than cryptocurrency, Chris invests in Artificial Intelligence materials over weekends.

  • Checking error rates of information and researching about all other computing powers or software that will provide you data and resources.

  • Cryptocurrency platform is a very promising platform wherein right now in its fast-paced growth, he wonders what other opportunities are.

  • There are 3 major technologies right now that like internet intersects with mobile technology: Cryptocurrency, Artificial Intelligence, and Internet intersects and will amplifies each other.

  • There are a lot of things that can be imagined and materialized. Every people will invest on this.

  • “There’s simplification in cryptocurrency industry than any other big companies so people will invest on them more.”

Links mentioned:

Untethered.email is still beta.

If you have any questions, feedback, or ideas for making untethered.email more useful for you, please contact me at @untetheredemail

I’d love to hear from you.

Onward, Upward and Untethered,
Untethered.email by Kevin Liu

# 8 - Which protocols to invest in, as an investor

From a16z Podcast and summarised by Untethered.email - capturing the uncaptured

TL; DL (Too Long; Didn't Listen)

“Instead of investing in companies, that are building on top of these protocols, Polychain invests directly into the protocols” - Olaf Carlson-Wee

“The difference now is that, you can invest for example, in directly in company like Coinbase or you can invest directly in the protocol” - Chris Dixon

“We’ve already seen the creators of many of these open source protocols make lots of money on this like the creator of Bitcoin, whoever he or she or they are has over a billion dollars in Bitcoin. So I think we’re already seeing this play out a little bit and it creates the same economic incentives for these projects that you might get as a start-up.” – Olaf Carlson-Wee

“Most people should not be investing in individual stock , you should buy ETF and someday hopefully they'll be a crypto ETF they could buy too but for now they should stay away unless you really know what your doing.” - Chris Dixon


Olaf’s View on investing in this space (Protocols):

  • It’s a more of a pure play is the way I like to think about so instead of investing on the application layer, which your taking a bet on a specific team, a specific business model… And we’re betting a layer below that.”

What is an App Coin?

  • When you think about Bitcoin, we think about money or currency and think about this broad base way to generate value and transfer value.

    • People nowadays are creating the so called: Applications Specific Tokens

    • These are basically a monetary layer, added on top of the specific type of application

Project Golem

  • A peer to peer marketplace for computation

  • This means that instead of shouting his computer at night, he can rent out the CPU and GPU cycles to some developers in all parts of the world

  • It is not really money, it is just a monetary layer to this once specific peer-to-peer network

  • Doesn’t exist in the current investment world. So the only means to gain exposure to this new ecosystem is to buy Cryptographic tokens or Cryptocurrencies

Benefits to people investing in these at the protocol layer

  • We’ve seen the creators of many of these open source protocols makes lots of money on this like the creator of Bitcoin

  • People who launch Golem Token Network, they had raised a total of 9 million dollars in 9 minutes

What is the flipside of this Protocols?

  • Flipside is that now there are so many of these protocol launching right now and it means that they will have competitions in the coming years.

Open vs Closed platforms

  • Open protocols have great user experience nowadays than the outdated and centralized management form of closed protocols in the last 15 years. - Chris Dixon

How do we solve the problem of trust without having a central authority in the middle?

  • You must not trust any individual party.

  • Trust no one

  • All sorts of bad people out there trying to steal, trying to dupe the network, trying to convince the network that they have a valid transaction when they do not

People may have heard of Bitcoin and Ethereum. Can you talk about some of the other coins were accepted?

  • Tezos - uses a proof of stake consensus mechanism instead of mining or proof of work. It is also proof of stake system is that the governance is also pushed to the coin holders at the protocol level

  • Maker or MKR - a sort of whole governance and insurance system for a separate coin that is pegged to the USD dollar value. One Dai equals one dollar

    • Dai. Long considered the “holy grail” of the cryptocurrency ecosystem, a decentralized stablecoin with minimal volatility will introduce a new era of usability and mainstream adoption

    “I think there is a need for a stable coin and basically the idea is a coin that doesn't change in value.” – Olaf Carlson-Wee

  • SWARM - which is a kind of a similar project on Ethereum that helps you build decentralized apps like the domain name system or DNS, there’s ENS or Ethereum Name System that maps ETH (Ethereum domain names) to Smart contract cryptographic addresses

  • Olaf also invested in a lot of these things that are part of the low levels of that Internet stack as well as the so called “The Middleware”

Challenges and Obstacles

  • The challenges are the brand new technologies nowadays. So these aren't facing just a market challenge. These are hard technology challenges

  • Olaf and Chris agrees and says that large groups of people have politics and disagreements

  • The only difference is that the arguments happen in public corporate board might have just as large an argument and one side fails but the shareholders never hear about that

Olaf’s view on the competition in inventing Protocols:

  • By the time there's lots of competition that means that the Polychain fund has done well but the long term vision for him that really matters is a web that is owned by the users of the web

Anticipation vs reality

  • Going to have emergent behaviors that show up that we have no way to predict

  • It's very easy to compare what's happening right now to the centralized web platforms because it's what we know

  • He anticipates that these protocols and economic incentive structures that create sort of swarm intelligence, will generate things that we could never have imagined

Links mentioned:

Untethered.email is still beta.

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