@_jillruth Probably Tezos. I don't know much about Dfinity – I need to get smarter about that project. EOS has some well-reported problems; generally I think the governance mechanisms were put together a bit hurriedly and as an afterthought. The condition that I think sets a protocol with on-chain votes up for success is a really well-understood social contract and set of shared norms that people can rally around. EOS attempted that with the constitution but it was sort of imposed from above rather than built collaboratively over time. I am curious to see how the Tezos community learns from the cases of Dash, EOS, Bitshares. To some degree, Tezos has already weathered a few storms, so it has some history of robustness. That's what I like to see in a community. How it responds to volatility and shocks.

Disclaimer: I have half a bitcoin's worth of Tezzies in my personal account.

@soonaorlater Fidelity was an amazing place – I was only there for a fairly short time, but it was an absolute privilege to be hired as their first cryptoasset analyst. Senior leadership there also have a really well-developed perspective on this industry, which is something that they don't always get credit for. I am really grateful for the opportunities that were afforded me there. And glad that I wasn't told to stop tweeting. I think I got away with one there. It just so happened that the opportunity came up to build out a fund together with Matt, and I've always been fairly entrepreneurial so I jumped at the chance. I had a great time at Fidelity and I hope that in my small way I was able to contribute to the collective understanding of cryptocurrency over there. But I am a self starter and I wasn't going to turn down the chance to build something.

@nic__carter what is an instrument

@nic__carter stop ruining my Q&A

Why are you dodging the question? Follow up: Are you concerned that, in some markets, the spread is obviously artificial?

@ricburton I'm pretty concerned about transactional privacy so I pay attention to the credible protocols there. Bitcoin is building out better privacy tools – and of course I spend a good deal of time on Monero, Zcash and Grin. I'm in between wait-and-see mode and cautious optimism on the other major protocols that aren't obvious nonsense.

@ricburton Monero and Grin

@myles_snider Thank you Myles. Yes our fund will have long-term positions in cryptoassets themselves as well as equity – but mostly equity. Our fund relies on a few principles:

- "fat monies," namely that markets for money tend to settle in to a power law distribution with one or two dominant

- holding preferences matter. so only cryptoassets that can tempt people organically into holding them for meaningful periods will accrue significant value.

- public blockchains are a new breed of institution. they provide extremely strong assurances about asset ownership and these assurances will unlock brand new markets. for instance, we already have evidence that multisig transactions are used for real estate in markets where banking is poor or unreliable. this is a huge segment of the world. public blockchains provide the basis for less frictional and more socially scalable transactions. that's huge.

- cryptoassets are part of a broader macro trend of localization and individualism. state power is being devolved and smaller political units are becoming more meaningful. first in the 90s strong encryption was made available to individuals. now in the 2010s, money is no longer the sole purview of the state. in the 2020s, we'll see stable political and economic institutions built on top of these non-sovereign monies. we are seeing early experiments with collective governance now; and while these are imperfect, we're also learning and adapting. I believe we will eventually see functional decentralized firms and capital formation (native "security tokens") where dividends are assessed automatically, and shareholder rights are formally codified. and I think more generally, people will begin to politically align with their favorite crypto-economic regimes and start to opt out of ethno-nationalist social contracts, and into these cryptocurrency-driven political regimes. that's a long term trend, and we don't know exactly how it will shake out, but it's something we have observed and we think will continue to be meaningful.

we do think that equity bets on these protocols has a good chance of outperforming the protocols themselves; we wouldn't have started the fund if we thought long-only BTC exposure was the way to go. we believe we're roughly at an inflection point where enough catalysts exist to support the creation of generational companies built on top of public blockchains. it's not just about the protocols themselves – there's a huge number of services and products that will be built on top of them, where traditional business models make sense.

@soonaorlater I think 90% of the time 'bitcoin maximalists' is a strawman. I think mostly bitcoiners use it to mean "I only care about Bitcoin" as only Bitcoin satisfies the properties of the projects that they want to support / work on. Some people are monetary maximalists, which means that they think (probably correctly) that in a liquid, free market for money, the same distribution of outcomes we've seen in historical precedents is likely to hold; that the winners settle in a power law distribution with one having the overwhelming majority of liquidity and value. If I had to guess I'd say the market for cryptocurrency, if it exists in 10 years, will end up being a winner-takes-most situation.

So you have bitcoin "maximalists" which are expressing a historical view about money. And that's a sort of empirical position. And then you have this notion of maximalists as people who disagree with the existence of everything aside from Bitcoin. And that's often a position ascribed to Bitcoiners which in many cases is unfair. That doesn't describe me, for instance, although I've been derided as a maximalist before. That's a normative view. And it's not quite as common as the empirical view that money has a network effect and probably we should look to the historical ratio of gold to silver, or USD to other foreign reserves as a guide.

While epithets and slogans to target groups of people make for powerful memetic warfare, usually you end up conflating heterogeneous groups. Now of course it's complicated because some bitcoiners have coopted maximalism and adopted it themselves. So it's a big old semantic mess.

To answer your question, I think criticizing nonsense forks or airdrops and especially ICOs does not necessarily make bitcoiners "normative maximalists." Most of the time those critiques are reasonable. And expressing the view that money settles in a power law outcome doesn't make you a normative maximalist either. It makes you a student of history.

Now maybe the outcome really will be different. Or maybe bitcoin isn't the winner in that power-law outcome. I can be convinced of that!

@alanhliang not perfect, but pretty good. I generally think about decentralization on a few layers – leadership/decisionmaking, block formation, and the network topology itself. Decisionmaking is pretty interesting, I think the UASF was a good case study. Hard to say exactly where we are there. Block formation isn't ideal but I don't think any single entity poses a threat to the network. I think a lot of analyses there are kind of naive. As for the network topology, it's good. Bitcoin nodes are cheap to run and there's a lot of them.

@KevinKJNK I think I read about Bitcoin on slashdot back in 2011 or so. There were a bunch of threads about it. I was also a pretty avid redditor back then and it was posted on the tech subs a lot. I'm not a super early adopter or anything, I was just curious as I aligned with the general ideology. I really got involved in 2013-14 when I had a lot of fun tipping people back and forth with Dogecoin on reddit. I even mined some DOGE in my dorm room. Those days were so innocent and fun. I miss those days.

"Crypto" generally doesn't mean much to me; privacy-coins have well-understood risks from regulators and governments. For Bitcoin, I think the risk is that central banks start doing a better job and tighten monetary policy, decreasing macro demand for BTC. Aside from the currency use-case, I think the challenge is just finding meaningful adoption, and scaling usage to a level which doesn't totally compromise decentralization.

@nickjamesbtc It was two years out of date and I had to get my photo taken for the new fund anyway so I figured it was time!

@nlw I don't think Bitcoin will grow forever – at some point it should flatten out. My guess is that there comes a time where your average dollar invested in a Bitcoin startup outperforms Bitcoin itself, because Bitcoin provides assurances to businesses building on top of it that will make them really successful. I feel like many early businesses built on Bitcoin failed – and soured investors – because they had sort of wrongheaded views of what Bitcoin was. Many were built with the assumption that Bitcoin was a cheap and quick payments network only. Which is kind of a narrow and incomplete view of the protocol in my view, and not what's really transformational about it. However now you see startups building on Bitcoin with the view that it's an inter-generational untamperable wealth store, and building on the second layer, and that's where the magic is going to happen in my view. So

I don't really believe in the fat protocol thesis. I think Arjun Balaji put it nicely when he talked about fat money. I think you have non-sovereign monies themselves, whatever they end up being, and then a bunch of second or third layer services or protocols which help people and businesses structure agreements on top of them. A lot of those things which belong on the second layer are being built into base layers for new protocols right now, and there will be a reckoning there at some point.

I'm pretty optimistic about the startup environment in the cryptoasset/cryptocurrency space. The attention is there, the talent is there, the opportunity is still huge. Smart founders that are focused and deeply understand the protocols they are building on can build amazing companies. There's also a whole set of businesses to be built which are somewhat agnostic as to the winning protocol. We have a lot of infrastructure to build before this thing really goes mainstream.

@sonyaellenmann my lawyer has advised me not to answer this

@sonyaellenmann @nic__carter hahaha

@derek_hsue Thank you for the very good question Derek. So I'm kind of obsessed with ants. I had an ant farm as a kid. I used to watch them for hours on end. We had frequent ant infestations in our house for whatever reason and I'd always feel pretty bad about using RAID on them. I really like ants. Did you know that most ants that you see foraging are female? And that the younger ants will perform tasks like larva rearing or caring for the queen, whereas the older ants that are more "expendable" are the ones sent on the more dangerous foraging missions? Ants are the most amazing case study in emergent behavior. Everyone should pay attention to ants. If you want a great case study on antifragility, read about polygynous versus monogynous ant species. I don't have enough time to go into detail now, but it's absolutely fascinating. Basically you have ant species with one queen per colony, and others with multiple queens that interoperate, basically. The interesting bit is that polygynous species tend to outcompete monogynous ones in the short term because multiple queens gives them significant advantages, so they expand over large territories quickly, but this also comes at the cost of being genetically homogenous. There's more variation in monogynous species. So the multi-queen species are more vulnerable to catastrophic events like fungi or bacteria. And so you have a cycle of polygynous species expanding, taking over, and then being wiped out, and the monogynous species filling the gap. Ants are so so cool.

I also love plants. My dream is to have a nice cottage with a large greenhouse and a garden somewhere tropical where I can grow a really nice variety of plants. Right now I have a south-facing apartment which is great – I can grow and propagate my succulents nicely, they get a lot of sun. I typically spend about 15 minutes in the morning looking at my plants. It's soothing.

@derek_hsue @nic__carter "stigmergy" theory developed in the study of social insects and is a great way to look at FOSS development.

@derek_hsue I really dislike it when people say "begs the question" to mean "raises the question" but at this point that's closer to the mainstream usage so I might have to give up the fight there. but in an originalist sense, "beg the question" or "question-begging" actually refers to the circularity of an argument. But I suppose language evolves...

@scott_lew_is yikes! umm. let's see. I remember when ethereum was announced and I sort of raised an eyebrow but didn't participate. I remember when the DAO was announced and I was beyond excited about that. I love the idea of DAOs, still do, and I'm hopeful we figure out how to build them. Decentralized firms. What's not to like! And when the DAO had its crisis I was pretty gripped by the whole affair. I was disappointed by the rollback but I do understand the thinking there. And the disappointment kind lingered. I just am generally of the disposition that these networks will be big enough that governments will want to pressure any obvious points of failure, and if there are leaders which are easy to pressure, that's a risk to the network.

I don't think I feel FOMO - I mean I missed out on, like, every pump of 2017 aside from my few core positions (BTC and XMR make up the bulk of my personal portfolio). But that's ok... I'm more interested in seeing if we can build something stable and robust.

@tonysheng the hardhitting questions

@tonysheng @soonaorlater no softballs here

@tonysheng dangling participles!!!

no softball questions here. not a one

@cryptorae @soonaorlater but imagine having to count them all

@cryptorae I don't have any blazers with elbow patches but I would totally go for one

@SuMastodon So like most things in life I didn't plan any of this, it sort of happened. When I joined Fidelity I was covering public blockchains as an analyst and helping build up the institutional knowledge there. The fund was an opportunity to build more of a personal vintage so I naturally jumped at the chance. It was a harmonious transition so we are grateful for that.

@macdonaldcrypto I hope so, but there are other great sources for market data. CM tries to be extremely good at one thing – on-chain data, and making it comprehensible. We're not focusing on exchange or market data right now.

CM can support any ERC-20 token easily, just ask. Due to UI considerations we don't list them all.

If you mean any other major cryptoassets, we try and allocate resources proportionate to their general popularity. If there's a non-ERC20 token you want to see supported, dm @coinmetrics and we will see what we can do.

@macdonaldcrypto @nic__carter Is there a data source you recommend for historical pairing level volume data per exchange? I figure there's no better person to ask. I've been searching around and the only solution I've found is to work directly with exchange API's

@macdonaldcrypto @macdonaldcrypto you might want to look into nomics or coinapi

@tiagoloriato very good question. avoiding cartelization is the biggest challenge with delegated voting systems. it comes from the asymmetry between acquiring loyal voters and the return from block production rewards and the potential return from redirecting blockchain resources to yourself + friends. in most cases, voter apathy/unwillingness means that acquiring votes is cheaper than it "should" be. I've said before that DPoS is a bit like proof of work with the "work" being political. bribery or vote-buying or other vote acquisition methods are however obscured work. so it's not quite as pure from a fairness perspective. (In PoW no one really has a significant structural advantage over anyone else).

I'm not sure how Tezos will keep cartels at bay. Rigorous monitoring of votes and a strong shared philosophy that repudiates vote-buying might help. Tools that make vote-monitoring easier and votes more transparent will help. Enforcing or encouraging a churn in top delegates is also important. No churn = no policing of delegates.

@huvoliveira I like the rising sun emoji so I figured that's as good a name as any. Do you mean alts breaking upwards with BTC flat or vice versa? In the near term I see a lot of bearish catalysts for alts generally – I think some regulatory action is inevitable and there will be a reckoning, especially at some of the exchanges which have enabled dodgy behavior and unregistered securities raises.

I think an ETF announcement, proper custody solution, or a real regulated exchange announcing support for BTC/ETH will probably see select large caps ("blue chips") decouple from some of the nonsense out there.

@huvoliveira @nic__carter Cool, thought it was the latest development in overcoming bots, as the emoji highlights the Twitter handle, not the public name. I meant in any way, as that could signal a new healthy market cycle instead of the constant botty swings we're seeing.

In regard to your reply, don't you think the ETF and custody narratives are over hyped? There's custody already, there are futures for institutions, exposure through mining companies, so how would those two new things change the scenario? A regulated exchange could change it though.

@sokirill I once said that valuation in a protocol context comes down to "to whom does value accrue, and what makes it so?" So I try to answer "where will value settle" and "how will it end up there". Basically, why would anyone want to store their wealth in cryptoasset y instead of x, how long their holding preference might be, and how that actually occurs.

What I do IRL is look at on-chain behavior, and try to compare that to development efforts and see if there's a credible path to mainstreaming these things to a global audience. On-chain data gives me an idea of how these things are actually used today.

@memamphil

1. this is a bit more popular now but (I am not a lawyer) I think ICOs are unambiguously securities offerings and are basically an illegitimate capital formation mechanism. If you want to create equity, do it within the bounds of the law and precedent... if you want to create a new currency, I suggest launching as a "fair PoW launch" or airdropping or as a fork.
2. I think the pace of development with real, functional security solutions for key management is pretty impressive. We're not that far away from a UX which is secure and accessible. That's a huge challenge and great progress is being made there by a bunch of exciting startups. I also think Bitcoin devs and wallet devs deserve credit for privacy enhancements to Bitcoin. That has gone sort of overlooked.

@crypto_bobby I'm so used to staring at my old picture that I keep getting confused when I see the new one and I think I'm logged in to the wrong account.

Running CM has been an amazing journey. I put it together when I was in business school about 18 months ago just as a side project. And I partnered with a few fantastic devs and we built something which has blown away my expectations. The best part is people telling me how useful they find it. It is amazingly validating.

@SMKainkaryam

1. I'm not very keen on XRP. Not too smart about DAG coins although my guess is there's probably hidden tradeoffs that they aren't disclosing. I don't like how IOTA devs respond to criticism. I think Nano devs aren't being honest with its shortcomings either.

2. I haven't given a lot of thought to that, but very excited to see how the market for LApps develops. However I think the timelines will probably be a bit longer than people think. Patience is a virtue in this industry.

3. Very sad about the boys going home, but proud of their performance.

4. We will be making public pronouncements fairly soon.

@theshivpat privacy and fair launch above all! ASIC friendliness should be the default.

@Mbr_89 there's a few unrealistic ideas.
- we can rebuild sophisticated governance systems from scratch
- cryptocurrency will replace fiat within the next decade

I think blockchains are great for trusted registries of global property rights that are absolutely inalienable and can't be repudiated. Rights that can't be argued over, basically. And when you have these institutions, then you liberate yourself from worrying about that, and suddenly new industries open up. It's kind of like shareholder rights. Modern joint stock firms were invented in the 1600s or so but we didn't figure out the best balance of power between shareholders and directors for hundreds of years. It was an iterative process. But once we figured it out, an amazing wave of wealth creation occurred. People were no longer too worried about directors expropriating their investments since the firm "protocol" became established and mutually understood. And it let them worry about other things.

I think if we can really nail down global, mutually trusted and understood property records (who owns what?) a lot will follow from that.

@_jillruth no 😭😭😭

@sonyaellenmann that citadel post on reddit – you know what I'm talking about? I think about that a lot. This one – https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/

I think a class of people will emerge that will disentangle themselves from the modern state system and begin to form collectives which are untethered from sovereign boundaries. This is already happening to some degree. Digital nomadism. I think that trend will accelerate. Jurisdictions will begin competing for this demographic of crypto-technocrats with fairer tax regimes – you know, special crypto-economic zones – and then we'll see migrations start to happen. That's something I spend a lot of time thinking about.

@sonyaellenmann @nic__carter this is my favorite thing that's ever come from the bitcoin sub

@derek_hsue Reading about political philosophy as an undergrad. Basically about how all these enlightenment philosophers devised concepts about human nature which were then instantiated into protocols which were used to help people self-govern. The US constitution is one such protocol. I think everyone who thinks about governance seriously should read Hobbes, Hume, Locke, Rousseau, Rawls, and Nozick. There's lots of prior art. We take this stuff for granted but it's actually been a multi-thousand year journey towards discovering the most stable and functional governance processes.

I like this paper. https://ledger.pitt.edu/ojs/index.php/ledger/article/view/62

@myles_snider First of all thank you for your excellent work on them. I think ultimately probably only fully or mostly-collateralized stablecoins will work, long term. And then very long term, I think the need for stablecoins will be decreased. A mental shift will occur where people aren't that upset with the volatility of cryptoassets, or it subsides, and people are more comfortable measuring their wealth in those terms. And the need for a fiat peg is lessened. But I do worry about the triffin dilemma and think it probably makes a non-fully collateralized stablecoin pretty risky.

@myles_snider @nic__carter How does the Triffin dilemma affect Stablecoins if the latter are apolitical, non-sovereign, extranational entities? They don't really have to concern themselves with the balance of payments or the current account. Did you perhaps mean that the Stablecoins might suffer from the Impossible Trinity?

@calchulus I am not sure posting orderbooks on a blockchain is a stable long term solution. I like the UX of decentralized exchanges which plug right into your hardware wallet – I think that's really cool. The question is whether protocols come to exist that can support high volumes on chain. Ultimately we're not going to do away with CEXes. DEXes are cool and exciting but probably a fair ways off – and really the big stumbling block is getting fiat into that system. We don't have a good way to do that, and until we do, the DEX value prop is weak. And as these markets continue to professionalize, and CEXes continue to innovate, a lot of the shadiness that afflicts CEXes will be forced out just through competition.

@ForegroundBlock I'll be that guy but a lot of what I've learned was from obsessively reading Taleb... I know people think his stuff is hackneyed but I learned a lot from Fooled by Randomness in particular. One of the most important things is that, given the nature of randomness and markets, at any given time, some of the most profitable traders will be those who have overfitted their strategies to recent market trends, and who are thus really exposed to any regime change. This is pretty important to remember. Trend-following can be super risky.

@divraj I don't know my ideal world involves a fully 'decentralized' ASIC market with no company at more than 5% market share – that's totally unrealistic and ultimately you have to let markets be markets. I think our best hope is a "good enough" situation where you have 3 meaningful competitors that hold each other in check. We're gradually getting there, I think.

@robustus 2013 or 14 right? I think 2014? For reference https://bitcointalk.org/index.php?topic=740112.0

@robustus @nic__carter But the genesis block itself says July 4, 2012: https://chainradar.com/bcn/block/1 ;)

Agree it's 2014, though. PSA: not all blockchain data & teams can be trusted.

@robustus @robustus the real reason satoshi posted that newspaper quote in the genesis block :)

@Doug-Moeller I think insurance will be part of qualified custody when it emerges. I am not certain that we need anything radically new that doesn't exist in traditional markets. insurance will be part of the 2nd wave of services that will herald the professionalization and full financialization of these assets – regulated, functional spot exchanges, qualified custody, recognized data solutions, and so on. it's inevitable at this point, just a function of when.

@_PeterRyan I support the separation of money and state! 28th amendment anyone?

@mskakala Thank you Martin, that makes it all worth it. I think the Dot com equivalent has already happened/is still happening. I don't think we needed to reach into the trillions for that. The parallels are pretty similar. I think we're in the midst of the reckoning now, although it hasn't fully sunk in yet. USD is still probably the best hedge, sadly. The blue chips will be dragged down once the air goes out of the ICO balloon.

@mskakala @nic__carter Thanks Nic!

@calchulus Blockchain data extraction, analysis, and provision :)

@calchulus I read about Bitcoin on various tech forums from 2012-14 and followed it closely. I got involved in late 2013 and had fun tipping back and forth. Loved the community aspect. When Bitcoin failed to die after Gox I really started taking it seriously. That was the moment for me. I wanted to write about it for my thesis because I had spent a lot of time on corporate governance in business school and I felt that it was worth determining what corp gov was like on blockchains. Turns out it's a cargocult imitation most of the time. And super paradoxical. You probably shouldn't be rebuilding corporate structures on blockchains if you want them to be functionally decentralized.

@Bullitoss you might be asking about crypto markets but I'll talk about equity markets first. ultimately the problem is pretty similar.

I'm extremely bearish on the idea that passively (and blindly) buying the US largecap equity is a foolproof way to make ~8% per annum. I know that's kind of a straw man version of the argument but it's what I think most investors come to believe after reading /r/personalfinance or the bogle forums. There's a few issues that I think will rear their heads.

1. valuations in US public equity right now are implying negative real returns for the next 10 years. no matter how you slice it, whether you're using CAPE or tobins q or corporate earnings / GDP. either earnings have to massively increase or ratios will have to contract. and historically the latter has occurred. it looks dismal pretty much across the board. maybe interest rates will be negative forever but I don't think we're in a sustainable macroeconomic regime at all.

2. as Taleb points out, the market is not ergodic with respect to individual investors. this means that the idealized experience of the aggregate is not recaptured by the individual. what do I mean by that? even if the market delivers a 7% CAGR for 5 years, some investors will inevitably trip up and become rekt. maybe they'll take on too much leverage, or they will need to make an emergency purchase and withdraw funds from their brokerage account in the midst of a 30% downturn and ruin their planned strategy. Scheilfer and Vishny's "The Limits of Arbitrage" talks about how this applies even to sophisticated hedge funds. if equity markets experience a lost decade, a whole lot of participants will become rekt instead of stomaching those poor returns and sticking around. The problem is that the dream of creating a nice nest egg through passive investing relies on the implicit assumption that the investor is psychologically able to tolerate sharp downturns and extended periods of no return. something that isn't said often enough but which is true is that you will have to hold a losing position in the S&P500 for 20 years to have a 90% confidence of achieving a positive return in that period. and sometimes it doesn't work. look at the Nikkei from 1989 to 2011. Japan is/was a prosperous, productive, modern nation, and if you applied conventional passive indexing wisdom to their index you would have been absolutely slaughtered. most people don't have the psychological profile to tolerate 50% dips in their net worth or to hold a losing bag for a decade before seeing positive returns. that's ok – but they shouldn't be encouraged to buy equity if that's the case.

3. when an investing strategy becomes conventional wisdom, it's probably not a great strategy. by definition. right now "passively invest x% of your paycheck into large cap US equity, you can't lose if you hold for long enough, those silly fee-grubbing active managers ha ha" is absolutely conventional wisdom. more to the point, the more AUM enters a given strategy, the less return is available to investors. if investors pile into one particular strategy and ignore other strategies / asset classes, most likely returns in their strategy of choice will be weak. this isn't quite the case yet but if the passive/active ratio reaches 80% and active managers can't afford to extract informational asymmetries from the market, then I think price formation becomes a bit stilted and maybe even fails to occur. a passive dollar just buys companies on a cap-weighted basis which sort of implies there will never be any churn between them. I'm not sure how that's going to resolve.

4. I think another major assumption between the "US equity yields 8% real on average" is colored a little bit by how fantastic a century the US had. the 1900s in the US were really the fastest wealth-creation event in history, completely unsurpassed. the post war dividend, while every other industrialized nation was completely destroyed, gave the US an amazing headstart the likes of which will probably not be seen again. equity was formalized in the 20s/30s and the friendly US common law regime made it an absolute barnburner for the next 70 years. if you're passively allocating on a long time frame, you're really indexing on GDP and productivity growth. so you're just making very general macro bets. is the US going to have another amazing 100 years? is growth going to happen within the confines of the joint-stock corporation? is productivity going to keep growing? are we reaching diminishing returns from the advancement of tech? will corporations continue to capture profits or will decentralized institutions replace them to some degree? will developed nations have a demographic crisis? will nation-states keep offering the same strong assurances that made markets work? all of these are pretty relevant considerations if you're indexing on growth but many of theme are often left out.

tl;dr most passive investors have swallowed a narrative that investing is easy if you just follow these steps. the truth is it's not easy, and if enough people follow the same narrative, it's almost guaranteed to not work. I think indexing itself is fine, just the evangelizing of passive investing as a stable wealth-generator is totally irresponsible, and is going to leave a lot of investors worse off.

as for indexing in crypto land, I think it's pretty straightforwardly a bad idea, although I have a lot of respect for the more thoughtful index-builders like Bletchley indexes and product-creators like Bitwise. I think the main challenge is building a stable taxonomy of these """assets""" that disentangles the nonsense from the real thing. however, if you start doing that, you're sort of actively investing. but since barriers to entry are so low to "list" a cryptoasset, the market is full of nonsense. so it doesn't make that much sense to me to give investors exposure to that. and really, in my view, you have currencies or money-like commodities (BTC/ZEC/XMR), and then you have equity (BNB, and other assets that promise a capital return). I'm not sure they belong in the same index. The other challenge is, once you have your basket or your taxonomy, you need to make dilution schedules consistent. does the market price bitcoin as if 21m units exist? what about stellar or ripple? should they be fully diluted? what about non-fixed supply and inflationary assets? it's kind of impossible making them all consistent.

I think these questions are actually fatal to the notion of indexing cryptoassets. I don't think it's possible to resolve those paradoxes. the reason being is that you have completely separate classes of things which you are trying to make consistent. and the solution, in my view, is to remove that constraint. treat them as heterogeneous. there's no "market for cryptoassets," theres no stable ranking, there's no coinmarketcap. you just constructs which are created, usually by marketers, to sell a product. if you strip that away, you're a lot better off, in my view. de-contextualize and isolate these things. what are the claims they make, what do they purport to solve, do they actually improve on existing institutions? these are the relevant questions.

so I think the problem with indexing equity and cryptoassets is that the people who create financial products around these things are strongly incentivized to sell you a fiction of a device which yields stable positive returns regardless of the constituents. I think that's a pretty seductive view, and it's often bolstered by financial theory like markowitz mean variance optimization and empirical findings about diversification and systematic vs idiosyncratic risk. but in many many cases the conditions for those theories to hold don't apply – I think they just straightforwardly don't in crypto markets. and in other cases they aren't sufficiently caveated. there will be reckonings in both mainstream equity land and crypto land and hopefully the discourse around indexing will be ameliorated as a result.