Posts filed under Global Economy

Intro to Bitcoin in 30 Minutes

I am often asked for information about what the decentralized asset ledger at the heart of bitcoin actually means.  

For a non-technical person trying to get a general sense of the broader opportunity that the tech world sees in bitcoin, reading the following would be a good start.   You would get the general gist in about 30 minutes.

General Context
Good context setting if you read the quick 4 part blog series.
By Jeremy Allaire (formerly CEO Brightcove, Macromedia)

Bitcoin as a Platform/Protocol
By Albert Wenger (partner, Union Square Ventures)
By Naval Ravikant (Founder, Angellist)

Excellent Description of "Mining" of Bitcoin
About as clear and non-technical as it can be made.  I love the characterization of mining as competitive bookkeeping.

Broader Applications of BTC
Interview with Richard Brown (executive architect, IBM) 
12:29 minutes

For the full bitcoin series:
Twitter: @polemitis and @ledracapital
Ledra Bitcoin Digest email newsletter:

Posted on December 19, 2013 and filed under Global Economy.

Digital currency and the University of Nicosia

The vast majority of press coverage of Bitcoin is focused, stock-market style, on its price.    While highly entertaining, it is the least important aspect of Bitcoin.   Bitcoin and any future protocols built on similar models, embody at least four important innovations:

(1)    Decentralized financial transactions

(2)    Distributed irreversible public ledgers and distributed trust

(3)    “Programmable Money”

(4)    The first stepping stone to legally autonomous artificial entities

These are important ideas, regardless of if the price of Bitcoin in three years is $30,000 or $0.30.  They represent the beginning of a representation of value and money that is native to the digital world.  

This is an field that touches upon key concepts relating to currency, economics, law, sovereignty, accessibility of financial services, economic development and the future of financial and technical innovation.   They are topics that deserve serious academic study.

Today we are delighted to announce the beginning of a three pronged effort at the University of Nicosia to develop an academic knowledge base about the societal implications and applications of digital currency, that draws upon our existing deep knowledge of the fields of accounting, finance, public administration, international relations and law.   Specifically:

(1)    We are launching a M.Sc. in Digital Currency to be offered online in Spring 2014

(2)    We are developing a set of policy recommendations for Cyprus to provide an appropriate regulatory framework for managing digital currencies and perhaps serving as a hub for businesses of this type.

(3)    And, in the spirit of practicing what we preach, we are accepting Bitcoin across all divisions of the university, effective immediately

We believe that we might be the first university in the world to accept Bitcoin but also to develop a full-fledged program on the applied elements of digital currency (as opposed to the technical aspects of cryptography that have been well covered for years).   This is an area, however, that requires much more study and we look forward to working with our colleagues around the world to push the thinking forward on this topic.

More details about the announcement are here:

Stay tuned.


Posted on November 21, 2013 and filed under Education, Global Economy.

Dubai 2009

In a further sign that the property bubble in Dubai has popped, Nakheel, the state-controlled developer, said it was halting work on a skyscraper that would have stood one kilometer tall, or roughly twice the height of the Empire State Building in New York.

The suspended building is part of a growing list of projects that have gone cold in what was one of the hottest real estate markets in the world. In December, Nakheel stopped work on Dubai’s very own Trump Tower — an $800 million project that was to sit on one of the emirate’s fabricated palm-shaped islands.

Other projects that are reportedly on hold for various reasons include big names like the W hotel and the Four Seasons Hotel.

Moody’s Investors Service sees more trouble on the horizon for Dubai and this week issued its first negative outlook on banks in the United Arab Emirates since it began reviewing them a decade ago. It believes that many small-scale developers that took out loans will go bust as property prices spiral downwards, according to The National newspaper in Abu Dhabi.

From the Wall Street Journal

So in June 2007, I went to Dubai with my father to visit local universities. It was my first time there and my father’s first time in 30 years.

He had previously been there to do a feasibility study for a dairy farm in Al-Ain because at the time there was no fresh milk in the area due to the scorching heat.

Much has been said about the amazing transformation Dubai has done to compete for the title of Middle Eastern (global?) city of the future and it is impressive and far-sighted.

But beyond the brand-name projects, what caught my attention was rows and rows and rows of regular apartment buildings being built simultaneously. I counted 40 cranes in a row on one highway

Now Dubai only has 2 million people and the vast majority are foreign laborers so the only possible market would be foreigners moving to Dubai and they would have to be emigrating there at a pretty radical rate to absorb this type of supply. I figured there had to be availability and maybe some good rental rates (we were considering running a study abroad program there).

“So who was buying all these apartments? Are prices falling? Could we rent some at a good price?” I ask.

“No, they are expensive. Everyone is buying them and making money because prices are going up very quickly. In fact, Saudis are buying whole apartment buildings and keeping them empty just so that they have an apartment building in Dubai

Oh. Well, that is certainly going to end well...

And yet rents are still supposedly soaring.

Later that year I was in Shanghai, the other construction capital of the world, and there even though it too was bubbly, it was hard to worry about the lead financial city of a country backed with a hinterland of 1 billion people. There will be ups and downs but the long-term future is assured.

Dubai though is possibly the most radical bet in real estate history, an attempt to make something out of nothing.

It is probably the optimal strategy to take the bet for Dubai because if they don't, the game is over once the oil runs out. But I can't think of any modern parallel to what they are doing. Either they will succeed in the medium term and become a major world hub like Singapore or Hong Kong or someday, 100 years from now, the desert will take back over.

Posted on January 15, 2009 and filed under Global Economy.

Why airfares are headed in one direction for now

You can fly between New York and Los Angeles for as little as $370 round-trip, not including taxes and government fees, on JetBlue, and $20 more on American. And out of that, how much will the airline spend on fuel? Almost $300 per passenger for JetBlue at current prices, and nearly $500 for American. Just Friday's $10.75 leap in oil prices would raise the cost to JetBlue Airways Corp. to fly someone from New York to Los Angeles and back by almost $24.

Full article from WSJ here, but the above paragraph captures all you really need to know.

Posted on June 10, 2008 and filed under Global Economy.