San Francisco godfather Jimmy Flowers talks planting gardens in public spaces, giving away weed, spreading love, and following his angels.
On Hyde and California in San Francisco we talk SF culture, the short fuse in the court of public opinion, and how “being gay isn’t all roses and penises.”
Nearly a decade ago when it was difficult for small sites to handle large amounts of traffic, especially from DDoS attacks, I remember stumbling on Cloudflare‘s first promotional video. At the time it seemed like magic. No hardware or software configuration needed, and you could ensure your site would stay up using Cloudflare’s infrastructure. Today, they are valued at over three billion dollars and are gearing up for an IPO.
I’ve talked about Cloudflare for some time now and championed their free to use privacy first DNS service and their suite of products and experimentation that are making the internet a better place. But for a company that powers nearly 10 percent of all internet requests you would be hard pressed to find them mentioned next to the cloud services giants of the world like Amazon, Microsoft, Oracle, and Google- that is about to change. With reports Cloudflare is going to IPO at over a 3 billion dollar valuation, it’s prediction time:
Before 2030 Cloudflare will be valued at over $20 billion. This equates to an ~18% growth rate every year. – Twitter
Microsoft capitalized on software, Google on the internet, Apple on mobile, and Cloudflare will capitalize on cloud services. Unlike the other cloud services providers in the space who have added cloud services to their offerings, Cloudflare has been doing it from the beginning- it’s in their DNA. I’m always bullish on companies that are built to take advantage of a specific booming sector from the beginning- avoiding the pitfalls that come with trying to reorient their business to handle it. Let’s see what happens.
Jack Dorsey, CEO of Twitter and Square, recently made public statements (shown below) voicing his support for Bitcoin while showing his lack of support for other cryptocurrencies. Given Jack is CEO of two publicly traded companies with a combined value of over $50b, it is no small thing for the cryptocurrency space that he is making these statements. I think he is a very intelligent and thoughtful person and I encourage you to listen to him on The Ringer with Bill Simmons or Joe Rogan. It is a great look inside the mind of someone who controls one of the most important public platforms. However, I think he is wrong to think that Bitcoin is the end all be all. Bitcoin as the one and only winner in the space is much more likely if all cryptocurrency amounts to is an internet based currency. But cryptocurrency is more than that and we are increasingly seeing that reality with projects like MakerDAO and Augur. Which leads us to my prediction.
Before 2030 Square or Twitter will have integration with a cryptocurrency besides Bitcoin. – Twitter
This could be, but is not limited to, the ability to transact with a cryptocurrency besides Bitcoin in Square’s Cash App or Square’s POS terminal. Currently the only cryptocurrency integration in Square’s products is the ability to buy and sell Bitcoin in Cash App. Or in the case of Twitter it may become possible to easily send cryptocurrency directly to another account. In fact, let’s make that another prediction.
Before 2030 Twitter will allow users to transact in at least one cryptocurrency. – Twitter
This could be, but is not limited to, tipping accounts or crowdfunding.
I only have bitcoin twitter.com/thomsoncrypto/…—
(@jack) February 05, 2019
@edsilva90 Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand.—
(@jack) February 05, 2019
(@jack) February 06, 2019
(@jack) February 06, 2019
Was riffing with some brothers on Tesla and some predictions came out of it. We’ll check back on this one in a few years. Let’s start with the no gradient prediction.
Before 2030 Tesla will be worth $100 billion as an independent company. – Twitter
• Elon Musk has an air about him, he will always be able to raise money.
• Their vehicles offer an unparalleled experience. Take a test drive, use the app, and tell me another automaker comes even close.
• Tesla is more than just an automaker- their innovations in solar roofing and energy storage will prove to be very successful.
Before 2025 Tesla will be bought, likely out of bankruptcy or extreme financial duress, for less than their current market price of $53 billion. -Pat Daly, Twitter
“A lot of their growth that’s priced in is predicated on their ability to deliver an affordable, mass market, fully electric vehicle and they haven’t been able to do that.”
Before 2030 Tesla will either be bankrupt or worth $300 billion as an independent company. – Tim Ferris, Twitter
“Either it’s going to the moon or it’s finished, there is no middle ground.”
Before 2030 Tesla will be worth $100 billion as an independent company. Automobiles will account for less than 25% of revenue. – Sawyer Billings, Twitter
Side prediction: By 2025 the minimalist dashboard (i.e. no buttons, knobs or dials) with a single display that operates the entire vehicle will be the norm across all major automakers’ new vehicles.
Before 2030 Tesla will be worth $500 billion as an independent company. – Greg Raiz, Twitter
Tesla will maintain >50% share of battery electric vehicles for another 4 years, through 2022. After 2022, Volkswagen, GM, and a subset of the Chinese startups will make the U.S. BEV market much more competitive. – James Newhouse, no gradient
Beginning January 5 Ethereum Classic was the victim of a 51% attack allowing the malicious party to successfully double spend tokens to exploit one exchange. I cover a timeline of the events, some learnings, and end with applicable excerpts from the original Bitcoin white paper.
On January 6, the Ethereum Classic organization contradicted rumors of an attack on ETC:
There have been rumors of a possible chain reorganization or double spend attack. From what we can tell the ETC ne… twitter.com/i/web/status/1…—
Ethereum Classic (@eth_classic) January 06, 2019
Several hours later they sent a warning to mining pools and exchanges urging extra precaution:
To all exchanges and mining pools please allow a significantly higher confirmation time on withdrawals and deposits… twitter.com/i/web/status/1…—
Ethereum Classic (@eth_classic) January 07, 2019
After the initial warning, in cooperation with SlowMist, they confirmed the attack:
"Chinese blockchain security firm SlowMist sent out an alert that the Ethereum Classic (ETC) network might have bee… twitter.com/i/web/status/1…—
Ethereum Classic (@eth_classic) January 07, 2019
The next day on January 7, Coinbase publicly confirmed the attack as well providing details on the deep chain reorgs of ETC:
On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a doubl… twitter.com/i/web/status/1…—
Coinbase (@coinbase) January 07, 2019
The attack is acknowledged by Gate.io, one of the exchanges compromised in the attack. They clearly state they will cover the losses for their users:
gate.io Exchange (@gate_io) January 08, 2019
Another targeted exchange that had thwarted the attack, acknowledged what had happened as well:
Bitrue (@BitrueOfficial) January 08, 2019
Haseeb Qureshi of MetaStable Capital released an excellent description of 51% attacks. I highly suggest you read it:
Ethereum Classic ($ETC) was 51% attacked yesterday. This is the largest cryptocurrency that has ever been 51% attac… twitter.com/i/web/status/1…—
Haseeb Qureshi (@hosseeb) January 09, 2019
Finally, the organization that tipped Ethereum Classic off to the attack, released their final report:
Beijing time On January 06, 2019, we warned of the possibility of the ETC 51% attack in SlowMist Zone based on the… twitter.com/i/web/status/1…—
SlowMist (@SlowMist_Team) January 09, 2019
Update: The attacker has returned the funds to Gate.io. You can see the transaction here. We don’t know the motivations for returning the ETC. My guess is either the attacker was afraid of getting caught or they simply wanted to expose vulnerabilities to help prevent double spend attacks in the future.
gate.io Exchange (@gate_io) January 12, 2019
It was amazing to see a cryptocurrency’s leadership, exchanges, mining pools, and researchers come together to address this issue. Typical security breaches offer little information to the public, but the open nature of blockchain encourages immediate assessments of attacks.
Now, onto the learnings:
- Understanding a 51% attack and “double spending” is a great way to understand how blockchains actually work. Haseeb’s tweet thread is a great start.
- The market does not fear 51% percent attacks. I predicted the attack would not only affect the price of ETC but also Bitcoin. After all, the goal of a blockchain is to maintain consensus. My next two reasons may explain why the market fears not.
- Funds in your wallet are safe. 51% attacks are only practical for changing recent transactions. The more blocks between when your wallet received the funds and the present, the more secure your funds are and the harder it becomes for a 51% attack to successfully undo it.
- 51% attacks are mostly targeted at exchanges. After all, attackers need a way to sell their double spent tokens to profit. And what better way to do this than on an exchange.
- Top blockchains are easier to attack than I thought. Crypto51 estimates that it would take an estimate of $350k to 51% attack Bitcoin for one hour. For a highly capitalized entity like a government, this really isn’t a high bar.
- Jeff Bezos could afford to 51% attack Bitcoin for 36 years. And likely even longer than that given Crypto51‘s estimates assume you are renting the mining equipment.
- Anyone can visit the scene of a blockchain crime. From the SlowMist report, you can see for yourself one of the wallets the attacker used.
- The market encourages these attacks, sort of. Because the price remains stable even when a 51% attack is acknowledged, this allows the malicious actors to retain value when they sell.
- Exchanges should come together and create a mining pool that activates when they detect a coin is under attack. This would not only help ensure their protection, but also ensure the protection of the attacked blockchain.
- It’s possible a malicious actor is mining a separate Bitcoin chain right now, waiting to unleash it. The alternate chain need not be made public as it is happening.
- Every 15 minutes Google makes enough profit to 51% attack the Bitcoin network for one hour.
- Google makes $12.5m in revenue per hour which equates to an hourly incentive to keep their systems operating. It costs $355k to 51% attack the Bitcoin network for one hour.
A 51% attack is something that every Proof Of Work consensus algorithm is vulnerable to. Including Bitcoin, as Satoshi Nakamoto discussed in the Bitcoin white paper released in 2008.
Satoshi discusses how the incentive structure of Bitcoin encourages those with a majority amount of computing power to act honestly:
If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.
Satoshi goes on to explain the limits of a 51% attack:
We consider the scenario of an attacker trying to generate an alternate chain faster than the honest chain. Even if this is accomplished, it does not throw the system open to arbitrary changes, such as creating value out of thin air or taking money that never belonged to the attacker. Nodes are not going to accept an invalid transaction as payment, and honest nodes will never accept a block containing them. An attacker can only try to change one of his own transactions to take back money he recently spent.
51% attacks will always be a reality in any Proof of Work consensus mechanism. The question always will be whether the cost of carrying out an attack is prohibitively expensive and is there enough of an incentive to keep would be attackers honest.
Though the cost prohibition and incentive structure begin to break down when the attacker does not care about the health of a cryptocurrency’s network, the value of the token, and only wishes to harm others who rely on it. As our reliance increases on a given cryptocurrency, an attack like that increasingly makes more and more sense. It’s a brave new world.
In 2018 I made a concerted effort to focus my attention on the slow moving trends behind the constant events of the news cycle. That’s where you stay the most informed. The Economist, Peter Zeihan, and Benedict Evans, among others, helped me with this. Below I cover things that were top of mind for me in 2018, which I think will help you put our world in perspective.
- The U.S. is the world’s top oil producer for the first time since 1973, surpassing Russia and Saudi Arabia. –AP News
- U.S. GDP was 60% higher than China in 2017. U.S. GDP per capita was 575% higher than China in 2017. – World Bank
- Since 1960, child deaths have plummeted from 20 million a year to 6 million a year. – Gates Notes
- Since 1960, the fertility rate has fallen by half, which is why Deutsche Bank projects world population will peak in 2055. – Gates Notes, CNBC
- 137,000 people escaped extreme poverty every day between 1990 and 2015. – Gates Notes
- In the U.S. more than 90% of all retail sales still happen in physical stores. E-commerce is just getting started. – Bloomberg
- Amazon has low single digit percentage share of US retail. Gas stations are a bigger business than all of e-commerce. – Benedict Evans
- Out of the 5bn phones in use globally, 3.5bn are smartphones — 28% of people are under 14; 28% Google Android; 20% feature phones; 11% iPhone; 8% Chinese Android, which does not have access to the Google Play store; 7% of people are over 14 with no phone. – Benedict Evans
- The Tesla Model 3 is the highest selling car by revenue. – Clean Technica
- 10 million years ago a supernova took place 100 light years from Earth; if it had taken place 30 light years away life on Earth would not exist. – Brad Gibson
- The internet has directly connected every person on the planet. Gatekeepers can no longer control the message. This explains the election of Trump despite no major newspaper endorsing him. It explains why Joe Rogan can reach 1.5 billion people a year with a completely independent show.
- Liberalism, in the classical sense of the word, is a “universal commitment to individual dignity, open markets, limited government and a faith in human progress brought about by debate and reform.” It needs a renewal. – The Economist
- The world economy is becoming less competitive. For example, in the U.S. roughly 600 out of 900 sectors became more concentrated between 1997 and 2012. – The Economist
- In the U.S. the popular will of the people contributes less to who is elected, with rural votes having more power than urban ones. – The Economist
- Members of congress over the last several decades increasingly vote along party lines. –PLOS One
- We are witnessing the break down of the international system the U.S. created post WWII. Trump is a symptom, not a cause. – Peter Zeihan
- Though it’s in vogue to say the U.S. is over the hill as the EU or China take its place, Zeihan argues that from an economic and defensive standpoint the U.S. has nothing to worry about. The rest of the world, however, will have to come to terms with a more disinterested U.S., which will cause global instability over the coming decades. –Peter Zeihan
- Despite the curtailing of political and civil freedoms, the past 25 years have been the freest in Russian history. – The Economist
- Many people are enamored with Nordic-style social-welfare policies that they associate with socialism. However, those countries are not socialist; they are free-market economies with high rates of taxation that finance generous public services. The “socialist” part of those countries would be unaffordable without the dynamic capitalist part many people dislike. – The Economist
- IBM and other companies developing “blockchains” is nonsensical. Bitcoin and Ethereum derive their value from their distributed and decentralized nature; one or even several companies managing a “blockchain” is just a database. – Benedict Evans
- Many people think the “world is getting worse.” By which metric? We live in the healthiest, wealthiest, most peaceful, most equitable time in human history. There are many things that need to be improved, but the past was much worse. – Gates Notes
- Building a wall on the Mexican border would actually increase illegal immigration. – Peter Zeihan
- Facebook doesn’t sell your data to advertisers. They sell ad placement and allow advertisers to target you in that ad space. That is a huge difference. – Motherboard
- Apple can read your iMessages: “If you have iCloud Backup turned on, your backup includes a copy of the key protecting your Messages.” – Apple
- Apple products used by Chinese citizens are not protected from government access. – Apple
- Signal is the most secure messaging app period. It is open source and the keys never leave the device. Even when the U.S. government requests access, Signal does not have the ability to share your messages. – Signal
- Long term the market always goes up. Don’t worry about market volatility — keep investing and keep saving for retirement. – no gradient
- Why don’t more people in the blockchain and cryptocurrency space talk about the BitTorrent protocol? It was blockchain before blockchain, released seven years before the Bitcoin white paper was released. It’s a protocol that allows nodes on a network to share a file and prevents nodes from sharing the wrong file.
- Why the Elon Musk hate? Does he say and do stupid things sometimes, absolutely. But zoom out. He has created the first successful American car company since Chrysler. Tesla’s vehicles are the safest the U.S. government has ever tested. He’s making space transportation cheaper. And, he’s pushing humanity towards renewable energy to combat climate change.
- “Civilization advances by extending the number of important operations which we can perform without thinking about them.” – Alfred North Whitehead
- “Justifying a solution because ‘it’s better than nothing’ results in something that is not better-than-nothing, but stands in the way of good solutions.” – Tomer Asher
- “The world is not a meritocracy, but merit still matters. The world isn’t fair, but being fair still matters. The world is unkind, but being kind still matters, perhaps more than anything.” – Ed Helms