The Waves of Time
Losing Static Views In A Cyclical World
I guess I think differently than most folks. I think the reason the world is a mystical, enchanting place, is because of the cycle of life. My body will decompose, but maybe some little element of it will be transformed into a particle of dirt, over years and years,and then a glorious flower will be nurtured by this particle of dirt. Then this flower will nourish a random bumblebee, who in turn will be eaten by a raven. So, in some future life, I’ll be able to fly. I look forward to that. I’ve always admired the freedom of birds — E. M. Crane
In an interview with CNN, Mark Zuckerberg said “I am not sure we shouldn’t be regulated”. This was with reference to the Cambridge Analytica storm that Facebook is embroiled in. Should social media be regulated? That question is akin to asking should the Blockchain be regulated. But then, does regulation mean the antithesis of platforms that were meant to be open, decentralized and symbols of absolute freedom. Isn’t it ironic then that the presence of malicious actors, on platforms such as Facebook and the Blockchain, promotes the requirement of gatekeepers or centralized regulation of decentralized but potentially harmful platforms? This article advocates for a different kind of thinking. A move away from static to cyclical thinking when thinking about long term consequences. The natural order of things operates in cycles. Why, then should our long term thinking be any different?
What Satoshi Taught Me
From the ashes of the financial crises of 2008 arose Bitcoin. Although the concept of a crypto currency preceded Bitcoin, Satoshi Nakamoto’s white paper on Bitcoin written on October 31, 2008 envisioned a grand experiment in anarchy. In it, Satoshi says:
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party…”
As I read more about Bitcoin, I began to question its long term effects especially given the required absence of knowing the actors (nodes) involved or KYC (Know Your Client) in banking terms. If the Blockchain were to go mainstream, would it need policing? Many would say absolutely. It’s needed to protect small investors or actors. But then, will the police be any different from central bankers or regulators today? If the answer is no, then are we back to square one?
Clearly, we learnt a lot of lessons including the fundamental value of money. How is bitcoin any different from other currencies given that fiat currencies are backed only by the promise of the sovereign. That is the view of the disrupters. The incumbents, on the other hand, accept the value of Blockchain as well as the proof of concept that Bitcoin offers. A proof of a totally peer to peer payment network especially beneficial to micropayments over long distances. All they need to solve for is the interest of the common man.
The other way to think about things is to question whether there is an illusion of sound judgment in conformity? The majority. is not always right.
Always think about the consequences of breaking from the pack just as Elon Musk thinks of things that others thing are completely irrational.
The answer to the regulation of Bitcoin will help you predict its value in the future ie where you are on the cycle and which way you think the cycle will turn. One thing is certain in that there can be a harmonious coexistence with cash, plastic and other forms of currency.
The Same Echo In Different Worlds
If financial crises, seasons and civilizations can be treated as cycles, three simple real life examples can also supplement why we need to adopt a cyclical view.
Regimes
These are the cycles not only with technology adoption but also with governments. The Arab spring began in 2011 in Tunisia after a man set himself alight to protest his treatment by the police. This set in turn protests across a large part of the Arab world including Egypt. Subsequently, things moved away from an envisioned long term democracy in the region.
The Roman Empire was followed by the British which in turn was followed by the American.
Dictatorship is followed by democracy which is followed by a coup and a resurgence of dictatorship or oligarchy.
Real Life Applications
Every new solution comes with its own set of problems. Let’s take a simple example of digital compression which ushered in a renaissance of music players including the iPod and the digital camera revolution. Purists and enthusiasts soon realized that the trade off for lower file size was loss of quality. Now, there is increased demand for old school SLR cameras and vinyl record players. A cycle that seemingly continues forever.
Economic Cycles
The concept of risk must always be looked at in the context of time. Liquidity, therefore becomes important. In times of stock market crashes, bullion or bonds may help you survive the down cycle while maintaining the same standard of living.
For entrepreneurs, there is a business cycle where macroeconomic factors may cause volatility in business models. Hedging risk becomes important to survive factors over which we have little or no control.
One of the most useful tools to understand long term cycles is the Kondratiev Wave that is used to predict cycles 50–60 years long.
Named after the social economist Nikolai Kondratiev, this cycle uses empirical observations to segment time into distinct economic waves.
Super Long Term
Stewart Brand, author of the Whole Earth Catalog (a book known more famously for the lines “Stay Hungry, Stay Foolish” quoted by Steve Jobs) encourages super long term thinking in millennia or ten millennia.
Stewart co-founded the LongNow Foundation and gives numerous lectures on the topic. As per its website:
The Long Now Foundation’s monthly Seminars were started in 02003 to build a compelling body of ideas about long-term thinking; to help nudge civilization toward our goal of making long-term thinking automatic and common instead of difficult and rare.
He curates these monthly seminars called Seminars About Long Term Thinking (SALT). Here is an example of a seminar with Jennifer Pahlka who talks about reforming government.
A Season For Action
Wangari Maathai (Nobel Peace Prize Winner, 2004) says: “The generation that destroys the environment is not the generation that pays the price. That is the problem”
Climate change is real while some others are more sanguine it is not and there is time. Whatever side of the debate you are on, you still need to question your every action and think whether it passes on a debt or a bounty for the next generation. If we take a finite view of resources, the debt argument grows stronger.
There are other glaring effects of nature affected by human nature. For instance, last week, the last male northern white rhino named Sudan died in Kenya. Although the efforts to revive the northern male Rhino are still on, many other species such as the cheetah face a same fate. As per recent estimates, only 7100 of Cheetahs are alive today occupying only 9% of the territory they once occupied. The main takeaway is to understand that some cycles just come to an abrupt end because some resources can not be replenished.
Cycles, perhaps, are the natural order of things. While our thoughts may be focused at a point in time, the truth is that point is a part of a larger tidal wave. The ability to anticipate where we are on that wave will help us guide our long term thinking.
Understanding the zeitgeist of the times with a historic context is absolutely critical to thriving with constant change. We may not want destruction but it may be the only way for the creation of a new order.
In our case, let’s hope it’s the destruction of short term, selfish interests.
