oskaradmin

Core concepts from “Outlive” by Peter Attia M.D.

Doctor Peter Attia is one of the foremost thinkers and communicators re: health, longevity and preventive medicine – you can find his work e.g on his website, podcast, Youtube etc. He published in March 2023 his book – “Outlive – the science and art of longevity”.

Others have written thorough reviews of the book (e.g. on Amazon) so I won’t try to do that as the extensive material in the book could end up overwhelming. Instead this post focuses on a few key concepts from the book.

Concept #1 – Health-span

Instead of focusing on Lifespan – where the last years of a long life can be plagued by tiredness, sickness and low energy – our Objective should be on increasing Health-span. This means we could live a slightly longer life, but also have the energy and strength to be able to do our favorite activities in our last decade. Whether that is hiking with friends, learning new skills, picking up a grandchild or just living independently, I think that is an admirable goal.

Concept #2 – the Four Horsemen

With the Objective of increasing our Healthspan in mind – what are the main causes of death in modern societies that we need to focus on preventing? Those are what Peter calls the Four Horsemen of chronic disease, which combined account for about 80% of all cause mortality (ACM):

#1 – Cardiovascular disease (CVD):

Is the leading cause of death for both men and women, accounting for about 25% of ACM
Common types are: Coronary heart disease, stroke and heart failure.
Causes and factors include: High blood pressure, High cholesterol, Smoking, Diabetes, Obesity, Physical inactivity, Family history

# 2 – Cancer

Is the second leading cause of death for both men and women, accounting for about 22% of ACM
Common types are: Lung, Breast, Colorectal, Prostate or Pancreas cancer
Causes and factors include: Age, Smoking, Diabetes, Obesity, Physical inactivity, poor diet, Family history/genetics, Environmental toxins

# 3 – Neurodegenerative disease, dementia

Is the third leading cause, accounting for about 8% of ACM
Common types are: Alzheimer’s, Lewy Body Dementia, Parkinsons
Causes and factors include: Age, Head injury, Diabetes, Obesity, excessive alcohol, poor diet, Family history/genetics, Environmental toxins

#4 – Metabolic syndrome and insulin resistance

“insulin resistance itself is associated with huge increases in one’s risk of cancer ( up to twelvefold ) , Alzheimer’s disease ( fivefold ), and death from cardiovascular disease ( almost sixfold ) — all of which underscores why addressing, and ideally preventing , metabolic dysfunction is a cornerstone of my approach to longevity”

Metabolic syndrome is a group of risk factors that increase your chance of developing CVD (#1), cancer (#2), neurodegenerative disease (#3), diabetes, obesity.
Causes and factors include:
Abdominal obesity. This means having a waist circumference of more than 35 inches for women and more than 40 inches for men.
High blood pressure. Blood pressure of 130/80 mm Hg (millimeters of mercury) or higher is considered high.
High blood sugar. Blood sugar levels of 100 to 125 milligrams per deciliter (mg/dL) after fasting overnight are considered prediabetes. Levels of 126 mg/dL or higher on two separate occasions are considered diabetes.
High triglycerides. Triglycerides are a type of fat found in the blood. Triglyceride levels of 150 milligrams per deciliter (mg/dL) or higher are considered high.
Low high-density lipoprotein (HDL) cholesterol. HDL cholesterol is often called “good” cholesterol because it helps remove bad cholesterol from the blood. HDL levels of 40 mg/dL or lower for men and 50 mg/dL or lower for women are considered low.
If you have three or more of these risk factors, you have metabolic syndrome, as do about 40% of Americans.

Concept #3 – the best medicine is exercise

There are many tools covered in the book to live a healthy life, and to prevent the Four Horsemen – e.g reducing stress, sleeping well, eating a healthy diet, and having meaningful relationships. However one tool stands above the others in terms of impact: exercise.

Any exercise is better than none, and ideally you should do both cardio and strength/ weights training.

Cardio training:

A study found that someone below – average VO2 max for their age and sex is at double the risk of all – cause mortality compared to someone in the top quartile ( 75th to 97.6th percentiles ). Thus , poor cardiorespiratory fitness carries a greater relative risk of death than smoking.

Strength training:

Subjects with low muscle strength were at double the risk of death , while those with low muscle mass and / or low muscle strength , plus metabolic syndrome , had a 3 to 3.33 times greater risk of all – cause mortality

Preventing #1 – Cardiovascular disease (CVD)

John Ioannidis , a Stanford scientist found that in randomized clinical trials, exercise – based interventions performed as well as or better than multiple classes of pharmaceutical drugs at reducing mortality from coronary heart disease , prediabetes or diabetes, and stroke.

To note: The book does go into detail also on the importance of reducing LDL-cholesterol (more specifically APO B) – if needed through medication.

Preventing #2 – Cancer

..I suspect that the association between obesity , diabetes , and cancer is primarily driven by inflammation and growth factors such as insulin . Obesity, especially when accompanied by accumulation of visceral fat, helps promote inflammation , as dying fat cells secrete an array of inflammatory cytokines into the circulation.

What I am saying is that we don’t want to be anywhere on that spectrum of insulin resistance to type 2 diabetes , where our cancer risk is clearly elevated . To me , this is the low – hanging fruit of cancer prevention, right up there with quitting smoking . Getting our metabolic health in order is essential to our anticancer strategy.

Preventing #3 – Neurodegenerative disease

The single most powerful item in our preventive tool kit is exercise , which has a two – pronged impact on Alzheimer’s disease risk: it helps maintain glucose homeostasis , and it improves the health of our vasculature.

The epidemiology linking strength and cardiorespiratory fitness to lower risk for neurodegeneration is so uniform in its direction and magnitude that .. .. I now tell patients that exercise is, full stop and hands down , the best tool we have in the neurodegeneration prevention tool kit .

Conclusions

I don’t want to sound hyperbolic, but IMO this book should be essential reading for every human being. This book should be taught in class-rooms around the world, until every-one understands these concepts thoroughly, because they are so fundamental for our health.

CGM Experiment (part 3) – cold therapy post

I’d wanted to learn about the benefits of cold therapy, to extract the physiological and psychological effects, benefits of getting into cold water, especially as it relates to health benefits, insulin sensitivity etc.

As an intro to this topic – this post covers Professor Andrew Huberman interviewing Dr. Susanna Soberg, an expert in deliberate cold and heat exposure protocols, talking about the science and impact of deliberate cold exposure from this study (Cell reports). The interview also covers the importance of the cold shock response and how to approach a deliberate cold exposure protocol.

FYI – this post has been ‘co-written’ using tools such as:

Forefront.ai – for transcribing the Youtube video:
Python / Langchain – for Retrevial and QA from the transcribed content
Google Bard – for editing the text for clarity

The study

The study was done in Denmark on a male cohort, and carried out by having participants do winter swimming for minimum two days per week, measuring brown fat activation with an infrared camera, and taking fat biopsies. The study was done in a field setting, and participants were encouraged to do the winter swimming whenever they had time. The relevant ‘minimum viable dose’ was 11 minutes of weekly cold exposure.

Why cold therapy?

Cold exposure can improve insulin sensitivity, which can help to prevent type 2 diabetes.

“ We did see that the winter swimmers had an increased insulin sensitivity. They produced less insulin on all the experimental days. We measured insulin when they were fasting, meaning that they hadn’t eaten in eight hours before the study day. We could see that the winter swimmers had lower production of insulin. Also when they had glucose drinks, the winter swimmers had a faster glucose clearance in the bloodstream. So after two hours, we could see that they had a lower level and the curve went down faster than in the control group.”

Cold exposure can increase brown fat, which is a type of fat that helps to burn calories and generate heat.

“ What happens is that you get adapted a little bit every time you go, like exercise, you get a little bit stronger. So every time you go into the cold water you will feel more comfortable in the cold. You are building your adaptation, which happens on a metabolic level, which is happening via activation of your brown fat.

The mitochondria in the brown fat cells are gonna be activated, you’ll have more of those and they will be more efficient at heating you up because the body expects you to do this again. The capillaries in your skin will also become better at constricting. So you will have a better shield of your body to prepare you for the next time.”

Also your stress response will subside a bit, so you will have a less increase of your catecholamines with time. With time also you have, because of this activation of your brown fat or your muscles, you will have an increase in your metabolism, which will then make your insulin sensitivity better.”

Cold exposure can reduce inflammation, which can improve overall health, mood and cognitive function.

The winter swimmers had lower levels of cortisol at night time – which is beneficial for sleep quality.

And I think it’s very important to think about the cold exposure and the heat exposure as something that lowers the inflammation in the body. And if we can do that, we will have an open door for preventing lifestyle diseases, right? So for type diabetes, but actually also for some mental diseases as well. So as known as depression and anxiety and also Alzheimer’s disease, which are all associated in research, also newer research showing that inflammation increases the risk of depression, anxiety, and Alzheimer’s disease, neurological diseases. So if we can decrease inflammation in the body, we will decrease our modern lifestyle diseases, but also these increasing mental diseases that we see in these modern lifestyle times.

It’s just exposure to temperature, actually just a cold or to heat that is gonna trick our body into a natural state again and reset it where the homeostasis, the balance is lost a bit. So the body is gonna repair itself in that way. And I think it’s beautiful that we can do that just by changing the temperature of our body.

Conclusion

Cold exposure is a safe and effective way to improve health. If you are considering trying cold exposure, be sure to talk to your doctor first and follow any safety tips.

I will incorporate cold baths into my health routines :

Tuesday, after cardio session – 4 minutes total time (2 x 2 min dip)
Thursday, after cardio session – 4 minutes total time (2 x 2 min dip)
Saturday, after cardio session – 4 minutes total time (2 x 2 min dip)

Thanks for reading

CGM experiment continues – Part 2

I wrote about my first two weeks with the CGM here, and here is a short update with new data. The overview of the data below, the new dates marked in yellow:

I wanted to try some things to reduce the average fasting glucose (FG), so here’s what I did.

Experiment 1 – keto diet

On Saturday May 5th I started a ketogenic diet , and as I’ve already been doing intermittent fasting, and generally I don’t eat a whole lot of carbs, I figured this would be easy to try. Here the results for three days:

Ok, that didn’t go as planned at all 🙁 The massive spike on Sat May 6th is from having one tiny slice of cake…

Apparently there is something called ‘adaptive glucose sparing’ which essentially means that since your muscle cells prefer fat when you are doing a low carb/keto diet, there will be more glucose floating around in your bloodstream.

I lost two pounds over the 3-4 days this lasted, and I generally feel leaner. The FG was very stable, but I don’t want to have FG that high in general. There are ‘extenuating circumstances’ (e.g insulin could still be low), but I would’ve needed a blood measurements of fasting glucose and fasting insulin to verify this, so I have try something else..

Experiment 2 – regular, smaller meals

After this I thought “hey maybe I’d just introduce smaller amounts of carbs, eat some breakfast and smaller portions”. This would allow my cells adjust to having carbs again, and with the smaller portions I don’t get as large spikes, here the next four days:

Ouch, not good either. And I wasn’t feeling too great this time, I could really feel sluggish and a bit more tired than usual.

Experiment 3 – back to intermittent fasting

So after this I thought I need to get back at least to where I was before. Here the next four days:

It’s really cool to see that after ONLY one day back to intermittent fasting, my FG normalizes again. I honestly don’t know any other health related measurement where one can see the results this quickly!!

Again I’m not worried about the higher readings around 16-17 as that is where I train, and interesting to note that movie night + salty popcorn does raise FG overnight -as can be seen on 05/15.

Conclusion

Overall I’m learning a lot re: how my body processes glucose/carbs, how intermittent fasting is really helpful for me – and it does make me want to try out some longer fasts (e.g. OMAD – one meal a day) style. Stay tuned.

Lessons from two weeks with a CGM

I received a CGM (Continuous Glucose Monitor) about two weeks ago via the Levels start-up. The package arrived a few days after ordering, and the initial setup was relatively easy and painless. I was able to easily export the data from the Levels website.

So how do the results look? The easiest way I can think of to show you the results are using Python (pandas, matplotlib, seaborn libraries) so here we go: (I’m skipping some data wrangling bits here..)

Glucose level distribution as a histogram

Glucose Level Time Series with rolling statistics

Honestly this data has me a bit worried because generally doctors, Peter Attia MD and the Levels program all suggest that fasting glucose should be less than 100/mg/dl…

Also, I wanted to correlate the glucose readings with the time of day, so we can do that eg with a heatmap:

Glucose Levels by Day, Hour in a Heatmap

This chart is really interesting to me because here a number of things stand out to me:

I was in Austin from April 26th to April 28th for a conference, and those days I did a light workout in the morning, and had a light lunch. So clearly a lighter lunch, moving around in the afternoon leads to lower fasting glucose.
I slept really badly Fri-28th-Sat 29th due to a late flight, and clearly a bad night sleep results in a bad fasting glucose.
I generally workout in the afternoon – between 4PM and 6PM, and so higher readings there are not alarming to me.
What strikes me as odd is the differences in the morning fasting glucose -say 5AM to 10AM – varies between 66 mg/dl to 120 mg/dl…The mean is still around 100 mg/dl (which is not great), but I’m surprised about the high variability.
Since I do intermittent fasting (lunch is my first meal) I had generally thought that my morning glucose would be lower.
There is a missing block on May 2nd as I switched the old sensor to the new one – as you have to do that every 10 days. The most painful thing was tearing the Levels patch off my hairy arms 🙂

All in all I’m very happy to have all this data from the CGM/Levels to explore, giving a lot of actionable intelligence – so I will try some life-style, diet modifications soon.

How I train in 2023

This post is an outline, a template of how I train in 2023.

Disclaimer: I’m a middle-aged male, 6ft 2 in, just under 200 lbs, and my goals are mainly to keep myself healthy for the long-term, and to have energy, vitality for all daily interactions. You can adapt this template to your own needs and always listen to your doctor 🙂

The basic training blocks are focused on either strength or cardio-vascular health, with each training day geared towards adaptions in either one. I train most days, with Sundays being ‘off’. This is a template, and so smaller changes can be made according to how I feel, my shorter-term goals and my schedule etc. Exercises marked e.g. 2A and 2B means they are super-setted, meaning you do one set of A, then one set of B.

Monday – strength focus

Focus	Exercise	Duration	Sets	Reps	% 1 RM
Speed	1. Front Squat	15 minutes	5	2	60%-70%
Strength	2 A) Standing Press	25 minutes	3-4	3-5	80%-90%
Strength	2 B) Weighted Chins	25 minutes	3-4	3-5	80%-90%
HIIT	3. Chins, Dips and Run (done as fast as possible)	15 minutes	3	12	60%-70% – HR 140-160 BPM

Tuesday – cardio focus

Exercise	# rounds	Duration	Comment
A – Assault Bike	3	8 min	Keep HR in Zone 2 (about 13o BMP for me)
B – Jog	3	8 min	Keep HR in Zone 2 (about 13o BMP for me)
Total		About 45-50 min	Followed by light stretching

Wednesday – strength focus

Focus	Exercise	Duration	Sets	Reps	%1 RM
Speed	Explosive push-ups & long jumps	15 minutes	3	3	N/A
Strength	Trap Bar Deadlift	20 minutes	3-4	3-5	75%-90%
Strength	Bulgarian Squat (or RFESS)	15 minutes	3	10	70%

Thursday – cardio focus (alt. yoga, alt. rest)

Exercise	# rounds	Duration	Comment
A – Assault bike	3	8 Minutes	Keep HR in Zone 2 (about 13o BMP for me)
B – Jog	3	8 Minutes	Keep HR in Zone 2 (about 13o BMP for me)
Total		About 45-50 minutes	Followed by light stretching.

Friday – strength focus

Focus	Exercise	Duration	Sets	Reps	% 1 RM
Speed	1. Power Clean	15 minutes	5	2	60-70%
Strength	2A Bench press	25 minutes	3-4	3-5	75-90%
Strength	2B Weighted Inverted Row	25 minutes	4	8-12	65-75%
Assistance	3A Bicep Curl	15 minutes	2-3	8-12	65-75%
Assistance	3B Lying tricep extension	15 minutes	2-3	8-12	65-75%
Assistance	3C Face pulls	15 minutes	2-3	8-12	65-75%

Saturday – cardio focus

Exercise	# rounds	Duration	Comment
1A – Assault bike	2	8 minutes	Keep HR in Zone 2 (about 13o BMP for me)
1B – Jog	2	8 minutes	Keep HR in Zone 2 (about 13o BMP for me)
2 – Sprinting	4-6	15 minutes	Vary shorter and longer sprints, with good amount of rest in between rounds.
Total		About 50 minutes	Followed by light stretching.

Hopefully this gave you some ideas or inspiration how to plan your own training, let me know in the comments if you have any questions.

Thanks for reading,

Oskar

Tip: Integrated Product Teams – Fueling Product success

An Integrated Product Team (IPT) is crucial for product startups to thrive in a hyper competitive landscape. Research by both academics and DoD has shown an IPT to increase customer satisfaction, reduce risk and time to market while helping better align stakeholder interests.

An IPT is a cross-functional group of professionals working collaboratively towards a common goal: the successful development, launch, and management of a product or portfolio of products. IPT members typically represent diverse areas such as design, engineering, marketing, and sales, ensuring a holistic approach to product creation, innovation, and customer satisfaction.

Key benefits of adopting an IPT approach include:

Boosted collaboration: Uniting cross-functional team members fosters open communication and swift decision-making.
Enhanced innovation: Harnessing diverse perspectives sparks creativity and cutting-edge product development.
Agile processes: Quick adaptation to changing market conditions and customer needs ensures efficiency and quality.
Accelerated time-to-market: Streamlined processes give startups a competitive edge by capturing market share faster.
Customer focus: Integrating customer feedback throughout development enhances user satisfaction and loyalty.
Engaged employees: An empowered and inclusive environment drives professional growth, satisfaction, and retention.

To embrace an IPT approach and unlock your product startup’s full potential today, contact me here or on Twitter @oskarhurme – my DMs are open.

Generative Agents: Five Bold Examples of AI Revolutionizing Product Development

Image created with Canva, no generative agent used here :-) — Image created with Canva, no generative agent used here 🙂

(first published on Linkedin)

As we are seeing ChatGPT become more widely used, companies of all sizes must ask themselves how do they adapt their products and their competitive strategies in this new world?

To recap – ChatGPT by OpenAI is a generative agent that is designed specifically for generating text by predicting what comes next in a given sequence. As a generative agent, ChatGPT can create new content, write code, carry out conversations, and even provide assistance in various tasks, depending on the context and the data it has been trained on.

Generative agents are poised to redefine product development, offering unmatched creativity, efficiency, and innovation. Here are five compelling examples of how these AI-powered systems are transforming the way we create and consume products:

Personalized Products: AI-Driven Sneaker Revolution

1.Generative agents will enable brands like Nike or Adidas to analyze user preferences and create customized sneaker designs tailored to individual tastes. These one-of-a-kind shoes will foster deep connections between consumers and brands.

Rapid Prototyping: Hyper-Iterative Rocket Design

2. Companies like SpaceX can leverage generative agents to rapidly generate multiple rocket designs, streamlining the prototyping process, and pulling our sci-fi dreams closer to the present.

Sustainable Design: Eco-Friendly Furniture Evolution

3. Generative agents can help IKEA analyze material data and environmental impact, creating innovative designs that minimize waste and promote sustainability. These eco-friendly products will resonate with environmentally conscious consumers, bolstering IKEA’s brand reputation.

Democratization of Design: Small Business AI Explosion

4. As AI systems become more accessible, Etsy’s small business owners will harness the power of generative agents to create professional, high-quality products. This democratization will unleash a wave of innovation and competition, transforming the online marketplace.

Metaverse Product Sales: The Ultimate Autonomous Agent Experience

5. Generative agents will bring the metaverse to life, creating autonomous agents that interact believably with users for product sales. Imagine the next generation of virtual real estate, where AI-driven real estate agents engage with potential buyers, personalizing the experience and providing valuable feedback to sellers.

Generative agents are set to transform the product development landscape with their AI-powered capabilities. Do you agree, disagree? Pls let me know in the comments.

The bull case for Ethereum

As I’m getting frequent questions from my ‘non-crypto’ friends re: why I like crypto and ETH in particular, here is my take as it stands today (March 2022).

TLDR version

The coming POS upgrade will enable large institutions to invest as the Proof of Work / ESG complication is removed.
The supply of ETH will drop in June from 12,000 ETH per year to 1,200 ETH per year which will all go to the holders of ETH.
Staking rewards will rise from the current 5% pa to 10-15% pa
ETH is growing like a rocket, with usage up 10x just in 2021
Companies like Consensys will hold ETH on their balance sheet
In the aftermath of Canadian truckers and Russian sanctions, the importance of de-centralization will increase, working against ETH challengers like SOL, FTM, Terra etc.

Background

Ethereum is the first ‘programmable blockchain’ with the whitepaper written by Vitalik Buterin in 2014, and the blockchain was launched in 2015. The genesis block was mined, so Ethereum today is a Proof of Work (PoW) blockchain.

Ethereum use cases

Ethereum enables a vast array of ‘decentralized applications’ or ‘dapps’ to be launched on top of it. The dapps are essentially smart contracts (programs) that run on Ethereum, and fees denominated in Ether (the native Ethereum currency) are paid (currently to PoW miners) to record the transactions on the Ethereum blockchain.

Dapps cover a wide array of use cases:

Decentralized Finance / DeFi – where the dapps today provide almost all of the services you can find in traditional finance (trad fi) – such as lending, staking, trading, options, etc. Yields on crypto assets in DeFi can often be very lucrative, with ‘stablecoins’ (e.g USDC – that is US Dollars on a Ethereum) you can earn yields of 8% to 19% p.a. with no fluctuating crypto prices. What is the interest you are getting in your current bank account?

The most popular DeFi dapps include Uniswap, Sushiswap, MakerDao etc. Just to be crystal clear here these are all autonomous programs that “live” on the Ethereum chain, and carry out all those functions with no human intervention. This is why banks are worried about ‘disintermediation’ from DeFi- meaning that banks would be put out of business.

NFTs – or NonFungible Tokens enable creators or communities to prove digital ownership of an asset, membership or status. The use cases range from:

Music – e.g. music artists being able to offer their fans different levels of interaction – where die-hard fans could buy access to a VIP lounge after a concert, or access to a discord channel with early releases of the artists more experimental music. This enables a ‘tiered pricing model’ which is much more favorable for the artists and fans.
Sports – sites like NBA Top shots allow fans to collect, share & trade ‘moments’ of their favorite stars (like digital trading cards).
Community via POAPs – Proof of Attendance Protocols enable you to show on your profile attendance to physical events, making it easier to connect with likeminded people.
On-chain ownership: eventually the ownership of your house or your car will be an NFT that you hold in your digital wallet. You will be able to borrow from your house (home equity loan), rent out your car for a weekend (like Turo) or even create an NFT out of the blog post or video you created.

Gaming – the fundamental shift of being able to own the artifacts, loot in the games give players a stake, a reward that was not possible before. Then being able to trade those artifacts for ‘money’ has given rise to the ‘play to earn’ phenomenon – shown eg by Axie Infinity. Granted there is pushback in the gaming community against cheap monetization, so as always the formats will be iterated on.

DAO’s – decentralized autonomous organizations are new ways for communities to organize themselves, and distribute decision making to the community. Quoting from the Bankless DAO article:

“What sets DAOs apart from all previous organizational forms is their flat, decentralized structures and absence of central planning. DAOs share a treasury and raise equity capital through the issuance of their own token, attracting anonymous investors and workers who believe in its mission.
The transparent nature of the blockchain means that all organization’s activities are managed on-chain and anyone can audit its smart contract codes, giving both investors and workers greater transparency into the inner workings of the organization.”
Bankless, Ryan Sean Adams

IMO DAOs are at the earliest stage as they have the promise of re-organizing how we work, how we form communities, how we deliver public goods (see GitCoin), how we do politics (see Andrew Yang on Lobby3).

Move from Proof of Work to Proof of Stake

Ethereum will move to from the current Proof of Work consensus mechanism to “Proof of Stake” within the next 3 months in a process called the ‘Merge”. This will bring the following benefits:

Energy consumption to secure the chain will drop around 99.8%. Instead the chain is secured by having ‘node validators’ stake their ETH (in a smart contract).
The cost of attacking the network will increase, and enable further de-centralization down the road.
In POS – for every new transaction validators can be called randomly to validate whether a particular transaction is ‘valid’ or ‘fraudulent’. If a malicious actor were to send in fraudulent transactions and your node were to validate the transactions as ‘valid’ – the Eth staked on that node would be ‘burned’ (rendered useless). Instead the nodes which validate transactions correctly are rewarded in ETH – currently on the order of around 5% per annum.

Ethereum Scaling

TLDR on scaling: Combined the POS / Layer 2 and Sharding solutions could take Ethereum from the current 15 tps (transactions per second) to 100k tps.

Scaling Ethereum will happen mainly via so called ‘zero knowledge’ roll-ups, or Layer 2 solutions. There are multiple Layer 2 solutions that are built today – but not yet in wide-spread use which enable faster, cheaper transactions.

Different variations exist such as:

Side chains like Polygon or Gnosis chain
ZK-roll-ups – such as ZkSync or Starkware enable batching of transactions so that the cost /speed of execution can be reduced by 100x or so. The key is that the code is ‘EVM / Ethereum Virtual Machine’ compatible so it can be deployed very quickly / instantly by a ‘dapp’. If the Dapp has been developed for Ethereum, it would in many cases work ‘out of the box’ with the Zk roll-up as well.
Optimistic Roll-ups such as Arbitrum, Optimism, Metis – bundle transactions as well, and reduce transaction fees by about 50x-100x as well. They have been in use for about one year, but are still experimental. The optimistic roll-ups “optimistically” assume that all transactions are valid during processing, but only validate each transaction later on. This means that it takes up to 7 days to move your funds off an Optimistic Roll-up.

On-chain scaling of the Ethereum main-net will happen via a process called Sharding, which splits the main-net into 64 different ‘shards’ to spread the load. This will happen sometime after the “Merge” – I’m not going to venture a date here… :-).

Ethereum valuation

With staking earning ETH holders ‘dividends’ – Ethereum can be evaluated using business valuation methods. Taking into consideration Ethereum’s growth rate in the past few years and the growing network revenue that will accrue to ETH holders – analysts have estimated ETH to be valued:

Entrepreneur Ryan Allis’s Discounted cashflow model values ETH at 12k/ coin today
Ark invest predicts the Ethereum network could be valued above $20 Trillion in 10 years or 166k / coin

And yes there are risks to these investment theses – competitors such as Solana, Polkadot, Terra, there are geopolitical issues, technical unknowns, malicious actors etc so DYOR. (***This is not investment advice***)

The recap

IMO Ethereum is setup for multiple events that I do not think ‘the market’ has fully priced in, such as:

The coming POS upgrade will enable large institutions to invest as the Proof of Work / ESG complication is removed.
The supply of ETH will drop in June from 12,000 ETH per year to 1,200 ETH per year which will all go to the holders of ETH.
Staking rewards will rise from the current 5% pa to 10-15% pa
ETH is growing like a rocket, with usage up 10x just in 2021
Companies like Consensys will hold ETH on their balance sheet
In the aftermath of Canadian truckers and Russian sanctions, the importance of de-centralization will increase, working against ETH challengers like SOL, FTM, Terra etc.

Thanks for reading,

Oskar

Future of money in 2022 and beyond

Reading the very good series and predictions about the future of money on Coindesk inspired me to put some of my own reflections down.

These points are drawn from sources like Balaji Srinivasan (here and here), Raoul Pal (here), Robert Breedlove (here), Alex Gladstein (here ) and many others.

If you peruse those talks and videos you will notice that a lot of them are about history, as in order to understand the present you have to understand your history. In order to predict the future, you have to understand the present. Underlying themes driving these predictions include A) Demographics, eg Fourth Turning B) Things can stay the same much longer than what any of us expect (see Japan) and C) Software is eating the world (ref Marc Andreessen).

There will be a monetary battle, a test of wills, between the following forces – Authoritarian capital (Eg China), Western Fiat (Fed, ECB) and Crypto capital. The Authoritarian capital requires the citizens to Submit as it is the Legal authority. Fiat capital / central banks claim to know what is best for the citizens, and the message is ‘sympathize’ so the CBs will spend greatly in order to keep the current house of cards going. Crypto capital is wild, volatile and offers get rich schemes interwoven with real world utility.

Fiat money central banks will, due to the economics of the fiat system, need to continue their QE infinity, but they will mask the fact that the system is broken in a language of social spending, of taking care of the inequalities in society. My prediction is that we will have some type of UBI (Universal Basic Income) or monthly Tax Credit scheme in most western countries within 5 years.

Unfortunately this will lead to further asset price inflation (as it has for the past 20 years) and secondarily to commodity and wage price inflation, so the main effect will be that asset prices (stocks, houses) continue to compound at 10-15% per year in fiat money terms, but measured against M2 money supply staying flat. Houses will cost double from now in 5 years and equities will have doubled as well, and we will still wonder who the hell buys any at those nose-bleed levels. The answer is TINA – There Is No Alternative.

The UBI / Social spending will be carried out via CBDC – Central Bank Digital Currencies that can be spent via your phone / device, as this will be cheaper for merchants than credit cards. Government can track the spending in real-time, can tax your income and purchases (via VAT) in real-time and merchants can provide discounts in real time based on your location, purchase history, memberships etc. Consumers will as usual have chosen convenience over privacy.

There will be some wage pressure due to the “Great Resignation” as especially Baby Boomers are feeling better about their finances while uncertain about their health, meaning there will be fewer job applicants for many open positions. My prediction is that wage inflation will outpace government CPIs (CPIs say 3-4% annually, wages 4-5%) while both will lag asset price inflation. But since asset price inflation ‘doesn’t really count’, government economists will still be wondering why the rich get richer and the poor get poorer. How much actually in ‘real terms’ will be spent to equalize the income/wealth divides will still depend on election results and politics.

Today (Dec 12th, 2021) the combined market size of Crypto is around 2.3 Trillion, Global Equities are around 120 Trillion, Global Government, Household and Corporate Debt around 300 Trillion, and Global Real Estate around 330 Trillion, so we can call the ‘real world’ financial markets a nice round 750 Trillion.

The ‘Defi Matrix’ will be the Crypto markets ‘eating the financial’ world in the 2020s.

In the words of Balaji Srinivasan :

The DeFi matrix may be to the 2020s what the social graph was to the 2010s. Once every asset can be represented in a digital wallet – bitcoin and ethereum, yes, but also CBDCs , stocks, loans, bonds, etc. – all these billions of assets will trade against each other every second of every day around the world.

This is not inevitable because I love crypto, and blockchains will create some utopian society ruled by empathy, code and crypto bros / babes. This is because I think most main-stream thinkers, politicians, businesspeople etc severely underestimate the power of:

A) how blockchains can enable Trust, an objective Truth to flourish in business and personal transactions. This is because Blockchains are a revolution in Accounting – Triple Entry Accounting (Debit, Credit, Public). Imagine for example every invoice sent, on a chain where the payer / payee can instantaneously verify its status, pay the invoice, confirm receipt and dispute it if needed.

B) Linux systems today run about 50% of the worlds webservers, and Linux is about 99% built on free labor, open source. Now imagine a similar system except that the people building the system can be rewarded in the token of the system, they gain as the token appreciates in value and the gain in the token allows creation of more utility, which brings more users, more value – creating a virtuous cycle. * How some-one like Charlie Munger who’s a student of human incentives can not see the benefits in this is beyond me..

C) The utility and financial rewards available in the Crypto / Defi markets will slowly drain away capital and resources from the TradFi world, and while the market size, number of participants in Crypto increases, the volatility and insane rewards fade away slowly.

So in the end some of the value in the 750 Trillion real world value will accrue to the Crypto layer, but obviously not all of it (as the real utility will still be in the actual houses, companies, factories etc). Raoul Pal has thrown around a number of 200 Trillion for Crypto markets, I’d be more ‘cautious’ with guesstimate of a nice 10x (25T-30T) in about 5 years time.

These predictions are basically based on a continuation of ‘more of the same’ as today, and could be upended of course if there were severe financial / monetary system crashes, wars etc. I hope not.. That’s all I got for now, any comments / feedback is always welcome.

Thanks for reading,

Oskar

A deflationary currency is better

As I argued in my previous post the financial system is broken, and it shows itself for example as the poor are getting poorer and the rich getting richer (US gini co-efficient 1990 – 2020). At the root of the financial system is the US dollar, which is no longer backed by anything else than ‘the might of the US army / IRS’, every dollar is an IOU to some-one else.

The message we hear in main-stream media is that spending is driving the economy, that the ‘mighty US consumer’ keeps the economy rocking and that ‘2% inflation’ is something the Fed should target as a worthwhile goal so that the economy can ‘grow’. Hold those thoughts in your head for a moment.

Does that work on an individual level? If one person spends all their money, and doesn’t focus on their earning power or saving anything – will that work? No, you will go bankrupt.

Does that work on a household level? No of course not – that family would end up on the street sooner or later.

Does that work for a company? A company spending tons on fancy offices, employee salaries, growing like a weed. Sounds like WeWork, and we know how well that worked. It ONLY worked as long as the company was growing.

So WHY in the world do we think that that advice, those policies are good for a nation?

The current consumerist, wasteful, opaque, spend it now messaging is due to the demands of constant growth, which is inherent in a debt-based, inflationary system.

We saw a small deleveraging happen in after the Financial crisis and the whole system almost came crashing down – because otherwise the costs of servicing debt will become un-tolerable.

https://tradingeconomics.com/united-states/households-debt-to-gdp

I predict that the inflationary, fractional reserve, constant growth mandate will sooner or later inevitably meet the limits of a finite, resource constrained world. We are seeing overconsumption of natural resources, overconsumption of calories / energy, leading to climate change and chronic indebtedness – both public and private. There is only so much debt that households and countries can take on – this is shown even by mainstream economists like Rogoff and Reinhart.

The alternative is a deflationary currency that incentivizes actors to save for the long-term – to adopt a ‘lower time preference’. A lower time preference encourages actors to plan long-term, postpone immediate gratification and encourages global collaboration.

A deflationary currency that is immutable – such as gold or Bitcoin, have inherent properties that are favorable for bringing about a lower time preference. The Gold standard worked well for a long time, and IMO a Bitcoin Standard would work fine as well.

Imagine a nation where politicians were not able to spend money willy-nilly, and budgets actually had to be balanced? Increases in bureaucracies would actually be questioned, instead of just pawned off on consumers to pay – eg 95% of new hires in health-care since 1990 have not been doctors, but administrators.

Imagine a nation where wars actually had to be paid for, and you would have to raise taxes if you wanted to go to war? Eg in World War I – the first thing the combatants did was drop the Gold standard. We’ve just seen how we can spend Two Trillion $ in Afghanistan, without real oversight or deliberation. How many less wars do you think we would have had, and could be avoided in the future?

Imagine a financial system where savers, wage-earners, pensioners were able to keep their earnings, savings in the base layer money and actually earn yield on that, instead of being pushed into equities and junk bonds in a reckless chase for yield, chase to keep the value of your ‘monetary energy’ intact.

And finally as as an investor which asset would you prefer to build your financial house on? The Fed balance sheet has almost 10x since 2007, and the USD is getting devalued at the rate of $120 Billion per month. Meanwhile Bitcoin is algorithmically set to get scarcer (new BTC rate is halving every four years), and has a cap of of 21M coins by 2140.

That’s algorithmically set, immutable, open-source money.