Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster



Wednesday, November 13, 2019 :::
 

Bitcoin is regarded as a digital currency, to some extent, but I often find it useful to think of blockchain as a system for indelibly publishing messages.  In the case of bitcoin, these messages are largely of the form "I am taking the bitcoin I got from [provenance] and giving X of it to [bitcoin address] and Y of it to [other bitcoin address]", and as part of the system of maintaining the blockchain it is verified that the sender has bitcoin from that provenance in a quantity that is no less than X+Y.

Actually buying bitcoin involves, as do all transactions, two legs: you give someone dollars or euros or pizza, and they publish a message on the blockchain publicly relinquishing some bitcoin to you.  There are exchanges that get together people who want to trade dollars for bitcoin and people who want to trade bitcoin for dollars.  When a match is found, the dollars are conveyed in some usual dollar-conveyance manner, and a bitcoin conveyance is published on bitcoin's blockchain.  I'm starting, though, to sort of envision a system in which the blockchain itself serves as the exchange.

Consider a blockchain on which the messages took the form of "I trade W units of asset A and X units of asset B, from [provenances], for Y units of asset C and Z units of asset D."  The process of incorporating a new block of such messages into the blockchain would require verifying that the person submitting the message has at least W units of A and X of B from the stated provenances, and also verifying that the entire block gives up at least as much of every asset as it conveys.  If there is a very small set of prices that clear the market, then calculating how to put such trades together into a valid block gets computationally hard if a lot of these bids are very close to worth zero, but if there aren't too many assets, and there are a fair number of orders that give up a nonnegligible amount of value for some set of market prices, it becomes practically tractable, and certainly sufficiently tractable to reasonably incorporate into the "proof of work" that is part of bitcoin mining.

There are two big technological barriers that occur to me: the simpler one is that there has to be a way to cancel an order that doesn't get executed.  It seems to me that bitcoin must have a way to deal with this — that, if I publish "I give Sam 2 bitcoins" and it doesn't go through within a reasonable amount of time that there must be a way to withdraw it or for it to expire — but I don't know what it is.  Probably the message should include some sort of timestamp and/or expiration time, along with a hash of the message that includes the expiration.  An actual cancel may be impossible.

The other, perhaps bigger, issue, is how the assets get on the relevant blockchain in the first place.  If the only messages convey bitcoin, and all bitcoin originate at some level of indirection from bitcoin mining, then you have a fully closed system, and it's all fine.  I can really only trade things that are on the blockchain, and for this to be useful they have to be able to somehow get there.

One possibility goes back to an older idea I had, and one that I later came to be was largely Ripple's initial idea, which is essentially to let each person have an asset that they can create out of thin air, simply by being them.  I can trade "Dean's dollars" in any quantity for anything I can persuade other people to sell me; the problem is just in getting them accepted..  The provenance is just me.  Other people can then trade them as they will, once I have put them out there.  Maybe some of my friends would be willing to accept a certain amount of Dean's dollars among themselves; widespread acceptance would probably only come to a few currencies issued by a few people who are in some sense trusted (perhaps trusted to back their currency at some ratio with some basket of off-blockchain asset).  You could imagine State Street publishing a list of blockchain addresses it maintains in which it promises to keep the "currency" of each address linked to a corresponding ETF.

Update: I meant to post this on my "Dean's Dough" blog, and have just cross-posted it there, but I'll leave it here, too, at least for the time being.


::: posted by dWj at 1:02 PM


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Tuesday, September 03, 2019 :::
 
I don't think I've mentioned this here, but I've been thinking about it for a long time, and who knows  The recent hook is discussion of how much the men's national soccer team is paid and how much the women's team is paid.  There are various statistics and counter-statistics, but I want to raise a question that seems to me to be obviously prior to most of the others, largely unaddressed, and quite non-obvious in terms of its answer: to what extent should a team's pay be determined by its success?[1]

Economically, sports leagues are obviously in the entertainment business; those that persuade people to pay more to be entertained by them are presumably entitled to that extra money.  College sports teams tend to become more popular when they do better (against the other teams that they play); there is also a (looser) cross-sectional correlation where-in teams that tend to do better are more popular than teams that don't.  I believe this holds up largely in professional sports as well, though I'm less sure of it; I certainly have the impression that the Chicago Cubs, in the second half of the twentieth century, had more popularity (relative to other major league baseball teams) than on-field success.

Sports analytic attempts to value players almost always attend solely to the player's effect on the team's ability to win games; I can think of very few occasions when a player seems to have been hired or paid more for a more entertaining style of play (with likelihood of winning held constant).  This may simply be my ignorance; I welcome any anecdotes people have, especially ones that don't involve anyone named Veeck.[2]

Within league it seems likely that imposing an incentive structure focused on winning creates a more entertaining product league-wide.  Sports analytics, again, tends to tease out how many dollars a win costs in a given league; those wins are constant-sum within the league.  I haven't seen research that tries to predict the revenues of a league as a function of anything about the players' talents or actions, though this seems very much like the kind of research that could exist without my having come across it.  I'd like to know, in particular, to the extent that you could attribute revenue generation for the league to different members of the league, how the pay to a team or its players depends on its own revenue generated, its on-field success, and the total league revenue.

Ultimately, in principle, it seems very likely to me that there's a setting in which a bad team that brings in little revenue directly, in a good league brining in a lot of revenue collectively, might be worth more than a good team bringing in more revenue directly but in a league that brings in comparatively little revenue collectively.



[1] In other words: why aren't all professional sports leagues WWF wrestling?  or Why do NBA teams make more money than the Harlem Globetrotters?

[2] I know little about the NBA, and have the impression that there are people who find slam dunks entertaining and there are players who gratuitously perform them; perhaps they have a financial incentive to do so, or perhaps I'm misinformed.  These aren't mutually exclusive, either.


::: posted by dWj at 1:35 PM


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Monday, July 01, 2019 :::
 
Every silver lining's got a touch of grey.
The Grateful Dead
There's been some consternation in the past couple of weeks about recent improvements in the ability of computer algorithms to produce fake videos that look real.  I'm more — well, let's call it "optimistic", but you can choose your own labels.

Certainly there's a long and accelerating history of technology improving the ability of people to provide evidence, to fake evidence, or to expose faked evidence, such that crimes and hoaxes alike are uncovered years after the fact.  In that, this isn't new.  People's faith in evidence, I think, tends to be a bit too credulous over all, but also to lag behind new technology — we trust what was good evidence a generation ago, and we're more skeptical of what was dubious then, but maybe not as much as we should have been.  This particular edition is new, but the issue isn't.  People will learn, eventually, to be skeptical of video evidence.  This is undoubtedly a good thing.

We have seen numerous cases in the past couple years of videos that go viral, and shortly thereafter a new video providing more context essentially refutes the apparent significance of the initial video.  This, too, is a new manifestation of an old problem; videos have really only been going viral on social media for a decade, but Jon Stewart in particular was notorious for taking videos and editing them selectively, and twenty years ago I received the advice that it was better to give interviews to newspapers than TV precisely because people expect the newspaper interview to be edited, and will take video as complete truth.  It's been more than 25 years since NBC was exposed for construing videos of trucks exploding as showing that the trucks were unsafe, rather than as showing that NBC new how to put a car bomb on a truck.

I'm somewhat sad that security camera videos will be less reliable than they used to be; those tend not to require a whole lot of context that would be in dispute.  If a security camera shows that a person was in a particular place at a particular time, that's usually all that's needed; if video shows that someone is breaking into a car, that person can try to explain why, but the factual disputes that security cameras resolve tend not to rely on context.

In most contexts, though, people put too much stock in deracinated videos, and the skepticism people learn to give them may be worth making them even less reliable than they are now.


::: posted by dWj at 12:23 PM


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Monday, July 09, 2018 :::
 
I probably enjoy sports differently from many Americans, but would posit that one of the reason that many Americans like our football better than soccer is well-captured by the kurtosis of changes in win-probability graphs.  Look at these games from fivethirtyeight.com :
This is, in fact, a pair of games that is somewhat generous (in the relevant sense) to soccer, in that the former in particular is unusually high-scoring.  What you see in the graphs is ten jumps with regions of gentle drift in between.  Compare this to the chart from advancednflstats.com :
This is, in fact, a game that is somewhat ungenerous (in the relevant sense) to football, in that it is a particularly close game.  It is still a much more continuous graph; there are occasional "big plays", but the eleventh-biggest moment of the game has much more impact on the final result than in soccer.

One can advance arguments about information sets or the like (and perhaps a graph based on an active live-betting market would better make the point), but there's no plausible way the most expert of soccer observers could enrich the practical state-space of soccer enough to appreciably smooth down the soccer graph; possession and field position count for something, but not very much.  Soccer advocates occasionally snark that the problem that soccer is low-scoring could be solved by multiplying the goals by 7 as football (more or less) does, but this confuses the issue of "scoring" with the more fundamental issue: even in a football game with 18 points between the two teams (7 times the average total score of world cup matches this year) will have meaningful progress toward points that is far less ephemeral than exists in soccer.

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::: posted by dWj at 1:29 PM


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Monday, June 11, 2018 :::
 
A closely divided Supreme Court wrestled Wednesday with a case challenging the legality of President Trump’s travel ban, which restricts travel to the U.S. for foreign nationals from five Muslim majority countries.
This version of the story is from the Washington Examiner
The liberal justices peppered Solicitor General Noel Francisco with questions surrounding a hypothetical president suggested by Justice Elena Kagan.
Kagan posed the example of an anti-Semitic president who made derogatory comments on the campaign trail about Jewish people, which was a veiled reference to Trump’s comments about Muslims while campaigning for president in 2016.
Once assuming the presidency, under Kagan’s example, the president then asks staff to make recommendations and issues a proclamation banning people from Israel from coming to the U.S.
This is an “out-of-the-box type of president” in the hypothetical, Kagan said, before asking what a reasonable observer were to think about such an order.
A reasonable analogy, assuming that Jews in that world are disproportionately involved in terrorist attacks and calling for the destruction of the US and whatnot and that Israel is one of several Jewish countries. But I've been wondering about another analogy a little bit further afield.

Suppose a legally unsophisticated presidential candidate appealing to legally unsophisticated voters makes gun violence a key part of his platform, regularly declaring on the stump that we need to eliminate guns.  Perhaps he denigrates gun owners, making a reference to their "clinging" to their guns.  He gets elected, partially on this basis, and assembles his advisers to start preparing legislation banning guns.

The head of his legal team tells him, "actually, we can't ban guns altogether because of the Second Amendment."

"Really?  I assumed my opponent was making that up."

"No, it's right there between the first and the third.  Also the Supreme Court has ruled that it isn't just decorative, and we have to operate within that interpretation."

"I don't want to evade my constitutional duties, but I really want to prevent gun violence.  It's the right thing to do, and it's part of the reason I was elected.  What options do we have?  Can we ban especially dangerous or scary-looking guns?  Can we restrict ownership by especially dangerous people?  Can we increase enforcement of laws that are already on the books to prevent dangerous people from getting guns?"

"Well, if you hadn't mentioned guns on the campaign trail, you could do any of those.  Alternatively, if you had campaigned on those proposals but had added that you didn't want to ban guns altogether, they would be okay.  But since you said you wanted to ban guns, you can't really do any of those.  Any change you want to implement will have to be made in such a way that a court won't think your real goal is to ban guns."

Is my legal adviser off-base?  Or is it true that a politician who want a policy as close to X as possible without violating the law can get a policy substantially closer to X if he knows what his constraints are?



::: posted by Steven at 11:26 AM


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Sunday, March 26, 2017 :::
 
A somewhat common rhetorical trope among Republican politicians in the last decade has been the suggestion that certain cabinet-level departments should be closed down; insofar as this is a realistic proposition, it's not that the government wouldn't, say, safeguard its nuclear weapons, but that that would be moved to (say) the department of defense in a reorganization.  Certainly it seems like the number of cabinet-level departments is rather more than you would be likely to create if you were starting from scratch, even assuming the government was going to try to do all the things it tries to do.  Some changes suggest themselves going from the status quo backward — the Commerce Department and the Labor Department should probably be re-combined, with most of the Labor department however going to Justice, and putting VA under defense or HHS would make some sense (it should certainly be viewed as part of the defense budget) — but it might be worth thinking how one would start over from scratch, just as a normative guide.

The initial four departments seem like a good place to start; having some sort of Department of Justice, especially in an age without private prosecution of criminal laws, seems like a no-brainer for any sort of government.  Likewise, a national government should have a Department of Speaking Softly and a Department of Carrying Big Sticks, though I think there's an argument for combining them.  I'm not as confident that a Treasury department per se is as clear; if you're going to have some sort of centralized management of financing etc. in the executive branch, it might well be part of a general Department of Administration, and it's perhaps worth noting in that context that what is now the Bureau of Land Management was part of the Treasury Department until the fifth cabinet position was created, so perhaps that's how it was viewed at the time — the department that managed assets and liabilities that weren't obviously directly within the bailiwick of some other department.  Going from that direction, I'm not sure I see an obvious case for a fifth department.  Perhaps the "Treasury" department should be divided up somewhat by the type of asset being managed and for whom, e.g. whether it's fairly open for use by the public (highways, parks) or not.



::: posted by dWj at 1:22 PM


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Monday, February 20, 2017 :::
 

My favorite presidents, in order:

  1. Coolidge
  2. Coolidge
  3. Benjamin Franklin (I know somebody is going to nitpick about this one, but I don't care)
  4. Coolidge
  5. Harding, partly for scaling back the presidency post-Wilson and tarnishing it through scandal, but mostly for dying in office
  6. Coolidge
  7. John XXIII, just to troll the anti-Catholics
  8. The band that performed "Lump" and "Peaches"
  9. Justin Amash (give it a few years)
  10. Jonathan Bush, who has been the president of a publicly-traded company (which I used to work for) for nearly a decade, despite his complete inability, as far as I could tell, to keep his most interesting thoughts to himself


::: posted by Steven at 11:59 PM


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Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.


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