Tag Archives: economics

March 24, 2023 · 5:25 am

The First Automated McDonald’s Is Open (And Why That’s A Big Deal)

In late 2022, there was a major tech news story that made headlines for a hot minute, but was completely forgotten. In Fort Worth, Texas, the first ever automated McDonald’s restaurant opened.

From the outside, it looks like a typical McDonald’s. It has the same aesthetics and architecture that have become so iconic. But inside, there are none of the usual fast-food workers. There are just rows of kiosks and a conveyer belt. Once you place your order, it’s automatically prepared behind the scenes in the kitchen. Then, when it’s ready, it’s bagged and wheeled out to you.

When it’s working optimally, you never have to interact with another human being. Whether you consider that a good or bad thing is entirely up to you, but that’s the ideal. As for how it handles orders that aren’t properly bagged, food that isn’t properly cooked, or drinks that aren’t properly prepared, that’s not yet clear.

This isn’t intended to be the start of a massive effort to automate every McDonald’s restaurant. It’s largely a test to see just how much a standard fast food restaurant can be automated.

As someone who’s first paying job was in fast food, I have some mixed feelings about this.

On one hand, I welcome this kind of automation. I remember what it was like working at these restaurants. The pay was awful. The conditions sucked. And you had to regularly clean up messes that made you want to throw up.

On the other, this is an undeniable sign that automation is accelerating and the low-skilled jobs that many people rely on might become less and less available in the coming years. And for those who really need a job, even if it’s a lousy, low-paying job, that could be seriously detrimental to large swaths of people.

In terms of the bigger picture, I think this is a much larger story than people realize. Automation has been a popular talking point for years now. I’ve certainly touched on it. And I think the recent rise of artificial intelligent programs like ChatGPT have really raised the profile of automation, mostly because it revealed that it’s more than just factory jobs that are vulnerable to it.

It might even be because of ChatGPT that this story about McDonald’s flew under the radar. But I honestly think automation in the fast food and restaurant industry could be more disruptive in the short-term than products like ChatGPT.

In the coming years, we might look back at this automated McDonald’s as the first step towards a new trend in automation. People have talked about automating things like fast food for years. Then, the lingering effects of the COVID-19 pandemic and new trends in labor converged to create new incentives.

This is no longer just an idea that exists on paper or in the imaginations of CEO’s fantasizing about not having to pay minimum-wage workers anymore. This restaurant actually exists. People in the Fort Worth area can visit it right now.

Again, it’s not part of an ongoing effort to automate every McDonald’s. If you go to this restaurant, chances are you’ll deal with a system that’s still being refined. There’s probably still people there behind the scenes, monitoring and fixing whatever bugs emerge in the system. There’s a good chance those people are paid much more than minimum wage. There’s also a good chance that this particular McDonald’s isn’t going to be more profitable than those with human workers.

But those are just logistical issues that can be polished, refined, and streamlined. All it takes is time and experience. It’s not unlike the first assembly line or the first 3D-printer. It’s messy and clunky at first, but it steadily becomes more efficient with time and investment.

Eventually, it’ll get to a point where a functional McDonald’s won’t ever need a staff of low-skilled employees anymore. In principle, it would only need one person to be there to make sure the ingredients are re-stocked and the equipment doesn’t break. The company probably wouldn’t even need to pay the person that much. If they’re qualified to work as an unpaid intern in a standard IT department, they’re probably qualified to manage this system.

And if McDonald’s finds a way to make it work, you can expect the competition to catch up quickly. There would just be too much incentive to remove all the low-skilled wage labor as a means of increasing profits. It won’t happen overnight, but one company only needs to succeed once before others copy it.

Fittingly enough, that’s something McDonald’s did before. Their system of fast food was pioneered in the early 1950s and proved so successful that many other competitive, including Burger King and Taco Bell, embraced it. It’s very likely we’ll see something similar play out with automation.

But what does that mean for low-skilled labor, in general?

That’s a relevant question. There’s no way this kind of automation will stop at fast food restaurants. Add AI tools like ChatGPT into the mix and even mid-skill jobs could be at risk.

I don’t claim to know the answer, but I suspect we’re going to see some major upheavals in how we work in the coming years. That’s going to have consequences, good and bad. And I honestly worry that we’re not prepared for the bad consequences in the slightest.

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February 24, 2023 · 5:24 am

Why We Should Embrace A Four-Day Work Week

If you’ve ever worked a full-time job, chances are that job had set hours during certain days of the week. It may vary from job to job, but in most developed countries there’s this concept of a standard work week. And it goes like this.

You work five days a week, often Monday through Friday.

You work eight hours a day, usually around 9:00 a.m. to 5:00 p.m.

You typically don’t work major holiday or overtime. But if you do, you get paid overtime.

That’s seen as a “normal” work week these days. I put “normal” in quotes because what constitutes a normal workday has changed a great deal over the years. But I prefer not to focus on the history of the work week. I just want to ask a simple question about the work week as we currently accept it.

Is the five eight-hour workday schedule really the most effective approach to work?

It’s an honest question and one I think the COVID-19 pandemic has made more relevant. Beyond revealing how much work we can be done remotely and from the comfort of our homes, it also revealed that our concept of a normal work schedule is somewhat skewed. And it might be a good time to re-evaluate our understanding.

Some are already doing that. A number of companies in various parts of the world are starting to experiment with a four-day work week. It doesn’t always entail less work. In some cases, people opt to work four ten-hour days instead of five eight-hour days. The duration of the shifts don’t change. It’s just the structure.

And according to the conclusions of multiple studies, the results have been a massive success for everyone involved.

Overall productivity remained unchanged or actually improved.

Worker satisfaction increased, as did overall work/life balance.

The same amount of work got done, even when fewer hours overall were worked.

There were practically no real downsides. People got an extra day off, but were just as productive. They were also happier, overall. Even if you’re a ruthless business tycoon with no sympathy for others whatsoever, these results are encouraging. After all, happier and more fulfilled workers means less turnover and less conflicts overall. Unless your company runs on the tears and suffering of others, that’s generally good for business.

Even in the absence of these studies, I can personally attest to the appeal and the merits of a four-day work week. While I wasn’t lucky enough to have that schedule with any of the full-time jobs I worked, I do know it was a popular option in one particular company.

Since I don’t know if my former employer visits my site, I won’t say their name or their industry. I’ll just say that this company utilized a lot of shift-work. There were some typical nine-to-five shifts, but most varied considerably in order to ensure 24/7 coverage of our operations. I typically worked five days a week, usually 10:00 a.m. to 6:00 p.m.

However, there was an option for those with kids to work four ten-hour days. The day of the week they got off varied. My supervisor actually encouraged those who used this option to coordinate and decide amongst themselves which day of the week they would take off. Some preferred having Monday off. Some preferred having Friday off. One even preferred having Tuesdays off.

It was probably the most popular shift, but one that wasn’t widely adopted. It was always framed as a shift reserved for those with young children who needed an extra day to take care of doctor’s appointments, personal matters, and what not.

Personally, I would’ve definitely preferred working four ten-hour days. Even if it meant those four days were longer, I would’ve gladly worked that time in exchange for a longer weekend. It would’ve made a lot of things easier, especially when I was young and just out of college. Even today, it would make a lot of things easier. An extra day would give me more time to rest, run errands, work out, and work on my personal life.

I suspect many feel the same way. Just think about how excited/relieved you are every time you have a long weekend to look forward to. But honestly, is a three-day weekend really that long? It’s still less than half of the week. And can you honestly say you get less done on a shorter work week?

Now, I understand that not all work is the same. There are certain jobs for which a four-day work week just isn’t practical. By the same token, there are also types of work for which a five-day work week isn’t practical, either. We just still use that schedule because it’s considered standard and “normal.” We’re so used to it that we don’t even question it.

But we should. The results of the studies I mentioned imply that there are better ways to get just as much work done with less time in a manner that is just as productive, if not more so. So why not embrace that?

I suspect a part of it has to do with how the five-day, 40-hour work week is engrained in a lot of labor laws. That is not a trivial detail that we can just overlook. But laws can be changed. And in this case, there’s a better and more efficient option available.

In a world with so many diverse people and so many diverse forms of work, it makes sense to be flexible. If a shorter work week means equal or greater amounts of efficiency, then the only thing stopping us is outdated assumptions about what constitutes “full-time work.”

I sincerely hope that changes in the coming years, especially as people continue to realize the value of a good work/life balance. Just because we’ve been structuring our jobs a certain way for decades doesn’t mean we should keep doing it that way. If a four-day work week is better by every measure, then we’re only making our jobs more miserable by clinging to outdated practices.

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November 4, 2021 · 5:49 am

My (Non-Expert) Proposal For Automation And Greater Human Prosperity

62% say robots can be more productive than human workers —V1 study

I’m not an expert on much. I don’t consider myself exceptionally smart on matters that don’t involve superhero comics, NFL football stats, and quality romance stories. I make that disclaimer because I don’t want to give the impression that I know more than I know.

That kind of perspective is important, especially if you’re going to talk about complicated issues with not-so-clear solutions. I’ve attempted to talk about some of those issues on this site, some being much more complicated than others. I don’t claim to have shed new light on a subject or changed a few minds, but I like to think I still contributed something.

To that end, I’d like to make another contribution to a subject I’ve also touched on before. In the past, I’ve highlighted both emerging and potential issues associated with the development of artificial intelligence, including the sexy kind. I’ve also highlighted the issues we may face in a future where so much traditional work has been automated.

Now, in wake of a global pandemic that revealed just how much we can get done at home, I suspect that trend will accelerate. I also expect that trend to bring many problems, not the least of which involve people struggling to find the kind of good-paying blue collar jobs that have helped people rise out of poverty.

Turning back the clock or just trying to ban automation at a certain point is not a viable solution. There’s just no way to enforce that in the long term and it’ll only get more difficult once artificial intelligence gets to a point where it can match the capabilities of an ordinary human. At some point, we’ll have to adapt and that includes changing how we live, work, and play.

The living and playing part have their own set of unique challenges, but I think the work aspect is more pressing. When most people express concerns about automation and AI, they revolve largely around the economic impact and understandably so.

Historically, people have had to work in order to earn money or resources to survive. Whether you’re on a farm in the 10th century or in a city in the 20th, this dynamic has remained fairly constant.

Automation, especially once supplemented by artificial intelligence, will likely upend that dynamic completely. It’s entirely possible that, at some point this century, we’ll develop machines that can do practically all the work humans have had to do in order to survive.

That work includes, but isn’t limited to, farming our food, mining raw materials, producing our goods, maintaining our streets, protecting our homes, and even governing our society. Since machines never tire and are prone to fewer errors, what other jobs will there be? I don’t doubt there will be jobs, but what form will they take? More importantly, will they pay enough to large swaths of people?

I don’t claim to know the answer, but I suspect they won’t. The dynamics of labor markets just can’t function when the machines are capable of doing so much more work than large swaths of people. Even if those people don’t work, they’re still going to need money and resources. How will they go about getting it?

Answering this question has often led to discussions about a universal basic income, which has actually become a more viable policy position in recent years. I’ve even touched on it a bit as well and while I think it’s a great idea, I think there’s also room for some supplementary policies.

For that reason, I’d like to submit one of those policies that could be implemented with or without universal basic income. I call it the Individual Automation Matching Dividend, or IMAD short. This policy would work like this.

  • All adult citizens within the borders of the country will have a piece of identifying information, such as a social security number, voter ID number, or driver’s license number, turned into a special digital token.
  • That token will be ascribed to a machine/robot/android that is currently active and conducting work that had been done by humans at some point in the past, be it manual labor, service roles, or something of that sort.
  • The productivity and wages of work done by these machines will be indexed to a minimum annual salary of approximately $78,000 in 2021, which will be adjusted for inflation on a yearly basis.
  • Any work done by these machines that exceed the value of that salary will be diverted to a national welfare fund to provide extra support for those who were sick, disabled, or otherwise in need of resources beyond that of a healthy adult.
  • No citizen will be ascribed more machines than any other and any machine ascribed to them that is lost, damaged, or obsolete will be replaced in kind by the state.

I apologize if some of what I just described is confusing. I tried to write this out like a lawyer or someone proposing a new policy to a future government. For those who don’t care for legalize, here’s IMAD in a nutshell.

Once you become an adult, you get your own perfect worker robot. That robot may take many forms, but for the sake of simplicity, let’s just say it’s an android in the mold of those we saw in the “I, Robot” movie. They can work without rest, do everything a healthy adult can do, and have roughly equal to greater intelligence.

You’re given this robot by the government to basically act as your work avatar. So, instead of you going out to work every day to earn a living, this robot does it for you. The work that robot does will be compensated, but the money will go to you. Basically, you get paid for the work your android does. It’s more a dividend than a wage.

Remember, since the robot doesn’t age or get tired, it can work 24/7/365. In principle, you won’t even have to meet it. It just works all day and all night on whatever job requires labor, be it construction, assembly, shipping, farming, cooking, etc. You just get all the money, up to about $78,000 a year.

Now, why did I choose $78,000? I didn’t pick that out of thin air. That’s a figure ripped straight from a real-world case study from a company that started paying all employees a minimum of $70,000 a year back in 2015. The idea was that previous studies had shown that when people make more money beyond a certain point, their happiness doesn’t increase. This company just took that idea and ran with it.

The results, by and large, were overwhelmingly positive. With that kind of money, people could create more comfortable lives. They could buy homes, start families, plan for retirement, and make investments. It makes sense. When people have this kind of money to work with, they have the resources they need to create prosperous lives.

The idea behind IMAD is to mirror that by leveraging the added productivity afforded by automation. It’s not some large blanket package of money like a universal basic income. It starts with an individual, acknowledges the work that they have historically provided for a society, and supplements that with technology.

I’m not saying it’s a perfect proposal. I’m not even saying it’s smart. For one, it assumes that one human-like android is enough and that we can control the artificial intelligence necessary for them to operate on a large scale. That’s still an ongoing issue. I’m sure there are plenty more problems I haven’t thought of, but that’s exactly why I’m sharing it.

Surviving a future with intelligent machines is going to be challenging enough. However, we can’t just stop at survival. We want to prosper. We want to live, love, and build better futures for ourselves and our loved ones. Technology like automation and AI can help us get there, but only if we use it wisely. It’s a big if, but one that’s worth working towards.

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October 4, 2021 · 5:50 am

Rethinking Jobs And Business: How Pandemics And Relief Benefits May Change Both

Help wanted? | Free | hometownsource.com

The world is always changing. That’s the only constant.

Sometimes, it changes more rapidly and chaotically than usual. That tends to happen a lot when major events transpire, such as a once-in-a-generation pandemic that infected millions and shut down entire countries. I hope I don’t have to belabor that to anyone with a news feed for the past year.

At the same time, these kinds of rapid upheavals can get us thinking harder about things we tend not to question. I’m not just talking about how much we take our health, our infrastructure, and our essential workers for granted. I’m referring to bigger concepts about how we approach life, society, and how we structure our lives.

One area that seems to be getting more scrutiny lately is how we approach jobs, work, and careers. I’ve certainly given it more thought, mostly in terms of the impacts of telework and how I used my stimulus check. I suspect many others have contemplated these topics in new ways in wake of recent events.

Now, as the pandemic nears its end, some of those concepts are already manifesting in the real world. One effect, in particular, has been especially jarring in America, mostly for reasons that other industrialized countries may find laughable. It has to do with people not wanting to work for a lousy, unlivable wage.

I know that shouldn’t be such a radical concept, but it is and as a proud American, I find it infuriating. There’s no getting around it. The ages for the average, non-CEO American have been stagnant for decades. It’s an issue that has been festering since long before the pandemic and even before I was born.

Before the pandemic swept in, there was an ongoing debate on whether the minimum wage should be increased to $15 nationally. I won’t get too heavily into the politics and talking points behind it, mostly because it ultimately descends into cycle of speculation and fallacies. I’ll just say that the pandemic has complicated that debate in unexpected ways.

During the height of the pandemic, the economy was basically shut down. Suddenly, millions were out of work and businesses had to shut down. Many still haven’t fully recovered. A big reason why many didn’t starve to death or end up on the streets was because of government relief packages, which included extended unemployment benefits.

While America’s relief package wasn’t nearly as generous as other countries, it was certainly better than nothing. I know plenty of people who genuinely needed that relief to stay afloat in terms of paying bills and feeding their families. It’s also not unreasonable to say that this was a critical measure in terms of preventing the pandemic from getting even worse.

However, this effort revealed something remarkable. According to a study done last year, the unemployment benefits that many workers received was actually better than their previous wages. It wasn’t an insignificant chunk of the work force, either. The benefits were greater for approximately 68 percent of American workers.

What does that say about the wages we’re paying our workers?

Moreover, what does that say about the system in general that workers can make more by not working than they would if they were?

Something about that doesn’t add up, literally and conceptually. I get that this was an unprecedented situation. At the same time, it reveal something about how we see work and workers. It’s something businesses are starting to realize too.

As the country and the world opens up, new job opportunities are arising. That’s good news for those who have been out of work. Unfortunately, those same businesses are having a hard time filling those positions.

The jobs are there.

The workers are there.

They just aren’t gravitating towards one another.

Here’s a brief rundown of the situation, courtesy of NPR. If you haven’t been working or are lucky enough to have kept your job during the pandemic, it should offer some insight and perspective.

NPR: Millions Are Out Of A Job. Yet Some Employers Wonder: Why Can’t I Find Workers?

At a time when millions of Americans are unemployed, businessman Bill Martin has a head-scratching problem: He’s got plenty of jobs but few people willing to take them.

“I keep hearing about all the unemployed people,” Martin says. “I certainly can’t find any of those folks.”

Martin helps run M.A. Industries, a plastics manufacturing company in Peachtree City, Ga. The company makes products used in the medical industry — specifically, in things like coronavirus tests and vaccine manufacturing and development.

But as he struggles to keep up with demand, Martin is finding it almost impossible to find new workers.

As someone who has worked his share of lousy, low-paying jobs, I can’t say I’m surprised by this. Don’t get me wrong. I still feel for the business owners who need workers to keep things going. I just can’t forget how arduous it was, working hard at a job that paid so little and left me so exhausted at the end of the day.

If the alternative is staying home and collecting unemployment, which ultimately pays more, then the choice is easy. That’s especially true for those who have kids or relatives they need to take care of. It’s not that they’re lazy, as some overpaid pundits love pointing out. It’s just that the nature of these jobs aren’t that appealing, especially when the pay is so low.

If anything, this situation has inspired us all to take a step back and look at how we approach work, jobs, careers, and business. When you think about it, it’s a little distressing that we build so much of our lives around work. It’s not just something we do out of obligation and responsibility. Many literally have to work in order to survive.

Is that right?

Is that just?

Is that healthy for society as a whole?

I say this as someone who has been lucky enough to have jobs that I’ve both loved and hated. I know what it’s like to work for a business that you hate. I also know what it’s like to have a job you find genuinely fulfilling. Not everyone is that lucky. In fact, I suspect the vast majority of the population, even in America, never experience that luck.

I get that there are economic reasons why some businesses can’t pay their employees high wages. I’ve worked in fast food restaurants. I know the profit margins aren’t exactly large. I also know that, even when I could make more than minimum wage, it was rarely enough to live on. That’s not even factoring the physical toll some of this work takes.

Despite that toll, there was still an undeniable stigma to those who didn’t work or those who simply avoided low paying jobs. In America, it’s a direct extension of that old protestant work ethic that equates moral worth with a willingness to do backbreaking labor for minimal pay. I’m not saying that work ethic is wrong, but I do think it needs to be re-evaluated.

The pandemic suddenly gave people an option on whether or not they wanted to do these kinds of low-paying jobs. Many understandably opt to just collect unemployment. They may not live luxuriously, but they will live. In some cases, they’re even better off.

It may be a sign of things to come. I already speculated on how the pandemic relief bills could be a precursor to a universal basic income. Now that people have experienced life in which their survival isn’t directly tied to having a low-paying job, I think it’ll be difficult to back.

I also think that’s a good thing. Regardless of how you feel about minimum wages, work ethic, or running a business, I think it’s generally a positive trend that we’re starting to decouple work with the right to survive. I think it’s a trend that has to happen, especially as automation does more and more of the low-skilled labor traditionally done by human workers.

It’s true. Some people are lazy and don’t like to work. Some people are just so driven and incapable of not working. Both still deserve to live without needed a job to keep them from starving to death or losing their home. As bad as this pandemic has been, I sincerely hopes it inspires us to rethink how we structure our society. There is a better way of doing things. We should always strive to do things better. Sometimes, that means rethinking everything we’ve come to believe about work, business, and life in general.

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September 9, 2021 · 5:45 am

Would You Shop At A Store Run Entirely By Robots?

Will Smart Machines Kill Jobs or Create Better Ones? - The Washington Post

Recall the last time you went to the store. It doesn’t matter if it was your corner grocery store or some big box department store. All that matters is you went there to do some basic shopping, as we all end up having to do at some point. With that in mind, try and remember how many store clerks you saw.

Maybe some were working at cash registers.

Maybe some were stocking shelves.

Maybe some were sweeping floors or cleaning up messes.

The chances are you saw at least several. I remember seeing at least three the last time I went to a grocery store. That’s fairly typical. I know I used to see more before the days of self check-out lines, but I always saw people working at these stores, diligently doing the things necessary to keep it running.

For most of us, that’s a mundane sight. For every store we go to, we expect there to be human beings working there to keep it going. It’s part of the infrastructure that keeps these stores stocked. On top of that, seeing other human beings contributing gives us a sense of comfort in that this place is being run by real people with real faces.

Now, try and imagine a store that has no people working at it. You walk in the door and you never see another human being carrying out the various operations we expect of a functioning store. All that is now done by machines and robots. They’re the ones who stock the shelves, handle your money, and clean the messes.

Does that change the experience?

Does that make you more or less inclined to shop at that store?

These are relevant questions because, as I’ve noted before, robots and artificial intelligence are advancing rapidly. Automation is an ongoing trend that promises to have major economic ramifications. Some of those ramifications are already here. It’s one of the reason coal mining jobs will never be as prevalent as they once were.

Other ramifications haven’t arrived yet, but they will eventually come. The technology is there. The incentives are there. It’s just a matter of investing, refinement, and scale. Eventually, it will reach retail work, a sector that employs nearly 10 million people. That will have a major economic impact for large swaths of people.

Unlike other forms of automation, though, it’ll be a lot more visible.

Most of us never set foot in a factory where cars are made, much of which is done by robots. Most will never set foot in an Amazon or Walmart warehouse, which already use robots at a significant scale. The impact of just how much work is done by robots these days is not visible to most ordinary people.

That will not be the case with stores and retail work. Like I said, we all have to get out and shop every now and then. Even though online retail has become more prevalent, people still go to traditional brick and mortar stores. Even as online retail improves, that’s not likely to change.

However, how much will that experience change once robots start doing the jobs that humans have done for centuries?

How will that change the experience?

Will you, as a consumer, shop at a store that had no humans working there most of the time?

If you think this isn’t that far off, think again. Below is a video from an AI channel on YouTube that shows a robot using a bar code scanner for the first time. The process is a bit cumbersome, but the robot is able to handle it. It is able to receive instructions. Given the nature of how robots improve and refine their programming, it’s not unreasonable to assume that future robots will be able to carry out retail tasks more efficiently than any human worker.

It may not happen all at once. You probably won’t just walk into a store one day and notice that everyone was replaced by a robot. Like self check-out, it’ll likely happen gradually. Once it gets to a certain point, though, it’ll become mainstream very quickly. The incentives are just too strong.

You don’t need to be an economist to see those incentives. Robots don’t need to be paid. They don’t slack off on the job. They don’t get sick or tired. In theory, they could keep a store open 24/7 without ever paying overtime. For big box retailers like Walmart, the potential profits are just too large to ignore.

It won’t stop at stores, either. Restaurants will likely undergo a similar process. There are already working robots that can cook meals from scratch. Once they get refined and scaled, then it’s also likely you’ll one day eat at a restaurant entirely run by robots.

Would you be willing to eat at such a place?

Your answer will probably be similar to the one I asked earlier about whether you’d shop at a store run entirely by robots. Personally, I don’t think I’m ready to shop at a place that had no humans working in it, if only because robots sometimes break down. However, within my lifetime, it may get to a point where stores and restaurants run by humans become the exception rather than the norm.

Are we ready for that future?

I don’t know, but it’ll come whether we’re ready for it or not.

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August 6, 2021 · 5:48 am

Why Amazon Accepting Bitcoin Would Be A Game Changer (And Why They Might NOT Do It)

Jeff Bezos Directs Amazon to Accept Bitcoin and Other Popular Cryptocurrencies: Report – Bitcoin News

In all the years I’ve been browsing the internet, I’ve never seen something so divisive or so disruptive as cryptocurrencies. Yes, that includes both video games and internet porn. Crypto’s impact has been that profound. That impact is likely to continue in unexpected ways for years to come.

However, there is still plenty of uncertainty and confusion surrounding cryptocurrencies. I recently had dinner with my parents and my mother asked me to explain it to her. I tried. I’m pretty sure I failed. I tried to simply frame it as digital money, but that didn’t even come close to explaining what cryptocurrency is, how it works, and why it has become such a huge industry.

There are far smarter people than me who can explain what cryptocurrencies are and how they work. This video here does a decent job of explaining it to beginners who aren’t particularly tech savvy.

While I’ve been following the rise, fall, revival, and growth of cryptocurrencies for years, I didn’t actually buy any until very recently. I even wrote about my experience, which ended up being somewhat mundane. It was no different than using an ATM.

That’s somewhat illustrative of where cryptocurrencies are right now. Buying currencies like Bitcoin has never been easier. You can download any number of wallets for free on your phone. If you don’t want to link your bank account to it, then finding an ATM like I did is very easy.

If you have any spare change lying around, you can turn it into Bitcoin. That’s where we’re at now with cryptocurrencies.

The harder part at the moment is actually spending Bitcoins. While you can find numerous online merchants who take Bitcoins, you can’t exactly use them to pay your bills, buy your groceries, or just purchase something on a whim. That’s one of the biggest barriers to cryptocurrencies in general. Using it is more cumbersome than regular cash. That’s why most see Bitcoin as an investment asset rather than a usable currency.

That could change very soon, however. The reason for that change could come from the largest retail entity on this planet, Amazon. If ever there was a company that could completely change the way we see and use cryptocurrencies, it’s this one. It may ultimately make Jeff Bezos even richer than he already is, but let’s table that concern for a moment.

This isn’t just me speculating. There was a recent rumor among the business world that Amazon was looking to start accepting Bitcoins as a payment method. While Amazon ultimately shot down that rumor, they did not say they would never accept Bitcoins.

In fact, I would go so far as to say it’s only a matter of time before Amazon starts accepting cryptocurrencies in some capacity. There’s just too much money to be made from doing so and Amazon, like all big businesses, is always looking to grow. This would be one way of doing that and it’s impossible to overstate the larger impact that would have.

For one, it would send shockwaves through all currency markets, crypto and otherwise, more so than a million tweets by Elon Musk. Suddenly, this asset isn’t just an investment vehicle anymore. It’s a form of money with an actual use.

Amazon is already the biggest retailer in the world. It’s also becoming one of the largest grocery chains. It still has some competition, mostly through companies like Walmart. None of them accept Bitcoin yet, but you can be reasonably certain that as soon as one of them takes that leap, the others will follow.

Beyond just being a novel payment method, Amazon accepting Bitcoins could have a far broader change. One of the main driving forces behind the development of cryptocurrencies is that this is money that has no boarders. It doesn’t matter where you are in this world. You could be in America, China, or the middle of Africa. So long as you have an internet connection, you can access this currency.

For companies like Amazon, that means accessing a customer base that has been traditionally inaccessible. There are over a billion people in this world who have no bank accounts. In some parts of the world, their currency just isn’t usable for companies like Amazon. Converting them to other currencies is already a hassle. Bitcoin could change that.

By accepting Bitcoin, Amazon and other retailers like it have the potential to the entire world in ways that weren’t possible until recently. If they’re going to keep growing, they need those customers and, like it or not, these people need Amazon. Opening more people up to an accessible market can only help get goods to people who need them.

All that being said, I can also understand why Amazon and other large retailers might resist accepting cryptocurrencies. Beyond them just being too loosely regulated, their volatile nature could be a problem for large retailers.

I can attest to that volatility personally. When I bought my first Bitcoins, the price was around $35,000. Then, it shot up to over $60,000 for a while. A few months later, it crashed to the point where it was worth less than my initial investment. It eventually recovered, but that’s a lot of instability for a currency.

That’s something I’m sure Amazon is aware of. By taking Bitcoins as payments, they’re also accepting its wild volatility. All those Bitcoins that paid for all those goods could be worth a thousand dollars one day and worth a fraction of that the next. Even if Bitcoin represents only a small portion of payment, that’s sure to create some anxiety among investors.

Given the current state of the economy and the world, as a whole, I understand why Amazon would hold off on diving into cryptocurrencies. For a large, publicly traded company, anything that makes the stock price or the overall value of its assets less certain might just be too much to handle for now.

It may not happen this year. It may not even happen next year. However, I’m not among those who think all cryptocurrencies are a scam, a scheme, or a fad. These aren’t Pokémon cards or Beanie Babies. This is a valuable tool for the digital world that has the potential to open up exchange with everyone, regardless of where they live.

That tool still needs refinements. Bitcoin certainly has its flaws. That’s beyond dispute. Amazon is aware of those flaws, as well. As they are refined, currencies like Bitcoin will gain more acceptance. Amazon and other big retailers will be part of that process. When that day finally comes, expect a whole new world to emerge. I don’t claim to know what kind of world that’ll be, but I’m excited to see how it unfolds.

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February 13, 2021 · 8:58 am

A Note To Investors/Enthusiasts Of Dogecoin

We live in a strange time. I know you could say that about almost any point in history, but let’s face it. The past year has been more eventful than most. The past few months have been even more eventful if you’re an investor or follow economic news. We recently learned that a multi-billion dollar hedge fund is no match for a bunch of shit-posters on Reddit.

I’m not gonna lie. That story still puts a smile on my face. Last year sucked, but when a bunch of shit-posters on Reddit tank a predatory hedge fund, the world is an objectively better place.

As much fun as that is, there are some other stories related to investing that are worth noting. On top of the craziness caused by r/WallStreetBets, it has been just as chaotic for investors of cryptocurrencies. When the financial world is in chaos, cryptocurrencies that thumb their nose at old economic institutions tend to thrive.

Now, full disclosure, I do own Bitcoins. That’s the only cryptocurrency I own and I don’t own much. I’m not a bold investor. I buy index funds and ETFs. I would not fit in on r/WallStreetBets, nor would I be a good evangelist for Bitcoin.

For that same reason, I’d like to send a special note to those currently caught up in the Dogecoin craze. If you don’t know what Dogecoin is, then that’s understandable. It is a cryptocurrency like Bitcoin, but it’s unique in a few very particular ways.

Most notably, Dogecoin is often treated as a joke. That’s because it started off as one.

That’s not my opinion. That’s literally part of its origin. Its creators, Billy Markus and Jackson Palmer, were legitimately surprised when people started using it. I guess they didn’t get the joke.

That doesn’t mean Dogecoin has absolutely nothing going for it. It is a functioning cryptocurrency that uses some of the same technology as Bitcoin. Its most notable difference is that, unlike Bitcoin, there’s no limit to how many Dogecoins can be mined. Whereas Bitcoin can only ever have 21 million, Dogecoins can be mined indefinitely.

It may seem like a small difference, but that difference matters if you understand the basics of scarcity in economics. Most people understand it on some levels. If you can make an infinite amount of something, then it’s not going to have much value. If something is incredibly finite and difficult to obtain, like gold or Bitcoins, it’s going to have more value.

It’s that concept that I’d like to convey to those cheering on Dogecoin. Thanks to the recent upheavals from r/WallStreetBets, Dogecoin has been surging more than most currencies and even people like Elon Musk are cheering it on.

That’s not unusual. Sometimes, certain assets get propped up for a brief period. That has happened a lot with cryptocurrencies over the past decade. However, with Dogecoin, it’s a lot more style than substance.

Whereas Bitcoin gains value as it becomes more accepted in various sectors of the economy, Dogecoin gains value because people are just cheering it on. One has long-term sustainability. The other ends as soon as people get bored or find something else to cheer on.

Today, it’s Dogecoin.

Tomorrow, it could be JackCoin, a cryptocurrency made exclusively for people named Jack.

Is that the dumbest idea in the history of finance? I don’t know, but entire economies have gone bust for dumb things before.

Again, I’m not an investment expert. I’m not giving investment advice to anyone. However, to those thinking about getting in on the Dogecoin craze, I offer one important message.

You can win with style over substance in a lot of things, but not when it comes to money. At some point, a product has to demonstrate its value. You can only prop it up for so long before basic economic forces take over. It’s not fair and it’s not rational, but that’s how economics work.

Dogecoin will find that out at some point. Investors may have to find out the hard way.

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February 5, 2021 · 5:51 am

Why We Should Treat Our Data As (Valuable) Property

Many years ago, I created my first email address before logging into the internet. It was a simple AOL account. I didn’t give it much thought. I didn’t think I was creating anything valuable. At the time, the internet was limited to slow, clunky dial-up that had little to offer in terms of content. I doubt anyone saw what they were doing as creating something of great value.

I still have that email address today in case you’re wondering. I still regularly use it. I imagine a lot of people have an email address they created years ago for one of those early internet companies that used to dominate a very different digital world. They may not even see that address or those early internet experiences as valuable.

Times have changed and not just in terms of pandemics. In fact, times tends to change more rapidly in the digital world than it does in the real world. The data we created on the internet, even in those early days, became much more valuable over time. It served as the foundation on which multi-billion dollar companies were built.

As a result, the data an individual user imparts onto the internet has a great deal of value. You could even argue that the cumulative data of large volumes of internet users is among the most valuable data in the world.

Politicians, police, the military, big businesses, advertising agencies, marketing experts, economists, doctors, and researchers all have use for this data. Many go to great lengths to get it, sometimes through questionable means.

The growing value of this data raises some important questions.

Who exactly owns this data?

How do we go about treating it from a legal, fiscal, and logistical standpoint?

Is this data a form of tangible property, like land, money, or labor?

Is this something we can exchange, trade, or lease?

What is someone’s recourse if they want certain aspects of their data removed, changed, or deleted?

These are all difficult questions that don’t have easy answers. It’s getting to a point where ownership of data was an issue among candidates running for President of the United States. Chances are, as our collective data becomes more vital for major industries, the issue will only grow in importance.

At the moment, it’s difficult to determine how this issue will evolve. In the same way I had no idea how valuable that first email address would be, nobody can possibly know how the internet, society, the economy, and institutions who rely on that data will evolve. The best solution in the near term might not be the same as the best solution in the long term.

Personally, I believe that our data, which includes our email addresses, browsing habits, purchasing habits, and social media posts, should be treated as personal property. Like money, jewels, or land, it has tangible value. We should treat it as such and so should the companies that rely on it.

However, I also understand that there are complications associated with this approach. Unlike money, data isn’t something you can hold in your hand. You can’t easily hand it over to another person, nor can you claim complete ownership of it. To some extent, the data you create on the internet was done with the assistance of the sites you use and your internet service provider.

Those companies could claim some level of ownership of your data. It might even be written in the fine print of those user agreements that nobody ever reads. It’s hard to entirely argue against such a claim. After all, we couldn’t create any of this data without the aid of companies like Verizon, AT&T, Amazon, Apple, Facebook, and Google. At the same time, these companies couldn’t function, let alone profit, without our data.

It’s a difficult question to resolve. It only gets more difficult when you consider laws like the “right to be forgotten.” Many joke that the internet never forgets, but it’s no laughing matter. Peoples’ lives can be ruined, sometimes through no fault of their own. Peoples’ private photos have been hacked and shared without their permission.

In that case, your data does not at all function like property. Even if it’s yours, you can’t always control it or what someone else does with it. You can try to take control of it, but it won’t always work. Even data that was hacked and distributed illegally is still out there and there’s nothing you can do about it.

Despite those complications, I still believe that our data is still the individual’s property to some extent, regardless of what the user agreements of tech companies claim. Those companies provide the tools, but we’re the ones who use them to build something. In the same way a company that makes hammers doesn’t own the buildings they’re used to make, these companies act as the catalyst and not the byproduct.

Protecting our data, both from theft and from exploitation, is every bit as critical as protecting our homes. An intruder into our homes can do a lot of damage. In our increasingly connected world, a nefarious hacker or an unscrupulous tech company can do plenty of damage as well.

However, there’s one more critical reason why I believe individuals need to take ownership of their data. It has less to do with legal jargon and more to do with trends in technology. At some point, we will interact with the internet in ways more intimate than a keyboard and mouse. The technology behind a brain/computer interface is still in its infancy, but it exists and not just on paper.

Between companies like Neuralink and the increasing popularity of augmented reality, the way we interact with technology is bound to get more intimate/invasive. Clicks and link sharing are valuable today. Tomorrow, it could be complex thoughts and feelings. Whoever owns that stands to have a more comprehensive knowledge of the user.

I know it’s common refrain to say that knowledge is power, but when the knowledge goes beyond just our browsing and shopping habits, it’s not an unreasonable statement. As we build more and more of our lives around digital activities, our identities will become more tied to that data. No matter how large or small that portion might be, we’ll want to own it as much as we can.

It only gets more critical if we get to a point where we can fully digitize our minds, as envisioned in shows like “Altered Carbon.” At some point, our bodies are going to break down. We cannot preserve it indefinitely for the same reason we can’t preserve a piece of pizza indefinitely. However, the data that makes up our minds could be salvaged, but that opens the door to many more implications.

While that kind of technology is a long way off, I worry that if we don’t take ownership of our data today, then it’ll only get harder to do so in the future. Even before the internet, information about who we are and what we do was valuable.

This information forms a big part of our identity. If we don’t own that, then what’s to stop someone else from owning us and exploiting that to the utmost? It’s a question that has mostly distressing answers. I still don’t know how we go about staking our claim on our data, but it’s an issue worth confronting. The longerwe put it off, the harder it will get.

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July 27, 2020 · 5:58 am

Doing The Right Thing: Results Vs. Motivations

Recall, for a moment, an instance where you were faced with a difficult choice. You had a pretty good idea of what choices were right and what choices were wrong, but could not be completely certain. What choice did you make and why did you make it? What motivated you to do what you did? What were the results?

We’ve all been in situations like that at some point in our lives. Most of the time, it’s mundane. It effects only us and those in our immediate surroundings. In those instances, motivations tends to be basic. You make a decision you feel works best and you deal with whatever consequences that occur. However, when it comes to larger decisions by people in powerful positions, it tends to get more complicated.

Those complications have become a lot more visible in recent years, due to the internet and social media. Now, if you’re a rich celebrity or in a position of power, your choices are always scrutinized. Doing the right thing is not just a matter of morality anymore. It’s an added complication for public relations and advertising.

People will do the right thing because it’s good for their image.

People will do the right thing because it’s for a cause they believe in.

People will do the right thing because they’re being pressured, criticized, or condemned.

Whatever the case, the decision is usually the same. Even the moral components of the decision are the same. It’s just the motivation that’s different.

With that in mind, and given the dynamics I just described, I have one more question to add to this issue.

When it comes to doing the right thing, how much or how little do motivations actually matter?

It’s a relevant question in a connected world where it’s painfully easy to overreact. Recently, I speculated on the reactions to the recent news that the Washington Redskins were changing their controversial nickname. It didn’t take long for those speculations to become real.

Less than a day after this announcement was made, people were already saying that it was too late. Even if it was the right thing to do and was the desired result that advocates had fought for, it’s somehow not enough. They’ll point out that the only reason the name was changed was because major sponsors pressured it.

That point is probably valid. If the franchise stood to lose a great deal of money over clinging to its old nickname, even if they sincerely believed it wasn’t offensive, the economic pressures were just too great. When it comes to impassioned pleas versus financial pressure, money usually wins out.

It’s unfortunate, but that’s the world we live in. Money talks louder than outrage. It always has. It always will. No matter how much we resent that, that’s not something we can change right now. Regardless of how you might feel about that system, the question remains.

Does it truly matter? Advocates got their wish. The name of the team is changing. It might not be changing for the reasons they want, but it is changing. Isn’t that enough?

Do the results matter more than the motivations? We can never see, touch, feel, or measure someone’s motivations. We can only ever experience the results. One is tangible. The other is not. Which matters more to you?

I think it’s a relevant question because those continue to complain, protest, and whine about the team are only doing a disservice to their cause and future causes like it. They’re setting it up so that, no matter what their opponents do, there’s no way they can ever appease them.

If they don’t change the name, they inspire more outrage and criticism.

If they do change the name, they’re still subject to outrage and criticism because they didn’t do it soon enough or for the right reasons.

How is that fair? How is that even logical? If anything, that kind of approach only gives everyone a good excuse to never engage with opponents. They know there’s nothing they can do to placate them, so what’s the point? Short of getting in a time machine and undoing history, there’s literally nothing they can do.

Either results matter or they don’t. It’s as simple as that. If you’re not happy with the results, then you’ll never be happy with anything.

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May 14, 2020 · 5:54 am

The (Uncertain) Future Of Movie Theaters

Many of us have fond memories of going to the movies. Whether it’s the first time you saw “Jurassic Park” and “Avengers” or the first time you got frisky with your significant other on a date, the movie-going experience has always had a certain charm to it. They’re such an indelible part of modern popular culture that it’s hard to envision modern life without them.

Then, a global pandemic hit and suddenly, we have to envision a lot of things we’ve never contemplated before. That includes the place movie theaters have in our culture and society.

Now, I’m not among the doomsayers claiming that movie theaters are doomed, although I can’t fault anyone for thinking that. The news surrounding the movie industry has been grim on an unprecedented level. As someone who often organizes his summer around which movies to see and when, it’s undeniably dire on so many levels.

However, I feel like there’s room for something better to come out of this for theaters. There’s just too much uncertainty to surmise what it is at the moment. I don’t feel that qualified to speculate. Many people much smarter than me already have. I’m bringing this up now because last weekend gave me a taste of what that future might entail.

For me, that future involves a lot less nights when I go to the movies and more nights of me renting a movie at home. That’s what I attempted last weekend. Specifically, I rented the movie “Bloodshot” on Saturday night. While the movie wasn’t exactly a huge blockbuster when it came out, I was still curious about it. Being a fan of comic book movies in general, I wanted to give it a chance.

I’m glad I did. I enjoyed the movie and not just because it was better than the reviews claimed. I enjoyed it because I got to craft my own movie-going experience. I ordered some pizza, bought a six-pack of beer, and had some skittles on the side. I basically created my own mini-movie theater in my living room and I had a genuinely pleasant time.

It also helped that it was much cheaper than going to a theater. To rent “Bloodshot,” I only paid $6. That’s half the price of a regular movie ticket on a weekend. The price of pizza and snacks was considerably less, as well. I probably saved money by just renting the movie and, given the state of the pandemic-hit economy, I imagine there are many more people out there looking to save where they can.

It has me re-thinking how I’ll see movies, even after theaters open up again. My experience with “Bloodshot” has me re-considering which movies I’ll see in theaters and which I’ll rent. I’ll still see big blockbuster movies like “Black Widow” and “New Mutants” in the theaters, but I’m going to be less inclined to see other movies in that setting. I just can’t justify the cost at this point.

That situation could change. I suspect that movie theaters will have to adapt their place in the movie/media complex. I don’t think it can survive solely on the success of big budget blockbusters. I also don’t think that’s good for the industry because it makes movies that bomb much more damaging to studios and theaters, alike. That means less risks, less innovation, and more generic movies made solely to turn a profit.

As much as I love those kinds of movies, there has to be room for innovative movies like “The Blair Witch Project” or “Clerks.” There also has to be a place for the bigger budget movies that Netflix has released. If you need proof of how good those movies can be, check out “Extraction.” It’s a movie that could’ve been another generic action movie in theaters, but works even better as a streaming exclusive.

In the same way Netflix is getting into the big budget movie business, some theaters are expanding beyond movies. Last year, the theater I live nearby played the Super Bowl and several major pay-per-view fights. Only a handful of other theaters did the same. I have a feeling more and more theaters will opt for something like that, if only to get more foot traffic.

The challenge is balancing all these dynamics in a world where people are less inclined to go to theaters and pay bloated ticket prices. I believe there is a way to do that. It’s just not clear what that is. I think there will still be movie theaters in a post-pandemic economy. They just won’t look or operate like they did in 2019.

It’s exciting, but distressing.

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