
Too Clever by Half - moat
http://epsilontheory.com/too-clever-by-half/
======
vpontis
I really enjoyed this article.

 _Summary_

Coyotes are too clever because they know that people shaking jars full of
coins can’t hurt them. Thus the animal control patrol has to get called and
when they don’t shoo, the animal control person who loves animals has to shoot
the coyote.

Coyotes are winning the mini-game of each human interaction, but they are
losing the meta-game of what society will do if coyotes aren’t scared.

 _Personal Connection_

This reminds me of a turning point that I had in high school. When I was
young, I would get in trouble and try to get around the rules each time I got
in trouble. /“Well, technically…”/

But at some point I realized that most of the time you aren’t getting in
trouble because you are breaking the rules. You are getting in trouble because
you are making the rule makers unhappy. Once I had that realization I was able
to focus on relationships with the rule makers and figure out what they
actually cared about. This allowed me to break the rules just as much but
without getting in trouble.

~~~
jacobolus
The problem is that the rule makers in high schools are sometimes (often?)
incredibly petty people with a very poor understanding of human psychology and
communication, not tremendously much empathy for the students, and very little
personal consequence when they make a mistake even if that has drastic
consequences for the student (and as a result little time spent introspecting
about their mistakes). I never got in particularly much trouble, but many of
my friends were screwed by minor miscommunication which incompetent adults
escalated beyond any reason.

And yes, under the circumstances (assuming the goal is to avoid problems,
instead of to aggravate the staff, perform ad-hoc psychology experiments, or
the like), any high school student should avoid contradicting the staff in
public, start by acquiescing to any request that doesn’t pose an immediate
injury risk, disengage quickly and completely and then marshal their parents’
help if there has been any kind of mistake that will affect them academically.

Few teenagers have figured this out though. To any high school rule makers out
there, please read _How to Talk So Kids Will Listen & Listen So Kids Will
Talk_, [https://amzn.com/1451663889/](https://amzn.com/1451663889/) and in
general, please try to treat the students with basic respect.

~~~
temp-dude-87844
It's not just kids, is it? This is pretty much the canonical and most self-
preserving way of interacting with anyone who has power over you and is in a
clear and present situation to apply it: school officials, police officers,
appeal adjudicators at companies who you try to turn to if you think there's
been some bureaucratic mistake, military personnel of a foreign power in your
country for reasons beyond your control, and even an abusive spouse -- much to
the dismay of advocates everywhere.

~~~
cema
Yes, I think you are right. In this sense, high school prepares children/teens
for the real life really well. :-(

------
jmull
I read the entire article.

My take: don't bother unless you have some time and are looking to be mildly
entertained (very mildly IMO).

It's fluff. The central analogy is a little amusing but doesn't even roughly
fit reality.

In chasing its premise the article ignores a key dynamic of "financial
innovation" schemes, which is that the schemers largely avoid the negative
consequences of their schemes. Well, the money spigot stops at some point,
which the schemers see as a tragedy, but they generally aren't losing too much
of what they grabbed before the end. In 2008, I think most had to endure talk
of losing their bonuses (not actually loss of bonuses, just talk and sometimes
a temporary delay). The real consequence is that they have to get back to work
building up a new scheme so they can do it all again.

~~~
zasz
Yeah, basically nobody went to jail, and yet, he considers Bear Sterns losing
its independent existence to be the equivalent of a coyote getting shot?
Sloppy thinking there.

------
erikpukinskis
This is unrelated, but they mention The Great Financial Crisis which made me
remember the Recession of my youth.

It devastated my family. My father was in construction. That market seriously
ebbs.

I remember a faint feeling I had back then: resentment towards families who
happened to be in industries that weren’t hit.

Not because I thought it was unfair that we were hit, I just resented that
they didn’t even have to notice what was happening.

And I just had to check myself about this Great Financials Crisis. Lucky
timing, I have been pretty employable the last 20 years. The “crisis” was
always a political skirmish to me. I cared about it, but it seemed small
compared to past crises.

Just now it occurred to me though, that whatever millions of people are going
through exactly what I did, their families collapsing.

And I’m the one can not notice that.

I’d like to securitize those families.

~~~
pjmorris
Reminds me of what I've heard called a Czech fable:

A poor farmer whose livestock is a single dairy cow goes to the field one
morning to milk the cow and discovers that she's dead. He falls to his knees
and looks skyward, shaking his fists and cursing God for his misfortune.
Suddenly a voice is heard from the heavens: "Your cries have reached me, my
son. Tell me what you would like me to do." The farmer gazes upward and says
to God, "Please, Lord, kill my neighbor's cow."

~~~
antognini
If your neighbor loses his job it's a recession. If you lose your job it's a
depression.

------
csomar
Okay. Let's slow down here:

The OP says.

>> And they’re not that smart. I’d put our barn cat up against a raccoon any
day on any sort of cognitive test. We think raccoons are clever because they
have those anthropomorphic paws and those cute little masks and even a Marvel
superhero with its own toy line, but please. Raccoons are takers, not
schemers.

From Wikipedia

>> Zoologist Clinton Hart Merriam described raccoons as "clever beasts", and
that "in certain directions their cunning surpasses that of the fox." The
animal's intelligence gave rise to the epithet "sly coon".[120] Only a few
studies have been undertaken to determine the mental abilities of raccoons,
most of them based on the animal's sense of touch. In a study by the
ethologist H. B. Davis in 1908, raccoons were able to open 11 of 13 complex
locks in fewer than 10 tries and had no problems repeating the action when the
locks were rearranged or turned upside down. Davis concluded they understood
the abstract principles of the locking mechanisms and their learning speed was
equivalent to that of rhesus macaques.

Learning speed equivalent to the macaques? You gotta be kidding me. These
creatures are underestimated and the author might just not like them?

I mean, look at his eyes:
[https://en.wikipedia.org/wiki/File:Raccoon_climbing_in_tree_...](https://en.wikipedia.org/wiki/File:Raccoon_climbing_in_tree_-
_Cropped_and_color_corrected.jpg) That guy looks really smart and self aware.

~~~
fhood
I am a big fan of raccoons as well. I think they are hilarious. They are just
smart enough to seem stupid if that makes any sense.

~~~
tclancy
I think one's feelings on racoons vary by where you live. Here in the semi-
suburban New Hampshire they're not much of an issue: if you have a decent
trash can you'll never know they are there. I imagine a owning a farm would
color one's perspective, especially based on the author's suggestion that they
kill more than they need.

I'm fairly neutral on coyotes but we've never lost an animal to them. I like
their haughtiness, though I can get the same from the fox that lives around
here somewhere without as much worry about what she might do to our pets.

It's really just the bear paw print that worries me.

------
nazca
The only issue with his metaphor is that coyotes have been doing very well at
the meta game. At the time of European contact there were no coyotes anywhere
near Connecticut. Lewis and Clark didn't encounter them until they hit the
great plains. Actually only a few decades ago there were no coyotes near the
eastern US.

But coyotes are clever and they've learned to adapt and live in close
proximity to humans. And as we've changed the landscape and removed & added
various animals and plants to the landscape they've found niches that work for
them and have expanded their range greatly.

~~~
stevenwoo
Slightly OT but the evidence we have strongly suggests that exterminating the
wolf is the primary reason for the expansion of the range of the coyote to
most of the continental USA.

[http://www.bbc.com/earth/story/20170516-when-wolves-
return-t...](http://www.bbc.com/earth/story/20170516-when-wolves-return-to-
the-wild-everything-changes)

~~~
endorphone
Here in Ontario (and likely elsewhere), the majority of coyotes are actually
coywolves
([https://en.wikipedia.org/wiki/Coywolf](https://en.wikipedia.org/wiki/Coywolf)).
We have them on the property regularly and they are no problem at all, but
they are larger and more adaptable than the coyote of old.

------
huffmsa
The true meta-gamer of the story snuck by with a single sentence reference.

So I'm calling you out barn cat. You think you can sneak by having your cake
and keeping your solidarity and standoff distance from the humans but also
benefit from the free housing + healthcare + steady food when you don't want
to kill mice + affection when you decide to wander over to the main house.

But I'm onto you.

~~~
zippitydoodah68
Actually the parasite infestation (fleas), lack of affection and food when
they want it (except through hard work), temperature variations, etc...make
the barn cat a misanthrope.

Every house cat owner knows that the house cat is the 'meta game mastermind'.
Hell, they've engineered the system to care about their safety so much that it
is cruelty to have them reproduce via the species own painful biology. Letting
them out into the street is homicidal. If they get pests they inflict them on
their caretaker and every other discomfort is communicated to the human
caretaker willy nilly. When they want to exert themselves they can be
amazingly cruel, subtle, unpredictable and unyielding. House cats win.

~~~
fhood
I'm not a fan of having house cats. Indoor only cats develop weird
psychological issues at a rate that makes me suspect that living inside isn't
all that healthy for them.

Every cat I have owned has been an indoor-outdoor cat. There are downsides.
They tend to be less affectionate and more independent than house cats, but
they also seem healthier and happier than the indoor cats I have known.

Also they don't need a litter box. That is a biggy.

~~~
zippitydoodah68
Well, having an indoor cat means keeping an indoor cat happy which is a larger
problem (for the caretaker) but indicative of the meta supremacy in house cat
behavior.

In all seriousness I would rather take the time to care for a house cat than
to deal with the possibility of roadkill/injury, disease, pests or other
accidents of nature. If the cat is a problem for you then don't own one?

~~~
singingboyo
On the other hand, I figure that yes, a cat (which I'll never have -
allergies) is safe indoors, but if they're happier outdoors... well, maybe
nature will happen, but should I really imprison the cat to save it? Not as
far as I'm concerned. The cat can go enjoy itself.

The point being, it's not that the cat is a problem. It's that some of us
think nature should remain natural, not be pressed into service keeping us
company.

------
80386
When I was in school, there were the people who seemed smart and the people
who seemed like they worked hard.

The people who seemed smart won the minigames. They got good grades with
little effort. But somehow, they ended up with no institutional support -- in
fact, the school hated them. Eventually one of the teachers (who was visibly
insecure about her own intelligence and competence) cooked up a nonsense
pretext to get some of them expelled.

One kid's parents brought a legal challenge, the school settled for a year's
worth of college tuition, and last I heard his parents had withdrawn him from
college to pack him off to rehab for heroin addiction. The only other expellee
I've heard from left the country, never to return.

The people who seemed like they worked hard didn't always get the best grades.
But the institution went out of its way to make life easier for them, and
they're all doing alright now.

~~~
internetman55
People hate their superiors unfortunately. This is why I think rich/high IQ
parents need to put their kids around other rich/high IQ kids: proles/low IQs
will tear your children apart out of jealousy, possibly leading to mental
disorders and drug addictions

~~~
tclancy
That does not seem like a recipe for a solid society. And suggesting the poor
are the cause of the rich's mental problems & substance abuse is . . . well,
it's something.

------
mcv
Appropriately, this article is a slightly-too-clever way of talking about
three things at the same time.

------
r_singh
The most relevant take away from this article (for me) is how the coyotes
(crypto and currency experts) invented Bitcoins, raccoons over leveraged it
out of dumb greed (investors) and the state took notice and acted out of sheer
desperation to not lose control and once again rendered the invention useless
by gaining more control than before (the part that is currently in its early
stages right now).

Update:

I think the article insinuates an interesting take on the invention of
cryptocurrencies (by coyotes), their bubble (by raccoons) and their
suppression (by the state). But IMO in this case, the state suppressed the
invention not just because they fear what the coyotes have produced but also
what raccoons have done with it (with the whole ICO bubble, etc.).

~~~
0xBA5ED
Of course, bitcoin's own limitations would've prevented it's widespread use,
with or without the over-speculation (lack of throughput and excessive energy
consumption).

~~~
r_singh
That's true. The idea holds up better if looked at from an all
cryptocurrencies perspective rather than only Bitcoin.

Also because states aren't just trying to control / suppress Bitcoin alone but
all cryptocurrencies. For example, here in India the central bank has banned
all cryptocurrencies.

------
jcoffland
> The coyotes know _exactly_ where the invisible fence begins and ends,
> without the benefit of _ever_ wearing a shock collar. How do I know? Because
> they intentionally leave their scat on their side of the invisible fence,
> creating a demilitarized zone as precise and as well-observed as anything on
> the Korean peninsula. Occasionally a coyote will try to test our dogs by
> leaving its scat juuusst over the line on our side of the DMZ.

My question is, why does the human think coyote scat on the other side of the
line was precisely placed and scat on his side of the line is an intentional
provocation? A more reasonable explanation is that the coyotes don't know
exactly where the invisible line is.

------
pitaj
I think the metaphor is a stretch, especially when applied to Bitcoin. There
were many factors which played a part in the financial crisis, including the
following non-exhaustive list which were not mentioned is the essay:

\- By bailing out big banks and other institutions, the government signaled to
these institutions to pile on risk because they'd just be saved by the
government when things went bad

\- Policy which gave incentives for risky mortgages under the intention of
helping the poor

\- Tax policy continuing to give incentives for people to buy houses instead
of renting

------
raverbashing
> Coyotes can change the world. (But) Not if they fetishize ANY financial
> instrument as an intrinsic aspect of a commitment to liberty and justice for
> all. Because it’s not.

This. In <blink> and <marquee> tags

------
mason55
I take issue with the way he describes securitization as if it's some horrible
evil. Securitization (and financialization in general) just takes big balls of
intertwined risks and breaks them apart into little balls of (theoretically)
consistent risk so that everyone can get the amount of risk they desire.

Imagine a company that has a single customer. There's a 50/50 chance that the
customer will pay. If the customer pays then the company makes a ton of
profit, if the customer doesn't pay then the company goes out of business.

For the company, this is probably more risk than they want to take. But
there's probably hedge fund out there who has enough money to survive the
customer not paying and is willing to take that risk for a fee. So the company
can go to the hedge fund and say "if the customer pays us in the future we'll
give you all the money. In exchange give us 40% of it right now".

And the company is happy because they have a 100% chance of staying in
business. And the hedge fund is happy because (if the risk was priced
correctly) they have a positive expected value in the trade.

That's all securitization is.

~~~
raesene9
That's true in that it's what securitization is _meant to be_ but
unfortunately as was seen in the mid-2000's it proved extremely difficult to
accurately price the little balls of risk and the money being made in doing
the selling and breaking apart those balls provided an incentive for people to
keep the pipeline of loans going well past what was prudent.

In the UK we ended up with all sort of shenanigans like "self-certified
mortgages" where the person taking out the loan was allowed to certify their
ability to repay. with that kind of product it's very difficult to classify
risk of non-repayment as you can't believe the evidence provided
(necessarily).

------
sunstone
PayPal was one of the few financial innovators to dodge animal control. They
were first and they were fast.

~~~
JulianMorrison
And they were compliant. Their business model was not "you can use this new
form of money to mail order cocaine".

~~~
ballenf
I don’t think they really care about the drug trade near as much as large
scale tax avoidance.

------
utkarsh_apoorva
The State still cannot tell the Coyotes from Raccoons. Especially so because
neither of them show there form truly until the deed is done. Thus the Coyote
population control. The utopia of a Coyote population playing the meta game
will indeed happen some day - just that the time isn't right. Yet! So the same
Animal Control that goes around looking for masked men with rifles, also
chases those who leak the rightful information to the People. The question is
not who is right - the question is are the People ready? And what's the ratio
of Coyote's to Raccoons. And how exactly do you tell them apart pre-facto.

~~~
mcv
I think because the raccoons are in the government. If Bear Stearns is a
coyote, Goldman Sachs is a raccoon. They don't mind breaking stuff for profit,
and yet they always get some people in every single US government.

------
jrootabega
Reminds me of when Andy Dufresne thought he was protecting himself when he
told the warden he'd never tell anyone about cooking his books.

~~~
handsomechad
what scene in shawshank are you referring to

~~~
habitue
The scene where Andy Dufresne told the warden he'd never tell anyone about
cooking his books

------
chb
Closes the article by implying that the federal government is a monolithic
political entity ("the State") that stands apart from private financial
interests.

And then quotes Jesus.

Way to stay true to your roots.

------
tylerjwilk00
If you enjoyed this article and especially the parallel between animal
populations and human behavior. I recommend reading about [1] Evolutionarily
Stable Strategy and specificly the book [2] The Selfish Gene by [3] Richard
Dawkins.

The gist of it is that survival strategies are only viable given the
distribution of the behavior throughout the entire species or population.
Similar to a finicial market, some strategies work only when a small
percentage of the population exhibits the behavior.

A bonus is that, like the phrase Too Clever by Half, Dawkins is also British.

[1]
[https://en.wikipedia.org/wiki/Evolutionarily_stable_strategy](https://en.wikipedia.org/wiki/Evolutionarily_stable_strategy)

[2]
[https://en.wikipedia.org/wiki/The_Selfish_Gene](https://en.wikipedia.org/wiki/The_Selfish_Gene)

[3]
[https://en.wikipedia.org/wiki/Richard_Dawkins](https://en.wikipedia.org/wiki/Richard_Dawkins)

------
w_t_payne
At least part of the point of the article seems to be about narrow
specialization creating blinders that inhibit deep strategic thinking.

I can see very strong parallels with systems thinking and the role that
systems engineers play within the V-model.

------
mfoy_
I'm not sure what the connection was, exactly, but this story talking about
coyotes and raccoons in finance gave me an epiphany of understanding about
Plato's Allegory of the Cave.

------
m3kw9
He’s just saying block chain is the next CDS(credit default swaps)

~~~
ItsMe000001
...but for individual instead of for institutional investors:

> _Turns out that B̶i̶t̶c̶o̶i̶n̶ a AAA-rated tranche of Alt-A mortgages wasn’t
> the store of value that coyote-math “proved” it was, to the detriment of
> i̶n̶d̶i̶v̶i̶d̶u̶a̶l̶ institutional investors who put a significant portion
> of their portfolio into these securities, and to the ruin of those who used
> leverage to acquire these securities._

~~~
m3kw9
I think opensourced block chain implementation is way more transparent than
the bundled derivative instruments the bankers made. The problem is that
people will still invest in stuff like shit coins or use stuff like Tether
where nothing is transparent

------
pbhjpbhj
Argh - please dang, can we have subtitles, or something, to reduce the numbers
of clickbait non-descriptive titles.

Sincerely,

Infuriated of Norwich.

------
rossdavidh
Fun article, interesting point, and I don't even necessarily disagree
(entirely, anyway), BUT: coyotes have a larger range now than they have had
since long before humans showed up in North America, largely because humans
cleared out their main competitors, the wolves. And raccoons are not stupid,
although they are destructive.

So, I get what the author is trying to say with this little parable, but the
fact that the central facts it is using (coyotes losing out, raccoons are
stupid) are both false, it makes me more than a little suspicious of the
conclusion, when I otherwise might not be.

------
dgudkov
If any animal has won the meta-game it's the cats. Yes, those adorable, cute,
dumb bastards. They badly lose on any tactical level. But man, win on the
strategical level so much.

~~~
kortex
We got some kibble from an aunt that the cat isn't keen on. She'll eat it if
and only if she's starving and it's the only stuff around. Also we use a feed
puzzle tower where she has to paw the kibble through holes to get it into the
"bowl". We mixed the bunk kibble with the good stuff to try to coax her to eat
it, but she sniffs each kibble and ignores the inferior stuff.

Well, the bunk kibble is round and likes to roll away. So in the course of
getting at the good stuff, the round garbage unworthy for the princess
scatters everywhere, gets stepped on, attracts ants, etc. Well, I'm left with
a tupperware full of the mixed kibble that I have to use up, so I just pour it
into the bowl so it doesn't scatter. Pesky poking has given way to the buffet.

I don't know if you knew you were playing, but good game, cat, good game.

------
MattyRad
Very interesting. One might also say something like "half measures break the
whole." The conclusion drawn about the State getting stronger and weakening
mobility for coyotes seems like a legitimate concern too.

In the case of Bitcoin, being such a foray into uncharted territory, I'm
unsure of how you would be good at the meta game, or figure out how racoons
will abuse your radical new idea. Maybe I need to improve my meta game, heh.

------
denverkarma
Perhaps the post itself is too clever by half. It was about “why Bitcoin is
going to fail” and yet all anyone is discussing is its well-told animal
analogy.

~~~
opinionator1
Probably because it's pretty obvious that Bitcoin is going to fail.

------
deciplex
>But the trait that ALL domesticated species demonstrate relative to their
wild species is a smaller brain. I’d bet it’s happening with humans, too, but
that’s just an observation for another day.

It is: [http://discovermagazine.com/2010/sep/25-modern-humans-
smart-...](http://discovermagazine.com/2010/sep/25-modern-humans-smart-why-
brain-shrinking)

~~~
AlexCoventry
Associating brain size with intelligence is facile. As the article points out,
no one knows why cranial volume is shrinking, and there's no clear connection
to intellect.

------
code_duck
This reminds me of the scene in the Indiana Jones movie when someone comes up
and starts challenging Indy with a bunch of flashy sword moves. Rather than
engage him that level, where he is definitely outclassed, Indy simply draws
his pistol and shoots him:
[https://youtu.be/anEuw8F8cpE](https://youtu.be/anEuw8F8cpE)

------
AlexCoventry
I'm curious about what people appreciate in this essay. In the end, I don't
think I learned anything valuable from it.

~~~
ItsMe000001
That you can be clever and win and still lose, and someone less smart may
actually do better. I ignored the second half (read it though) because I
thought it was quite a stretch from the coyotes to financial instruments.
Actually, it's _all_ quite a stretch as far as the details go, while the
general idea that I stated at the beginning is true but not exactly original.

~~~
jaggederest
I think the take away is basically that you're optimizing for the the sum of
all series, which means that focusing on winning either the battle or the war
by itself is fruitless and counterproductive.

I agree, in a lot of ways, I prefer to make situations win-win because it
leads to better long term outcomes. It's as much about framing as it is about
succeeding in the short or long term.

------
stcredzero
_They are, to use the wonderful Brit phrase, too clever by half...not good in
the meta-game. And the meta-game has turned against the coyotes with a
vengeance._

Here's the thing about the meta-game: It's very contextual. Coyotes can't play
the meta-meta-game of thinking about your context and possibly changing it.
Some human beings can.

------
mholt
Slightly OT: For us on our farm back in Iowa, the clever animals were the
raccoons. It got to the point where we had to put locks with keys on the grain
bins; metal hooks and clasps---even some requiring refined motor skills to
open---were not enough to keep the buggers out. Fortunately, they couldn't
pick the locks. :)

------
alaxsxaq
There is a pretty good book about the history of the Coyote - Coyote America
by Dan Flores.

------
phendrenad2
I've long had the suspicion that in domesticating animals, we've dumbed them
down severely. And I sometimes wonder if humans were smarter before
civilization replaced evolution as the driving factor for intelligence.

~~~
leetcrew
> And I sometimes wonder if humans were smarter before civilization replaced
> evolution as the driving factor for intelligence.

this is an odd proposition. evolution has not been replaced; rather, the
evolutionary pressures have changed. in any case, civilization is not much
more than 10,000 years old, which is pretty short in evolutionary timescales.

and although we employ some measures (ie social services) to prevent the
weakest from dying outright, it seems like long term strategic thought is more
important than ever. for instance, it takes 5-7 years for a high school grad
to get a master's degree. can you really envision an adult hunter-gatherer
working towards something for that long without seeing the fruits of their
labor? their environment mandated a much shorter term focus to avoid
starvation or lethal competition from other humans.

~~~
phendrenad2
Well, if humans haven’t changed in 10,000 years then the author’s thought that
domesticated animals are different is also false.

~~~
sangnoir
What are you basing that assertion on? For starters, animals had way more
generations than humans in those 10,000 years - probably by an order of
magnitude or 2 depending on the animal.

------
kemonocode
I'm quite amused to see all that veiled scaremongering when it comes to
crypto, even if it has a grain of truth. Yeah, truly the ones who get involved
in it can be thought of as either coyotes or raccoons, but I think prohibition
and "the war on drugs" only shows how much can something be made desirable by
making it unfit for public consumption, and at that point the animal simile
breaks down.

Not to mention that, as other commenters have mentioned, coyotes have been
rather successful in spite of human encroachment, just like cryptocurrencies
grow stronger in the face of looming regulation and sanction. Sure, it might
scare off some raccoons and kill some coyotes in the short term, but it's
going to be still there. And for all the "coyote institutions" that perished,
there are still many more.

~~~
kortex
I don't know if it's scaremongering because I'm not entirely sure what point
the writer is getting at. The angle I chose to read is that, cryptos acting
all "You can regulate us, because distributed blockchain! Muahaha!" is the 1st
order game, akin to the coyote calling bluff on the noisy can.

Government types developing an ill will towards the defiant cryptos is the
neighborhood moms getting pissed at the bold coyote.

The animal control is the 2nd order game. Regulators come in and crack down on
cryptos. Put the squeeze on exchanges, make it hard to cash out to legal
tender.

------
shishy
What do people think of his connection between Credit Default Swaps and all
these ICOs?

~~~
AlexCoventry
I don't see any useful insight in it.

------
ravensraven
Hands down one of the best reads I have had in a longgg while

------
coyote-w-912
The author describes how coyotes win the "skirmish game" when they casually
walk into suburban yards and demonstrate that they are not afraid of the
humans when they do things to scare them away such as make loud noises at
them. However, they lose the "meta-game" when animal control shows up and puts
them down because they won't go away.

The author uses this analogy to compare coyotes to financial innovators. His
argument is that every time financial innovation gets out of control and the
economy at large is impacted, larger powers step in and squash it. He argues
tha this is what happened in the 2008 financial crisis with mortage backed
securities, and that this is the same thing happening now with Bitcoin and
cryptocurrencies.

I disagree with the parallel he draws to cryptocurrencies.

While I don't necessarily think cryptocurrencies will dominate the world, and
Governments may even succeed in reigning them in, they aren't in the same
category as other financial innovation.

Mortgage backed securites were the coyotes stalking across the laws of
suburban moms, hoping animal control wouldn't interfere.

Cryptocurrencies are a coordinated attack by a pack of coyotes on animal
control headquarters.

They were designed specifically to be as government-resistant as possible.
Now, animal control has a lot of firepower and they can call in
reinforcements. Governments have a lot of resources and powers they can draw
on to stop and regulate cryptocurrencies. However, these coyotes are well
aware of the meta-game, who the true enemy is and they're gunning hard for
him.

Before bitcoin, no currency that wasn't backed by a government lasted long
before being shut down by a government entity. Bitcoin has been going for nine
years now, and in that time further innovation has given us Monero and Zcash
which are even more censorship and surveillance resistant.

The primary attack vector, the only one that's worked, has been made by the
"racoons" at Blockstream and their investors from Visa and the banking
industry. This is a much more subtle attack than direct government
intervention. In a nut-shell, when Satoshi left the project, he left a guy
named Gavin Andresen in charge. Gavin trusted the wrong person with commit
access to the project, who was co-opted by the banking industry and who then
booted him from access. Thos current group of developers crippled Bitcoin by
repeatedly refusing to expand the block size and moving forward developing the
"Lightning Network" which is nothing more than a copy of the current inter-
bank payment system and which, quite frankly doesn't work.[1][2] They also
took over the r/bitcoin subreddit as well as the bitcointalk forum and
completely censored it.[3]

The fact that the racoons have taken this more subtle approach, suggests to me
that the enemies of Bitcoin now believe that attempts to shut it down by more
direct mean will fail.

However there are still a lot of coyotes working on other cryptocurrency
projects. These coyotes are clearly playing the meta-game, and for now they're
winning.

[1] Summary of what the lightning network is:
[https://www.youtube.com/watch?v=UYHFrf5ci_g](https://www.youtube.com/watch?v=UYHFrf5ci_g)
[2] Discussion of a developer who tried to implement micropayments with
lightning network, but had to switch because it did not work well:
[https://www.youtube.com/watch?v=Ew2MWVtNAt0](https://www.youtube.com/watch?v=Ew2MWVtNAt0)
[3] A (brief and incomplete) history of censorship in /r/Bitcoin:
[https://medium.com/@johnblocke/a-brief-and-incomplete-
histor...](https://medium.com/@johnblocke/a-brief-and-incomplete-history-of-
censorship-in-r-bitcoin-c85a290fe43)

~~~
jeffreyrogers
It would be pretty easy for the government to shut down any cryptocurrencies
it cared too: go after the exchanges. This is already happening by making them
follow the know your customer regulations that banks have had to follow for
years. But I think you're being a little to cynical. I don't think the
government cares that much about bitcoin except to the extent that it allows
people to get around existing laws, and its high potential for abuse by
unscrupulous business people.

------
XnoiVeX
Truly HN quality post!

------
bachbach
> I’d bet it’s happening with humans, too, but that’s just an observation for
> another day.

Ho Ho!

Tell me more brother. I am curious.

This links up with David Krakauer's ideas I'll bet.

------
M_Bakhtiari
>I know, I know … it’s negative reinforcement

No it isn't. It's positive punishment.

------
justherefortart
Oh no, poor finance jerkoffs got ripped off by their own cleverness.

Nothing says dbag like Alabama man who now lives in Connecticut crying over
dead asshole financial firms.

We've had 4 (or more) of these banking/finance ripoffs in my fucking lifetime.
Bankers and finance assholes are the scourge of mankind.

I got a degree in Finance just so I could avoid the bullshit these fucking
assholes use to rip everyone off. A State Bank as the author is so scared of,
like the one in North Dakota, won't run into any of these issues. Because
their goal isn't profit at any cost, it's providing banking and investment
services.

tl;dr; fuck this guy

~~~
jeffreyrogers
A local commercial bank and a New York investment bank are really different
things. The financial industry has caused some large problems, but it's also a
big part of why the modern world works as well as it does. I don't think
you're being charitable in your criticism of the article.

~~~
justherefortart
The modern world works well for whom?

Laughable.

~~~
jeffreyrogers
When would you rather be alive? There are tons of problems with the world
today and many that we can fix but aren't. But the idea that things are worse
now than before is just not true.

~~~
mykull
The idea that our measurement of progress only needs to be binary (did we or
didn't we progress?) shows indifference to the endless problems yet unsolved.
Better than yesteryear doesn't mean good enough. Far from it.

~~~
jeffreyrogers
I don't view progress as binary. That some things are worse now than in the
past is a banal and uninteresting point, but it's clear that the world is much
better now than it was even 50 years ago for the average person by virtually
any metric that matters: number of people living in poverty, childhood
mortality, life expectancy, chances of being persecuted for your religion,
race, or sexual orientation. The list goes on.

There are obviously tons of problems still but the improvements that have been
made are vast. I get that we still have a lot of progress to make, but the
cynicism of the person I was replying to is inappropriate when you look at the
facts.

------
r4unwud
It's really sad to see this article about animal abuse on the front page of
HN.

~~~
nurettin
You did not read until the part he starts drawing parallels between Bitcoin
and the 2008 mortgage crash.

~~~
ars
Nevermind that - what animal abuse? r4unwud, I didn't see any animal abuse
mentioned in the article.

~~~
celticninja
They are referring to the zap collar being used on the dogs.

------
gowthamgts12
I was reading this in Dwight K Shrute's voice. lol

------
YeGoblynQueenne
>> When the dog gets close to the wire, the receiver starts to beep, and when
the dog gets all the way to the “fence” boundary, the receiver generates a
small electric zap. I know, I know … it’s negative reinforcement and it’s a
shock collar and all that. Don’t care. It’s fantastic for us and our dogs.

That's disgusting.

~~~
solotronics
How would you keep a dog from straying into the wild and getting injured?
These are pets and not wild animals able to survive in the bush on their own.

~~~
oldandtired
Talking with a friend recently about how "wild" our pet dogs are. In the local
area, dogs get out at night and form packs that hunt calves and lambs and
simply kill them and leave the bodies.

There is a good business in hunting feral cats and dogs that were pets and
have been left to fend for themselves in the wild because they were no longer
wanted.

~~~
rlonstein
It's changed as the demographics shifted and the county urbanized but thirty
years ago the local sheriff still issued deputy animal control papers to
hunters, farmers, woodsmen, etc. who reported dog packs. There are fewer
farms, greater housing density, more posted land, revised laws, and different
attitudes toward animal control (generally, better) but the problem still
occasionally comes up. Feral dogs aren't just a semi-rural problem, this was
the situation in Brooklyn [https://gowanuslounge.blogspot.com/2007/07/dog-
days-remember...](https://gowanuslounge.blogspot.com/2007/07/dog-days-
remember-red-hook-gowanus-wild.html) and resulted in a handful of publicized
attacks on joggers and pets.

~~~
oldandtired
The dogs I referred to are not feral as such. They are pets to someone. It is
when they get together in packs that their behaviour goes wild. The owners are
often unaware that their dogs have wandered about and partaken in killing of
stock.

It is also applicable to cats.

