Hidden Forces

In Episode 37 of Hidden Forces, host Demetri Kofinas speaks with Josh Wolfe, co-founder of Lux Capital. Lux Capital is a venture firm that specializes in the hard sciences, supporting scientists and entrepreneurs who pursue counter-conventional solutions to the most vexing puzzles of our time. Josh is also a founding investor and board member with Bill Gates in Kymeta, which makes cutting-edge antennas for high-speed global satellite and space communications. He is a Westinghouse semi-finalist and published scientist who previously worked in investment banking at Salomon Smith Barney and in capital markets at Merrill Lynch. In 2008, Josh Wolfe co-founded and funded Kurion, a contrarian bet in the unlikely business of using advanced robotics and state-of-the-art engineering and chemistry to clean up nuclear waste. He is a columnist with Forbes who has lectured at MIT, Harvard, Yale, Cornell, Columbia, NYU and been invited to The White House and Capitol Hill to advise on nanotechnology and emerging technologies. The fields of science, technology, and investing are not new territory for Hidden Forces listeners. These are subjects that we have covered at length with previous guests, including Geoffrey West, Ray Monk, Robert Johnson, Christopher Cole, and Tim O'Reilly. Rarely, though, do we find ourselves in conversation with someone like Josh Wolfe, who has made a multi-billion dollar business of investing in and around ground-breaking technologies and innovations in the hard sciences. Some of these breakthroughs include artificial intelligence, advancements in medicine and biotechnology, gene editing, energy technology, and much, much more. In an effort to help us understand how he capitalizes on these breakthroughs, Josh Wolfe shares his unique perspective on investing with us, as well as his methodology for learning about the forces shaping our unknown future. What role does art play in informing our understanding of the world? How do we gain direction for our work from the insights provided to us by our passions? What information can we glean from the substance of our curiosities? How important are the presence of internal strife and discontentment in propelling us towards success? Can we learn to nurture our contrarian impulses in the face of our instinct to follow the herd? In a philosophical discussion that ranges from the material to the immaterial, Josh Wolfe inspires us to reckon with the paradox of our own humanity. Are we simply animals born in an indeterminate world whose mysteries we are helpless to uncover? Or, are life's greatest mysteries - the nature of reality and the hard problem of consciousness - open to same types of empirical analyses and reasoning that have propelled our species forward since the earliest days of human enlightenment? Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 36 of Hidden Forces, host Demetri Kofinas interviews Leemon Baird about the launch of Hedera Hashgraph, a public ledger built atop the hashgraph consensus protocol that aims to serve as the trust layer of the modern Internet. Hedera implements a suite of solutions that we have never seen before in a public ledger. Its method of governance is unique. Its open review approach to software development challenges the paradigm that has dominated the world of cryptoeconomics for the past decade. Its approach to database sharding allows for massive increases in throughput and its approach to proxy staking incentivizes ownership without the burden of having to stand your own node. Is the technological superiority of hashgraph enough to secure its success as the utility protocol of the future, or will blockchain developers reject a model of governance that demands stability over the right of any one individual to copy the code and fork the ledger? Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 35 of Hidden Forces, host Demetri Kofinas speaks with Alex Mashinsky. Alex is the founder, and CEO of Celsius, a next generation lending wallet that aims to be the ‘Killer App’ of the bitcoin and cryptocurrency revolution. Celsius attempts to overcome the limitations of a traditional banking system by leveraging technology and rethinking lending for the 21st century. A serial entrepreneur, Mashinsky is the founder of seven New York City-based startups with over three billion dollars worth of exits to his name. He is a serial inventor with over 35 patents, relating to exchanges, VOIP protocols, messaging & communication. Alex Mashinksy is also one of the inventors of Voice Over Internet Protocol with a foundational patent dating back to 1994. In their conversation, Demetri attempts to understand the mechanics behind the Celsius Network, as well as how the company intends to manage risk, execute short sales on behalf of institutional clients, and lower borrowing costs for its users. Who are Celsius' main competitors, and how does its lending wallet differ from the competition? How are loans issued on the Celsius network? How does the CEL token work, and how does it incentivize the network to service its customers and not some financial middleman? What is the revenue model for this network? How does Celsius generate income from lending, short sales, and staking? What are some of the unintended consequences that could arise from a securitization market in cryptocurrencies? What are the risks associated with hoarding utility tokens in a proof-of-stake system? Could Celsius and other networks become central points of attack for malicious actors looking to destabilize the Ethereum once it moves from proof-of-work to proof-of-stake? Finally, what is the timeline for Celsius' new wallet and how soon will crypto holders be able to rely on it as a real source of credit and interest-bearing income? Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 34 of Hidden Forces, Demetri Kofinas speaks with Brian Kelly, CEO of BKCM LLC, a digital asset investment firm. He is an experienced Global Macro investor with over twenty-five years’ experience in financial markets and a CNBC contributor who appears regularly on Fast Money. Our most recent episodes with Chris Burniske on modeling cryptoassets and with Ari Paul on cryptocurrency trading methodologies introduced two foundational frameworks to our audience. This week's episode with Brian Kelly affords our audience the opportunity to explore both of these perspectives (theory and execution) in a single conversation. Brian Kelly is uniquely qualified to talk about the financial side of cryptocurrencies, but he also provides valuable perspective on how the media is covering this space. Brian begins his conversation with Demetri by recounting his introductory experience to bitcoin, how he made his first investments, and what he learned in the year he wrote his book “The Bitcoin Big Bang.” The two explore familiar topics like the problem of scalability, exchange and regulatory risk, cash-settled futures and ETF’s, and how bitcoin may fare to gold during a systemic financial crisis. Is there any way to measure the intrinsic value of a given cryptocurrency? Can permissioned blockchains compete with public ledgers, or will cryptocurrencies come to dominate the future of software? Besides bitcoin and Ethereum, what are some of the more interesting cryptocurrency investment opportunities out there? Brian and Demetri also cover the recent spike in financial volatility amid this rising interest rate environment. Lastly, they consider how the rise of systemic trading strategies and passive investment vehicles like ETFs may accelerate (or not) a future market downturn. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 33 of Hidden Forces, Demetri Kofinas speaks with Bill Browder about how his wealth was plundered by Russian oligarchs and placed in the hands of Vladimir Putin. This is the story of Bill Browder and the end of glasnost. It stands as a microcosm of how the USSR attempted, and failed, to reform itself. However, in order to truly tell the tale, we must begin with another man: Mikhail Gorbachev. Mikhail Gorbachev came to the stage at the end of the 1980s with a policy of glasnost, which can best be translated and explained in English as “openness.” Practically speaking, the policy was focused on ending the nation’s endemic corruption by making the government transparent. Or at least, by making the government a little more transparent. Gorbachev hoped that such a policy would thwart the schemes of the bureaucrats who enjoyed complete control of the economy and redistribute power more evenly. Unlike his predecessors, Gorbachev also had a far stronger focus on noninterference. Ultimately, these policies led to the thawing of the Cold War, the fall of the Berlin Wall, and the decline of the role of the Communist Party in government. These are also the policies that led to the dissolution of the Soviet Union. As a result, saying that Gorbachev changed politics in Russia would be a dramatic understatement. By the time he left office, he’d revolutionized global power dynamics. However, the promises of openness and noninterference quickly died in the Russia state and reform was never realized. Instead, Gorbachev’s destabilization of previously entrenched power structures quickly led to the traumatic redistribution of wealth into the hands of a tiny kleptocracy. This is where Bill Browder enters the story, and where the tale of the plundering of Russian industries and resources truly begins. Bill Browder is the founder and CEO of Hermitage Capital Management, which was the largest foreign investor in Russia until 2005. That year, he was refused entry into the country and had $4.5bn in assets liquidated. The reason? According to Browder, the government was attempting to punish him for exposing corrupt practices. Then, in 2009, his lawyer, Sergei Magnitsky, died in prison after he uncovered a $230 million fraud committed by officials in the Russian government. That is was when Bill Browder went to war. Over the last decade, he has been leading a campaign to expose, and ultimately end, Russia’s endemic corruption and excessive human rights abuses. His work led to the passage of the "Magnitsky Act" in the United States and, since that time, many countries have passed similar legislation. The work also made him an enemy of Vladimir Putin and the Russian state, which has issued several warrants and placed him on Interpol's arrest list. Today, Bill Browder joins host Demetri Kofinas to tell his story and discuss what his tale—a story of high finance, corruption, and murder—portends for the future of this powerful nation. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 32 of Hidden Forces, Demetri Kofinas speaks with Ari Paul about the inner workings of hedge funds focused exclusively on the cryptocurrency space. Over the course of the last year, cryptocurrency has dominated our society. The price of the most popular digital currencies surged, increasing in value by well over 1000% in a matter of weeks. We saw similar rises in initial coin offerings, with the number of token offerings increasing from just seven a month in January 2017 to more than forty a month by the end of the year. This crypto euphoria fueled the formation of several cryptocurrency hedge funds which, according to their various founders, aim to bring the professional trading and portfolio management of Wall Street to the emerging class of digital asset. Although this work promises to open the crypto space to an entirely new class of traders, there are many questions regarding how these funds work and how reliable they are. For example, how are crypto fund managers managing risk? What sorts of benchmarks are crypto funds using in order to measure performance? And how does a cryptocurrency investor seek alpha in an already uncorrelated market? To answer these questions, and help shed some light on the emerging world of crypto hedge funds, we turned to Ari Paul. As a portfolio manager who oversaw risk at the University of Chicago’s endowment investment office and the Chief Investment Officer at BlockTower Capital- a leading crypto hedge fund that raised over $140 Million in 2017 - Ari Paul is uniquely qualified to discuss the most interesting and creative investment opportunities for making money in cryptocurrencies. His positioning also means that he is intimately familiar with many of the risk factors that populate this new and fledgling market. Over the course of the discussion, Ari Paul speaks with host Demetri Kofinas about the skepticism surrounding market values, how we can protect ourselves from counterparty and exchange risk, and how hedge funds like BlockTower Capital are making it easier for someone who may not be intimately familiar with blockchain technologies or the inner working of specific cryptocurrencies, participate in this new digital economy. Demetri also asks Ari what the benchmarks for crypto funds like Blocktower are and how they measure performance. The challenge in the cryptocurrency space, according to Paul, Is that there are really three benchmarks: bitcoin, cryptocurrencies in general, as well as the broader equity markets. Seeking Alpha in an already uncorrelated asset class, therefore, presents a slew of new risk factors that aren’t present for traditional hedge fund managers. Ari Paul also gives his opinion on how the flood of institutional capital might alter these correlations, what a consolidation in cryptocurrencies might look like, and if we are verging near a collapse in valuations. The two also take a look at cash-settled futures markets, consider the use of put and call options, and explore ways in which investors can better protect themselves from counterparty and exchange risk. Finally, they examine some of the most interesting and creative investment opportunities for making money in cryptocurrencies and what the average investor can do in order to take advantage of them. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation at @hiddenforcespod

In Episode 31 of Hidden Forces, host Demetri Kofinas speaks with Chris Burniske about how to value a cryptocurrency. Chris is a co-founder of Placeholder, a New York venture firm that specializes in cryptoassets. Before Placeholder, Chris Burniske pioneered ARK Invest's Next Generation Internet strategy, leading the company to become the first public fund manager to invest in cryptocurrency. He then transitioned to focus exclusively on cryptoassets, paving the way for Wall Street to recognize it as a new asset class. His commentary has been featured on national media outlets, including the Wall Street Journal, the New York Times, Fortune, and Forbes. With the total market capitalization of all cryptocurrency having surpassed $800 billion by the start of 2018, it was only a matter of time before Wall Street would stand up and take notice. The establishment of a cash-settled futures market for bitcoin in late 2017 is one of many bullish signs for the long-term viability of cryptoassets. It has also opened the door to further institutional capital and crypto-focused hedge funds with hundreds of millions of dollars to deploy. The opportunities for profitmaking are too lucrative to ignore, but the flood of institutional and private capital into the cryptocurrency space is also fueling a speculative mania. The newness of this asset class and its lack of historical price data make proper valuations even more challenging. So, given these constraints, the question remains, how do you value cryptocurrency? The answer lies at the intersection of macroeconomics and financial modeling. Chris Burniske and Demetri Kofinas start by laying out a taxonomy for cryptoassets that breaks them into three categories: cryptocurrency, cryptocommodities, and cryptotokens. In their conversation, they explore how one can learn to differentiate between the different currencies, DApps, and tokens. How does one judge the merits of a white paper, the seriousness of the dev team, and the enthusiasm of early adopters? How important is governance? How can volatility in the underlying token impact the robustness of the software? How do supply schedules determine future values? What are some of the most reliable, early indicators of success or failure for a cryptoventure? These are just some of the questions that Demetri and Chris address in this highly informative and timely conversation. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 30 of Hidden Forces, Demetri Kofinas asks the question, "how can we learn how to predict the future?" According to his guest, Tim O'Reilly, learning how to predict the future starts with building better maps. Tim O'Reilly has played a seminal role in creating the framework through which an entire generation has come to know and understand the modern Internet. If you have ever used terms like “open source” or “web 2.0,” you are relying on the language cultivated by Tim O'Reilly, through his innumerable conferences, gatherings, and intimate conversations. His work has reshaped how people in the computer industry think about technology. He is the founder, CEO, and Chairman of O’Reilly Media, and his most recent book, WTF: What’s the Future and Why It’s Up to Us, forms the basis for much of this conversation. The need to explore is a fundamental driver of human progress. Without it, we would never have ventured off the plains of Africa, conquered the seas, or landed men on the moon. How has humanity managed to navigate the unknown? The process of exploration is one of mapmaking. Maps are not some relics of a bygone era. Maps are not artifacts that exist naturally in the world. Maps are products of the human mind. Mapmaking is the process through which our brains structure time and space; they help us put order around experience. Maps are the expression of human perception. If we want to navigate the world better, and if we want to learn how to predict the future, then we need to build better maps. Tim O'Reilly helps us do just that. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 29 of Hidden Forces, Demetri Kofinas speaks with Hooman Majd about how to interpret the Iranian protests within the wider political, cultural, and financial dimensions of the greater Middle East. The ongoing Iranian protests have delivered the worst scenes of unrest since millions took to the streets over a disputed presidential election in 2009. During the tensions that occurred a decade ago, protesters claimed that widespread election fraud resulted in the state erroneously reelecting Mahmoud Ahmadinejad, as president of Iran; however, the most recent protests are about far more than an election — and it is about far more than just Iran. Although many reports have noted that the protests were triggered by growing anger stemming from economic hardships, such as increasing unemployment and income inequality, the root cause of the unrest goes far deeper. The unrest in Iran cannot be entirely separated from the larger forces moving through the Middle East. In order to understand the nature and scope of the present problem, we need to consider the socioeconomic and political forces operating in both Iran and the Middle East at large. Few are better equipped to discuss this topic than Hooman Majd. Hooman Majd is an Iranian-American writer and political commentator. He is the author of the New York Times bestseller The Ayatollah Begs to Differ, as well as The Ayatollahs’ Democracy and The Ministry of Guidance Invites You to Not Stay. He joins us today to discuss how we can interpret and locate the Iranian protests within the wider political, cultural, and financial dimensions of the Middle East. Over the course of the conversation, Hooman Majd and host Demetri Kofinas discuss how the Iranian protests fit within the western-oriented framework of thinking about Iran, and how much of what Iran is experiencing is the result of forces that are reshaping the oil-reliant and politically volatile economies of the region. Ultimately, the conversation investigates the source of the ongoing protests, and what these demonstrations express about the current state of Iranian society, its economy, and its politics, in order to provide a framework for understanding the larger forces operating across the Middle East. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

In Episode 28 of Hidden Forces, host Demetri Kofinas lays out his vision for a future driven by the emergent forces we have been covering in 2017. He reads passages from Ted Kaczynski’s “Industrial Society and its Future,” as well as from Bill Joy’s “Why the Future Doesn’t Need Us.” He plays clips from interviews with Barack Obama, Tim Cook, and Jamie Dimon, as he considers how power, privacy, and control, all factor into the emerging technological landscape. What is the goal of the machine? What do we seek to accomplish with our technologies? What are the benefits and the costs associated with the technological, political, and economic forces of the modern age?  Producer & Host: Demetri Kofinas Editor: Stylianos Nicolaou Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod