Memia 2021.38: Endemic broken supply chains📦// unregulatable📜// moving to Gwagwalada 🇳🇬// throw away your phones📵// fjord carbon sink?🏞️// parallel parking in space🛰️

Measure like a Brit

Kia ora,

Welcome to this week’s Memia newsletter - your weekly scan across emerging tech, new ideas and thinking about the future from Aotearoa. As always, thanks for being here!

Roundup

🖱️The most clicked link in the last issue (10% of openers) was the amazing (to us here in the anarchic West) video of Japanese queuing at scale.

🙏Still feeling for you in lockdown Tāmaki Makaurau folks…

🌩️AWS announced a new $7.5Bn data centre region in Aotearoa claiming the creation of 1,000 jobs… a sceptical Bill Bennett unpicks the numbers:

“A more likely story is that AWS has bigger plans for New Zealand that serving local markets. It has hinted at this without explicitly saying anything. New Zealand gives, say, Australian AWS users a viable alternative location with, if not always similar, at least readily understood local conditions.

One last point. Until now, the big global cloud companies stayed away from New Zealand. They didn’t like it when there was only one submarine cable network. They didn’t like what they saw as a hostile and monopolistic telecommunications market. It took ten years of industry reform.

As far as technology is concerned, no-one thinks of us as a smug hermit kingdom.”

🌲Following last week’s discussion on carbon farming… this Te Hono Speaker Series talk from Alexey Rostapshov, Head of John Deere Labs is well worth a listen. Great download on some of the key tech, trends and challenges facing agtech companies in 2021. (Thanks Sarah Adams for the link).

  • After getting “stuck” with his partner in Aotearoa last year when the borders were closed due to the pandemic, Alexey spent over a year working remotely from Nelson, only recently returning to San Francisco. During his stay, he helped co-found the Nelson AI Institute spinout CarbonCrop which provides AI-driven analysis of carbon farming opportunities to landowners:


📦Endemic broken supply chains

The political Covid-related reckons in the [social] media reached fever pitch this week … hooray for the “mute” button on Twitter.

However, there was one very measured and cogent voice amidst the cacophony: independent economist Shamabeel Eaqub’s article in Stuff: Covid-19: Our path from pandemic to endemic is absolutely on-point:

“Lockdowns and closed borders have been an effective strategy so far. Our approach saved many thousands of lives, 7300 compared to Sweden for example.

We would value this at $33 billion if those people had been killed in road accidents. It also avoided an overburdened health system which could have led to increasing mortality from other sources (valued at another $11b), and long Covid, where those who recover from Covid experience long term and often debilitating health issues (not enough data to put a cost on it yet).”

On economic recovery, he calls a long game:

“Just like the health response, the economic response will also need to change as we move to an endemic with a widely vaccinated population, and a health system with enough capacity to deal with sudden surges in demand. This could take years, rather than weeks or months.

Vaccination remains low outside of the rich world, including in manufacturing and trading hubs. This will affect access to products and prices may increase.

Just in time, the mantra of global supply chains of many decades, will be replaced by resilience. This means onshoring. For most New Zealand businesses this will simply mean holding more inventory, rather than new manufacturing plants.”

In effect this means more working capital tied up in onshore inventory… I sense a few entrepreneurial opportunities for businesses with the strongest inventory forecasting algorithms…

(There are already clear signs of broken supply chains - with champagne shortages at New World near Mission Bay!🍾)

More seriously, this thread from Sahil Bloom on what’s happening in global supply chains is pretty pessimistic…things are not going to fix themselves soon… so don’t expect too much to arrive from Santa in time for Xmas.

(Top Xmas gift idea tho, introduce the next generation to supply chain concepts: Ryan Petersen, CEO of Digital freight forwarder Flexport, has written a children’s book The Big Ship and The Little Digger (inspired by the Evergiven in the Suez Canal)💯)


📜Unregulatable

So, in a move that wasn’t unexpected, China's heavy-duty regulators explicitly announced a total ban on cryptocurrency-related activity. Reuters reports:

“The People's Bank of China (PBOC) said cryptocurrencies must not circulate and that overseas exchanges are barred from providing services to China-based investors. It also barred financial institutions, payment companies and internet firms from facilitating cryptocurrency trading nationally.”

Crypto prices wobbled but recovered losses almost immediately…as with the previous Chinese ban on crypto-mining earlier this year, long term effects were few as mining activities moved to other parts of the world.

While the ban will certainly have an impact on commercial exchanges, decentralised exchanges (DEXs) such as Uniswap, Sushiswap, and dYdx have seen surges of activity since Friday and are largely unregulatable. (Unless Chinese regulators chose to go after the servers hosting the nodes or software developers residing in other countries... in which case, it wouldn’t be too speculative to envision some forms of cyber-retaliation from various loosely supportive hacker groups around the internet…)

One casualty is immediately apparent: Sparkpool, the 2nd largest Ethereum mining pool with over 22% of overall Ether hashrate has suspended its Chinese operations.

There were two rather “ok, boomer” takes from local commentators whose views I often align with, but not here:

“This has been coming for a while. There is no need to this junk to be legal, and I would love to see NZ follow the lead. That would incidentally help local speculators get out near the bubble top.”

“My core view is regulators globally are gathering to make crypto illegal for banks and others to use or interact with because they rightly fear the loss of sovereignty if any crypto currency became established as a global currency of choice. The central banks (although ours is lagging) are also scrambling to build their own truly digital fiat currencies that solve a lot of the cost and complexity issues of payments now.

Crypto is being driven underground to become a vehicle for criminals, money launderers and despots, which some would argue was the whole point of this Libertarian project from the start. I wouldn’t touch them with a barge pole, and anyone who does should get ready for the regulatory fallout, and being tarred with that criminal brush.”

Ouch. Innovation as criminality *by association*… dark times ahead indeed. What about, er, universal human rights like Freedom of Thought? (Outside China, natch…)

An alternative narrative might go something like this:

  • The *technology* of existing fiat money is woefully outdated, without significant innovation since credit cards were invented in the 1950s. The current mishmash of interwoven national currency systems is a mess with high transaction costs and unnecessary intermediation - and a sloping playing field that favours incumbent financial intermediaries in the name of “financial stability”.

  • A global unbanked population of 1.7Bn is completely unserved by the current system. Crypto payment systems, on the other hand, are generally permissionless to use, directly peer-to-peer and open to anyone with a basic smartphone.

  • Additionally, younger generations in the West who find themselves shut out of a system of wealth controlled by an elite gerontocracy are increasingly distrustful of traditional institutions and choosing to put their digital assets elsewhere.

  • Traditional financial institutions are stiflingly unrepresentative: developed nation central banks are run by mostly middle-aged caucasian Men In Suits (US - 4 men, 2 women), (NZ - 5 men, 2 women) (UK - 5 men, 2 women) (Australia - 4 men, 3 women) (ECB 23 men, 2 women including President Christine Lagarde), middle-aged Chinese Men In Suits, middle-aged Japanese (all but one) Men In Suits… in each case a small number of establishment individuals, put there not to rock the boat, potentially susceptible to insider influence and capture - but able to wield disproportionate impact over whole economies. After over 13 years of quantitative easing with no end in sight, the whole setup looks more like the Wizard of Oz by the day.

  • So (…the narrative goes…) these central bank institutions have almost certainly lost their previously state-coerced monopoly on money supply (and the ability to inflate such). They just don’t know it yet.

  • Furthermore, the latest rounds of regulation by China and others are more likely to accelerate technology innovation to build more resilience into the decentralised architecture to innovate “around” any national regulation … yes, no doubt there will be public floggings of key individuals (a la Julian Assange) as regulators try to enforce using fear… but globally distributed technology will find a way around any locally enforced rules as it always does.

  • Fundamentally: decentralised, borderless, metaversal money with a transparent and less-gameable governance system is a better technology for 21st century money than outdated national currencies controlled by and for incumbent elites (even if fronted by fierce-sounding but ultimately ineffectual state bureaucracies).

  • Expect plenty of Chinese punters to continue to hold and trade their crypto using secret wallets, DEXs and VPNs. Let the games continue…

…On which note:

  • Twitter announced that is enabling tipping with Bitcoin, making it the first major social network to encourage use of crypto as a method of payment. (Twitter clone BitClout is another). This will use the Strike wallet running on Lightning Chain).

    • (Also in the same announcement: something about NFTs blah blah blah🥱).


[Weak] signals

Weekly curation of signals from near and far futures.

🇳🇬 Moving to Gwagwalada

  • Data from the UN visualised: the top 20 fastest growing cities worldwide are all in Africa and Asia: (h/t @SamRag)

6% per year compounds pretty quickly… the world will be very different again in 2050.

Aotearoa results from the same 2018 UN dataset are more sedate (2020-2025 forecasts):

  • Auckland: 1.26%

  • Christchurch: 0.59%

  • Wellington: 0.6%

📵Throw away your phones

More signs of global tech bifurcation driven by geopolitics:

“As countries fall from grace in the eyes of the Chinese government, Chinese consumers change their buying patterns, revealing a certain nationalistic impulse that trumps other concerns…Chinese consumers have started to take sides in the trade war with the United States, favouring smartphones from Huawei, Xiaomi and Oppo. Apple’s iPhones remain popular, but if the Cupertino behemoth does something to upset Chinese consumers, I’m guessing they would start to shy away from Apple products too.”

Big EMP

3D printing for humans and mice

Two significant advances in microscopic 3D printing this week:

Charge my moped

🏞️Fjord carbon sink?

A new 5-year research project by the University of Otago aims to discover if fjords, which act as natural “sponges” for carbon, have a tipping point of carbon absorption:

The combination of steep slopes, steep topography, native rainforests and tectonic plate activity makes Fiordland the perfect place for [carbon sinking] to occur.

“Many of these fjord basins have very low oxygen concentrations in the water, so the ability for the fjord to hold onto that carbon for a long period of time is really, really high, so we think Fiordland is a really important carbon sink.”


Mind expanding

Stimulating my neurons this week:

  • I’ve just finished this fantastic book framing modern economics and geopolitics: The Great Rupture: Three Empires, Four Turning Points, and the Future of Humanity by global market strategist Viktor Shvets. It’s a sprawling read, starting way back in history looking at key turning points in the development of Chinese, Ottoman and Russian empires… leading to a lack of freedoms to explore new ideas and innovations which placed their inheritors economically behind the Anglo-saxon west during much of the 20th century. But now in the 21st century, as the twin mega-forces of accelerating technology and financialisation gather pace, we are witnessing autocratic regimes around the world centralising more power, and harnessing AI to innovate and consolidate power even further. Shvets asks the fundamental question facing global society right now: “Do we need to be free to be innovative, prosperous, or even happy?”.

    • A rewarding and - despite the first half focusing on history - utterly contemporary book referencing Harari, Kurzweil, Kai Fu Lee, Mazzucatto, Brynjolffson and many other modern philosophers and economists… and ultimately leaving the question yet to be answered…


Rollcall

Massive congratulations to Manawatū author Laura Jean McKay - the first New Zealand-based author to win the Arthur C. Clarke Award, one of the world's top science fiction prizes, for her debut novel, The Animals in That Country: “a speculative science fiction novel where animals can talk”.


Hidden gems

Finally a couple of welcome distractions from the political noise this week:

Measure like a Brit

🛰️Parallel parking in space

Amazing video from the ISS.

That’s all for another week…thanks as always for getting in touch with your thoughts, feedback, links - appreciated!

Ngā mihi

Ben