DAS NYC, Day 3

Efficiency isn’t everything.

Reading is more efficient than listening, for example. Talking is more efficient than writing. 

But in both cases, something gets lost in the process.

The media theorist Marshall McLuhan said that while the written word “made possible explosive increases in knowledge and production,” it did so “at the cost of human wholeness.”

Before the printing press, he explains, “man lived in acoustic space: boundless, directionless, horizonless…in the world of emotion.”

That world was immersive and participatory. Inefficient, perhaps. But whole.

After the printing press, our experience of the world contracted and fragmented: “Print isolates vision, enforces linear sequence, and fragments the sensus communis, thereby narrowing the channel of communication compared to embodied speech.”

With the advent of print, the world became more orderly and intelligible, but less immersive and engaging.

In other words, it’s good to talk. Ideally in person.

That might be why people devote time and money to attending conferences. It’s not the most efficient way to collect information — you can’t put a live panel on 2x speed, for example. But it’s an opportunity to escape the narrow channel of communication that email, Telegram and Slack confine us to.

Breaking the bonds of print allows us to live in what McLuhan calls “acoustic space” — holistic, non‑linear, immersive and tethered to “the world of emotion.”

It’s a nice place to be, especially in this age of social media and information overload. Importantly, this is more than an alternative way to communicate. It’s an alternative way to think, too.

McLuhan defined verbal speech as “an actual process of thought, which is in itself nonverbal.”

That kind of thinking can’t be optimized.  

McLuhan’s ideas could sometimes use some optimizing — they’re often hard to follow (in print, at least). But Jerry Seinfeld would understand. He once told an interviewer that his long-running sitcom was successful because it was micromanaged:

The inefficiency of micromanaging a sitcom is to Seinfeld what inefficiency of speech was to McLuhan: It’s where the magic of thinking happens.

Below are a few of the more magical things I heard at DAS today.

Keynote speaker: Michael Saylor

Bitcoin’s chief hypeman was at DAS to pitch a new derivative thereof: Strategy’s preferred shares, STRC.

The pitch starts by reframing bitcoin as “digital capital” — not just digital gold, but digital credit, money and yield, too.

Why is bitcoin digital capital? “Because the most powerful person in the world believes it’s capital,” Mr. Saylor said (while standing in front of a giant photo of the President). 

That may be the least-crypto statement in the history of crypto. But Strategy isn’t really a crypto company, so that’s fine. Nor is it just a bitcoin treasury company, as it’s often described. Instead, Mr. Saylor now describes Strategy as a bank: “We create currency.”

Last I checked, Strategy did not have a banking license. But he still wants you to think of it that way. “Who wants a bank account that pays 11.5%?” he asks rhetorically — with the implication that the only correct answer is “everyone.”

But it gets better. The yield on STRC is tax-advantaged, so Mr. Saylor says that, for a New York City taxpayer, “it’s like a bank account that yields 23%.”

23% is a lot — especially as he says it’s “risk-free.”

It’s not, of course, because the yield on preferred equities is not FDIC-insured. 

Mr. Saylor himself describes STRC as “the best of both worlds” — both credit and equity. 

Neither of those worlds are risk-free!

Impersonating a bank account is not explicitly illegal in the way that, say, impersonating a police officer is. But it’s not exactly legal, either. In 2009, the SEC charged the managers of the Reserve Primary Fund with fraud for telling investors that the fund would always trade at $1.

Another clue that STRC is not free of risk is what Strategy uses the money for: more bitcoin. “We’re buying all of it,” Mr. Saylor says. 

For that reason, Mr. Saylor also describes Strategy as “a synthetic miner that mines all the bitcoin in the world.”

Because they’re using money raised from issuing STRC, the bitcoin, Mr. Saylor adds, is acquired “at no cost to our shareholders.”

Amazing stuff. To recap: STRC’s 11.5% yield is risk-free, tax-free, and a cost to no one.

Caveat emptor.

Sreeram Kannan on agentic companies

Crypto has been in need of a new elevator pitch, and I believe the founder of EigenCloud has found it: AI agents will become companies, and crypto will make them investable.

To that end, Kannan redefines blockchains as the technology “that allows programs to own property, have rights, and be liable.”

This enables an all-new kind of firm: “agentic companies” that are purely software. These will have no employees or human governance. They’ll just be a bundle of properties, rights and liabilities held in a smart contract. 

Being companies, some of these will want to raise money — and crypto will be the only way to do it.

Kannan describes this as “a YouTube moment for companies.” In the same way that YouTube enabled anyone to create videos and put them online, AI has enabled anyone to create and deploy software. And the combination of AI and crypto allows anyone to create companies and raise money for them.

This raises the happy prospect of thousands (millions?) of agentic companies issuing tradeable equity onchain. 

There was a lot of optimism for institutional crypto at DAS this week. But it’s unclear to what degree institutional crypto will ever benefit decentralized crypto. (Some would even say institutional crypto isn’t crypto at all).

Kannan’s agentic companies, however, would do everything — borrow, lend, transact, raise money and invest — on permissionless blockchains. 

But here’s what I really want to know: Will they attend conferences???

Quotable quotes:

Day 3 takeaway:  

Scallion + cream cheese + lox bagel and a box of raspberry rugelach from Russ & Daughters on 34th Street.

— Byron Gilliam

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