Perverse market theory and the perversion of crypto-currencies

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I recently tweeted:

I was later asked for more information about perverse market theory, and after digging around I have drawn a blank. The term “perverse market” is usually used to refer to unintended or unanticipated market responses, but that is a different meaning from the one I referred to here.

Perhaps my memory fails me on the concept’s name (let me know if you can instruct me on this!), but the idea really struck me when I heard about it in my early career working in financial markets.

Do markets want to hurt people?

The idea of perverse market theory essentially anthropomorphizes the markets, attributing it intent, not dissimilarly to how Kevin Kelly describes directional behaviors in the development of technology in his book What Technology Wants.
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The potential and dangers of the ‘autonomous economy’ where machines transact with machines

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Australia’s largest bank Commonwealth Bank has just released a very interesting white paper Welcome to the machine-to-machine economy, anticipating machines engaging in financial transactions with other machines or parties, for example hiring and paying for their own maintenance workers. This would require them to have their own bank accounts and payment systems.


Source: Commonwealth Bank
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The Global Economic Policy Uncertainty index is at an all-time high: the implications

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A group of top economists has created an Economic Policy Uncertainty Index for 17 countries, using media reporting and economic forecasts to show how much uncertainty there is economic policy.

The Global Economic Policy Uncertainty Index is currently the highest it has been since the beginning of the period analyzed starting at the end of 1996.
global-epu
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Video: Why professional services leaders need to think about the future

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Leading up to the Client and Firms of the Future: How to Compete conference in Sydney on March 11 (which I discussed in a previous blog post), my co-organiser George Beaton and I have recorded a brief video to set the scene.

In the video we begin by addressing the question: Why do professional services leaders need to think about the future? and go on to discuss what to expect at the conference.

Points we make in the video include:
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The focus of big data should be creating value FOR customers

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Big Data is one of the hottest trends at the moment, as shown in this Google Trends chart below.

However much of the big data discussion is about how to market better to customers, gathering data ABOUT them so companies can sell more to them.

This seems to me to be the wrong way to think about it. Big data should be used to CREATE VALUE FOR CUSTOMERS. From that good things will flow to everyone, including of course attracting the most customers.
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The new layer of the economy enabled by M2M payments in the Internet of Things

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Last week I gave a keynote on The Future of Banking to a group of the most senior risk leaders in a major bank, sharing some provocative ideas on how the banking landscape may change in the years to come.

One of the ideas I shared briefly was on how micro-payments between connected devices could enable an entirely new layer of the economy.
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Civic crowdfunding and the future of government and taxation

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Crowdfunding is central to my interests in understanding the future. My background in capital markets and long-standing perspective of the living networks has made it a natural space for me, in looking at new ways our collective financial resources can yield the greatest economic and social benefit.

I was recently named one of the top 30 influential thought leaders in crowdfunding in the world (of which there are only 2 outside the US). I think it’s fair to say that’s an exaggeration of my prominence, however as I am increasingly focusing on the future of crowdfunding I hope the insights and perspectives I am currently developing will have a significant reach.

One of the most obvious ways in which crowdfunding can have a far broader impact than it does today is in playing a role alongside government, by allocating funds to benefit citizens. The “civic crowdfunding” space, focused on funding local community projects such parks, community centers, festivals, and education, has thrived, with platforms such as Spacehive and Neighborly doing well, and strong enthusiasm from cities such as Bristol.
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The future of credit unions is community

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Two weeks ago I gave the closing keynote at the Boards of Directors and Supervisory Committees Conference of the U.S. National Association of Federal Credit Unions in the beautiful Hawaiian island of Maui, on the topic of Profiting From Technology Trends.

The credit union sector in the U.S outperformed commercial banks after the financial crisis according to the very interesting ILO study Resilience in a downturn: The power of financial cooperatives, moving from 42.8% to 45.0% market penetration to a total over $1 trillion in assets, while in the same post-GFC period credit unions increased their market share in most other regions in the world.
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The top 30 Thought Leaders in crowdfunding

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There is no doubt that crowdfunding has been one of the major trends evolving over the last couple of years in particular. It has caught the imagination of the public, and already had a large impact on how artists, startup ventures, and many others consider their funding options. The trend of crowdfunding has a long, long way further to go.

Israeli-based equity crowdfunding platform OurCrowd has just launched a list of the top 30 influential thought leaders in crowdfunding, those who have shaped how the industry is seen and understood.

They commissioned Evolve Inc to do the study, which took into account “a variety of factors including social footprint, popularity among industry insiders, engagement frequency, citations by influential writers in venture finance and other factors” to create a ranked list of the top 30 influencers from a pool of 800 people studied.

The top 5 are Perry Chen of Kickstarter, Naval Ravikant of AngelList, Slava Rubin of IndieGogo, Ben Horowitz of Andreessen Horowitz and Fred Wilson of Union Square Ventures, followed by a variety of entrepreneurs, regulators, politicians, media commentators, academics, and others.

I made the list (just!) at #29, probably mainly due to the success of my book Getting Results From Crowds and the crowdsourcing workshops I’ve been running around the world over the last couple of years.
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Not just Bitcoin: How will multiple digital currencies compete, succeed, and fail?

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Bitcoin surpassing a valuation of $1,000 yesterday is a real landmark, giving the currency a market capitalization of almost $12 billion and 75-fold growth in value this year.

However Bitcoin is not the only digital currency, simply the most prominent. As Bitcoin’s value has soared, partly driven by a positive response from Senate committees last week, participants have looked further afield to see whether there may be other alternatives that have not risen by so much already.

The second most prominent currency is Litecoin, with a market capitalization of over $1 billion. After that Peercoin and Namecoin currently have capitalizations of close to $80 million, followed by a number of others from $20 million and down in a long tail, with the 23rd ranked currency, Goldcoin, still valued at over $1 million.

Litecoin is over 10 times its value from just 10 days ago, with Peercoin growing 4-fold and Namecoin 12-fold in value over the same period.

The following chart is a snapshot from Coinmarketcap, which provides real-time information on digital currencies. The table shows the largest currencies by market cap, with the chart on the right hand side showing growth over the last 90 days.

Digitalcurrencies_Nov13
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