Learning in Public: 5/2/2021
Bits and bytes
M-Pesa & the IndiaStack: The Internet Country
M-Pesa is a mobile phone-based money transfer service, banking, payments, and microfinancing serving consumers in Kenya, Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, and South Africa. M-Pesa offered banking in countries where there was none. And now it is the standard — as in just like China has the SuperApp of WeChat, M-Pesa could be considered the super infrastructure/app for the countries above. M-Pesa leapfrogged traditional/physical banks. As the article above details, Kenya had mobile person-to-person money transfers via cell phone in 2007. The US didn’t get that until 2009 — and STILL today, there is no defacto answer — Venmo? Cash App? Bank to Bank? I highlight M-Pesa for the extreme value they have brought to their users/countries.
In 2009, only 17% of Indian adults possessed a bank account.
By 2018, almost 80% of Indian adults possessed a bank account.
How? The IndiaStack:
Just as the US Government funded the highways, India in 2009 started building an Identity Layer, a Payments Layer, and now a proposed Data Layer.
For the identity layer, ~400M Indians in 2009 had no id — as in no Social Security Number equivalent. And today there are 1.27 billion Aadhaar (identity) cards. More importantly, these cards brought down the cost of KYC to pennies from tens of dollars — hence enabling the payment layer.
Again, read the essay above, but the interesting bit is the payments layer. The government of India made a common piece of core infrastructure — the National Payments Corporation of India — through which all digital payments transact. This ensures that new companies can join and participate — and that no one company can get a stranglehold on the payments infrastructure — the way that the Credit Card companies have here in the US — with a ~2% tax on transactions. It also means sending money from person A to person B — at any bank connected to the NPCI will just work.
We need more boring infrastructure projects like this. What are the data/internet projects the US Government is currently funding that will have a significant impact 50 years from now? What are the platforms and infrastructure being built? I ask this honestly and with no snark. Most of what I read about has to do with revitalizing the ailing infrastructure of years past.
Recommendation: Only read if this is your type of thing. I read it a month ago and don’t really remember much — which doesn’t speak too highly.
Frauds basically prey on the greedy, the desperate, people who don’t know what they are doing.
All fraud falls into one of four categories: “long firm,” counterfeiting, control fraud, and market crimes.
This is probably the most interesting bit from the book. Just go look up the 4 types and you are done.
Kelly criterion: is a formula for bet sizing that leads almost surely (under the assumption of known expected returns) to higher wealth compared to any other strategy in the long run (i.e. approaching the limit as the number of bets goes to infinity).
The temperature of the moon:
In sunlight: 260 F
In darkness: -280 F
Note: Wow. I hadn’t ever thought of the moon as “hot”.
MSCHF is still the most interesting thing happening in art:
Their Satan Shoes, custom Nike Air Max 97 shoes, created as a collaboration with musician Lil Nas X caused quite the stir to the point that Nike sued - and MSCHF responded - key quote: “We believe it is better to make art that participates directly in its subject matter; it is stronger to do a thing, than to talk about a thing.”
“Web Bankers” - Computer monitors website for updates, when there is an update, it is passed to a queue of humans to review, extract the updated data and create structured data out of unstructured updates. Great technique and good thread:
Bubble? - Read this thread. Great look at how everything is at extreme highs. Last year I was sent a pitch about how wine is a great asset and this startup was making effectively index funds for investing in wine. They argued that the wine market is better than S&P500 AND that it is uncorrelated. In reading this thread, I’m reminded of their pitch, how I think it is/was garbage, and how LPs love being told an investment is uncorrelated with the broader market — as in irrationally love it.