🎄Dec 20 - Recession, Crypto Devs, BTCs Arc, Digital health 2.0, Best jobs

S3T Podcast Dec 20 2024

0:00

/2102.8571428571427

1×

Click the player above to listen to this edition of S3T! You can also listen on Spotify.

In this Edition of S3T:

1. 📉 Economic Contradictions: Despite the Fed's recent rate cut and a seemingly strong macro-economy, underlying factors like unsustainable corporate profit rates and rising unemployment suggest a potential recession. Jonah Goldberg and Albert Edwards offer valuable perspectives.
2. 💻 Crypto Developer Insights: Electric Capital's annual report highlights ~24,000 active crypto developers worldwide, with Ethereum leading in developer activity. Crypto developers generate significantly more value per capita compared to traditional software developers.
3. ⚛️ Quantum Computing Risks: Google's quantum breakthroughs raise concerns about encryption vulnerabilities. Bitcoin's developer community faces pressure to implement quantum-resistant solutions, underscoring broader security industry challenges.
4. 🩺 Digital Health 2.0B: A new wave of AI-powered digital health startups is emerging, focusing on workflow efficiency, diagnostics, and mental health care, addressing a global issue projected to cost $6T by 2030.
5. 🔄 Change Leadership Strategies: The S3T Change Leadership Series explores organizational transformation, emphasizing conflict resolution, accountability, and cultivating ownership mindsets in teams and partners.
6. 🪜 Career Development Resources: Top workplace lists from Fortune, Forbes, and Glassdoor, along with a unique layoff recovery toolkit, provide tools for navigating career transitions and finding opportunities in uncertain times.
7. 🧠🚀 The 2 Kinds of Talent: Every successful team needs those who want to KNOW (focus on understanding and analysis) and those who want to GO (focus on action and execution). Recognizing and leveraging this balance transforms conflict into collaboration, empowering diverse talents to create shared success stories.

Opinions expressed are those of the individuals and do not reflect the official positions of companies or organizations those individuals may be affiliated with. Not financial, investment or legal advice, and no offers for securities or investment opportunities are intended. Mentions should not be construed as endorsements. Authors or guests may hold assets discussed or may have interests in companies mentioned.

🥧 US Economy: a pie that looks great, but tastes like a recession.

This week the Fed cut interest rates by another quarter point, but signaled that there won't be as many cuts next year - another worrying sign of inflation. Mortgage rates jumped and markets fell sharply before stabilizing. Thursday another government shutdown circus erupted on Capitol Hill.ab

Jonah Goldberg offers a review at the US economy's progression with a valuable note about the difference between a macro-economy vs. a micro-economy. This pairs nicely with the bearish views from Albert Edwards who sees the US corporate profit rates as unsustainable, derived from "greedflation" rather than a healthy economy, noting that US unemployment moved above its 3 year average (sign of a recession). 46% of shoppers say debt will make them spend less this Christmas.

The top of this pie looks like the best economy in the world. The filling tastes like a recession.

Get informed so you can find your opportunities and path forward: S3T-Curated list of top open sources of economic data & insights - top data, analysis & trends to build your own independent forward looking perspective.

Electric Capital Annual Crypto Developer Report

Each year Electric Capital analyzes the crypto developer community and the ecosystems they are focused on. Takeaways from this years hot off the press report:

• The US and India lead the world in numbers of crypto developers:

• The total crypto developer community is still relatively small (about 24,000 monthly active developers). For comparison, Python has ~11 million developers, Java has 9 million. CodeNinja estimates there are 26.3 million software developers in the world.
• If you take the current crypto market cap (~3T per Forbes) and divide it by the number of crypto developers (24K per Electric Capital), it suggests that each developer is enabling $125M in value - a much higher ratio than traditional software: total software spending world wide is estimated ~1 Trillion. Divide that by 26 million developers = $38,000 value contribution per developer. Acknowledging that the average IT software project doesn't have the hype and investor euphoria that Bitcoin has, this is still a pretty wide variance.
• But the crypto industry continues to attract developers:

• The Ethereum ecosystem continues to have the biggest collection of active developers - about 5600 - followed by Solana (and the SVM Stack), Polka Dot, Cosmos and Bitcoin. (See LearnEVM for a good explainer and developer on ramp for the Ethereum ecosystem).

Some tips for using this report:

• The rankings by active developer is an interesting alternative to the Market Cap view of Crypto assets.
  It can be helpful to notice the Crypto Ecosystems with rising numbers of full time developers. This in some cases can be a signal of future growth and adoption.

More Quantum Worries

Quantum computing will de-stabilize the relatively static set of security standards we build on top of.

This week BlackRock released a 3 minute educational video about Bitcoin.

While some heralded this as a "paradigm shift", more worries surfaced this week in the wake of the Google Willow quantum breakthrough that seems to place commercially viable quantum computing a lot closer than originally thought. Some of the headlines (which may/may not be true) claim Bitcoin would need significant downtime (some say 300 days, some say 76) to implement an upgrade to make it quantum resistant.

Practical near term tips:

• If you hold your own crypto in a wallet, make sure it is a modern wallet rather than the old Pay-To-Public-Key (PTPK) wallets created before 2012. (You would have to be a rare person to have a wallet made before 2012).
• Watch the Bitcoin developer community and its sponsors (more about this below). To date they have relied on a fairly stable encryption standard that had no credible threat. As that changes, the Bitcoin developer community (or some group) will need serious funding and focus to enable new encryption and/or other protective measures.

My take: this will be at some point a threat to Bitcoin, but it will also be a threat to a lot of other aspects of our daily life that rely on secure encryption. The security industry is about to get even more interesting (and likely require even greater levels of funding and focus).

What's Next for InfoSec

Expect a new kind of arms race between offenders vs defenders:

• Offenders: malicious actors armed with AI powered quantum compute who leverage new and accelerating capabilities to defeat encryption
• Defenders: encryption and other security specialists racing to create and maintain protective moats against an accelerating array of intelligent quantum security threats...did we just coin a new phrase (IQST)? 😸

It will be interesting to see how the Bitcoin developer community (about 1,200 individuals per Electric Capital) mobilizes to address this issue. Will they develop a solution specific to Bitcoin or will they collaborate with a broader industry consortium that focuses on the quantum threat to encryption? I think it will have to be the latter owing to their size and funding levels.

Bitcoin evolves via Bitcoin Improvement Proposals BIPs. The Bitcoin community is not controlled by any one person or group, and it does not have a visible leader like Ethereum's Vitalik Buterin.

I recall industry players voicing frustration back in the 2021 timeframe with the Ethereum community's seemingly slow pace compared to some of the faster moving groups. Yet now, on the other side of several major upgrades, Ethereum enjoys a level of trust that many other dev communities don't. The smaller Bitcoin developer community may face a similar test in the years ahead.

The Bitcoin developer community is a decentralized group of volunteers who manage and maintain "Bitcoin Core" the foundational software that runs the Bitcoin blockchain - good explainer here. Funding and sponsorship come from a handful of companies including Coinbase, Square Crypto and Gemini.

The long arc for Bitcoin

The last Bitcoin is expected to be mined 115 years from now, around 2140. Why is that significant? At that point, one of Bitcoin's key stakeholders - Miners - will be out of business (unless the Bitcoin community decides to lift the 21 million cap programmed into Bitcoin's software).

Consider the formidable powers quantum computing will possess at that time (and well before). Barring a few wildcard events there could be a mass divesting of Bitcoin in anticipation of a showdown between quantum vs the loose-knit Bitcoin developer community. Great movie, not so great gamble. Cue the predictive timelines of Bitcoin's rise to x million and then decline to zero? Maybe.

Some wildcard events that could change the course of things, listed in order of likelihood (in my thinking):

• An industry consortium develops approaches that limit quantum computings ability to break encryption.
• The Bitcoin developer community itself develops cryptography or other measures (perhaps boosted by AI?) that allows Bitcoin to stay ahead of quantum's code-cracking abilities.
• A larger entity (industry group or US government?) decides to take a more formal role in managing the Bitcoin network, and mobilizes a larger more formal software team that builds in a new round of protections against quantum threats.
• A derivative or successor to Bitcoin is created. One potential candidate: the Quantum Resistant Ledger (QRL)

Nothing is forever. But the end rarely comes when investors expect.

Digital Health is back - and different

A new cohort of emerging digital health companies offer a glimpse into the ways AI in healthcare will shift from "from powering point solutions to becoming an essential part of healthcare delivery for patients."

Workflow efficiency is a big theme as well as diagnostics and virtual care delivery for a range of needs including mental health - a key investment theme given that mental health issues are on track to cost the world economy 6T by 2030.

See CBInsights top 50 infographic below and full report here.

Activating Change Leadership at the Organizational Level

Continuing our S3T Change Leadership Learning Series, this week we move on to learning about change leadership at the team and organizational level.

How do you inspire and lead change in your company?

You'll have to apply the lessons you learned in previous weeks about activating change leadership on a personal level. But now you're going to add a new layer of skills and tools, and learn how to use them. Here's a preview:

• Know talent vs go talent - harnessing the 2 kinds of talent needed to successfully drive change.
• Resolving conflict - a framework of 6 proven ways to resolve most conflicts including conflicts involving resistance to change.
• Evenly distributed accountability - Innovation and transformation initiatives are often challenged by uneven accountability: one part of the team feels a high degree of ownership and accountability, but must rely on other teams that seem to not.
• How to cultivate an ownership mindset in vendors and partners - Change Leaders gain an edge by cultivating an ownership mindset in the vendors and partners they work with.

Ready to go through this week's lesson? Click here to learn the difference between Know talent vs Go talent, why you need them both, and how to harness both kinds to successfully drive change.

Self Development

Taking stock of your career? Want to find a better place to work?

Here are some of the top lists of best companies to work for:

• Seramount 100 Best Companies for Multi-Cultural Women (Seramount is former publisher of Working Mother magazine)
• Fortune Magazine's Top 100 Best Places to Work   
• Forbes Magazine "World's Best Employers" List  
• Glassdoor Best Places To Work - based on Glassdoor ratings

Turning a Layoff into a Level Up: The Essential Layoff Recovery Kit

This free toolkit is designed to help you navigate this transition with confidence, giving you practical tools to help you set a strong positive mindset, conduct a highly effective job search, and be 110% ready for what’s next. 

There are a lot of tips out there for finding a new job. What you're going to learn here is unique: You're going to learn how to share your past success stories in a way that excites people about working with you to create future success stories.

⌛How to protect your time and focus in an uncertain economy - a practical tip and invitation.

In the next 6 months your company and customers will face tough decisions. You want to be on the right side of those decisions when they happen. This practical choice will tilt the odds in your favor.

🎄Hope you are all set for a nice Holiday! Thank for reading and sharing S3T and thank you for what you do! Learning and applying change leadership principles in your work makes a difference. Happy Holidays!

Ralph