What we’re reading (12/17)
“Bitcoin ‘May Not Last That Much Longer,’ Academic Warns” (CNBC). “‘Bitcoin’s use of the blockchain technology is not very efficient,’ said [Prof. Eswar] Prasad, who is the author of ‘The Future of Money: How the Digital Revolution is Transforming Currencies and Finance.’ The cryptocurrency ‘uses a validation mechanism for transactions that is environmentally destructive’ and ‘doesn’t scale up very well,’ he explained. Indeed, bitcoin’s carbon footprint is bigger than the whole of New Zealand. Prasad said some of the newer cryptocurrencies use blockchain technology far more efficiently than bitcoin does.”
“America’s Future Depends On The Blockchain” (Jay Clayton, Wall Street Journal). “While securities trading and other financial transactions may appear instantaneous, many back-end processes still move at a snail’s pace in rigid sequences set decades ago. A mortgage payment isn’t completed when the funds leave the homeowner’s bank account. Those funds have many hands to go through before they come to rest, days or weeks later. Through tokenization, many of these cumbersome and costly processes can be streamlined with better market information, greater certainty and enhanced security.”
“AQR: The 60-40 Portfolio Won’t Protect Investors Anymore” (Institutional Investor). “While a mix of stocks and bonds has provided investors with solid diversification benefits over the last decade, that effect will likely be reduced in the coming years, according to a report by the investment firm AQR.”
“The Risk Of Avoiding Emerging Markets” (New York Times). “Numerous studies, including those by Vanguard and Morgan Stanley, show that over extended periods, the stock returns of emerging markets and developed countries like the United States don’t move in lock step most of the time. Over the long term, this low correlation means that adding emerging market exposure to predominantly American investments can reduce the overall portfolio’s volatility and enhance returns.”
“Smartphones Are A New Tax On The Poor” (Wired). “Smartphones and on-the-go internet access have made many of our working lives more efficient and flexible. But the requirement for constant connectivity isn’t only a fact of white-collar work—it has spread to workers up and down the income ladder. And while the requirement has spread, the resources that workers need to maintain it are not evenly distributed. Today, more than a quarter of low-income Americans depend solely on their phones for internet access.”
