Woke Up This Morning: A Blue Tick Guide to 2022

Richard Bradbury: What have we learned? It’s a question Matt Armitage tries not to ask too often. He says it’s because it interrupts the flow of cosmic knowledge into his quantum core. At BFM, we think it’s because he’s a goblin on the verge of a breakdown.

Matt Armitage:

• I’m glad you mentioned the goblin thing.

• Not that I am one. But the whole goblin mode discussion kinda passed me by in the most ironic way.

• I missed being part of the conversation about goblin mode because I’ve spent most of the year in goblin mode.

• If you’re still wondering what it is, then it’s because you too are in goblin mode.

• It was the Oxford English dictionary’s term of the year.

• And it basically means letting yourself go.

• Slobbing around on the couch, aimlessly bingeing rubbish on your least hated streaming platform.

• Immersing yourself in Reels, toks and, I was about to say tweets, but that’s for trolls not goblins.

• Eating an endless stream of junk food and wearing those stale food crumbs with pride.

Richard Bradbury: [replies]

Matt Armitage:

• That’s goblin mode. And that it’s the word of the year tells you what a year it’s been.

• I’m not going to ask you what kind of year you’ve had.

• Genuinely, at the start of this year I was quite optimistic.

• It looked like we were emerging from the worst of the pandemic.

• The world looked open again – not without bureaucratic hurdles – but open, all the same.

Year Zero was bad but somehow: 2022

• I don’t think I know anyone who has had a good year.

• And it isn’t just the global factors like the cost of living crisis, it’s as though we stored up all this angst and tragedy over the past couple of years…

• and let it loose like a supercollider’s particle beams.

• People are tired, angry, apathetic and impatient all at once.

e lockdowns we experienced in: 2020

Richard Bradbury: Is the rest of the show going to be this cheery?

Matt Armitage:

• I hope so. Without this show, I’d spend a lot more money on therapy.

• I don’t want to be overly negative – and we will talk about all the good stuff as well.

• Even though it might feel as though it’s hiding under a lava stone at the back of a dusty armoire.

• Do I get bonus points for working armoire into the conversation?

• That’s actually been one of my go-to bright spots recently.

• Watching clips from the US version of the Antiques Roadshow.

• A guy with a: 1950

• And an old lady with a large china dish she sometimes lets her cat sleep in, finding out it’s worth $200,000.

• Possibly the world’s most valuable cat bed.

• The other bright spot has been watching clips from that reality show hoarders – because it reminds me that my own goblin mode could be a lot worse.

• On the a lot worse front, I’ve also watched a lot of New York apartment-letting videos.

• Mostly the ones on Cash Jordan’s channel.

• Which reminds me that at least I’m not paying the value of that antique guitar to sleep in a cupboard in one of NY’s outer boroughs.

Richard Bradbury: Let’s start with ingenuity then…

Matt Armitage:

• Yes. So, ingenuity usually goes in the positive column.

• Why it’s in the negative?

• We’ve seen a lot of lethal ingenuity from the defenders of Ukraine.

• Using crowdfunding platforms to raise money for equipment and supplies, for example.

• And turning consumer drones into military surveillance and even munitions carrying weapons.

• At the same time, simple messaging apps have been used by both sides in the conflict to gather intelligence and spread word about personnel movements.

• So we’ve also seen an increase in the deployment of jamming equipment to stop people using those same tools to share intelligence.

• It’s been a road test for Elon Musk’s Starlink satellite Internet service.

• Which has been providing coverage in parts of Ukraine where the local infrastructure has been destroyed.

• That’s a great thing to do.

• The world’s richest man rather blotted his copybook on that one by querying who would pay the bill for Starlink’s work.

• But credit where credit’s due.

Richard Bradbury: Are we onto Uncle Elon now?

Matt Armitage:

• Not yet. Plenty more meltdowns before then.

• Obviously we’ve seen the meltdown of a lot of business sectors.

• But crypto and Web3 has been especially hard hit.

• We’ve seen the prices of currencies like Ethereum and Bitcoin drop massively as part of an overall trend that is being branded the crypto winter.

• Crypto had a great pandemic. People with stimulus checks were merrily traded currencies, buying and selling NFTs.

• And graduating from one level to another.

• Terms like defi and gas fees have been mainstreamed.

• And I finally got to stop explaining what blockchains are to people.

• Although a lot of people seemed to think that Bitcoin was the blockchain, so maybe I shouldn’t have stopped explaining.

• But you know, everyone has Google, if they choose not to use it…

Richard Bradbury: And why disturb your goblin mode?

Matt Armitage:

• Exactly. I have been deep in a hole of slow-motion videos this year.

• I keep telling myself it’s physics in action but really I just like watching things explode at a million frames per second.

• And who doesn’t want to watch Australians drop a two tonne axe on a fridge in slo mo?

tn in late: 2021

• So the market is down by over two thirds on its peak.

• I think the first big one was around May, when Singapore based TerraUSD, a currency pegged to the USD, collapsed.

• In part due to its relationship with an unpegged token called Luna.

• The collapse in value and subsequent sell-off sent a ripple throughout the economy.

• Sending token prices crashing, and wiping around half a trillion dollars in value in the space of a couple of weeks.

• How have your crypto holdings done this year?

Richard Bradbury: replies

Matt Armitage:

• Subsequently, we’ve also seen the collapse of a couple of large crypto-based lenders, Voyagers Digital and Celsius Network.

• As well as Three Arrows Capital, a crypto hedge fund, also based in Singapore.

• For a lot of retail investors, the collapses had a devastating effect on their savings.

• The more seasoned players have already been through this cycle before.

• Are more diversified and had been preparing to hibernate until the markets recovered.

• I don’t think anyone was expecting the shock collapse of FTX last month.

• Unlike the other platforms, FTX is a major exchange where traders would swap complex financial instruments like derivatives.

• Its founder Sam Bankman Fried was feted by the press. Was on the covers of titles like Forbes magazine.

• Was the face of the so-called altruistic capitalism movement which promotes the accumulation of wealth in order to give it away.

• For wage earners like us, that’s just called taxation.

• And he was celebrated for eccentricities like playing video games during meetings and always wearing shorts.

• At its peak the company was valued at around $30bn and SBF as he’s known was worth as much as $16bn.

• But it all started to unravel when FTX offered to step in with around USD400m to save Block Fi, a distressed crypto bank.

• At first it played out like FTX was such a force in the market that it could step into stabilise.

• But it later turned out that BlockFi had substantial holdings

Richard Bradbury: This could be the closest to reportage you’ve managed this year.

Matt Armitage:

• Maybe that’s something else I’ve learned?

• Yeah, so while this was all playing out, Coindesk, one of the major crypto news sites put out a piece on Alameda Research.

• Another SBF-owned currency trading platform, alleging that the company held what the Washington Post framed as an outsized holding of an FTX issued currency.

• This led to Binance, essentially a partner and a competitor to FTX, liquidating over $500m of its holdings of the FTX coin FTT.

• You see – a year ago all of this would have seemed like ancient Greek – now everyone understands it.

• That’s how mainstream this stuff is.

• Binance’s move caused a run on the coin, its values plummeted, and withdrawals were halted before the company was forced to file for bankruptcy.

• Binance also held out the possibility of a rescue, but essentially declined after viewing FTX’s financials, precipitating that bankruptcy filing.

• All of this is still playing out. SBF was arrested in the Bahamas this week at the request of the US justice department.

• And it seems that FTX customer cash may have been improperly loaned to Alameda to bridge risky or failed investments the company had made.

• The company’s new administrator is a veteran of the Enron collapse in the early noughties and claims that FTX is worse.

• Citing a complete failure of corporate control.

Richard Bradbury: We have to head for the break, but what do you think this indicates for crypto in general?

Matt Armitage:

• I’ve mentioned mainstreaming for a reason.

• Crypto markets are becoming increasingly commingled with the traditional economy.

• You’re seeing more traditional hedge funds and traders moving into the space and taking up positions.

• When crypto was a fringe playground for investors with a large risk appetite, that was fine.

• Now, it increasingly poses systemic risks. Not yet on the scale that derivatives and subprime loans did to the last financial crash.

• But close enough that regulators are now seriously looking to rein the sector in.

• How will that play out? It’s hard to say how central banks and decentralised finance will co-exist in the long term.

• However, regulatory steps like mandatory insurance schemes could help to mitigate the risk to retail investors at the smaller end of the market.

• It would also likely force companies to adopt the kinds of governance and ring-fencing of customer funds that seems to have been missing at FTX.

• Which isn’t to say that those risks are being repeated on other exchanges.

• But at this point, anything that helps to shake out the shady operators and shores up public confidence in blockchain, crypto and Web3 in general.

• Will be to the benefit of the industry in general, if not to some individual players.

Richard Bradbury: I’m not sure how we’re going to get to the positive stuff. We haven’t touched on Twitter yet. Let’s see if Matt can put a smile on my face after the break.

BREAK

Richard Bradbury: We’re back and I’m ready to smile…

Matt Armitage:

• Hey, I put a smile on your face when I introduced you to midjourney.

• And you’ve gone way further down that rabbit hole than I have.

• Would you like to explain yourself?

Richard Bradbury: [please tell the kind listeners about your midjourney journey journey]

Matt Armitage:

• [ad lib]

• But yes. We must quickly touch on uncle Elon before we leave the electrons for the protons.

• I am a neutron, of course. Totally neutral.

• We’ve covered this in so much depth over the past 6 weeks.

• In a nutshell. Elon wanted to be king of twitter.

• Then he didn’t. Then Twitter tried to force him to be their king.

• And he said that they lied about their kingdo, that their palace was a hovel.

• And then he wanted to be king again. And now he is king.

• People don’t like new twitter. Apart from all the people who do.

• Advertisers definitely have their doubts about new twitter.

• Especially as the king sacked most of the people who made twitter a place the advertisers could imagine being.

• He may be getting into trouble for turning the offices into a giant dormitory for the ones who are still there.

• Donald Trump is back on Twitter. Except he isn’t because he has his own Twitter.

• But it’s not a twitter that anyone uses.

• Is there anything I missed?

Richard Bradbury: You’re supposed to have learned something.

Matt Armitage:

• I did. I think most of us have.

• By the way, for fans of Musk, BradMusk, Richard’s signature scent will be available soon.

• As for what I’ve learned.

• All of this makes the tech-bro era of Jack Dorsey now seems like a cuddly relic.

• That’s how good a year: 2022

• He isn’t the #1 tech supervillain anymore.

• I imagine he’s happy that the heat is on someone else, especially given the current performance of Meta.

• The rumour that Mark Zuckerberg has asked Guillermo Del Toro to transform him into a real boy, is sadly entirely untrue.

• I know that because I started that rumour just now.

• I did a talk a couple of weeks ago and one of the guys listening jokingly asked if Mark Zuckerberg was an alien.

• And there was a hush in the room. You could sense people kind of wondering whether it was a serious question.

• And it’s not a good thing when a room full of legal professionals

• Something else that’s good that all the big tech guys and politicians and business people agree on is how much they hate quiet quitting.

Richard Bradbury: I thought this was supposed to be the positive part?

Matt Armitage:

• It is. We covered quiet quitting a few months ago.

• Which, despite the name, doesn’t have anything to do with quitting.

• It means doing your job. But not doing more than your job.

• Or doing someone else’s job.

• And it kind of puts an end to the millennial hustling culture and pushes us towards a future dominated by zoomer workers.

• I can see why quiet quitting would annoy employers.

• It increases their costs. But with my economist head on,

• If your business model relies on the free labour of your workforce.

• It’s neither sustainable nor is it a transparent representation of your true costs.

• The argument being that we’re in a period of inflation – increasing wages to cover those additional hours or employing more staff would be inflationary.

• I would refer them back to Joseph Stiglitz, the nobel laureate economist, whose recent work points

• To a big chunk of the causes of our current inflationary pressure being related to supply chain bottlenecks over the past couple of years.

• As well as companies increasing their prices above inflation to boost profit margins.

• And this is why I see quiet quitting as a positive act.

• This is about an entire generation saying no. We want something different.

• Millennials can hustle, they can find their identity in work.

• We’re going to work for a living and explore our passion outside that sphere.

• It’s not laziness. It’s not a lack of ambition. It’s a different set of priorities.

• And I think it’s good for businesses too, because, although it increases their costs in the short term.

• It forces them to bake resilience in to their operating models.

Richard Bradbury: You’re being reasonable again…

Matt Armitage:

• Well, I’m being reasonable by being unreasonable.

• Or at least saying what a lot of management efficiency types think is unreasonable.

• It’s one of the interesting things about what’s happening with Twitter.

• I think I picked this up from another economist – Robert Reich

• There’s been a tendency to treat labour as a unit of production.

• Which assumes that it’s simply an asset that can be swapped or moved around.

• This also goes back to that resilience issue.

• We think that workers having less control and influence is good for our bottom line.

• But increasingly we’re seeing that the reverse is the case.

• Their expertise is your competitive advantage.

• Treating people like machines may help you reach a goal in the next quarter but it doesn’t help you to sustain your business.

• It’s tactical rather than strategic.

• And the zoomers understand that labour – them – is a strategic asset.

• Sorry for the long diversion, but you asked me if I learned anything.

Richard Bradbury: You also learned that the metaverse is the Internet…

Matt Armitage:

• Yes. I won’t go into this in any detail because we’ve covered it over the last three shows.

• It’s not so much that it’s something I learned. I kind of understood it but didn’t realise that it isn’t obvious.

• What I didn’t realise is how much the different terminology confuses people.

• Web3. Metaverse. Crypto. It’s all just Internet.

• Like I mentioned NFTs earlier. Pretty much everyone has an idea of what an NFT is and does.

• Even if they think it’s mostly a way to buy digital pictures. It doesn’t really matter.

• The same with your experiments with midjourney, right?

• By the way, OpenAI is developing a watermark so that it can detect whether content has been created with ChatGPT, so watch out and read those disclaimers and terms of service.

• All of this, it’s just another flavour of the Internet.

• Unlocking the potential of what it could be.

• My turn. What have you learned this year?

Richard Bradbury: replies

Matt Armitage:

• [ad lib] – we can take this for a few minutes.

Matt Armitage:

believe what a terrible year: 2022

• Sincerely, I hope that 2023 is better.

• But this is still the best time to be alive.

• We’re getting close to vaccines for some cancers, based on the same mRNA technology that allowed us to develop Covid vaccines so quickly.

• Let’s see how many people are still vaccine sceptics when it comes to a choice between a shot and cancer.

• The James Webb telescope is not just opening up huge tracts of space for us to look at.

• It’s showing us our history. It’s showing us how our planet, our solar system, our galaxy formed.

• Pictures of our pre-history that are advancing our knowledge and understanding of the universe and helping us develop the future.

• And who knows, that knowledge might help us to build a flatscreen. Or something even more important.

• SpaceX is launching multiple space flights a week. We’re heading back to the moon.

• And we did a story a few weeks ago about developments in nuclear fusion.

Richard Bradbury: Harnessing the power of the sun?

Matt Armitage:

• Yes, or rather recreating it in these giant reactors called tokamaks.

• Tbh – that’s my word of the year, rather than goblin mode.

• Goblin mode describes me. Tokamak is a word I actually like.

• And how in Seoul in September they set off a short-lived supernova.

• This week, just a week before Xmas, the Lawrence Livermore National Laboratory in California

• Which was one of the pioneers we talked about in the fusion episode.

• Reached the critical milestone of creating more energy than it took to ignite the reaction.

• Without which the goal of self-sustaining nuclear fusion can only ever be a dream.

• And we areen’t even looking at what’s around the corner.

• We haven’t covered biological computing on the show at all, I don’t think.

• Which we’ll have to remedy. These are computers that are organic and can potentially be stored in DNA.

D printing. Yes, that’s so: 2015

• We can print entire circuits. Allowing us to embed microscopic layers of computing power for use in any number of applications.

• We’re now able to bio-print all sorts of human cells and tissues.

’ll be even more amazing in: 2023

• See, I can do positivity. This is our last show for the year.

• So, for those of you celebrating, I wish you a merry xmas. A happy new year.

• Thank you for listening and supporting this show.