Michael Lewis: idea that bitcoin will replace currency is ‘insane’
via SF Chronicle
Author Michael Lewis said the idea bitcoin will replace traditional currency is “insane.” He said about two years ago he met with some bitcoin enthusiasts who tried to sell him on the coin’s future. It ended with them putting $5 on his phone and taking him to a coffee shop to use digital currency. After about 30 minutes fumbling with bitcoin Lewis took a $5 billion out of his wallet. “The technology was spectacular,” he said, referring to the paper bill.
Author Michael Lewis has no idea where the next “big short” is coming from but says it won’t come from the banking system.
Lewis’ best-selling book “The Big Short” chronicled traders who anticipated the housing market collapse and made a fortune shorting, or betting against, complex mortgage securities. It was later made into a movie with an all-star cast including Brad Pitt.
“Banks are much better capitalized than they were” before the financial crisis, Lewis said at the LendIt financial technology conference in San Francisco on Tuesday. “Insufficient bank capital will not be the cause of the next financial crisis.”
The Berkeley resident has written other books about Wall Street but hasn’t been paying it much attention lately, because he’s been researching the inner workings of the federal government. Lewis has been writing for Vanity Fair magazine about how ill-prepared and uninterested in such details the Trump administration appears to be.
Lewis said people had been nagging him to write about bitcoin. So about two years ago, he agreed to drive down to a fancy rented house in Palo Alto that reeked of marijuana to possibly meet Satoshi Nakamoto, the cryptocurrency’s reputed inventor. Instead, he was greeted by a group of bitcoin entrepreneurs who tried to convince him bitcoin would replace currency.
He said they put $5 worth of bitcoin on his phone and took him to a nearby coffee shop to buy a latte. After about a half hour fumbling with the bitcoin, which the shop really didn’t want to accept because the price was moving so quickly, he took a $5 bill out of his wallet.
“The technology was spectacular,” he said, referring to the paper bill.
(I had a very similar experience in 2013 when the Internet Archive’s Brewster Kahle tried to show me how easy it would be to buy sushi with bitcoin.)
Lewis said he finally cashed in the bitcoin a few months ago for about $600. The idea that bitcoin will replace currency “is insane.”
Lewis is probably best known in the Bay Area for “Moneyball,” his 2003 book on how Oakland A’s general manager Billy Beane used statistical analysis to scout players who had been cast off or overlooked by richer teams that relied more on human intuition. It also was made into a movie starring Pitt, as Beane.
Lewis said most of the stories he has written since then are “spokes off the hub” of “Moneyball.” His most recent book, “The Undoing Project,” was about two Israeli psychologists, Nobel Prize winner Daniel Kahneman and the late Amos Tversky. The duo pioneered the field of behavioral economics, which attempts to explain how psychological and emotional factors lead to irrational decision making and market inefficiencies.
When Donald Trump was elected, Lewis began wondering how you would evaluate a president who is so “radically different” than his predecessors.
He discovered that the Obama administration, a year before the transition, had assigned several thousand people to write up detailed instructions on how to run the country, not from an ideological standpoint. They described such things as how to deal with an Ebola outbreak and preserve the nuclear arsenal. He said the U.S. Department of Agriculture has people shooting geese at America’s airports because the birds fly into airplanes. “Some Elmer Fudd character … with a shotgun,” Lewis said.
Previous administrations had prepared similar transition documents. But Trump appointees paid virtually no attention to these briefings. The administration, he said, had no idea it was responsible for the weather forecasts that show up on AccuWeather and weather apps and what could happen if a satellite that collects the data is allowed to deteriorate.
He said a lot of the federal government’s “collective knowledge” is leaking out, and a lot of what’s left is demoralized.
The nation, Lewis said, is ignoring this huge risk. “People aren’t focused on the important stuff. They are focused on the day-to-day drama,” such as the Stormy Daniels story.