경제학 교실

Mar 6th 2024

The cryptocurrency is up by 63% this year

On January 10th the Securities and Exchange Commission, an American regulator, approved applications by ten investment firms, including BlackRock and Fidelity, to create bitcoin exchange-traded funds (etfs).

These make it easier for everyday investors to buy the cryptocurrency. Rather than setting up an account with a specialist exchange, creating a crypto wallet, making a bank transfer and then finally buying bitcoin, people can now simply log on to their brokerage accounts and purchase an etf.

Assets in the ten largest bitcoin etfs now come to around $50bn. And the activity appears to be self-reinforcing

Yet it is now obvious that it is of pretty limited use for payments, as it is restricted by both the high costs and slow speed of transactions. Those trying to build applications on top of blockchains are not doing so using bitcoin either.
With the creation of etfs, it is now clear that bitcoin is an investment asset and nothing more.

So after this initial surge of interest, what will its returns look like?

There are two explanations for them. One is that purchases are basically a broad bet on technological progress, with variations that reflect prospects for crypto itself. For instance, even as tech stocks soared in the middle of 2021, bitcoin slumped after Elon Musk posted negative tweets about crypto payments. Prices were depressed in late 2022, too, even as stockmarkets were rallying, owing to ftx’s failure.

The other theory is that bitcoin is a kind of digital gold. After all, supply is inherently limited, just as gold supply is restricted by the amount of the metal in the ground. Neither asset pays a yield or earns profits. This theory fell out of favour in 2021 and 2022, as inflation soared and bitcoin collapsed, but last year the cryptocurrency once again moved in line with gold.

Perhaps both theories contain elements of truth. And a hybrid tech-stock-crypto-vibes-gold-bet asset could be useful in even pedestrian portfolios, especially if it is only somewhat correlated with other assets an investor might hold.
Diversification among uncorrelated assets is the foundational principle of portfolio management. Reallocating, say, 1% of a fund to bitcoin would be a low-stakes hedge.

If investors buy this argument, bitcoin’s price is likely to rise for a while yet.

What happens, then, when the cryptocurrency’s transition into a standard financial asset is complete?
Assume that bitcoin has been added to most investor portfolios. Also assume that crypto tech does not really catch on. In this world, bitcoin’s returns probably do come to resemble those of gold: there is a fixed amount of it, and its price would rise over the long term roughly in line with the stock of money. That implies steady single-digit returns. The creation of a bitcoin etf may have set off a frenzy of eye-popping gains—but the future it portends could be slower and steadier.

The rules for verbal exchanges are surprisingly enduring

Dec 19th 2006

In his essay “On Duties”, Cicero remarked that nobody, to his knowledge, had yet set down the rules for ordinary conversation, though many had done so for public speaking.

The rules we learn from Cicero are these: speak clearly; speak easily but not too much, especially when others want their turn; do not interrupt; be courteous; deal seriously with serious matters and gracefully with lighter ones; never criticise people behind their backs; stick to subjects of general interest; do not talk about yourself; and, above all, never lose your temper.

Probably only two cardinal rules were lacking from Cicero's list: remember people's names, and be a good listener.

To remember names, and to listen well, are two of Carnegie's “six ways to make people like you”. The others are to become genuinely interested in other people; smile; talk in terms of the other person's interests; and make the other person feel important.

Feb 15th 2024

생산과정에서 고온이 필요한 공장이 내뿜는 탄소를 어떻게 줄일까?
기존에는 CCS, 수소가 있었는데 여기에 heat pump가 새로운 대안으로 등장

Will electrification of industry live up to its promise?

electricity needs to become even more versatile. One of the key challenges is providing heat to industry. If you want to dry, cure, melt, smelt, set, distil, reform or otherwise change the state of something, as industrial processing so often does, heat tends to be involved. In 2016 providing such “process heat” produced almost seven gigatonnes of carbon-dioxide emissions, roughly 20% of all those from fossil fuels.

Carbon dioxide produced at the plant where the fuel is burned could be pumped into an underground repository, a process called carbon capture and storage (ccs); natural gas could be replaced by hydrogen. In the meantime, natural gas would continue to be used as a “bridge fuel” to a future both greener but also, alas, far off.

This presumption is now coming under attack. Innovative entrepreneurs and imaginative incumbents are finding ways to turn electricity into useful forms of heat, from scaled-up heat pumps of the sort used in some houses to space-age containers filled with white-hot molten tin and graphite plumbing.

In general, heat pumps are a lot more energy-efficient than combustion. Systems that store heat for later use, sometimes called “thermal batteries”, can be charged up when electricity is cheap,

The biggest advantage, though, is that when industries use clean electricity they slash their carbon-dioxide emissions.

Pricing carbon emissions from industrial heat would help a phalanx of innovative technologies whose benefits to society are currently unrewarded. It would be bad news for the natural-gas suppliers that dominate the provision of heat. The effect on decarbonisation by way of ccs, either at the plants where heat is used or at the facilities which turn natural gas and steam into hydrogen, is harder to predict.

ccs may, for all that, have a vital role to play, and sincere proponents of its potential should welcome the spur to innovation that increased uptake of electrical options will provide. It seems highly likely that some applications and some forms of industrial cluster will be best served by ccs or hydrogen. Competition is the best way to find out which.