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Hilary J. Allen @profhilaryallen.bsky.social · 15h

My review is in this chapter, if you’re interested fintechdystopia.com/chapters/cha...

Hilary J. Allen @profhilaryallen.bsky.social · 15h

I watched the God Bless Bitcoin movie for the team. Not quite the same level of commitment, but ugh. It takes a village, I guess

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Hilary J. Allen @profhilaryallen.bsky.social · 15h

I believe we call this “taking one for the team”

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Hilary J. Allen @profhilaryallen.bsky.social · 1d

I grew up watching Four Corners! Well done!

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Hilary J. Allen @profhilaryallen.bsky.social · 1d

No one does.

fintechdystopia.com/chapters/cha...

At the same time as protections for the public are being torched, other more overt handouts to the crypto industry are in the works. In particular, whackadoo proposals for the U.S. Government to create a strategic reserve of bitcoins are now being taken seriously. I regularly get asked questions about these proposals, and it’s hard for me to answer them with a straight face. I want to reply by saying “it is patently ridiculous for the United States to establish a strategic reserve of magic beans,” dropping the mic, and walking off stage, but we have sadly reached the point where I have to dignify the suggestion with thoughtful and reasoned rebuttal. So here goes.

The United States sometimes maintains strategic reserves of things that could be useful in an emergency, like medical supplies set aside for use during a future pandemic. But bitcoin is not practically useful in any way – it is simply a notation on a database and therefore has no real-world usage. While some have argued that a bitcoin reserve could be used to pay down debt or pay for other things if there were a problem with the dollar, as explored in Chapter 2, bitcoin has proven highly ineffective as a payment mechanism and its value has proved both highly volatile and highly correlated to other market movements. In a moment of national emergency, bitcoin’s price is likely to be falling and even if that price were high to start with, if the US government held a large volume of this Ponzi-like asset then any attempt to sell off significant portions of bitcoin holdings would drive the price of bitcoin down and undermine its utility (not to mention that the US government would inevitably be front run by those paying bitcoin miners to let them sell ahead of the United States).

Well done me for managing to keep the literary equivalent of a straight face as I said all that. But really, there’s just no serious justification for creating a bitcoin reserve other than to juice the price for those who already hold it, and to ensure that environmentally destructive bitcoin mining continues for years to come. Maybe there’s also a hope that the strategic reserve will help legitimize crypto in the eyes of the investing public – as we’ve already seen, that’s been a crypto industry goal for a long time. The deep irony, though, is that the Trump administration’s full-throated embrace of crypto may be undermining the industry’s attempts to look less scammy.

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Hilary J. Allen @profhilaryallen.bsky.social · 2d

... and crypto and stock trading apps are part and parcel of that pocket casino:

fintechdystopia.com/chapters/cha...

A particular challenge for financial reform is that the public typically isn’t very interested in supporting these kinds of policies except immediately after a financial crisis – but sometimes there are other issues that financial reformers can hitch their wagons to, and given how much traditional finance has devolved into gambling, financial reform might find broader support amidst a backlash against online sports betting.

Problem gambling has risen sharply in the United States in the last six years, and it’s likely to get worse as people start to feel the increased economic precarity unleashed by the “One Big Beautiful Bill” (if I wanted to be really cynical, I might suggest that a goal of that bill was to create a bigger market of desperate people for the sports betting and crypto industries to exploit…). The anti-cigarette movement was a grass roots movement motivated by the noxious health consequences of smoking and second-hand smoke, and as the health and other social costs of problem gambling become more apparent in our communities, I wouldn’t be surprised if we started to see similar growth in grass roots movements targeting online betting. If we do, we should work to make sure that speculative finance is also a target of those movements’ ire.

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Hilary J. Allen @profhilaryallen.bsky.social · 4d

Sadly, the line between gambling and investing keeps getting more and more blurred

fintechdystopia.com/chapters/cha...

To be fair, the line between investing and gambling has been blurring for decades, and the traditional financial industry bears a lot of responsibility for that. The law has also contributed to that blurring, and things could get worse if we go about regulating new kinds of “investments” in the wrong way. For example, a UK parliamentary committee raised the important concern that regulating crypto investments as a “financial service” could “create a ‘halo’ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.” Their proposed solution? Regulate crypto speculation as gambling, not investing.

Sadly, no one listened to them, but their proposal makes a lot of sense. True investing is supposed to be for the socially useful purpose of raising capital for productive activities, where there’s a possibility of a win-win outcome for both the investor and the business using the investor’s capital. The more that “investment opportunities” resemble zero-sum gambling, the more likely it is that the big fish investors and market intermediaries will benefit at the expense of the little guys. In these kinds of situations, “democratizing” is tantamount to throwing the little fish to the sharks.

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Hilary J. Allen @profhilaryallen.bsky.social · 4d

A good quick video on why bad content drives out good, as @jtlg.bsky.social would say

youtu.be/_zfN9wnPvU0?...

AI Slop Is Destroying The Internet

YouTube video by Kurzgesagt – In a Nutshell

youtu.be

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Hilary J. Allen @profhilaryallen.bsky.social · 7d

(I was less succinct - I wrote a whole book about it, and about how the GenAI industry is playing a very similar game:

fintechdystopia.com)

fintechdystopia.com

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Hilary J. Allen @profhilaryallen.bsky.social · 7d

"Exploiting regulatory loopholes and bypassing national controls is the name of the game" with crypto.

"Crypto has never been about innovation, but about getting away with things you would not otherwise be able to."

Nice to hear someone else say it! @jemima.bsky.social

www.ft.com/content/dbd0...

Crypto skulduggery isn’t a bug, it’s the whole point

Exploiting regulatory loopholes is the name of the game

www.ft.com

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Hilary J. Allen @profhilaryallen.bsky.social · 12d

I would love to know if there's been a similar shift in sentiment re crypto and stock trading apps.

Folks will always gamble to some degree, but I suspect some gambling on crypto/stocks/sports is unenjoyable but driven by forces of economic precarity: fintechdystopia.com/chapters/cha...

Problem gambling has risen sharply in the United States in the last six years, and it’s likely to get worse as people start to feel the increased economic precarity unleashed by the “One Big Beautiful Bill” (if I wanted to be really cynical, I might suggest that a goal of that bill was to create a bigger market of desperate people for the sports betting and crypto industries to exploit…). The anti-cigarette movement was a grass roots movement motivated by the noxious health consequences of smoking and second-hand smoke, and as the health and other social costs of problem gambling become more apparent in our communities, I wouldn’t be surprised if we started to see similar growth in grass roots movements targeting online betting. If we do, we should work to make sure that speculative finance is also a target of those movements’ ire.

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Hilary J. Allen @profhilaryallen.bsky.social · 13d

In fintechdystopia.com, I stress how important it is to make fun of the Silicon Valley elite.

Today I heard Thiel is bankrolling Rogan’s Comedy Mothership in Austin, where comedians punch down, not up.

uomod.com/joe-rogans-m...

Is Thiel really behind it?

@gilduran.com @jacobsilverman.com

Joe Rogan’s Mothership Turned Austin’s Comedy Scene Into a Platform for Punching Down - UOMOD

Austin’s comedic landscape bears the stamp of Joe Rogan’s Mothership Comedy Club–a venue that traded creative risk for reactionary applause.

uomod.com

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Hilary J. Allen @profhilaryallen.bsky.social · 13d

The ideologies @xriskology.bsky.social identifies
are also motivating crypto, as I explore here: www.project-syndicate.org/commentary/u...

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Hilary J. Allen @profhilaryallen.bsky.social · 14d

“bespoke legal AI tools still hallucinate an alarming amount of the time: the Lexis+ AI and Ask Practical Law AI systems produced incorrect information more than 17% of the time, while Westlaw’s AI-Assisted Research hallucinated more than 34% of the time.”

hai.stanford.edu/news/ai-tria...

AI on Trial: Legal Models Hallucinate in 1 out of 6 (or More) Benchmarking Queries | Stanford HAI

A new study reveals the need for benchmarking and public evaluations of AI tools in law.

hai.stanford.edu

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Hilary J. Allen @profhilaryallen.bsky.social · 15d

It's End Times Finance!

Project Syndicate @projectsyndicate.bsky.social · 15d

With a single piece of legislation, Congress has made the US financial system more vulnerable to crises, increased the chances of government bailouts for tech platforms, and further entrenched Silicon Valley’s political power, @profhilaryallen.bsky.social warns. bit.ly/4728dfQ

America’s Crypto Apocalypse

Hilary J. Allen foresees grave risks from recent US legislation deregulating stablecoins – and from the ideology it reflects.

bit.ly

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Project Syndicate @projectsyndicate.bsky.social · 15d

With a single piece of legislation, Congress has made the US financial system more vulnerable to crises, increased the chances of government bailouts for tech platforms, and further entrenched Silicon Valley’s political power, @profhilaryallen.bsky.social warns. bit.ly/4728dfQ

America’s Crypto Apocalypse

Hilary J. Allen foresees grave risks from recent US legislation deregulating stablecoins – and from the ideology it reflects.

bit.ly

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Hilary J. Allen @profhilaryallen.bsky.social · 17d

Good article, although I have one quibble. If law is as toothless and obsolete as the article implies, why do these tech titans spend so much time and money trying to coopt the law and bend it in their favor?

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Hilary J. Allen @profhilaryallen.bsky.social · 18d

This is indeed a thing I wonder:

(from fintechdystopia.com/chapters/cha...)

Wall-E was intended as a cautionary tale, but it sometimes seems like our overly optimistic friends in Silicon Valley miss the subtext and react to dystopian fictions with the response “coooooool - what if we actually did that?!”

Hilary J. Allen @profhilaryallen.bsky.social · 18d

I like it!

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Hilary J. Allen @profhilaryallen.bsky.social · 18d

With both crypto and AI, there are humans involved at every level of the stack. Narratives of automation make it seem like the process is merely mechanical, but if there are humans involved, there are points for regulatory intervention (and in this case, humans who may need legal protections)

The Distributed AI Research (DAIR) Institute @dairinstitute.bsky.social · 18d

"“AI isn’t magic; it’s a pyramid scheme of human labor,” said @adiod.bsky.social , a researcher at the Distributed AI Research Institute based in Bremen, Germany. “These raters are the middle rung: invisible, essential and expendable.”

www.theguardian.com/technology/2...

How thousands of ‘overworked, underpaid’ humans train Google’s AI to seem smart

Contracted AI raters describe grueling deadlines, poor pay and opacity around work to make chatbots intelligent

www.theguardian.com

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The Distributed AI Research (DAIR) Institute @dairinstitute.bsky.social · 18d

"“AI isn’t magic; it’s a pyramid scheme of human labor,” said @adiod.bsky.social , a researcher at the Distributed AI Research Institute based in Bremen, Germany. “These raters are the middle rung: invisible, essential and expendable.”

www.theguardian.com/technology/2...

How thousands of ‘overworked, underpaid’ humans train Google’s AI to seem smart

Contracted AI raters describe grueling deadlines, poor pay and opacity around work to make chatbots intelligent

www.theguardian.com

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Hilary J. Allen @profhilaryallen.bsky.social · 18d

Unfortunately, Newsom's track record on crypto doesn't inspire much confidence that he'll do the right thing on AI.

From fintechdystopia.com/chapters/cha...

California Governor Gavin Newsom signed an Executive Order in May 2022 that starts by saying that “blockchain technology has laid the foundation for a new generation of innovation” and has “the potential to reconfigure the logic and structure of the World Wide Web and its place in modern society.” It then gives a helping hand to a technology that has struggled to find real use cases by directing California’s Government Operations Agency to “explore opportunities to deploy blockchain technologies to address public-serving and emerging needs.” I’m sure overstretched government employees just loved having to come up with plausible-sounding blockchain use cases on top of everything else they had to do. Newsom followed up with an AI executive order in 2023, pushing agencies to try and come up with plausible-sounding AI use cases too – I think some people hope that California will be a bulwark against bad Federal policy, but we’re probably kidding ourselves if we think establishment California Dems are going to do much to oppose the Silicon Valley elite.

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Hilary J. Allen @profhilaryallen.bsky.social · 19d

fintechdystopia.com/chapters/int...

First, develop a business model that centers a particular technology. Tell some stories about how that technology will solve a legitimate problem (preferably using the words “democratize” and “disrupt”). Bend or break some laws with that business model, and profit from not complying with the law. Get away with bending or breaking the law, and with harming people along the way, because lawmakers and regulators are too timid to stop “innovation.” Get big enough that you can convince lawmakers and regulators to change the law so that you never have to comply with it and those who are harmed have no recourse – because you haven’t actually solved the problem, and your business model isn’t good enough to survive if you have to follow the same rules as everyone else. Bonus points if the law is changed in a way that guarantees you a monopoly or oligopoly position. Lather, rinse, repeat.

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Hilary J. Allen @profhilaryallen.bsky.social · 21d

As my new paper on sandboxes explores, there’s no reason to believe that these AI sandboxes will benefit anyone other than the tech industry…

…but you probably guessed that already.

papers.ssrn.com/sol3/papers....

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Hilary J. Allen @profhilaryallen.bsky.social · 23d

Behold! Abundance at work!

WIRED @wired.com · 23d

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center. www.wired.com/story/louisi...

Louisiana Hands Meta a Tax Break and Power for Its Biggest Data Center

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center.

www.wired.com

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WIRED @wired.com · 23d

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center. www.wired.com/story/louisi...

Louisiana Hands Meta a Tax Break and Power for Its Biggest Data Center

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center.

www.wired.com

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Hilary J. Allen @profhilaryallen.bsky.social · 26d

Link to op-ed here:

www.ft.com/content/6a28...

Tech does not deserve special legal treatment

Pulling down regulatory barriers to aid innovation ignores the fact that they protect the public from harm

www.ft.com

Hilary J. Allen @profhilaryallen.bsky.social · 26d

Spot on, Neil Richards.

As I wrote for the FT

Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/6a2826fc-2bc8-4f1a-bb37-143b464090d0

Arguments for the tech sector’s special legal treatment are ultimately built on a paradox. Policymakers are told that any attempt to curb a technology’s harms would stifle innovation but they are also told that legal barriers are futile because progress is inevitable.

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Hilary J. Allen @profhilaryallen.bsky.social · 26d

Perhaps they might not feel the same way after they listen to the podcast that I did with Art Wilmarth and @amandalfischer.bsky.social on this issue....

creators.spotify.com/pod/profile/...

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Hilary J. Allen @profhilaryallen.bsky.social · 27d

It was great to speak with Art Wilmarth and @amandalfischer.bsky.social about crypto in 401(k) plans for the DCBar's Brief Encounters:

creators.spotify.com/pod/profile/...

Impact on retirees of Trump's 401(k) order encouraging crypto and private investments by Brief Encounters

President Trump's August 7 executive order directs the Labor Department and the Securities and Exchange Commission to issue guidance allowing employers and plan sponsors to include various private ass...

creators.spotify.com

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