The economic engine of Ethereum

Bitcoin is extreme at optimizing very specific parts of its crypto-economic system. BTC the asset is prioritized above all other components. Bitcoin is designed to preserve the 21 Million hard cap supply of BTC, and everything else is a means to produce this end. From the perspective of a holistic, integrated system design of both an economic engine and monetary fuel, Bitcoin has sacrificed the efficiency of its engine to produce scarcity in the asset.

But crypto-economic systems are composed systems, and as with all technological innovations, there have been 12 years of crypto-economic research and development to leverage. Leveraging these advances in crypto-economics means that we can elaborate and explore narratives beyong a ‘Gold 2.0’ and move into mind-bending sci-fi economics using optimizations in both cryptography and digital economies.

The big deal that is Proof of Stake

Proof of Stake is an alternative to Proof of Work that leverages the value of the native asset of a crypto-economic system to provide security to the economy. Bitcoin Proof-of-Work secures itself via a competition in resource consumption, and forces potential attackers to match and surpass the rate of economic consumption to attack the network. Ethereum Proof-of-Stake secures the system by erecting a ‘wall-of-value’ that a potential attacker must overcome in order to attack the system.

Currently, there is 3,618,200 ETH ($6.7B) staked to the Ethereum beacon chain (the early foundation for Ethereum 2.0). An attacker must stake an equivalent amount of value to attack Ethereum, denominated in ETH. If an interested party wants to attack Ethereum, they will need to source 3,618,200 ETH in order to do so. $6.7B of buying pressure on ETH the asset is likely to significantly increase the price of ETH, so the US-Dollar value of Ethereum security is actually likely much higher.

What’s more important, however, is that Proof of Stake systems do not consume economic resources. All that is needed to secure Ethereum under PoS is a Raspberry Pi, an internet connection, and 32 ETH. Stakers are not required to sell their ETH rewards to pay for the economic costs of providing security. The ‘economic costs’ of Ethereum are the opportunity costs of holding ETH. Proof of Stake operates on the assumption that there is a sufficient supply of interested parties who will hold ETH in order to access ETH-denominated rewards.

Naturally, the disposition of people who are particularly suited to do this are those who are bullish ETH. People who are bullish ETH always want more and more ETH. These people will both purchase ETH off the secondary market in order to stake it, and keep the ETH dividends that they receive. Those who are fundamentally the most bullish on ETH the asset are also those that are willing to accept the least amount of ETH rewards as compensation for locking up their capital in ETH to stake to Ethereum.

Proof of Stake rewards increase or decrease as a function of the supply of ETH being staked to Ethereum. If there is less ETH staked, ETH rewards are higher and vice versa. As more and more validators stake ETH to Ethereum, the ETH-denominated rewards are reduced. This process will wash out the lesser-ETH bulls who are less interested in reduced rewards, leaving those who are willing to receive the least amount of ETH possible. Through this mechanism, Ethereum organically discovers the optimal balance between Ethereum security and ETH issuance.

This mechanism leverages control-theory to optimize for sufficient Ethereum security, while maximally retaining ETH scarcity. Additionally, this mechanism tilts the axis of power towards those who are the most bullish on the economic asset that powers the Ethereum economy: ETH. ETH holders are the individuals who are most interested in Ethereum’s health and success, and Ethereum perpetually rewards these individuals with the asset they love the most: ETH.

This is how Proof of Stake erects the highest walls around its economy, while specifically compensating the party of people who are the most inclined to uphold the network, for the cheapest cost. As a result of this mechanism, Ethereum needs to issue the least amount of new currency to provide adequate security for Ethereum. Once Proof of Stake is adopted and the Proof of Work system is forked away, yearly ETH issuance drops from ~4.75M ETH to a projected 0.6-1M issuance with staked ETH projected between 10M and 30M.

Burn baby burn 🔥

Ethereum has mechanisms for capturing the economic excesses of the Ethereum economy, and funneling these excesses back into the value of ETH. EIP1559 formally links the economic power behind the Ethereum economy with the value of the ETH currency.

BASEFEE is paid by economic actors on Ethereum to get a transaction included on the Ethereum ledger. The size of BASEFEE is determined by the demand to get a transaction included. If there is significant demand to transact on Ethereum, BASEFEE moves upwards. BASEFEE operates as a governor over Ethereum’s economy. If the economy gets hot, BASEFEE increases; if Ethereum’s economy cools down, BASEFEE decreases. -> BASEFEE is burnt.

Unlike Bitcoin and other non-EIP1559 crypto-economic systems, Ethereum’s transaction fees aren’t paid to those that provided security. They are simply removed from supply, effectively returning the value of the burned units back into the remainder of the circulating supply. This is the exact opposite of issuance, where the minting of new coin is borrowing monetary power from the circulating supply. EIP1559 makes the flow of power go in reverse: value flows from the excesses of the economic engine into the economic unit. All systems generate heat loss, but EIP1559 is a heat-recycling mechanism that recaptures Ethereum’s economic excesses.

BASEFEE is the crypto-economic analogue to Central Bank interest rates; it goes up when the economy heats up, and it falls when the economy cools down. It adds value back to the balance sheet of the holistic economic system. This is restoring power back to the economic unit. BASEFEE is a persistent buyer of ETH. It is a ‘stock buy-back’ of company equity. It is the central bank charging interest rates, to add strength to the currency. Every single transaction on the Ethereum economy is adding power into its monetary asset, ETH. This mechanism benefits all ETH holders equally, as all ETH holders have a higher percentage of remaining ETH supply. As a monetary unit, EIP1559 makes ETH a more compelling money to hold. EIP1559 is a mechanism that associates economic output to economic unit scarcity. ETH gets more scarce as Ethereum’s economy produces economic output. As we discussed above, sound money is money that tracks the economic output of an economy.

Growth in the economic output of an economy charges the monetary unit with economic power. If the GDP of an economy doubles, and the supply of money stays the same, the power-output of money should have also doubled. With EIP1559 and the burning of BASEFEE, the supply of ETH reduces as a function of the growth of the Ethereum economy. This is the new paradigm specifically enabled by crypto-economics. This is the difference between trying to recreate ‘stone-age’ economics (gold 2.0), and the creation of something brand new, using new tools.

Sound money is money that grows in scarcity as a function of the growth in the size of the economy that uses it. But what is money that receives outsized tailwinds from economic growth? Importantly, the more power lies behind ETH the asset, the less ETH is needed to be issued to fund economic security, as one economic unit of ETH goes further as a reward for providing security.

The rate at which BASEFEE will burn ETH won’t truly be known until it is implemented; test-nets and economic models only go so far. But the Ethereum researchers estimate that BASEFEE will burn 50-70% of Ethereum’s current fees (50-70% estimation from a conversation with Ethereum core devs). There are reasons as to why EIP1559 doesn’t burn 100%.

According to CoinMetrics, the 200-day moving average for ETH fees paid to Ethereum is ~10k ETH per day (March 2021). If EIP1559 were to be implemented right now, the yearly ETH burn rate would be projected to be about 2.2M ETH (60% burn rate, 10k ETH paid in daily fees).

The ETH burn rate is strongly correlated to the total economic activity that is hosted on Ethereum. Ethereum fees have never found any sort of equilibrium; there is no ‘normal’ fee level. Future fee magnitude is highly unpredictable.

Critics of Ethereum will point towards Ethereum’s current state of highly speculative, yield-chasing, gambling-esque behavior and claim that Ethereum fees are only sustained by a greater-fools game.

Those bullish on Ethereum will rattle off a seemingly endless list of possible economic activities that Ethereum is uniquely suited for, as mechanisms for long-term sustainable fee demand.

Ultra Sound Money 🔊🦇

Ultra Sound Money refers to the compounding synergies created from EIP1559 and Proof of Stake.

EIP1559 puts perpetual buy-pressure on ETH from the fee revenue it generates from its native economy. In contrast to the federal reserve being the ‘lender of last resort’ for the USD, Ethereum is the ‘primary buyer’ of its own native currency, and it uses all of its excess revenues to buy-and-burn ETH from the circulating supply. Simultaneously, Proof of Stake inherently rewards the smallest viable cohort of ETH bulls who are willing to accept the least amount of ETH rewards possible while providing adequate Ethereum security.

The power of these components are multiplicative. They are a function of each other; a recursive relationship between the power behind one function feeding into the others. With Proof of Stake, yearly ETH issuance is under 1% (~25% ETH staked). ETH issuance drops from 4.75M ETH per year (4.5% monetary base inflation) to between 0.5M ETH and 1.2M ETH per year (~0.5-1% monetary base inflation). With EIP1559, yearly ETH burn is at 1.9%, an estimated ~1M ETH will be burnt in fees (at current fee markets, assuming 60% fee burn). All of these factors feed into each other and make each other stronger, creating a positive feedback loop into the value of ETH.

This positive feedback loop is furthered by the fact that ETH is the most trustless asset on Ethereum. As the native asset on Ethereum, ETH has favorable risk parameters as collateral on DeFi. There is no matching ETH’s level of trustlessness, as all other assets on Ethereum were issued by humans (who are folly) or code (which can be buggy).

We can see this in applications like MakerDAO, Aave, or Compound, who give favorable interest rates and collateralization ratios to ETH collateral, enabling ETH capital to be more efficient than alternative assets. We also see this in applications like Uniswap or Sushiswap, where ETH is the dominant trading asset. Total Uniswap liquidity is $5B as of March 2021, and ETH represents $2.1B of this total supply of liquidity. The second most liquid asset on Uniswap is USDC, sitting at $350M. We also see this in applications like RAI, which attempts to make a self-referential, governance-eliminated, non-USD stable collateral, which logically can only use ETH to back it, due to the design-goal of eliminating human governance.

ETH’s privileged position as pristine collateral in DeFi applications will add to the scarcity tailwinds to the supply of ETH; an additional source of power that feeds into the monetary energy behind ETH. The 12 years of crypto-economic advances made since the introduction of Bitcoin in 2009 are coming to a head with Ethereum and Ether. With the integration of EIP1559 and Proof of Stake, along with a native economic layer on the internet, Ether is will be the most economically optimized asset that humanity has ever come up with.

A new era of economic efficiency and monetary soundness will be unlocked, and will assist humans everywhere to more effectively achieve their economic goals and aspirations.

With the Ultra Sound Money putting power into our engine, a new age of human coordination and flourishing is upon us!

The Bitcoin rationale

My wife asked me what we should do with our cash assets in 2021 and my idea is to go all in Bitcoin with whatever we have sitting in index funds and stocks right now. Here is why:

1. Bitcoin is the best performing asset in the past ten years. The price appreciated by around 80% every year. Past performance is no guarantee for future results, it can however be a helpful metric to choose an investment.

2. Digitization is eating the world and the adoption curve for Bitcoin is faster than any other global infrastructure rollout before. It’s growing faster than the rollout of the internet, mobile phones and easily faster than ‘virtual banking’ players like PayPal.

3. If Bitcoin is a Bubble and has no real advantage it should pop. After existing for a decade and coming back after the 2017 peak and ensuing capitulation, this view is not valid any longer. BTC has caught on with Paul Tudor Jones, Steve Druckenmiller and the CEO of Blackrock, the biggest money manager in the world. Even Ray Dalio wondered whether he is “missing something” about Bitcoin.

4. If Bitcoin is a new monetary technology whose appeal is largely limited to technologically savvy and libertarian minded nerds who tolerate the volatility, it’s long term target is $10.000 - $100.000.

5. If Bitcoin is a new monetary good that will primarily disrupt its closest monetary cousin, gold, while being significantly superior to gold in divisibility, mobility and scarcity, then it’s long term target is $300.000 - $1.000.000

6. If Bitcoin is the ultimate world reserve currency and the superior collateral asset to anything ever created and sucking store of value premiums out of bonds, stocks, real estate, precious metals and rare arts, it’s long term target is $10.000.000.

7. The simplest way to think of Bitcoin is in supply and demand. That’s it. The supply won’t ever change, it’s fixed at 21 Million. Bitcoins inception and distribution is meticulous¹ and won’t ever be rivaled by other monies, forks or coins. Demand will continue to rise with money printing, political chaos in the west, and digitization. Bitcoins stock to flow will make it the rarest asset class in the world, rarer than Gold or Silver which will show in price.

8. A beautiful way to think of Bitcoin is that its value comes from energy conserved into information. Energy can only be converted in form, but not created or destroyed. With Bitcoin information truly is ownership, there is no difference between knowing and owning. Everything is energy, Bitcoin is energy, and therefore everything is Bitcoin.

Now we just need to answer this question: in 20 years, is Bitcoin worth:

1. nothing

2. roughly the same

3. a lot more

My rationale is a) and b) are very unlikely and therefore it must be c). Buy Bitcoin!

Currency developments

Since the pandemic the macro-economic situation has changed dramatically. I don’t think this is a sudden change whatsoever, but a acceleration of the developments we have seen since the last financial crisis from 2008. Interest rates going down and exploring negative territory with states funding their investments with debt by printing more money.

EURCNY exchange rate

In a German WeChat group someone posted the above chart yesterday, and exclaimed “What the heck is going on?”. So what has been going that would make the EUR appreciate over the RMB so heavily, all the while the ECB and EU are pumping out trillions to stabilize the European economy? Well, Corona has revealed certain positives about the European system. As surprising as it seems the old continent still has a couple of tricks up it sleeves. First, the capacity of European health care infrastructure is quite resilient and has helped to keep the outbreak under control in comparison to countries like the US, Brazil, India, or Turkey. Second, the stickiness of firm/employer relationships has proved resilient in the face of an economic storm. While companies probably would have like to get rid of their employees as fast as possible during the lock-downs European labor law simply makes this harder to realize. On top of that, countries with short-time working policies that subsidies employees wages have seen moderate success in keeping consumer demand-driven economical activity up. Third, the less divided political & media environment. While politics and media have revealed negatives about the United State, the EU is alas being divided, far less so than the United States who are pre-occupied by the legacy of racial hierarchy and the last half-century of widening inequality. During this dire domestic situation the FED lowered its interests rates, bought bonds & stocks, and ventured into the unlimited printing of USDs, all to avoid an even deeper economic fallout. But the FED also had to consider its money supply to the rest of the world, with the USD being the world reserve currency. The FED is responsible to pump liquidity in global markets to avoid a liquidity crash and drying up economic activity in its entirety.This combination of domestic & international liquidity needs led the FED to print about 70% more money than the ECB has printed in EUR. Lastly, a weakened Dollar has been on the agenda of the Trump policy all along. A lower Dollar could potentially makes goods Made in USA more attractive to global buyers, bring manufacturing back to the US and create blue-collar jobs, whose recipients would all belong to Trump’s voter base.

Now, the CNY depreciating against the EUR is just a side affect from all of the above. The PBOC owns most of the USD denominated debt in the world and the CNY is in many ways tied to the USD. The US is Chinas biggest trade partner and the economy of the US stuttering under the pandemic, China eventually sees less growth on the US market for their domestic products. In the broader scheme China also sees massive headwinds in global trade outside the US due to Corona and the longterm geo-political issues. To name just a few, see the move to de-globalization of supply chains to bring back manufacturing of essential industries back to local markets, the escalating trade war that hasn’t even come close to meet the Phase I Deal agreements, the ban on information technologies like Huawei, TikTok, WeChat and E-games in the US, the UK and India, the flaring border conflicts in the South China Sea and on the India/China border as well as the tensions around China’s Belt & Road Initiative and the alleged debt-trap diplomacy in Africa and South East Asia.

Further reading:

• Don’t Ban TikTok. Make an Example of It.

On how to deal with social media specifically without erecting a version of China’s Great Firewall and reign in the excesses of monopoly platforms like FAANG. I expect a similarly transparency-driven approach from policy-makers for all information technologies going into this decade.

• Whose century?

About the mistake of thinking we are in a “new Cold War”. From Beijing’s point of view, there was no end of history in 1989 with the fall of the iron curtain and the ensuing Western dominance. For China there is historical continuity, manifested in the Tienanmen Square massacres. Westerners only have a crude understanding of China’s ideology. We should not comfort ourselves with the thought that because nationalism is the main mode of Chinese politics today, Xi’s China is just a totalitarian regime. This article helps to grasp the history between the US and the CCP with it’s gigantic mission and novel socio-political experiment of enrolling one-sixth of humanity in economic participation and opportunity.

Update 9 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

With how much can I finish March?

There are hardly any more restrictions due to Covid19 in China. However, as a foreigner I get particularly well check and controlled everywhere I go now. China is afraid of a re-import of the virus, and thus I am checked with a lot of scrutiny. At work we are obligated to wear masks until 01st March. From them we will also start eating as a group in the canteen again, as opposed to delivered meals to our individual desks. 90% of the shops I see in Hangzhou and Ningbo are open for business again. Some restaurants are still closed for reasons I don’t know. There are no more lock-down policies in place for restaurants, but I assume those shops closed still, have individual problems to re-open. Construction work has picked up all over the place and traffic as well as noise have increased significantly, almost back to what it was before the crisis.

China is back on its feet and ready to keep the economy pumping, for better or worse. While the west is boiling over, China has seen 0 new infections in the past five days. I am embarrassed at how negligent Europe and the US have handle the outbreak of this virus. While China was in crisis mode none of the elected officials in the west took action to prevent the spread, even though they basically had the chance to act as early as January or February.

I was even able to sign up for a marathon race that, god willing, takes place on 2nd March in Baozhou, Hebei. The best is that Eli is back with us in Hangzhou and adds so much fun and joy to our little family.

- 25 books

Finally finished War & Peace. A good book, but not one of my favorites. Now despite my plan to start a short book, I picked up the massive biography of German Chancellor Willy Brandt. It reads very well, but 800+ pages will take time.

- run 2 marathons, one sub 4h, one sub 3h

I’ve built a good aerobic base in the last few months, but can feel my body screaming on the long-runs. My long run last Sunday was excruciatingly painful. I actually planned to run somewhere between 22 - 28k, but took a wrong turn somewhere and ended up with a good 31k. I still haven’t fixed my hydration problem. I need to get a camelback or handheld bottle to carry more water on my long runs. I have already reached my March goal today and am excited to see with how many km I can finish this month. My new goal is 300km. My updated training log.

- visit Germany once

No update.

- go on a bare-bones camping holiday with Jade & Eli

No update.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

I am doing excellent on this goal. Even last weekend, when Eli was finally back with us in Hangzhou I got at least 7 hours. It feels a little weird sometime to go to sleep at 9pm so that I can wake up for my morning run at 5:15am, but my body and mind sure thank me for the healthy lifestyle.

- use a scale to check my weight every day

When in Ningbo I get my measurements in. On the weekend I mostly forget about it which is fine. I measure my blood pressure during the week as well and am constantly above 120 & 80. I found that if I measure my heart pressure later in the day the pressure is within the norm. I think blood pressure is raised right after I wake up because of my fight or flight instinct responding to the phone alarm ringing.

- do not use my phone within 90 minutes of waking up or going to bed

Doing good. It’s not even a challenge anymore at this stage.

- earn a promotion

Let’s see. I am thinking of several possibilities once completing one year in service at my Hooya

- write weekly progress of 2020 goals every Monday

I am not hitting the target day, but at least I write an update weekly.

Essential readings on Corona

While the virus is exploding outside of Asia, we have the worst behind us in China. Covid19 might have originated in China, but from my reading of how governments react to the threat, it was also China where the most aggressive and effective measures were taken to curb the spread.

I not really surprised to see little central control in the US and Europe, where the virus has full potential to ravage thanks to democratic societies that hold up individual human rights higher than in China. Freedom of movement has only really been restricted in Italy, which has almost as many deaths as China by now. I sincerely wish that the approach in Germany and US will succeed in stopping the spread of the virus, but I doubt it. Western societies and their governments still underestimate the danger of the virus. After living in China for 5 years, I know that China would have liked to do everything else, rather than crash their economy as they did. This was the first time I saw health valued higher than capitalism in China. On an individual and a societal level. Truthfully, I wasn’t here during the SARS outbreak, but the reaction this time around was quick & resolute.

One might also note that only a healthy society can resume the economy at the speed it’s been before the pandemic. So while China has first and foremost avoided a national health crisis, it has also avoided a complete economic disaster thanks to the stop-and-go approach.

Some more essential reading on the virus:

• FAZ on the reverberations on our global society. In German.

• Report to the German parliament on risks in civil protection. From 2013 this reads like a blueprint for Covid19. In German.

• NYT on whether we are overreacting to the virus.

• Chinas guidelines on medical treatment of Covid10 In German.

• NYT’s Donald McNeil on what the west can learn from China in fighting the virus

The case of the missing song :: if you ever had an earworm listen to this podcast

“Maybe the greatest podcast episode of all time” - Guardian

I have to agree with the Guardian. Yesterday was the first time I listened to the reply-all podcast, but this episode made me smile from ear to ear and I want to recommend it to everyone who likes podcasts, has ever had an earworm, or loves music. So pretty much everyone, after all who doesn’t love music…

“The case of the missing song” is a fanatic journey on finding the song that’s stuck in the head of a young man who remembers the lyrics and melody of the song remarkably well. But he can’t find the song anywhere on the internet.

I’ve been there myself before. Typing random parts of lyrics into Google and after an anxiety inducing search I finally find the track and listen to the song. Sounds familiar? I guarantee you will like this episode, where they literally go nuts over finding the track.

I subscribed to reply all, and you will too. Just go listen now.

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Update 8 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

hiking to Five Clouds Temple (五云寺）in Hangzhou

- 25 books War & Peace just keeps going on and on. It’s a great book and I like reading it, but it is longer than the bible and definitely tough one to finish. I am still doing well, and should really be finishing the book this before the weekend. I’ll pick my next book strategically short-paged, even though I know this sounds kinda dumb, just to hit my target of 2 books.

- run 2 marathons, one sub 4h, one sub 3h I did a 30k run on Sunday. It was beautiful weather in Hangzhou and the track along the river was completely open after weeks of Corona fear. It was a wonderful run, the sun shining in my face, even giving me sunburn, and hundreds of people out and about at the same time letting dragons fly or practicing with their long boards. I was also better prepared for this long run than last week. I had more nutrition and water with me. Ultimately though I could have eaten one more gel, just to finish the run as strong as I started it. I might finish my monthly target of 250k early this week, with just 89km left to run. 89k is also exactly what I ran last week, so a very attainable goal with so much progress already made this month. I joined the PR Marathon Program last week, which also put me into the Strava Club with roughly 200 more “serious” runners. I thought I could finish last week in the Top10 of said club with my 89km weekly distance, however I barely made it into the Top10 with one runner finishing an astonishing 200km in one week. My updated training log.

- visit Germany once Less homesick than I was after returning from Germany, but still have to keep this goal in mind for Eli & Jade.

- go on a bare-bones camping holiday with Jade & Eli

No update, it’s winter still and this is definitely something for summer, before Eli goes to kindergarten.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

Doing pretty pretty good on this. Despite needing a full nights sleep yesterday, after my long run, I had problems falling asleep and feel very tired from the weekend hike and run. The weekdays should give me the freedom to go to bed early again and lock-in much needed sleep to combat another physically challenging running week.

- use a scale to check my weight every day

I did better last week, and only forgot it on the weekend in Hangzhou. I also came to the conclusion that this is a very unimportant goal as long-term weight gains and losses will be felt much more dominantly in hip width than on the scale. Still, keeping this up until at least July to see how my daily life will reflect on the results over time.

- do not use my phone within 90 minutes of waking up or going to bed

Doing well! Getting easier and easier cause I just replaced my phone with books.

- earn a promotion

Corona is underway in the rest of the world, while China is relaxing. I dare not to think of any personal economic outlooks just yet. I will keep doing my best, so just do what I do already, and reevaluate my situation in a few weeks time.

- write weekly progress of 2020 goals every Monday

Doing well today. It’s Monday and I am here writing down last weeks progress. Not bad, not bad at all.

Eli is still not home, and I am getting very pissed at my mother-in-law who refuses to travel back to Hangzhou with him on the grounds of transportation inconveniences. We had 2 amazing weekends in Hangzhou, where it would have been awesome to have Eli with us. This week we went hiking on a trail just a short walk from our house and had great time with delicious food to top it all off.

To that effect, turn your goals into habits and progress will be noticeable and much more attainable.

Update 7 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

- 25 books I made some nice progress on War & Peace and will finish by the end of the week, giving the second half of the month to read another book. I was hoping to have read 7 books by the first quarter of 2020, but what gives! It’s not a competition and I still plenty of time to go. Recently, I’m asking myself if my reading pace increases, just like my running pace increases from training.

- run 2 marathons, one sub 4h, one sub 3h I did a painfully exhausting 32k on Saturday. It was my longest recorded distance so far, and while it feels good to have this run in the bank for my aerobic base, I did feel very fatigued and dehydrated. I really need to take care of my water intake on such long runs, especially now that the weather get sunnier and warmer. With the virus spreading globally and events canceled left & right, I might not get a chance to run any official marathon this year. It would be quite the start to my running “career”, with a massive base building phase thanks to Covid19. My updated training log.

- visit Germany once Less homesick than I was after returning from Germany, but still have to keep this goal in mind for Eli & Jade.

- go on a bare-bones camping holiday with Jade & Eli

No update, it’s winter still and this is definitely something for summer, before Eli goes to kindergarten.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

Doing better than ever on this. The last two days I went to bed at freaking 9 o’clock in the evening. I am not even sure that the sun had set by then ;-) I get up for my morning runs between 5 and 5:15, easily allowing beautiful 7.5 - 8h of slumber every night.

- use a scale to check my weight every day

I was slacking! Most mornings I totally forgot about the blood pressure, and even the weighing myself sometimes only occured to me only much than later than I am aiming for. I actually want to measure myself right after waking up, while sitting on the edge of my bed, before getting up. Most mornings though I am still a little sleepy and simply go about my morning rituals before realizing what I missed. More training and consistency should edge this into my habits sooner or later.

- do not use my phone within 90 minutes of waking up or going to bed

Did pretty well this week with reading before sleeping and running right after waking up. It seems like I got into a habit here, and feel much better about this than just a few weeks ago.

- earn a promotion

It’s increasingly more difficult to think of a promotion this year. The whole world economy is sliding into a recession thanks to the epidemic, which eventually will effect my companies ability to grow and promote me. I am still figuring out other options and have my thoughts laser focused on finding a business opportunity that allows me to promote myself.

- write weekly progress of 2020 goals every Monday

Yeah, I meet half of this goal. It’s not always Mondays, but at least I sit down once a week to write down my progress and thoughts.

Eli has now been on Shengsi for about 2 months, and I haven’t seen him for 1 month now. Apparently there is no convenient transportation back to Hangzhou yet and stays on Shengsi for at least another weekend. I miss him dearly and just hope I get to see the little booger next weekend again. Nonetheless, last weekend with Jade was very nice. We had a beautiful Pizza at Angelo’s in Binjiang. Great thin crust and delicously melting mozzarella cheese. We also lounged around pretty comfortably and enjoyed ourselves during exercise, walking around or cooking meals together. The work week in Ningbo has finally seen some improvements in regards to the virus prevention measure. The travel restrictions around town have finally been lifted, my running trail is available again, and restaurants are slowly opening up. Work has been busy all week so far, but also pretty rewarding because I just got a shit ton of stuff done to the benefit of my reputation within the company. But really looking forward to the weekend now and wishing Eli would be in Hangzhou as well.

To that effect, turn your goals into habits and progress will be noticeable and much more attainable.

Why the Success of The New York Times May Be Bad News for Journalism :: The Times new media columnist criticizes the monopoly of his paper

I spent my whole career competing against The Times, so coming to work here feels a bit like giving in. And I worry that the success of The Times is crowding out the competition.

Ben Smith takes on an outsiders perspective on the New York Times in his first article. The article is somewhat in line with the media criticism of David Perell I pointed out last week. Since the US Presidential election has heated up, the Corona virus has been ravaging China and I have deleted twitter on my phone, I found myself reading the Times again much more. I have also been attracted by the really good podcast The Daily from the Times, which focuses on one specific news item everyday.

Frankly, I don’t find the Times reporting to be very balanced. It is heavily steered towards a moderate democratic US audience, with high praise for #metoo, but staunch criticism of progressive socialist Bernie Sanders on the other side, and elusive conspiratorial reporting on China. Nonetheless, I consider it the best newspaper available to me in the digital age, and his completely replaced CNN as my ‘global’ news source over the course of the past 10 years.

I am debating to subscribe to the NYTimes as it publishes great in-depth articles and can allow itself as pretty much the only newspaper around to have its vast army of reporters on the pulse of the news stream around the world and 24 hours a day. An introspective and self-deprecating article like that is a noble approach to keeps its journalistic values of critical reporting alive. Its a step that once more makes my mouse hover of over that subscribe button.

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Update 6 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

250k goal achieved in february

- 25 books Well on track with 4 nice books finished thus far. Reading War & Peace does take me a little longer than I thought though. My estimated remaining reading time just doesn’t shrink and is still at 6 1/2 hours. I will have to put squeeze some less discerning books in-between.

- run 2 marathons, one sub 4h, one sub 3h Last Saturday I ran for 28k in uncomfortable weather conditions and on a steep path in Hangzhou with 800m elevation gain. This was probably one of my most challenging training runs so far, but I felt absolutely stellar doing it and even assembled a couple of cabinets after coming back. During the run it became clear to me that I am ready to run my sub 4 Marathon in April, and for the first time I started calculating how much below 4 hours I can finish the race on the 12th of April. If I can keep up my training injury free I am looking at a race time of 3.30 now. Fingers crossed!
My updated training log.

- visit Germany once Less homesick than I was after returning from Germany, but still have to keep this goal in mind for Eli & Jade.

- go on a bare-bones camping holiday with Jade & Eli

No update, it’s winter still and this is definitely something for summer, before Eli goes to kindergarten.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

I am doing well on my daily sleep target, and now focus on sleep quality more. After listening to the Extramilest podcast on nasal breathing, I will try taping my mouth at night soon. I am still looking for the right surgical tape, but hope that this technique might fix my dry mouth issue in the morning and, as Patrick McKeown promised, improves the quality of my sleep.

- use a scale to check my weight every day

Got my scale and a blood pressure monitor last week and have started to incorporate using both during my morning routine. It will take a few days/weeks to remember this step automatically, but shouldn’t be a problem do use both just before my morning run. The results are, as expected, rather boring, though I hope to see some improvements on lowering my blood pressure with persistent endurance training in the future.

- do not use my phone within 90 minutes of waking up or going to bed

I did slightly better last week, with not using the almost every morning and only using it twice or three times at night before bed. On a good day, I get up, out of bed and start exercising before looking at my phone in the morning. At night I now am more disciplined to read on my kindle instead of staring at YouTube or twitter. Again, deleting twitter has made this much easier and I am considering which other measures I can take to decrease phone usage in general.

- earn a promotion

I am fully back to work after the Corona virus crisis and last week was a busy and stressful week with some new responsibilities handed over to me. I am seeing this as a step in the right direction and will keep my motivation to work on that promotion. I realized that it has been no more than 7 months with Hooya now, and I can only really expect a promotion after fulfilling a full year. I am now looking forward to the next biz trip with the founder of the company to convince him of my hard work and effectiveness in making him more money. Trickle down economy is what I am hoping for here ;-)

- write weekly progress of 2020 goals every Monday 5am for 30 minutes + 30 minutes diary

Well, after now 6 updates like this, i still haven’t managed to write it at 5am once. Being a realist I am gonna change this goal to a more liberal Monday all-day schedule. Apart from that, I am happy in keeping up this progress report and help me focus on what I want to improve in 2020.

Last week has been a pretty good week in terms of fitness, career and sticking to my goals. I was very diligent on my running and put a similar effort into my work. Work was busy especially due to the some of the work that lay flat while the virus was raging. The weekend was equally busy with lots of distance behind me, and many pieces of furniture assembled for our new apartment. All that was missing for ultimate bliss was Eli, who is still on far away but save Shengsi Island with his grandmother. The little guy should be back with Jade and me next weekend and make us even busier, and happier.

To that effect, turn your goals into habits and progress will be noticeable and much more attainable.

News in the age of abundance

David Perell runs a business entirely dedicated to writing. He offers a course, called Passage of Writing, that was recommended passionately on twitter and peaked my curiosity very much.

Last week one of David’s own articles suddenly showed up as a recommendation in the finimize newsletter. It’s a very long read that took me two attempts to finish completely, which however is no indication of how much David’s piece resounded with me.

The news looks for Joseph effects when it should really be focusing on Noah effects. A small number of events carry outsized influence, but obsessive news consumers are too close to the action to distinguish the two. Past a certain point, consuming more data hurts our signal-to-noise ratio and can actually decrease our ability to make smart decisions. When the rate at which we think our knowledge increases rises faster than it actually does, we overestimate our knowledge of the world, act with over-confidence, and make stupid mistakes.

David makes the case for news abstinence or at least fasting. I have been trying news fasting myself by deleting my twitter app (though David also makes a big case for twitter) and cutting down my newsletters to just 3 subscriptions. I fully realize how news has become purely entertaining and over-dramatic and sought to stop my indulgence on this 24/7 cycle of breaking-news and public outrage over events I cannot influence and mostly don’t even influence me.

My wife convinced me through her consistent dis-interest in news that there was really nothing I would miss if I quit the news. She was doing just fine. And so am I. With less news and more time for the things that I can control and that control me, like my family and my mental and physical health. Part of my goal to read more books is inspired by my quest to read less fast food news, and instead read time proven works of literature. I.e. Tim Ferris pledged for himself not to read any books that did not stand the test of time and are younger than five years. I don’t think I have been reading many new books that I would have to impose such a rule on myself. Still, I think this rule is good as a general orientation to find meaningful works of literature that have succeeded in sending their signals, though being trialled by our fast-than-ever changing civilization. While by this logic good literature will be published consequently, regular readers are best advised to filter for truthful literature through a democratic process by early-adapters and experts in the prospective fields.

The march towards truth is a noble and worthwhile goal, even if we’ll never be able to understand everything about the present moment. Knowledge is the carrier of civilization. It’s the engine of progress, the story of humanity, and the torch we carry into the future. As Rene Descartes once said: “Reading good books is like having a conversation with the finest minds of past centuries.”

What strikes me most with David’s essay is the existential importance he ascribes to writing. Of course, David himself has a business interest in that his readership raises the writing skills on a pedestal, and I am can’t blame him for it. As a father, I agree wholeheartedly with him in calling for an education that puts more focus on the humanities than on capitalistic skill sets, for my sons’ joie de vivre will not be founded on money and status, but on savoir vivre.

“Fathers and mothers have lost the idea that the highest aspiration they might have for their children is for them to be wise — as priests, prophets or philosophers are wise. Specialized competence and success are all that they can imagine.”

It is worth your time to bookmark David’s article and read it when you have time. No rush needed - it’s no breaking news.

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Update 5 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

Runner’s breakfast - congee of red & white rice, banana, jujube dates, milk

- 25 books I am absolutely on track with 4 finished books and another about half way done. I think deleting twitter helped. Also being back alone for work in Ningbo helped. an hour a day of reading and this goal is no problem this year.

- run 2 marathons, one sub 4h, one sub 3h I took 5 days rest in between Shengsi Island and Ningbo. The weather just wasn’t good enough in Shengsi with lots of wind and rain the last few days before my departure. Back in Ningbo, I am finally returning to my routine of early morning runs. Only impediment now is that the local authorities have blocked access to the pathway along the river, in effort to control migration of local residents and stop any potential spread of the Corona virus. I am a little bit behind my goal of 250k per month, but should be able to achieve when just running around 10k every day for the last 5 days of the month. Luckily it’s a gap year and February has 29 days this time around. My updated training log.

- visit Germany once

Less homesick than I was after returning from Germany, but still have to keep this goal in mind for Eli & Jade.

- go on a bare-bones camping holiday with Jade & Eli

No update, it’s winter still and this is definitely something for summer, before Eli goes to kindergarten.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

Doing very well on this one the last few weeks. I mostly never sleep less than 7 hours, and sometimes even get to so sleep 8 hours and more. Now, what I want to improve next is sleep efficiency through closed mouth sleeping. Coincidentally as I was just thinking about my dry mouth phenomenon in the morning, the great Floris Gierman recorded a podcast with Patrick McKeown, who is a fervent advocate of nasal breathing. That podcast will be live soon, but in the meantime I dug more into Mr. McKeown’s so called Oxygen Advantage and the positive effects nasal breathing has on sleep, the brain and physical endurance.

- use a scale to check my weight every day

Back in Ningbo and just today my bluetooth enabled scale arrived. Logging weight from tomorrow. Additionally, I bought a blood pressure monitor and will measure my BP regularly every morning. While this might look like overkill, Dr. Maffetone in his book made me more aware of how important and revealing regular blood pressure measurements can be.

- do not use my phone within 90 minutes of waking up or going to bed

Yes, making progress, but still no total abstinence. It has become obvious to me how much I use my phone, especially before and after bed, and how much of that usage is needed to set an alarm or text my loved one, or simply wasted on reading the news and watching youtube.

- earn a promotion

The corona virus has had a huge impact on the Chinese economy as a whole, and I don’t know yet how that will affect my company and my position in particular. Since getting back to the office though, I have been hard at work on sourcing great products and pushing our marketing for Germany forward. I hope that the situation will return back to normal, and our business can thrive and enable me to get a promotion regardless of this massive dip right now.

- write weekly progress of 2020 goals every Monday 5am for 30 minutes + 30 minutes diary

I skipped my first updated last week. The superficial reason was, because I was preparing to go back to work in Ningbo, but the actual reason was pure laziness and dissatisfaction with own progress, especially in running.

I am finally back to work and the succesful routine I got used to last year. Live in Ningbo still is a little inconvenient thanks to the Corona virus and the policies enacted by the government. Most shops and restaurants are still closed, as are roads I used to run on. And wearing a mask and getting your temperature taken 6-7 times a day, doesn’t really add a comfortable feeling. I see things moving in the right direction however, and look forward to the next few weeks when the situation should have normalized. I am still wondering whether my Marathon in Yangchen will be cancelled, and how soon Eli is safe to return from Shengsi Island back to the big city of Hangzhou.

To that effect, turn your goals into habits and progress will be noticeable and much more attainable.

Update 4 on my new year’s resolutions

You can only improve what you track and measure. Therefore, I journal my progress for my 2020 resolutions.

Running around Shengsi Island

- 25 books I deleted Twitter. Nothing there that would make my life better in any meaningful way. Maybe this helped me to finish 3 books by now. Right on schedule. But the current book I am reading is a big one. 1600 pages of 18th century Russian literature - tough to get through this in the next 14 days.

- run 2 marathons, one sub 4h, one sub 3h I am on and off with the running. Not quite running as much as I wish I would, but also not completely lagging behind. I am on track for my monthly target of 250k, and will start my morning routine runs as of next Monday again. My updated training log.

- visit Germany once

Less homesick than I was after returning from Germany, but still have to keep this goal in mind for Eli & Jade.

- go on a bare-bones camping holiday with Jade & Eli

No update, it’s winter still and this is definitely something for summer, before Eli goes to kindergarten.

- sleep 7 to 8 hours per night, aim to be in bed by 9:30pm

Did well last week after I adjusted to the Chinese time zone again. The jetlag seems to be worse going east, instead of going west. First time in my life I used sleeping pills for the long flights and taming the jet-lag. I used melanin, which is supposed to be all natural, and also didn’t seem to have any effect on me. Heavy training in combination with factors like jet-lag or alcohol also increase insomnia. Last night I only got 4 hours of sleep after a strong run (15k), a long days work in a coffeshop instead of my office, and too much alcohol (2Liter) in the evening. Definitely need to keep reducing alcohol intake in order to be able to perform at my best. More than 1 glass of alcohol (wine, beer, schnapps) is affecting sleep and rest. Since I use my Garmin watch to track my sleep, I can even see, track and measure the effects in the astoundingly accurate body battery.

- use a scale to check my weight every day

No scale around while traveling. It will become become a priority to turn into a habit once back home and at work in February.

- do not use my phone within 90 minutes of waking up or going to bed

Have been better at this last week, mainly because I deleted twitter from my phone and worked on my reading goal. In the mornings I am still checking the phone for work updates or the weather, so I know when I can go for a run.

- earn a promotion

Been busy following up on the purchasing orders from our trip to IMM Cologne and also work has picked up significantly this week, with more regularity getting into the work from home. Next week Monday work will be back to normal with me being physically in the office.

- write weekly progress of 2020 goals every Monday 5am for 30 minutes + 30 minutes diary

I’ve been procrastinating this task until Thursday this week for no apparent reason. I think it’s just that the updates are getting less significant and I value writing these reports less the more often I do them. I figure that I need to keep my resolutions flexible to the upside, adding more where I deem it necessary or scrap some which evidently don’t change for many months. This way writing and keeping track of the improvements becomes more interesting.

I am not sure whether the Corona virus is under control now, but certainly businesses are eager re-open and thus many people are getting back to their offices this and next week. I’ll be going back to work next week and look forward to the regularity of the live in Ningbo.

To that effect, turn your goals into habits and progress will be noticeable and much more attainable.

nCov-Corona Virus

2019-nCoV Global Cases by Johns Hopkins

Two weeks ago I was still in Germany laughing off the hysteria about the Corona infections and doubted the virus would have any effect on me. Now, two weeks later I am back in China and while my family and I are all well and healthy, the impact the virus had on our daily live is something I have not dealt with before.

The virus hit right before the Chinese New Year’s festival season while everyone, including myself, was preparing to meet the extended family and celebrate the beginning of the year of the rat. Chinese New Year is the biggest holiday season in China, comparable to Christmas in western countries and brings the China to a halt for a whole week. This year though the holiday got an unexpected extension, by decree of the central government in Beijing. All companies were ordered to give an additional 3 days paid-leave to their employees so that the great migrating between provinces starts later and would confine the virus. However, the trend of increased infections did not reverse during the holiday, and so companies were asked to postpone opening of their offices and factories and additional full week until 10th of February.

I was lucky that we celebrated Chinese New Year on the small island Shengsi, just 100km west off the coast from Shanghai. The island has had 0 cases of confirmed infections and live here felt just like it did every year, extremely slow and cozy, like it should be on a fisher island.

There are usually several ferries going back to the mainland everyday, but since the Corona crisis broke out the local government hast reduced the ferries to 1 boat every day. There is also no public transport from the port on the mainland to the cities of Shanghai, Hangzhou or Ningbo, and only individual cars are permitted to travel on the highways. The government tries to keep travel to an absolute minimum to avoid the further spread of the disease has the military and police control travelers everywhere along the roads.

To travel from Shengsi to our home in Hangzhou for example we would have to go through at least 5 fever check-points: the first when boarding the ferry on Shengsi, the second when getting of the boat on the mainland, the third at a checkpoint along the highway towards Hangzhou, the fourth at a checkpoint when entering the city of Hangzhou, and the final check at the gates of our residential compound in Hangzhou.

This route right now is just theoretical though, because since yesterday the city of Hangzhou as pretty much quarantined itself and does not allow anyone to enter the city whose ID is not from Hangzhou.

2019-nCoV Global Cases by Johns Hopkins

While these measures look outlandish to me, I must say that I feel extremely safe and confident in the government to contain the situation as good as they can right now. While were most likely at the outbreak of the crisis, I cannot think of any other state doing a better job right now. The city of Wuhan did underestimate the severity of the virus in the beginning and tried to cover up the cases so the bad news would not interfere with official meetings being held that time. In addition, after SARS broke out in China in 2003, the government built the largest disease surveillance & reporting system in the world. Unfortunately, it didn’t work out this time.

Yes, these are grave shortcomings, and they are saddening especially for the thousands of people whose health is affected by the nCov-Corona. Those mistakes or others for that matter do happen in other, more and less developed, more and less autocratic nations, more or less populated nations, all the time as well.

At this moment, of course, China is in dire need of more medical supplies such as face masks, but this inevitably is what happens when 1.4 billion people start wearing face masks on a daily basis. Apart from the obvious health crisis that is going on with over 20.000 suspected cases of infections, I feel there is no transparency crisis from an autocratic Chinese Government. Information is plentiful and freely shared on social media and of course face-to-face. I myself was visited and informed by the local police on my doorstep about the severity of the virus and steps I should take to preserve my health and that of my family and community.

2019-nCoV Global Cases by Johns Hopkins

Today it looks like that the virus has been successfully contained. While there were more than 2.000 new cases every day just 3 - 4 days ago, the trend seems to be slowing down with less than 500 new cases confirmed overnight.

What I am most grateful for is that we are Shengsi at the moment, with healthy and able bodies and can live our days in relative safety from this health crisis.