Entrepreneurs don't have a gene for risk–they come from families with money - <AUTHOR> https://qz.com/455109/entrepreneurs-dont-have-a-special-gene-for-risk-they-come-from-families-with-money/ <comment><USER2> Being a developer really helps. I've interviewed many dozens of self-funded founders who've explained that the reason they felt comfortable "taking the leap" of entrepreneurship was because they knew they could always fall back to working as developers. Getting paid hundreds of thousands of dollars to write code is a pretty solid fallback plan.

This was true for me as well, and is why I've never had trouble starting things, even when I didn't have investors or a rich family to rely on.

YMMV, etc…

<comment><USER3> Not only that, but (for tech products) they don't have to invest tens of thousands of dollars paying someone to build the software.

<comment><USER4> Exactly, being an entrepreneur has a survivorship bias from having an excess in money or some other resource

People that want to make high margin, high growth companies will be making "tech companies" (cloud based ephemeral software services)

Developers are rich in "I dont need to pay other developers I cant communicate with to build the initial idea" and are ALSO rich in money

Survivorship bias means they can try and fail and try again very quickly, compared to someone that gets one shot before having to save up again for the next 15 years who experiences life changes and loved ones saying "maybe its time to get realistic Roy"

<comment><USER5> I feel your post sums up my thoughts well. As a developer it easier to be an entrepreneur for sure .

</comment></comment></comment></comment><comment><USER6> Okay, but so what? Do we do something about it? Or is this just complaining.

I feel like this is analogous to something many people here are used to. We all know people that have been programing since they were a child. Those people had money for a computer (I'm under 30 and this was still a thing). Most of those people had a parent or two that were more highly educated and even more likely that one did STEM (and probably knew some programming or someone that did).

Is that privilege? Yes.

Do I wish I had those opportunities as a kid? Kinda

Am I going to do anything about it? No. Why would I?

If this article is only about the myth of the self made millionaire/billionaire then okay. But that doesn't come across. We all already knew that these people came from high places of privilege. But complaining about how they had opportunities that we don't is useless. The problem is lack of opportunities and resources for the less privileged. You don't even need to take away the opportunities from those already privileged. This isn't a zero sum game. If you want to present solutions I am happy to read more articles and do my part. But this just came off as complaining.

<comment><USER7> Maybe determine how much money the families need to have in order to spawn entrepreneurs? I suspect that number isn't $100M, but more like $10M. Then, change the tax policy to create 10 families with $10M instead of 1 family with $100M.

<comment><USER8> How would you come up with that number?

As noted by others in this thread, starting with entrepreneurship is a combination of knowledge, skills and somewhat being financially independent enough to commit significant amounts of time to creating something from scratch and - most significantly - having a network to achieve the latter.

Creating opportunity is a systemic, complex and long term challenge that you can't simply put a $ amount to. Your surroundings and upbringing shape you massively and there is no money which can make up for that and time. When you're 25 coming from a dirt poor community and are the first to study in your family there is such a slim chance you have seized dozens of opportunities correctly so that they stack up to put you in a spot where you are not only able to (aka resources present) but capable of achieving successes comparable to privileged peers. Network and skills are essential. Highly recommend reading "Cities and Ambition" ([http://www.paulgraham.com/cities.html](http://www.paulgraham.com/cities.html)) for more context.

I guess what I'm trying to say is that the old Chinese proverb "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime." is true when it comes to creating opportunity. It's not a "point in time", but a continuous problem.

<comment><USER7> Maybe you could look at the family financial situation of entrepreneurs at the time they founded a company? With that information, along with the number of families in each wealth bracket, and company revenue after N years, you can calculate what the optimal population of wealth distribution is for maximum entrepreneurialism. Not that I expect any country to pass such laws to shape their elite class distribution in this manner, but it's a good drinking conversation.

<comment><USER9> It's not limited to the financial situation. You also need a social network, and growing that network takes time.

</comment></comment></comment></comment></comment><comment><USER10> _Many startup founders do not take a salary for some time. The average cost to launch a startup is around $30,000, according to the Kauffman Foundation. Data from the Global Entrepreneurship Monitor show that more than 80% of funding for new businesses comes from personal savings and friends and family._

This sounds to me like they really mean _big money, high growth enterprises_ and are out-of-hand dismissing the kind of people who start more traditional small businesses with no goal of ever becoming a Mega Corp.

I haven't looked at the data too much recently, but twenty to thirty years ago:

Women had trouble getting funding at all, plus typically had ongoing obligations to do the _women 's work_ at home, so they typically started smaller ventures with less risk and less growth potential. They were disinclined to borrow any money at all and completely bootstrapped it, paying for any growth out of earnings as they were able to afford it.

If your very definition of _business_ de facto excludes the type of businesses typically started by women -- and no doubt other less-privileged groups -- you shouldn't be shocked when they are underrepresented in your data.

<comment><USER11> My great-aunt borrowed money from a bank to start her own beauty salon. In the 1920s.

Of course, she also had a reputation for ignoring what other people said she couldn't do, and hugely enjoyed her life. I wish I'd met her.

<comment><USER10> Your great-aunt sounds great.

My parents had a small business for a time back before the internet and all that. It failed.

I knew a lot of small business people growing up. I was surrounded by people who worked from home, etc.

Most small businesses are not incorporated. If they have to be incorporated to be part of your study, it's practically a dog whistle that "We're actually only studying businesses created by rich people."

<comment><USER11> I started many businesses as a kid. One was when I lived in Germany for a time. I ordered American candy from a friend back in the states, and would sell it at school to the other American kids who missed it.

I'd pay for the candy by sending my friend gummi bears, which were not available at the time in the US.

I probably could have made decent money at it if I wasn't so lazy.

</comment></comment></comment></comment><comment><USER12> (2015) Not sure what the point of this article is. It seems to take a pretty narrow view of what constitutes entrepreneurship then curses it with privilege.

<comment><USER13> I'd say this could probably give some people a way of looking at things, the environment they live in and that privilege is often there even though it's tabu / taken for granted.

At the same time, I find this to be true for a small type of entrepreneurship. My barber, the local store, my favorite restaurant is not really connected to privilege and everyone of them has gotten where they are anyways.

<comment><USER12> Your second paragraph gets at what I meant by 'narrow view'. Entrepreneurship happens all over the country at just about all layers of the socioeconomic spectrum.

</comment></comment></comment><comment><USER14> It's 100% true. At this point in my tech career, I could start a company, but how am I going to support myself while that company is getting off the ground? I've worked for startups most of my career and all the founders are the same: rich and/or came from Stanford or MIT. Most have been mediocre at tech at best (that's why they hire me) and have been poor business people and poor managers.

There's nothing special about them except they have all come from money. Not a single one was the bootstrap rags to riches story. I know those are out there but don't let them fool you: at least in the Bay Area tech startups (if you want to be a founder) is a rich man's game. This is based on my experience working for about 10 startups over about 15 years.

<comment><USER2> _> At this point in my tech career, I could start a company, but how am I going to support myself while that company is getting off the ground?_

You're a developer working at Bay Area tech companies? Move somewhere cheaper (or don't!) and take contract jobs. Set your own schedule, work 15 or 20 hours a week, and you'll be able to afford rent, even in expensive SF. Spend your free time starting your company.

Alternatively, save up your money and take a year or two off.

Source: I've successfully taken both approaches.

<comment><USER14> It's not the point, the point is risk and opportunity cost. In order to "save up money" like you said means I need to make a lot of sacrifices in the here and now for a future risk. People with money don't have to sacrifice.

If the business fails, I'll be out all that money and time that I can never get back. People with money may just have to trade in their Tesla for a Range Rover.

<comment><USER2> Of course entrepreneurship requires risk-taking and sacrifices. I don't think anyone is surprised or upset by that. In fact, it'd be bizarre if there were any alternative to working full-time that we couldn't say the same about. It's not so different than, say, going back to college.

But the fact is that many millions of average people can afford to make these sacrifices and take these risks. Your initial comment heavily implied that this is only something the rich can afford to do.

</comment></comment></comment></comment><comment><USER15> From the article:

 _> When you know you have a safety net, you are more willing to take risks._

Maybe to a certain degree, but not really.

Not having a safety net is what makes you more likely to succeed because there's no "well, if this doesn't work out at least I live in a mansion and my family has enough millions of dollars to live however I want to a realistic degree for the rest of my life".

When you have no access to money, you have a special kind of drive. It's the drive that says "look, working a regular job for the next 40+ years is going to drain your soul -- either bust your ass and figure out how to do what you want, or suffer for the rest of your life". The alternative is so awful that you'll do anything to avoid it (assuming you want to be someone who starts their own business).

This is coming from the POV of knowing with 100% certainty I was not made out to work a regular job since I was 11 years old and my family has no money.

<comment><USER16> > When you have no money, you have a special kind of drive. It's the drive > that says "look, working a regular job for the next 40+ years is going to > drain your soul -- either bust your ass and figure out how to do what you > want, or suffer for the rest of your life". The alternative is so awful that > you'll do anything to avoid it.

Ironically, what you fail to see is that this line of thought is only possible under two circumstances: rock bottom, or born to money. An unemployed 30 year old in between would give their right arm to have a job for 40 years.

<comment><USER15> > Ironically, what you fail to see is that this line of thought is only > possible under two circumstances: rock bottom, or born to money. An > unemployed 30 year old in between would give their right arm to have a job > for 40 years.

I wasn't born into money and I never hit rock bottom. I worked a few part time non-technical jobs as a teenager before I really got into computers and quickly realized that there's a 0% chance I would be able to exist in a world where I was reporting to someone every day for 40+ years in hopes they keep me employed. That lifestyle just isn't for me.

I was lucky enough to find computers in my late teens and programming is something I very much love doing so I made a freelance career out of it for the last ~20 years and still do it today (because I like it).

That drive to work for yourself is not tied into having a safety net. It's a mindset and maybe genetic (I have no idea). Most of my related family works for someone else though, so it's not like I'm coming from 10 generations of entrepreneurs here.

I think it's more of a mindset because I don't do this for the money. If we lived in a world where you could somehow survive comfortably with no income I would still try to make my own business doing whatever I really enjoyed doing. The primary output of what I do to me isn't money, it's personal enjoyment and the satisfaction of helping others.

> An unemployed 30 year old in between would give their right arm to have a > job for 40 years.

And this is where the problem lies. Unless you're super skilled working at a company that is massive and will never run out of funds then there's practically a 0% chance you'll have a guaranteed steady job for 40 years. You might get a few years or a decade even in some places but it's never guaranteed. The only thing that's mostly guaranteed is you will get paid your salary for a span of a single pay check duration or perhaps any duration you pre-define in a contract. After that, you're hoping that the business you work at stays in business and you are doing your job well enough not to get laid off.

<comment><USER16> Please don't take my short response to think that I did not value your comment. It was obviously well thought out.

> I was lucky enough to find computers in my late teens

25 years ago?

You still don't get it... 25 years ago, how many people could afford to "find computers" in their late teens?

"Coming from money" doesn't mean you are institutionally wealthy. It means that you have access to opportunities others don't and failure isn't even visible to you. When you have no idea of the consequences of failure, you are able to take risks. For me, I have personally (unfortunately) been involved with some bad people but were it not for my inability to understand what failure is, I would never have recovered and there would be a pretty unfortunate cycle starting with me.

You have not dissuaded me from that perspective at all. Indeed, all you have said is "I was successful and didn't want to be a slave like the others in my family". But you never saw failure. You never wanted a safety net. Perhaps you used one and you didn't even know it.

So what in your life would have made you afraid to take risks?

<comment><USER15> > You still don't get it... 25 years ago, how many people could afford to > "find computers" in their late teens?

In the public high school I went to they had a computer program, so I had access to that which helped. There's also the public library too. Although in my case I was able to eventually get a computer at home but it took a lot of saving. Also in the mid / late 1990s computers started to come down a lot in price compared to the early 90s.

But really, nowadays it's a totally different world so my specific situation doesn't matter. You can grab a decent laptop for $350ish. You could work a summer job to afford that while still going to high school, or a part time job for a few months. There's also an endless amount of free (or paid) tutorials on a ton of technical topics.

> So what in your life would have made you afraid to take risks?

I'm not smart enough to answer that question because I can't figure out what you're asking.

But I will leave you with, of course having a base line of family security is helpful. For example if your parent(s) are employed and you are able to have food, clothes and electricity then you have an advantage over someone who lives on the street but the article made it seem like you need "family money, an inheritance, or a pedigree and connections that allow for access to financial stability" to run your own business. To me that's much more than the basics. When I read that, I read that as coming from a family where your parents probably make 350k+ year and there's 5+ million in a low risk trading account or something that can be liquified on demand.

That's a totally different world from a family living paycheck to paycheck but can still save a little bit here and there. That type of family is more in tuned with how I was brought up. It was always a struggle with a lot of sacrifices, but it was never "bad bad".

<comment><USER16> Sure, the key point in the article is very early on:

> And this is a key advantage: When basic needs are met, it's easier to be > creative; when you know you have a safety net, you are more willing to take > risks.

Your (and my) basic needs were met. In the USA, 40% of families could not meet a $500 surprise expense. That's not paycheck to paycheck, that's pretty close to the edge and such a family would generally be averse to rocking the boat.

The ability to take risks is very important for success, but what that really translates to for entrepreneurs is an inability to believe failure is a thing.

So again, you did not have an upbringing that would make you afraid to take risks, therefore you took them.

I had an upbringing that made me afraid to take risks because even though my father was well off, his upbringing was during wartime. I took risks anyway, and my kids are basically rich kids in that they are unafraid to go after everything they want. It's very strange to see.

</comment></comment></comment></comment></comment></comment><comment><USER17> There are rather a lot of confounds here. I don't really want to get too much into that because it's a rathole of speculation, but if there were a gene for risk, and if risk taking made people more likely to accumulate wealth, then being descended from parents with money might lead to an inheritance of both financial assets and some polygenic entrepreneurial genotype.

Honestly though, that's missing the point. There are plenty of persons with a high appetite for risk who end up as burglars, robbers, embezzlers, fraudsters, or some other unsavory and largely unsuccessful or net destructive career. In my observation there are two _essential_ traits for a successful entrepreneur: persistence and creativity. Everyone knows what persistence is, but I mean creativity in a broader sense than just art. Anyone who has read Julian May's marvelous Saga of Pliocene Exile will know what I mean. For those who haven't, creativity is essentially the ability to create. Every successful entrepreneur has by definition created something of value. Since as far as we know all traits are heritable, creativity must be heritable as well. However it's an even more subtle and ephemeral quality than intelligence, so I doubt we'll be able to identify the genetic basis of creativity within our lifetimes. By this I mean that while it is at least somewhat possible to synthetically test intelligence, there is no test for creativity other than reality itself.

I actually believe that for the sufficiently creative individual, risk is a non-factor. I have had the privilege of knowing a few people of this type, and they literally can't really fail. Sure, one enterprise might not work out, but these folks are just a wellspring of ideas plus execution. They could be dead broke and they'd still succeed in building things.

<comment><USER18> > burglars, robbers, embezzlers, fraudsters, or some other unsavory

is compatible with being a successful entrepreneur. Common wisdom says it's essential, even.

</comment></comment><comment><USER19> I don't think people can really understand how risk-averse poverty can make a person.

When you don't have a safety net or you've always had to struggle to get by it's very hard to take chances with money. Of course, there are exceptions but given poor vs rich, I would bet that entrepreneurs are more likely to appear in the population that never had to struggle to get by.

</comment><comment><USER20> The MANY entrepreneurs with broke immigrant parents (me included) would probably disagree.

It doesn't hurt to come from money, and get a small loan of a million dollars, sure. But more important than that luck is being resilient and having stoic ideals, and that's something most Americans including the author of this article lack nowadays. It's very easy to constantly put yourself in a victim position and complain about how your life is harder than that of others, but that's mostly just self destructive as it wastes intellectual and mental energy you could instead spend on something more productive.

</comment><comment><USER21> As predicted, the article doesn't contain any genome wide association study to back up its claim in the title that entrepreneurs "don't have a gene for risk".

Instead they present another causal factor for creating startups and just implicitly deny that other factors exist.

I think Quartz is basically the archetype of fake news at this point.

</comment><comment><USER22> I often think about this. If my parents (solid middle class) hadn't paid for my studies and if they wouldn't have had the means to support me for the time after that, when I started a company which took about two years to sustain itself (and me), I would probably still crunch out code somewhere as a low level dev.

Thanks mom and dad!

<comment><USER23> Neither of my parents finished high school and didn't value education but they did value hard work and they encouraged me to get a trade. I joined the military, got a trade there, and now in my early/mid 30's I'm completing a CS degree.

Working for others isn't such a bad life if you have the drive to establish a life that you want for yourself.

</comment></comment><comment><USER11> I personally know many that did not. Including refugees from other countries who arrived with nothing.

<comment><USER24> The fact that some can win in entrepreneurship playing the game in hard mode, doesn't negate that most winners still play in easy mode (coming from money).

It just means that it's not impossible to win in entrepreneurship starting poor. But then again nobody said it is: the article says it's just much harder and thus less common.

Here's what TFA says:

"University of California, Berkeley economists Ross Levine and Rona Rubenstein analyzed the shared traits of entrepreneurs in a 2013 paper, and found that most were white, male, and highly educated. "If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit," Levine tells Quartz. New research out this week from the National Bureau of Economic Research (paywall) looked at risk-taking in the stock market and found that environmental factors (not genetic) most influenced behavior, pointing to the fact that risk tolerance is conditioned over time (dispelling the myth of an elusive "entrepreneurship gene")."

It says nothing about there NOT being people who've made it in startups coming from a poor background. It merely says those are way less compared to males, that are highly educated and with family money.

<comment><USER11> > most were white, male, and highly educated.

That doesn't mean they have money. Most PhD students appear to be scraping by on a stipend provided by the university, not zipping to campus in their Lambos.

One founder I know personally who's a wealthy man today drove a wretched Datsun for a decade as he had nothing while he worked for his PhD.

<comment><USER24> That's precisely what it means, there are not that many "highly educated" people without family money...

Besides, you seem to have ignored the "If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit" part...

<comment><USER11> > there are not that many "highly educated" people without family money

I don't buy that. I know lots of PhD's with no family money. In fact, modern complaints are about PhD's deeply in debt from student loans.

</comment></comment></comment></comment></comment><comment><USER25> If having a fall back plan is what drives entrepreneurship, you'd expect the firm safety net countries in the EU to have far more of it than a country like the US.

Yet we don't.

<comment><USER24> Actually we do.

Several European countries have as many or more entrepreneurs than the US. It's just that in Europe it's small self-owned/family businesses, not Facebooks and Theranoses.

"In 2016, about 5.6 million small business employers and 24.8 million non- employers were counted in the United States"

compared to:

"There were estimated to be approximately 24.5 million small and medium-sized enterprises (SMEs) in the European Union in 2017, with the vast majority of these enterprises micro-sized firms which only employed fewer than nine people. A further 1.42 million enterprises were small firms with between 10 and 49 employees and 231 thousand were medium-sized firms that had 50 to 249 employers."

<comment><USER26> Just want to back this up, entrepreneurship has been falling since the 1970s in the USA, it is actually pretty scary to see the graphs and data around this, some good studies below showing some of these trends (EIG has some great data on that + the ramifications for the American workforce):

[https://eig.org/dynamism](https://eig.org/dynamism) (great report)

[https://www.hamiltonproject.org/charts/the_entrepreneurship_...](https://www.hamiltonproject.org/charts/the_entrepreneurship_rate_has_fallen_by_almost_half_for_workers_with_a_bach)

</comment></comment></comment><comment><USER27> A "garage startup" is the silicon valley's symbol of romantic start "from zero". Fun fact though: most people around the world, even middle-class (by local standards), simply can't afford a garage.. So if your family owns one, you indeed come from a family with money.

<comment><USER28> I'm sorry what? Open up zillow and you can find plenty of houses with garages pretty much everywhere in the US that the middle class can afford. Here is one in the suburbs of chicago [0].

[0]: [https://www.zillow.com/homedetails/207-Lafayette-Dr- Bolingbr...](https://www.zillow.com/homedetails/207-Lafayette-Dr-Bolingbrook- IL-60440/5400388_zpid/)

<comment><USER27> I explicitly wrote "around the world".

</comment></comment></comment><comment><USER29> This is mostly true but not always. I was given nothing from anyone, and had an extremely hands off manner of being raised. Meaning I was taught nothing and given no encouragement. I definitely would've been in a gang if I had been born in a big city as I was very aggressive and a tough kid. Thankfully I was from a small town, and my excellent community saved me.

That said it took me until I was 36 to have the money to take any entrepreneurial leaps. It took me that long to save up enough money. Working in bad conditions that most kids with money would never put up with.

I'm not special in any way except my character is rare, resilient.

I wouldn't join in being resentful towards rich kids but I do recognize the need to force the wealthy to pay a lot more in taxes to give others like me and the worse off, a chance to succeed.

That's what we all owe to the society that enabled our wealth. Some owe more than others, as their wealth increases.

</comment><comment><USER30> I feel said type of founders having much less chance of becoming strong leaders. Anecdotally, I've worked with founders who have their parents wealth to fall back on take their position a lot less seriously than those who have nothing to go back to.

The situation I mentioned creates a high friction situation sometimes, in which those who work under rich founder (without many prospects outside the company) start to actually take the potential for success seriously, while rich founder is oblivious to poor management and bad decisions having any serious implications for themselves longer term.

It would be interesting to see a survey done on this actually, even more interesting would be to work for a company where consequences of action matter more.

</comment><comment><USER31> What a terrible article. Think of how many would-be founders read this and see it as an excuse not to start. Not to mention it takes credit away from all the founders who don't come from wealth.

<comment><USER11> > Think of how many would-be founders read this and see it as an excuse not to > start.

None. None of the founders I know were influenced by the endless stream of people telling them they couldn't possibly succeed. The people who aren't founders justify it with an endless stream of excuses.

</comment></comment><comment><USER32> The usual argument has broken out that yuh-huh and nuh-uh and there will be salvoes of anecdotes screaming into previously-entrenched opinions.

The thing is: some founders come from privileged backgrounds. They have nothing to fear, so they take big chances.

Some come from unprivileged backgrounds. They have nothing to lose, so they take big chances.

My guess? Both of these types of people will be over-represented, compared to the general population.

In any case, after two clicks, it's possible to read the original paper everyone was hanging their blog posts off at the time: [https://www.nber.org/papers/w19276.pdf](https://www.nber.org/papers/w19276.pdf)

The same authors have continued to work on the population characteristics of entrepreneurs: [http://faculty.haas.berkeley.edu/ross_levine/Papers/SES_FULL...](http://faculty.haas.berkeley.edu/ross_levine/Papers/SES_FULL_26042019.pdf)

</comment><comment><USER33> Does the author even know what genetics are? I was expecting some sort of study of adopted kids and risk taking behavior to control genes vs environments. Instead the author doesn't seem to realize that entrepreneurs coming from families with means is hardly evidence against the genetic argument, and in fact supports the opposite view.

</comment><comment><USER34> How does _family_ background disprove _genes_?

<comment><USER18> Jeff Bezos was adopted.

<comment><USER35> He was adopted by his step dad. However, his (biological) mother came from an educated family: "Bezos is the maternal grandson of Lawrence Preston Gise, a regional director of the U.S. Atomic Energy Commission (AEC) in Albuqurque". - Wikipedia

</comment></comment></comment><comment><USER36> > in a 2013 paper, and found that most were white, male, and highly educated.

> Research (paywall) looked at risk-taking in the stock market and found that > environmental factors (not genetic) most influenced behavior

how does one reach the conclusion of the title from these 2 very distinct data points? It's nonsense. Plus there is a very wrong causation argument being made for the first one. This is worse than clickbait

</comment><comment><USER37> This won't go down well with the temporarily embarrassed Donald Trumps on this website.

<comment><USER38> Would you please stop posting unsubstantive comments and/or flamebait here?

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

<comment><USER39> Can you explain why this comment is flagged?

[https://news.ycombinator.com/item?id=20545221](https://news.ycombinator.com/item?id=20545221)

I feel like I'm taking crazy pills of late. I understand you all may be dealing with unprecedented volume, but I hope you can address egregious ridiculousness when it occurs. I'm willing to acknowledge my shortcomings (I have many), but I would like to understand the fundamental errors of my ways.

</comment></comment></comment><comment><USER40> This article seems to be a "no true Scotsman" argument. The paper that it is based on, [https://www.nber.org/papers/w19276.pdf](https://www.nber.org/papers/w19276.pdf) , divides entrepreneurs into two groups, those with incorporated businesses and those with unincorporated businesses. Then says those with unincorporated businesses don't count. And then draws conclusions about entrepreneurs based on only the incorporated ones.

Of course unincorporated businesses are limited in size and complexity. Incorporated businesses are going to be made by people familiar with lawyers, business practices, etc. Businesses that require large amounts of capital are more likely to be incorporated. People who actually incorporate their business I suspect are more likely to have had a good education.

So yes, if you exclude all the people who are just hustling along with all the mom and pop businesses, then it seems to be that richer people are what is left.

The article also mentions that both incorporated and unincorporated entrepreneurs were more likely to engage in illicit activities in their youth. So it seems the lede of the article is not supported at all.</comment>


AmpMe, Sync your phone with friends to create the most portable sound system - <AUTHOR> http://www.ampme.com <comment><USER2> Seems like a really cool app idea.</comment>


Automated Sleep Coach helps you sleep better - <AUTHOR> https://eightsleep.com/blogs/news/artificial-intelligence-sleep-coach-eight <comment><AUTHOR> Max here, CTO and Co-Founder of Eight Sleep. We used 2.5M nights of sleep data to build this automated Sleep Coach feature. I'll be here all day to answer any questions from the community.

<comment><USER2> Hi Max, interesting concept. I ran across Sleep Coach because we've had a sleep app called SleepCoacher for a while. [https://play.google.com/store/apps/details?id=edu.brown.slee...](https://play.google.com/store/apps/details?id=edu.brown.sleepcoacher)

Your daily updates are actually quite similar to the automatic ones we generate as well :-) [http://jeffhuang.com/Final_SleepCoacher_UIST16.pdf](http://jeffhuang.com/Final_SleepCoacher_UIST16.pdf)</comment></comment>


Geek business myths - <AUTHOR> http://rondam.blogspot.com/2006/10/top-ten-geek-business-myths.html

<comment><USER2> He lost me at "[Microsoft] has never had a single brilliant idea in its entire history".

Criticizing the company is one thing. Pointing out the flaws fine. Anger at bad behavior fine. Even laughing at dumb mistakes, that's not gonna rile me.

But denying the brilliance of the company and people who built the powerhouse that is Microsoft? That, my friend is a far better candidate for number one in the list of top ten geek business myths.

<comment><USER3> My read of that was not that Microsoft wasn't a brilliant company, they just did not have any brilliant product ideas. Instead, they took ideas from others and did brilliant marketing.

The point being that a really amazing idea is a very small percentage of what it takes to make a really successful business.

<comment><USER2> All I did was quote what he said.

The paragraph is about ideas. If he meant product ideas I would hope he would say so, but no, he includes "Page rank, text-only ads, massive parallel implementation on cheap hardware" in the brief bit of Google worship. Only one of those is a product in the simplistic sense.

Hate on Microsoft all you want, but failing to recognize their ideas is gonna be a little limiting is what I gotta say.

<comment><USER3> I'm not MS-hating. I tend to agree with the article that very few companies do something completely new, including MS and Google.

MS did a brilliant job marketing. Regardless of whether you agree with their tactics, they executed on them in an amazing way.

Google had a really good technology that by itself would have amounted to nothing. However, they executed very well on the business side. Now people say "Alta-who? Isn't Vista from Microsoft?"

The point is that, as technologists, we get really wrapped up in the cool technology we are building, but that is a minuscule part of making a successful business. I've even been involved in a startup where it was actually detrimental, because everybody patted themselves on the back so often, they forgot they needed customers.

<comment><USER4> One need look no further than recent history to find evidence of this better than anyone can hypothesize about: VHS vs. Betamax. Tesla vs. Edison.

Vision is important. A good example of someone who deftly handles both tech and business is like Wolfram, but he's out of our league; most of us, anyway.

Fascinating read about Wolfram's embarkation into business: <http://www.stephenwolfram.com/interviews/88-fortune/>

</comment></comment></comment></comment></comment><comment><USER5> > One of the ironies of the programming world is that using Lisp is vastly > more productive than using pretty much any other programming language, but > successful businesses based on Lisp are quite rare.

Citation is needed. Paul Graham doesn't count.

<comment><USER6> Their rarity is clearly true. As for the grandiose assertion of superiority, it's worth noting the context: _Lisp programmers never develop the social skills needed to work effectively as a member of a team._

Fred Brooks didn't see Lisp as a silver bullet, which a "vastly more productive" language would be. I'm sure he talks about functional languages specifically in his retrospective essay "Still no silver bullet" (or something like that).

</comment></comment><comment><USER7> He instantly destroyed any chance at credibility with his senseless bashing of Microsoft.

</comment><comment><USER6> _...patent filings. It's not hard to do once you learn how (get the Nolo Press book "Patent it Yourself"). You'll do a better job than most patent attorneys and save yourself a lot of money._

I have that book. It's quite good (and very encouraging), but I find it not very helpful for software patents (eg. it wouldn't help much for patenting PageRank). I agree that "most patent attorneys" wouldn't do a good job on a software patent, but the idea is to go to one who specializes in them (another plus for the Valley) - like the one that Google used (it's on the patent).

</comment><comment><USER8> Was the first question that sprung to mind for anyone else on a few of these not whether it was accurate or not, but whether it actually opens an exploitable space?

Myth #6 particularly, I have a lot of reason not to doubt this, and if true it reads to me like "People are so incompetent by and large that outside the structure of a very large bureaucracy nothing will ever get done". The author even goes so far as to actually cite a counter example of exactly what I'm talking about with lisp efficiency.

</comment><comment><USER9> He made mainly good points. It is true to say that Microsoft isn't innovative. They buy innnovation rather than spawn it. It is true to say PHD's aren't an automatic respect earner, in fact they aren't really useful unless you are doing something specific with them (of course you could always argue how the soft skills are important, you should already have them if you have undergrad anyway).

Other than the MS thing (which I think is right) I don't see how this guy is far off the mark?

<comment><USER9> I don't understand why this would be downvoted. I wasn't rude or obnocious in any way, I just stated my opinions on the post.

If you think I'm wrong then tell me why rather than trying to silence me. This isn't reddit.

</comment></comment><comment><USER10> What a dumb asshole. Everything in the article is either banal, a straw-man, or very questionable, which contrasts a lot with his tone.

This guy somehow luckily got into a position of power where he is allowed to invest other people's money. Nobody would ever listen to him if it wasn't for that twist of fate.

<comment><USER10> Downvoters, please explain what is good in the article.

<comment><USER11> Generally speaking, an "asshole" is someone who is excessively inconsiderate and self-centered. No evidence is provided to support this assertion. I didn't down vote you, but your comment is essentially an unjustified and unnecessary personal attack.

<comment><USER10> I apologize for the personal attack. However, the author insulted, without much argument, so many groups at once (geeks, Microsoft, people that appreciate the value of ideas, Ph.D.s, etc.) that I would claim there is some ground for calling him an asshole.

I still think a community should listen to people with insight more than to people with money (especially if it isn't his own money, as in the case of a VC).

<comment><USER9> He didn't insult phd's or geeks and depending on how you look at it he didn't insult MS.

<comment><USER10> You say that based on what? Did you read it?

"The only thing a Ph.D. means is that you're not a moron, and you're willing to put up with the bullshit it takes to slog your way through a Ph.D. program somewhere." If he instead said that it is neither necessary nor sufficient to have a Ph.D. for task X, I would actually agree. But that would be too banal to catch attention.

"Microsoft has never had a single brilliant idea in its entire history. Microsoft has achieved success largely by seeking out and destroying other people's brilliant ideas." Depending how you look at it, seriously?

"The idea is very nearly irrelevant." If he instead said that he as an investor has no time/ability to tell good ideas from bad ones, it would have been reasonable, but this way it is insulting to people that work with ideas.

<comment><USER6> As someone who works with ideas, I agree with him very much that ideas are a dime a dozen. It's the work on the idea that is valuable - and therefore the people who do that work.

Unfortunately the term "idea" is flexible. At one extreme, it can mean a precisely worked out and implemented design or _concept_ (like PageRank), or at the other extreme, it could mean a wish (like "wouldn't it be cool to fly like a bird!" - which would be awesome btw).

<comment><USER10> Yes, I completely agree that there are many bad ideas (or even some whose quality cannot even be measured). But that is different from saying they are irrelevant.

I have seen many bad ideas, but I have also seen very smart, hard-working people stuck on a problem for a few months, while they really needed a new idea to move forward.

Also, if a good idea saves you a month of hard work, it is worth exactly as much as the month of hard work, isn't it?

In academia, smart, hardworking people are a dime a dozen, and a huge success is usually at the end of a string of many good ideas. I don't know mch about building a company, but I doubt it is very different.

<comment><USER6> I'm not saying there are good and bad ideas. I'm saying there are ideas that are questions and there are ideas that are answers.

The inspiration of "how can I fly like a bird?" is a great idea. But it's not an answer. The only value it has is that it inspires you (and that's why we have aircraft). It cannot save you a month of hard work.

But an answer that comes to you - why don't I swap the orders of the tubes, so that the one that is slower to warm up is second, so that when it amplifies something, there signal will be ready? It seems like a simple idea, but it refers to specific parts of a known system. This idea is an answer. This kind of idea could save you a month of hard work.

I'm saying that _question_ -like ideas are a dime a dozen - that's my position. Does that fit in with your point of view? I think the article means the same as me, but I don't know for sure.

<comment><USER10> I'm totally with you on the "ideas as answers", but I feel the article is bashing exactly these kinds of ideas - the ones that "geeks" tend to have.

There seems to be a number of people here that often say things like "execution" or "knowing what customers want" are what matters, as if those weren't composed of many good ideas, too.

<comment><USER6> I just reskimmed the article's comments on ideas, and I think you're overlooking his nuanced point of view on "brilliant ideas". For "business" (that's the scope of his comments) the key is being useful to a customer. He's exaggerating his position to counter the geek tendency to ignore this aspect.

2\. _for every Google there are ten examples of companies that had killer products that didn't sell_ \- and for 1/10 the idea alone is enough. Nuance.

3\. _Even on the off chance that you do manage to stumble across someone who is as excited about your idea as you are_ \- most people don't appreciate your idea (I can't even explain my current idea to myself half the time, as I'm lost in the gritty detail - that's why some kind marketing is needed). [BTW: I think that once your idea is successful, patent protection can be useful, esp to have something to sell to acquirers.]

4\. _What matters is what your customers think._ \- it's true that to sell something to someone, _they_ have to think it's worth buying. If you think it's a brilliant idea, that's only helpful if it somehow translates (in some way) to something that customers want. Maybe you can communicate your conviction that it's great (like Jobs?), or (more likely) you use the idea to provide them with something that they already value. For the latter, the brilliance of the idea is utterly irrelevant to them; they don't even need to know it exists.

9\. _The idea is very nearly irrelevant._ \- he's not saying the idea is irrelevant, but almost irrelevant. Another nuance. He's saying it _is_ relevant - just much less than he, or the hypothetical audience he writes for, would tend to weigh it.</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment>


Show HN - Sparrow6 – language agnostic automation tool, try it out - <AUTHOR> https://www.reddit.com/r/devops/comments/bul3b9/sparrow6_language_agnostic_automation_tool_try_it/ <comment><USER2> Neat, this looks really well done. I should know, I am working on something similar, and coincidentally I also posted to Show HN yesterday ( [https://news.ycombinator.com/item?id=20039933](https://news.ycombinator.com/item?id=20039933) ) :-)

It seems we had roughly the same idea, an intermediate layer/DSL which is used by a generic front-end, that can control different back-ends. Looks like we have a slightly different focus (both in terms of front-end, back-end, and how to describe tasks), but I find it highly interesting and educational to look at your design and architecture, and compare it to what I came up with.

Instead of languages as back-ends, for example, I'm targeting frameworks (Ansible, Terraform, although I also intend to add a shell and powershell adapter). And I'm only just now starting to think about how to feed one tasks output into the next tasks input. I'll have a look how you did this, to get some inspiration, hope you don't mind :-)

<comment><AUTHOR> Thank you very much. At least much better response then on reddit ;-))

Feel free to "steal" design, it's opensource ...

Freckles looks interesting ...

<comment><USER2> Ha, I know exactly what you mean, Reddit is scary, esp. when you show them something you build very dear to your heart. If you are lucky, they just ignore you... :-)

<comment><AUTHOR> Yeah, I'd say for some reasons _some_ people here seem to ignore something not passing pattern:

ansible|docker|terraform

sigh ...

</comment></comment></comment></comment><comment><USER3> please link to the repo instead of reddit.

(if you're the creator, consider a Show HN: )

<comment><AUTHOR> Sure. Here is the link - [https://github.com/melezhik/Sparrow6](https://github.com/melezhik/Sparrow6)

I can't change it in the post itself.</comment></comment>


Ask HN: What Kind of Biology Study Did You Have in Higher Education? - <AUTHOR>

I'm trying to get a sense here of how many of the HN participants, who I wildly guess are mostly people who studied computer-related subjects in their most advanced education, also studied a higher-education course in biology or a related life science. My last formal course in biology was my university's first-year undergraduate honors biology course, a course popular with aspiring physicians. While I was at university, I developed quite a penchant for reading journal articles and monographs in the university's Bio-Medical Library, but a lot of new biological science has been discovered since I last took a formal school course in the subject. How about you? What life science courses have you taken? What books or journals do you read to keep up with the subject? I like PLoS Biology
http://www.plosbiology.org/
PLoS Medicine
http://www.plosmedicine.org/
and
PLoS Genetics
http://www.plosgenetics.org/
because they are free-beer free, Web-based, and current. <comment><USER2> I just graduated with a BSc. in Biology from the University of California, Irvine. The plan was to go on as a physician, and thus, to fulfill med school requirements, I took 3 years of biology courses. Dna to Organisms, Biochemistry, Molecular Biology, Cellular Biology, Cellular Neurobiology, Language and the Brain, Neurology lab, Immunology, Human Physiology, and Evolutionary Biology, in no particular order.

By far, though, the best biology course I took was a graduate course called Systems Cell Biology, where we used Mathematica to create mathematical models of receptor responses and secondary messenger systems. Reason I loved it so much was, considering my lack of cs background, because it was the only class where I witnessed and experienced the the intersection of cs/mathematics and biology. The text we used in the class is called 'The Cell' by Alberts, and James Watson. I asked the professor of the class about further reading, and he suggested "2 texts: (1) An Introduction to Systems Biology: Design Principles of Biological Circuits (Alon, U.), and (2) Physical Biology of the Cell (Rob Phillips et al.)."

Hope that helped. You can email me for more info, email is in my profile.

<comment><AUTHOR> _Dna to Organisms_

That sounds like a very interesting course. That would hardly have been possible to present in my undergraduate days. What was the content of that course?

 _Evolutionary Biology_

I was hoping my introductory biology course would get more into evolutionary issues than it did. It hewed pretty closely to a plan of spewing out lots of essential facts without a lot of theoretical framework. I think the same course was presented much better just a few years later when a friend took it and a different professor was the lecturer.

</comment></comment><comment><USER3> I opted to take 2 intro to bioengineering courses during my computer engineering degree. We basically covered "Molecular Cell Biology" by Lodish. I really liked the courses. It was a bit hard getting used to reading the published papers, but I learned a lot.</comment>


India's Central Bank Bans Regulated Entities From Dealing In Virtual Currencies - <AUTHOR> https://www.bloombergquint.com/business/2018/04/05/rbi-bans-regulated-entities-from-dealing-with-virtual-currencies <comment><USER2> Well, hind-sight is 20-20 but let me post-rationalize.

India's biggest problem is unofficial economy and low tax base, and is trying to expand tax base and trying to get more and more people into formal economy. Cryptocurrencies are not really tax-base expansion friendly even if regulated. So this makes sense from the point of view.

The interesting part here is Government of Andhra Pradesh is a member of Ethereum Enterprise Alliance, so now how are New Delhi and "Amaravati" going to deal with this situation would be interesting.

<comment><USER3> With the alliance, Govt of AP is primarily aiming at integrating blockchain tech in to governance and that's that. Their vision is still perfectly aligned with RBI guidelines and will perfectly act as a case study for the rest of the states to follow should things fall in place. Not sure what "situation" are you hinting at.

<comment><USER4> People don't understand the EEA. They think it means "these partners will use the publicly traded ETH asset"

</comment></comment></comment><comment><USER5> India has strict laws on tender or cash. Personal foreign currency holdings are severely restricted. So, this doesn't come as a surprise at all.

That said,

> The regulator, however, decided that it will promote the use of blockchain – > a public ledger that serves as the backbone of bitcoin – in financial > services for strengthening transparency and improving inclusion.

As reported earlier, Wall Street is already cooling down on the blockchain hype:

[https://www.reuters.com/article/us-banks-fintech- blockchain/...](https://www.reuters.com/article/us-banks-fintech- blockchain/wall-street-rethinks-blockchain-projects-as-euphoria-meets-reality- idUSKBN1H32GO)

So, what plans does the RBI have for blockchain?

<comment><USER6> > _what plans does the RBI have for blockchain?_

Same ones my buddy at State Street did: say "blockchain" to a superior to get budget for long-needed database (and other back office) upgrades.

<comment><USER7> So _that 's_ what I should've done while I was there so we could've gotten a legit database to handle our yield curves processing! We were expected to do everything in Excel, and if we were lucky, MS Access :|

</comment></comment></comment><comment><USER8> Well, yes. The Albanian Lotto Riots of 1997 are still remembered, many Albanians lost their shirts over it. People made money through the free markets after the fall of communism, but there wasn't much of a banking system yet or experience with investments, so Ponzi schemers jumped in to fill that need. When these schemes failed, there was rioting that the police and military suppressed only half-heartedly ( _they_ had lost hard-earned money themselves), so local gangsters took it on themselves to restore order and became warlords in the process. If this sounds like a big mess, it was. English Wikipedia even calls it a civil war: [https://en.wikipedia.org/wiki/Albanian_Civil_War](https://en.wikipedia.org/wiki/Albanian_Civil_War)

<comment><USER9> Whatever word is appropriate, it was basically a complete disappearance or the rule of law. Basically, imagine all the police and military disappearing instantly, in a country that was already quite corrupt and infantilised by communism (not that I'm sure a more 'civilized' country would do any better under the circumstances).

<comment><USER9> I don't usually do this, but I'm very curious why this might warrant downvotes?

</comment></comment></comment><comment><USER10> The sad thing is that while the Indian government has all these regulations to prevent you from holding $2,000 of Bitcoin, or goes on adventures like demonetization disaster which affect ordinary working people, giant scams and irregularities (like Nirav Modi getting away with billions, or prominent citizens being named in the Panama papers) are business as usual.

<comment><USER11> A few tweaks to the phrasing and you've basically described all nation state behavior and the entire history of human attempts at "society".

Power brokers control the activity and discourse of the populace. Ignore the rules for personal enrichment (the US Congress and others pass rules for us [ banning insider trading] but not them).

This isn't just an India thing

<comment><USER12> Very true, most assuredly not just an India thing.(although perhaps India is a well known example)

The basic premise, stated another way, is that power tends to corrupt.

</comment></comment></comment><comment><USER13> Anyone who want's some insight/context into India's economic regulatory environment from which these controls came from should watch this (2 part) video:

[https://www.youtube.com/watch?v=hVwIZzGHxwc](https://www.youtube.com/watch?v=hVwIZzGHxwc)

There's a crazy amount of regulation and paperwork for even the most benign business. And much of it differs as you go between the different areas, so businesses that have to say transport goods from Mumbai to New Delhi may have to stop 4-5 times to fill out each regions regulatory paperwork.

It's really not surprising to such a top-heavy state being wary of something which seems like it can't be as easily controlled top-down. Which we saw with the "banning" of those paper bills - which had a significant negative impact on the economy, as much of the economy manages to function _in spite_ of those rules, large by side stepping them.

India will never catch up to China's growth unless they clean up this mess. And even beyond growth, it benefits no one to have so many businesses feel the _need_ to completely bypass all the rules because they are so bad ones in between the good.

<comment><USER14> Indian here.

India's regulation love is mind-boggling and matched only by Venezuella or North Korea. Only difference being that people beat the system no matter what.

My family decided to start a fully self-funded private school in 2004. Here are the steps.

1\. First we need to get NOC from the local government which we will get only if we show the land, building etc. Most important factor in NOC is "need". So we need to show paperwork that there are not enough schools nearby for the projection of new students over 10 years and all that.

Clearly, you can't argue that "my school would be better". (We paid $10k as bribe to get this)

2\. There is lot of regulation related to teacher's salaries and qualification, teacher-student ratio etc. Fee regulation etc. but relatively easier to get with very less bribe.

3\. Right to Education Law (RTE) kicks in.

We have to do tremendous amount of paper work and give 25% of our seats to government for free which the government allocates based on complex lottery that uses caste/income etc. Given that our school caters to lower middle class a plumbers kid is paying to subsidise education of electrician's son because the former did not win the RTE lottery.

We have to increase fees of remaining 75% students to cover the expenditure on these 25%.

The government promised a small money per seat by law. However for last 4 years we have not got a penny. The amount is any ways very little.

But then RTE has various other provisions and the violation of that results into withdrawal of NOC, closure of school and criminal proceeding against the principal/management.

Here are some of the provisions: \- There should be X toilets per 100 students. \- You can not dismiss any student for any reason. (not just 25% RTE students but all 100% students) \- You can not set any admission criteria what so ever. No tests, interviews, family background nothing. Pure lottery only. (For the 75% students)

Most parents know this and will simply refuse to pay fees after we give admission to their kids. All we can do is to beg.

4\. There is 100% exemption to any school that is run by management whose members are Christians, Muslims, Buddhists, Jain or Sikh. (which means RTE applies to your school only if the management is Hindu or Jewish)

5\. RTE resulted into closure of thousands of schools in India and mushrooming of Church run schools.

My family closed the school in 2016. There are various court cases still going around this.

<comment><USER15> Re 4: Article 30 in The Constitution Of India 1949 30\. Right of minorities to establish and administer educational institutions (1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.

This was put in the constitution as a guarantee to linguistic and religious minorities that they could maintain their identity within the vast majority. This was in liu of the more unpalatable option of providing special representation in Parliament for each minority group. In subsequent years after independence the Supreme Court clarified that the minority status would be determined by state. So presumably, you could set up a school in Mizoram if you are a Hindu. Or a Hindi language school in Tamil Nadu. If I am not mistaken, Sindhis run their own colleges in Mumbai under these minority rights.

<comment><USER16> Yes. Indian constitution discriminates based on religion when it comes to running schools and other edu institutions.

Article 30 gives special rights to christians and muslims and subsequent amendment 93 also gives right to occupation to minorities but not to Hindus and Jews. RTE was deemed unconstitutional even in the light of Article 30 in TMA Pai vs State of Karnataka thus giving rise to 93rd ammendment.

> If I am not mistaken, Sindhis run their own colleges in Mumbai under these > minority rights.

You are most certainly mistaken.

States can only declare linguistic minorities. Religious minorities are determined by a body called NCMEI. NCMEI by law can not have a Hindu as its member as a result a body that comprises of Muslims and Christians gets to decide if a Hindu school in Mizoram can start a school and avail minority benefits. They have categorically refused to do so in Kashmir, Nagaland and in Kerala so far.

</comment></comment></comment></comment><comment><USER17> Not unexpected. China might follow suit too. Developing countries who are experiencing capital flight will want to close the cryptocurrency loophole. For the same reasons, our governments are unlikely to want to chase away the golden goose.

<comment><USER18> Does China even have official exchanges?

Binance works from Hong Kong afaik.

<comment><USER17> The exchanges are not essential for capital flight. What China needs to ban, is Bitcoin mining, which does happen on the mainland.

</comment></comment></comment><comment><USER19> Blockchain without decentralization isn't that exciting. The problem with banning crypto is that there will be an entrepreneurial group of people willing to accept cryptocurrencies for a high fee and turn it into fiat or a commodity in a neighboring country. As someone developing in the crypto space, I look at this tech as the formation of a global, secure, always-on, always- accessible, standardized, permission-less database. When people talk of "the cloud" I feel that crypto platforms fit that description more aptly then traditional services.

<comment><USER20> "Blockchain without decentralization" is just plain database. Truly said, it's nothing exciting.

<comment><USER21> Well, it's even worse than not exciting; it's very slow database, so not the benefits of blockchain and not the benefits of modern dbs.

</comment></comment></comment><comment><USER22> Since the BJP government took power, India has had multiple faux pas from the central government front. They swapped out Raghuram Rajan with a no name yes man as the governor for central bank. Then they did demonetization, a quixotic adventure at getting rid of black money by making all legal tender obsolete on one fine morning. This caused deaths amongst people standing in queues in front of ATMs. They couldn't print the new money fast enough. To protect the new money from being used in black market, the party spread a rumor about some advanced tech embedded in currency to make it easy to track from satellites. This is demonetization 2.0 and would permanently damage all progress Indian startups made in FinTech space.

<comment><USER23> Same Raghuram Rajan knew about the massive PNB bank scam and did nothing?

</comment></comment><comment><USER24> I'm surprised they waited so long. But decision meshes well with the government push for government-approved (UPI?) digital payments, all with pretty strict KYC policies.

</comment><comment><USER25> Indian governance is a mess right now. A govt sending a message like this while collecting tax in parallel from the same system is a contradiction to me.

To start with RBI needs to sit with IT dept. And please include some CS professors.

</comment><comment><USER26> >Accordingly, the RBI has constituted an interdepartmental committee that will submit a report on the feasibility of a fiat digital currency. The committee will submit its report by June-end.

Man, I really hope they consider Taler. No blockchain bullshit, but it would be really nice to have a privacy-first digital currency launched in .in

<comment><USER27> I've said this before but it bears repeating: GNU Taler wants to give the government a backdoor. That's privacy in the same way the Clipper chip in the 1990s was privacy.

</comment></comment><comment><USER28> The matter is not entirely clear from the article. Surely they aren't banning individuals from holding bit coins? What does regulated entities even mean: I don't think they mean bitcoin exchanges because they aren't regulated; probably it means banks.

</comment><comment><USER29> Another positive step in the demise of the traditional banking system.

</comment><comment><USER30> This is the same federal / central bank which has banned or demonetised their own currency and killed economy.

<comment><USER31> And they still have the balls to call such childish manoeuvre as a success.

</comment></comment><comment><USER32> Eventually Bitcoin or the fiat currency goes to zero. I think Indian politicians made the wrong choice.

<comment><USER33> Zero! That is extremely wishful thinking. Even as a historical artefact Bitcoin will never go to $0. Hell, Bitconnect is still trading at $0.69 with $13,000 volume today. I really hope this is wash trading.

<comment><USER34> Bitcoin will be a multi-decade artifact at minimum. A novel collectable.

<comment><USER32> No fiat currency will go to zero.

<comment><USER33> Not 0 due to the cost of printing, but 4.2 trillion Marks to $1 USD in Weimar Germany 1923 is pretty close. Given that they aren't in circulation now, I think we can assume at least some period of 0.

</comment></comment></comment></comment></comment><comment><USER35> Early adopters to the blockchain and crypto market will position themselves favorably in ten years.

</comment><comment><USER36> The irony of all these banks and governments banning crypto currency purchases is that all they are doing is strengthening the use case for crypto currencies to begin with. One of the most appealing things about crypto currencies (specifically decentralized ones) is that you are free to hold them and use them however you like.

There aren't restrictions on who you can send them to, what time of the day you can send them, the maximum amount you can send. You don't have to worry about your bank account being frozen or suspended. You don't have to wait days for transactions to go through. You don't need a bank account at all to store them. The more that banks restrict the way people are allowed to use their money, the more it will push people into crypto currencies.

State backed crypto currencies are unlikely to succeed in the same way that decentralized ones like Bitcoin are because central control allows the bank or government to print as much as they would like and alter transactions however they see fit. It's unlikely there will be any sort of public ledger/blockchain or accountability. Eventually people will catch on to this and figure out a way to move back to Bitcoin and others. It may take 10-20 years or longer, but I don't think this charade is going to last forever.

In addition, I am always wary when banks do things like this citing reasons like: "Our goal is to protect our customers. It's too volatile. It's used for money laundering." Banks have never and will never care about their customers. In fact, they benefit from their customers going into debt (credit card fees, loan interest, overdraft fees, etc). How concerned were the banks about issuing loans to customers leading up to the 2008 housing crisis? Money laundering is still primarily done using cash and often with banks turning a blind eye.

This is all about banks understanding the threat of crypto currencies and trying to maintain control of the financial system by eliminating any and all competition. They know that widespread crypto adoption will make them obsolete. I think this battle will go on for years, but I think eventually the banks are going to lose. It's possible that they already know that too.

<comment><USER37> For people to be "pushed" into cryptocurrency they need to encounter a situation where they want to do a financial transaction and their usual payment systems don't work. How likely do you think that is?

<comment><USER36> I disagree with that. For people to be pushed into cryptocurrency, it has a lot more to do with debt and inflation and problems with fiat currencies. I didn't mention that in my original post because I wanted to focus more on the technology aspects, but I believe the monetary aspects will be the real catalyst that ultimately causes adoption.

The fact is, if you hold your savings in USD in a bank account with close to zero interest rates, your life savings will be worth less every single year (purchasing power, not dollar amount). With a deflationary currency such as gold or bitcoin, that is not the case. I think as people realize this, it will eventually become a self fulfilling prophecy where people are pushed into cryptocurrencies as a hedge against hyperinflation (it is already happening in certain countries such as Venezuela).

It stands to throw off the entire balance of power in the world which is why people in high places are trying to slow it down and prevent it from happening, but I believe it is just putting off the inevitable. That is why I am saying it wont happen today. I said 10 to 20 years as an aggressive estimate, but in reality it could take 50 to 100 years.

I also believe the entire surge in Bitcoin and crypto and subsequent crash may have been orchestrated by big players in order to shake the public's confidence and trust in these markets to push adoption farther down the road.

<comment><USER38> Bitcoin is not "deflationary". It's lost roughly the same amount of purchasing power since around Christmas as the USD has in my lifetime.

The difference between the USD and BTC isn't that one loses value every single year and the other doesn't. It's that one is actively managed to ensure it retains ~98% of its purchasing power over the course of the year and the other isn't.

That 2% fall really isn't such a huge deal for people that want instant access to the only money their creditors are required to accept, the only money they can pay their taxes in and the only money that's widely accepted elsewhere. (Other assets might actually gain purchasing power more often than not, but can also fall _relative_ to that impending tax bill)

Most of the world's wealth is stored in assets which are not money or bank accounts anyway. And if people want to hold _all_ their savings in something with a better return than their bank account, then bonds and stocks have been around, fungible and convertible to cash via apps for a very long time and payment app-ized versions of those are a far more plausible alternative to traditional banking for the average person than intrinsically worthless cryptographic signatures "mined" in China and shilled for on forums. The only thing unique about cryptocurrency as an economic asset is that it has no legal tender status and zero income stream, rights or assets attached to it. There might have been people orchestrating surges and crashes, but that's pretty much the _best_ case scenario for assets which people have no reason to value at all.

<comment><USER36> Clearly my opinion is quite unpopular. I am fine with that. If you gave me $10,000 today and gave me the option to put that money anywhere: Stocks, Bonds, Savings, Gold, Silver, etc. I would choose Bitcoin 10 times out of 10.

Yes, Bitcoin has lost a lot of value since Christmas, but it is still up around 600% from last year. I am taking a long term view here. It is unfair to criticize Bitcoin's decline because in terms of an asset class it is still miniscule. I consider it in the early price discovery days. Amazon stock declined from $107 to $7 around 2000-2001 so you could make the same argument that buying Amazon was a bad investment then, but you would look pretty dumb today. For reference, just last year, Bitcoin's market cap was around $15 billion. That would be the equivalent of buying Amazon at around $32 based on the current price.

The Bitcoin volatility will stabilize over time, and I think it will become a legitimate asset class. I would like to ask you in response to

> There might have been people orchestrating surges and crashes, but that's > pretty much the best case scenario for assets which people have no reason to > value at all.

Why would you say that fiat currencies have value (other than because the government says so)?

<comment><USER38> > Why would you say that fiat currencies have value (other than because the > government says so)?

This is a good question. Two reasons. Firstly there are many people who _must_ obtain dollars in future to repay debts (all new dollars are created as someone's debt) or to pay taxes of around a quarter of GDP per annum. Secondly, central banks actively intervene to decrease supply when purchasing power drops faster than they desire. Since people _need_ dollars, others will be able to purchase things they sell with dollars.

Bitcoins on the other hand are created permanently, and BTC-denominated future repayment obligations are tiny in relation to supply. Since virtually nobody _needs_ Bitcoin there is little reason other than optimism for value to remain above zero, never mind increase over time.

AMZN was not the only stock to drop in 2000-1. Enron also dropped. Bitcoin does not have the properties of AMZN (a legal claim of a share of ownership of a business which has since become very successul indeed) but does have similar properties to those of Enron share certificates after the company was wound up (people have spent money acquiring them, their authenticity is verifiable and they cannot be duplicated, but they grant no claim on any tangible assets or income stream and thus are only worth what some Enron-certificate-enthusiast is willing to pay for them)

</comment></comment></comment></comment></comment></comment><comment><USER39> Cryptocurrency is just high tech money. Governments that ban cryptocurrency just prove that they are obsolete governments.

I know this will sound crazy to most people but one of the things I am hoping to see from artificial superintelligence is for repressive outdated human institutions like the large countries to be replaced by systems that are contemporary and functional.

<comment><USER40> Plenty of countries limit exchange of their local currency to other currencies.

What are you on about with AI, that seems unrelated.

<comment><USER41> > _Plenty of countries limit exchange of their local currency to other > currencies._

This is true, however if those countries (and companies within) take out loans denominated in another currency, and want to pay in their local currency, they still have to worry about the offshore exchange rate via instruments like non deliverable forwards.

I wouldn't be surprised in the next coming years if NDF markets expand to using cryptocurrencies to enable even greater speculation on those local currencies.

</comment></comment></comment><comment><USER42> Makes sense.

You'd think that country that has issues with tax compliance and has already done things like removing large denomination bills would want to move to a fully traceable currency.

Furthermore it would make even more sense that it would use a currency of its own creation rather than one that isn't under its own control.

I think most of finance has accepted that cryto currencies are the future, it just won't be bitcoin or Etherium but rather a currency for each country/region just like fiat currencies we currently have.

<comment><USER43> Cryptocurrencies don't make any sense unless they're decentralized and not controlled by governments. That's where the value is. Bitcoin has value because it cannot be controlled, printed (inflated) or easily confiscated. It gives financial sovereignty and freedom.

But, it's not for everyone. You obviously believe that governments need to control finances. That's fine. I think most people don't want freedom. But there's certainly SOME percentage of the population that really want and value freedom. That's why Bitcoin has and will continue to have value.

<comment><USER8> _Cryptocurrencies don 't make any sense unless they're decentralized and not controlled by governments_

You can seat the people representing 90 % of hashing power on a stage: [https://twitter.com/lopp/status/673398201307664384](https://twitter.com/lopp/status/673398201307664384)

That's decentralization now?!

<comment><USER44> There's a meme that hashing power is equal to control, but the truth is that having a hashrate majority gives you a pretty limited set of powers, and if you abuse them you will see people flee to other cryptocurrencies or systems.</comment></comment></comment></comment>


Chinese firm paid insider 'to kill my company,' American CEO says - <AUTHOR> http://investigations.nbcnews.com/_news/2013/08/06/19566531-chinese-firm-paid-insider-to-kill-my-company-american-ceo-says?lite

<comment><AUTHOR> > causing its stock price to plummet and forcing the company to lay off half > of its workforce of 900 employees

Seems like it almost destroyed the company.

I wonder how they should've protected against this. Their source code was obviously their "secret sauce", but their engineers need access to it to work. The best I can think of is Secret Gov't style protections of no external network access, but that's hardly conducive to a productive work environment.

Maybe put some backdoors into the source to phone home, but in their case I doubt the wind turbines have wifi access.

<comment><USER2> You might be able to compartmentalize the knowledge. I.e., design the source code to be multiple independent modules that communicate through published API's. Then each person who has to work the source only needs access to one module.

Someone would still be able to steal the module they're working on, and the specs for the other modules it communicates with, but a single spy presumably wouldn't be able to steal all of the modules.

I doubt this is much outside of defense/intelligence, though (or even in those sectors for that matter -- look at how much Manning and Snowden had access to). It'd make things much more expensive and bureaucratic, for one, and it limits your top talent by forcing them to stick to their one little slice instead of improving the pie as a whole.

</comment></comment><comment><USER3> They should have put up a Chinese wall.

</comment><comment><USER4> I wonder what the "Chinese rules" are.</comment>