But the people push back.

It’s just a few leftist luddites harassing her on Facebook, but they say that water and electric rates will skyrocket.

Jess replies back that the neighboring state has fifty of these businesses, and their electricity and water bills are basically the same price. She also mentions that new capacity can be built, and they’re planning on doing so. She even loops back with the company to find out more about their business, and they inform her that they’ll just be running computers, nothing crazy. They again promise to pay for any new infrastructure as needed.

“Easy win,” she thinks.

In a few months, at the next county meeting, the handful of people from before have recruited friends and have now shown up in person. Now it feels like the entire environmental movement is pushing back.

The noise and water pollution issues are just too much for them to stomach. Apparently running computers kills nature and has countless harmful effects on the communities and animals adjacent to the building. They beg her to make sure these things aren’t built near any homes, schools, or forests.

Alright, she says, they can be noisy, and the pollution is a valid concern, so she says she’ll check again. She knows the land is unutilized farmland. No one would bat an eye if it turned into a junk yard or some unsightly manufacturing plant. But again, Jess discusses it with the company and some experts. Apparently, she finds out, these businesses can be dangerous if not built properly. She learns that localities should require noise padding, proper wastewater treatment, and, of course, for the new data centers to be kept far away from sensitive areas and placed in only heavy industrial zones instead.

By the time she goes to tell them the good news, the people have multiplied again. Now it’s normal people too. Everyone seems to hate these companies.

Seeing a campaign coming up, Jess signs an executive order mandating that these new data centers be built to the strictest standards around. There’s no way anyone can disagree now.

The companies are annoyed at first, but actually still want to move forward. They throw in money for the local schools and even give a donation to Jess’s campaign to show support for her willingness to engage them.

As predicted, though, the people still push back. At this point it’s everyone in the county.

Some of the protestors are still pushing back against electricity and water issues. Others bring newer critiques.

“The company’s only going to create a handful of jobs,” they claim, as if it were ever the goal.

“Actually, it’s just that the AI isn’t even worth it,” they add. “It’s going to take all of our jobs, enrich a handful of people, and make us all dumber, like social media.”

Jess sighs. At this point, she’s convinced that these people are brainwashed by online rhetoric. She’s hopeful that if she makes it past the election, it will all just blow over.

BREAKING - Merck pays $4.85B after hiding heart attack and stroke risks from doctors and patients

Clearly not all data center negotiations are as innocent as this one. Sometimes the deals reach cartoon levels of blatantly evil practices: literally forcing NDAs, moving through political back doors, or just ignoring the law altogether in the approval process.

That said, the protests happen regardless of those issues.

To make it clear: data centers are just racks of computers.

A handful is likely fine, but a lot can be a strain on resources. No different than houses or manufacturing or cattle farming. This isn’t rocket science, yet, for some reason, agreements can’t be found.

It’s weird. No matter what the company or the politician says, the people push back.

At what point do we need to look at the protestors and ask if they even want to make a deal?

Is that even ok?

More importantly, how the hell did it get this way?

BREAKING – 3M settles for $10.3B+ after contaminating public water systems with “forever chemicals” it knew didn’t degrade

In the world of data centers, the real estate in question is being sold to a company that doesn’t live in the town. The customers of that company also don’t live in the town. There are very few workers at the company. The company wants as much electricity and water as we’re willing to sell.

The infrastructure was never set up for this.

The entire model of corporate charters and commercial ownership of real estate was developed on the theory that there were always workers or customers that the town had an incentive to support. Water and electricity are regulated public utilities you sell at cost because the community also gets some jobs and a new place to shop. We’re not selling resources for profit. Sure, there’s benefit in the money for resources, but the company also creates social goods in the jobs and the thing being built. Now we’re just being asked to price our water, land, and electricity grid.

We’ve never really thought of an exit price.

BREAKING - FTC finds Facebook told users their data was private, then repeatedly shared it with advertisers and outside app developers without real consent

In crypto, the regulatory strategy of “ask for forgiveness, not permission” became the norm.

I watched as countless companies went to regulators to ask for approval. The regulators would take years debating the legitimately difficult choices, going back and forth with the new applicant.

During that time, some other companies wouldn’t ask, they would just launch. They would claim to be “decentralized” versions. They would add some form of technical obscurity, and many times, they would absolutely take off in terms of adoption. They’d find product market fit and billions in investments.

By the time the regulated option became available, the decentralized versions or the traditional banks were ready to pivot into that lane as well.

BREAKING - Countrywide settles for $8.68B after deceiving borrowers about loan terms ahead of the housing crash

Prediction markets, derivative exchanges, early-stage equity or “governance” tokens, stablecoins, and even crypto exchanges – all of them had an existing regulatory structure.

It was always the same playbook. The underlying details of the crypto version were slightly different, so the founders claimed novelty. Most of these guys were like 22. They honestly had no idea how regulations worked. The VCs and investors, however, almost certainly did know. But they didn’t care. The demand was there, and they weren’t liable.

The legitimacy of a 7-figure seed check and dozens of similar companies racing to the scene gave the founder more than enough peace to move forward.

The company would launch with some meaningless level of decentralization (e.g., have five people run your servers instead of one). They’d then issue a token and sell it to retail. By the time the regulators pressed charges years later, the VCs and founders were already onto their next venture. Those still around would agree to make some adjustments after paying a fine.

Regulators claimed the fines to be a sign of success, but they haven’t stopped anyone. To the up-and-coming founders, the fines and lawsuits increasingly meant you made it.

The running question for lawyers was “Can I go to prison for this?” The whole game was a free options contract: either make it and have the company pay a fine (you’re rich by then), or the company doesn’t work out, and you just keep your salary for the next year or two. As long as you don’t help terrorists or launder money, the optimal strategy is to ignore the law, launch, and then deal with it later.

So, after people got hacked, exchanges went under, and retail investors lost the vast majority of their investments, the regulators still can’t figure out why the law is ambiguous.

BREAKING - 426 positive salmonella tests at the farms since 2008 that the company never disclosed before shipping

Financial engineering has expanded this crypto-startup mentality to every industry. Whereas founding a company or building a business used to mean building a lifelong career, it now represents an increasingly shorter amount of time. It’s all driven by the same phenomenon of exit. I make money, I leave, and someone else deals with the consequences.

Thanks to PE or pre-IPO markets, founders and investors from AI companies to restaurant owners can now exit whenever they wish. Why set up a sustainable business when you can pump the books and get out?

The incentives are black and white, and yet we’re absurd to bring it up.

For the bigger companies, exit has long been the goal of the executives. “The name of the game, moving the money from the client’s pocket to your pocket.”

This principal-agent problem has always existed, but the system is now eating itself. Decades of self-interest-as-a-goal are pushing communities to throw out the baby with the bathwater. From ideas of government-run grocery stores to straight up banning data centers, can you really blame them?

BREAKING - Whistleblower reveals Facebook hid mental health research showing harm

The free-market theory is that what you do for your employer is good for society by definition. But somewhere along the line, it broke.

Those of us that were around during the great financial crisis watched as bank executives made money during the bubble and then walked away with golden parachutes. They got bonuses up until the crisis and then got to keep every penny. Those of us in crypto saw the same story as well; founders and VCs would make millions only to watch the token crash to zero.

For any business, after the founders and the original investors leave, the MBA caretakers and fund custodians are even worse. To them, fines are just another budgeted line item. We all know this. We all know the negative effects of salaries linked to temporary stock performance, and yet here we are.

BREAKING - Senate hearing revealed Irish subsidiaries paid no tax to any nation on tens of billions in profit

Back to the data center approvals in these small towns.

People know that no matter what deal they happen to cut, it’s likely going to be ignored at some point in the future. The founders and investors who are pushing these deals are not liable. They’re on the way out, and they will be fabulously wealthy regardless of how this plays out. The dreams of a stable business that serves the community are a pipe dream less plausible than the alternatives thrown around:

• The development plans will change, and the people will later learn it’s much larger than they agreed to.

• Some undisclosed danger of the noise or radiation will be disclosed in decades.

• The mini nuclear power plants being proposed to power these locations will have some catastrophe. We’ll be told it was an anomaly that could have never been predicted.

• The wastewater will accidentally seep into the water table and poison residents who will lose every penny they have in their now unsellable homes.

• The AI bubble pops, and the eyesore of a slowly decaying warehouse will serve as a reminder for decades to come.

BREAKING - EPA notice revealed “defeat device” software that let diesel cars cheat emissions tests

Politicians and companies will push back, saying that the contract will force a beneficial agreement.

But let’s be serious. What are the citizens going to do? File a lawsuit?

There are movies made when a small town successfully sues a giant corporation.

Even the federal government struggles to win cases. For local or state governments, they don’t stand a chance. Amazon alone is worth forty times Virginia’s entire state budget. Everyone knows corporations have more to spend on legal fees, and there is nothing small towns can do about it.

No one’s going to tell you there’s no police.

In the same way, no one had to tell corporate investors and executives that they aren’t liable for what the company does. No one had to tell the politicians they can inside trade or have their spouse directly involved in the companies they regulate.

Each group will deny it. They’ll pretend they can’t. The good ones will be bound by the invisible law for much longer than most, but eventually they’ll be replaced by the person who will.

BREAKING - Breach exposed 147 million people’s data after the company failed to patch a known vulnerability

For some reason we can’t just admit the system is broken.

I think that deep down, most of us fear what that actually means. If we really don’t trust corporations… if the rule of law really is broken…

It’s scary, and we’re trying our best to avoid it.

BREAKING - PG&E pleads guilty to 84 counts of involuntary manslaughter after neglected equipment causes fire

So, when people ask why citizens don’t want data centers, it’s not that they don’t understand the science or that they haven’t read the studies comparing golf courses to data centers. It’s actually perfectly valid that they just don’t trust these companies. Time and time again, these large companies have proven that they are not part of our communities, and they do not care. If backing out of one of these contracts increases their bottom line, they don’t live here, and they won’t think twice about it.

We need to quit assuming people need a why. Sometimes protecting a good thing requires conservative thinking that puts the onus on the thing wanting change.

BREAKING - Amazon to pay $20.5 million settlement over data center’s nitrate pollution

Just as you’ve probably started ignoring all of the links in this article, most of us ignore the reality all around us that the structure of businesses and their relationship to society is broken.

If AI is that important, we need different options. Maybe locally owned options. Maybe we should start revoking corporate charters or changing what “limited liability” looks like. Maybe a complete rewrite of equity ownership and the ability to sell. I honestly don’t know. But we need to restore trust, and no amount of promised revenue or cost-benefit analysis will help.

Milo runs it, but we all own it. Americans have shares, the British have shares, and even Germans have shares. As a result, or so Milo claims, the subconscious drive of everyone is to increase the value of the syndicate.

In one part of the book, Milo is confronted by the main character Yossarian. The syndicate killed his friend and Yossarian is angry and wants to know why. Milo, clearly frustrated, explains there was nothing he could do about it. He told Yossarian that the syndicate was contracted by the Americans to bomb a German bridge. The syndicate was also hired by the Germans to protect the bridge. Since he knew how to get around German anti-aircraft (he placed them) and he also knew when the attack would take place (since he planned it), the real decision was just how to keep everyone happy. Since the syndicate got an extra thousand dollars for each American plane shot down, he ran the numbers, and this was the best option.

Everyone won because the syndicate won.

He pleaded, “don’t you understand that I have to respect the sanctity of my contract with Germany?” He wanted to save Americans’ lives but was bound by his moral duty to increase the value of the syndicate. The lives of soldiers came secondary to the integrity of the contract. He explained that no one would argue for the lawlessness implied if the contract failed.

It seemed he had no option.

………………………..

I’ve been relatively quiet about the direction of Ethereum lately. In fact, the last time I took a vocal stance was pushing back against Lido centralizing the validator set a few years ago. But now we’re back to discussions on staking and centralization. It’s not that it’s necessarily urgent at the moment, but the dialogue is completely different this time around. Rather than discuss the merits of the proposal, there’s this almost religious belief that we shouldn’t change things.

We all want solo stakers, limited unnecessary payouts to centralized actors, and ETH (not an LST) as money, but we’re stuck picking which eternal path we need to take to get us there.

The real issue is that we’re so set on limited changes and neutrality that we’re trying to solve a values problem (we want a decentralized set of stakers) with a market parameter. It’s like Milo trying to figure out how not to kill his friend while running the numbers. “Which parameter can we tweak so we never kill our friends again?”

its not just staking

Like many of you, I’ve been here a while. I’ve also kind of changed my mind on a few things.

Hopefully you have too.

We should be growing up as a space. I know it’s hard for some to hear, but there’s a reason people tend to lose the ideological purism that defines one’s youth. For those in crypto early on, these ideas were of pure markets and privacy. We were cypherpunks building unstoppable tools, all with goal of eventually existing outside of society in some John Perry Barlow-esque digital utopia.

And so, create we did.

One of my biggest gripes now is when people say, “we should build a decentralized [enter category]”. The truth is that we built most of what we say we want. Pretty early on, we had all of these things, and they were truly decentralized. Prediction markets, off-chain payments (SpankChain), oracles, stablecoins, perps, even messaging protocols and internet browsers…all of it fit the bill of what we said we wanted.

And yet none of them won.

They had their moment in the spotlight, and we all worked through the UX bugs to get them to work for a minute, but the centralized versions beat them out.

Every single time.

Someone came along, stripped out every piece of decentralization, and mopped the floor in terms of adoption. And it’s hard to blame the user. Most of the time, these projects pretended to be some technological miracle that solved the trilemma and the few who said something were shunned as if they just didn’t understand.

The leadership and thought leaders in the space said nothing. You’d be lucky to get an Eric Wall article or have Vitalik politely hint at their needed progress in an article. Decentralization was a spectrum and projects were fine as long as they had something in their roadmap.

And this is how the space progressed. Over time those older systems were forgotten, and the newer ones were replaced by even more outright tradfi systems. The gas became too high to do anything non-financial on-chain, and the financial stuff was so intertwined with centralized stables that the point of decentralizing a higher point in the stack became pointless.

What happened?

To me, this is how we get back to Milo. Somewhere along the way, we went from having a side to just running the numbers in an emotionless system. We legitimized our relationship not based on ideas or goals, but through the common holding of a specific token. We all became part of the syndicate.

As a result, we too would sacrifice the goal for the price. In fact, the two became indistinguishable for most of the newer faces.

We’ll watch as repeat scammers pump a new coin or literal terrorists steal from a system. We’ll sit by idly as a thinly veiled Ponzi scheme captures billions of dollars.

We’d love to do something, but we have to respect the sanctity of the contract. They’re paying gas; they’re members of the syndicate too.

We then happily tout their usage in our aggregate statistics. “Look at our growing usage [of centralized applications]!”

We’ve been doing this for so long that we’ve made a religion out of not doing anything. We’ve been following this neutrality at the top level and then are left in disbelief when everything under it fails to fall into line.

In my book, I place the blame on neutrality and markets.

We set up these systems, and we think that they’ll just take care of themselves forever. We think there is such a thing as a perfect bonding curve. We feel like we can somehow encode our values into the parameters and walk away as the code and incentives perfectly work for all future generations.

We act as if the problem of the syndicate was in how the syndicate was structured. “If only we could make the numbers work out differently.”

It never will.

Markets will get captured and monopolized. Scams and extractors will use your system for everything it’s worth and you will be left with the scraps. Financialization and the need to put it all into numbers will drain every ounce of human connection, values, and goodness out of your system.

So stop the arguing on the perfect system or the perfect curve. It will never be perfect. Just move in the right direction and be nice to the people still hanging around.

If you’re lucky and successful, you’ll have to maintain this and argue about governance and monetary policy tweaks and social forks until you pass it on to your kids to do the same.

Just quit saying you’re neutral toward the use case. You do care who uses the system. You don’t want bad actors, and you don’t want scammers or systems that enrich tradfi. You want solo stakers and you don’t want LST’s. If Ethereum ends up as a platform used primarily by the CIA and Goldman to funnel money to terrorists, by the definition of CROPS, it could still be considered a success.

Reject this.

We can choose to keep moving toward a goal, and it isn’t the asset, the network, or especially the principles we use to build it. The goal is what it's used for. It’s for people posting private messages and using private coins. It’s for people using a decentralized internet. It’s for people organizing and being part of a digital community.

You do care if your friend dies and you’re ridiculous for pretending you don’t.

When you walk out my back door, it’s only about 100 feet until you hit the tree line. Previously blocked off with overgrowth, a few years ago I decided to cut a path to the trail that runs a few miles through the woods.

It was the best decision ever.

Even besides the runs I take through the barely lit woods in the morning, I get the chance to take my daughters on hikes all the time now that we don’t have to walk another half mile to the trail entrance. I just love being in the woods.

It’s not that the trail goes anywhere exciting or has breathtaking views, it’s just that it’s always changing. We always find a new bug, a snake, a deer, or even just the ever-present squirrels. It’s somehow always a great time and the best part is that you don’t even need to think about where you’re going.

You just follow the trail and it does the rest.

the path here

I’m not new to this writing thing. In my adult life, I’ve kind of never stopped writing. I started back in 2010 after college with a blog austrianinvesting.com. I was a huge Ron Paul fan and had to stand up against the evils of big government. Even found a picture on the wayback machine:

After I did that for the next 5 years, I took a couple years off and then started a Medium that I wrote for while I built DDA/Tellor (the crypto company I ran for almost a decade). Of course, Medium got horrendous at some point, so I tried Twitter (also went downhill) and some decentralized alternatives, but ultimately stopped the articles altogether for the past few years while I wrote my book.

And now that too is in the past.

I’ve never been one to enjoy the selling process, so marketing the thing is of course taking a side seat to working on new ideas, and of course, writing about them.

So with nowhere to post long form content, I found myself once again looking for a proper platform and Substack seems to be where the cool kids are at.

the content

I write longer form content on economics and crypto.

I’ll often venture into the hot topics of the day (e.g. AI, housing, politics) where I feel I can offer something different with my framework of thinking. I know I have some articles coming on the coming interest rate collapse, stablecoins wrecking monetary policy, AI labor effects, and the perils of immutability.

My thoughts on economics have come completely full circle since the austrianinvesting days and I don’t expect them to stay the same. In fact, I hope I find better arguments for every one of my positions.

So take the articles with a grain of salt. I tend to be so early to some trends that it’s a disadvantage and far too late on others to be cutting edge (e.g. starting a Substack in ‘26), so please don’t take any investment advice from me.

winding

So this is where my trail is going and I’m staying on it. I feel unfathomably blessed to be in a place where I have the time to write and the freedom to not have to hold back. The trail’s working out for me even if I don’t know exactly where I’m going.

If you do disagree with the arguments, I hope the writing is pleasant enough to keep you around and maybe give you a chuckle or two. I promise to make every piece something I’m proud to give.

-Nick