Everyone living in the 1980s knows the story of Michael Milken’s rise to become the “king of junk bonds” and his guilty plea and subsequent time in prison. However, what most do not realize is the real story behind the fall. A story that closely resembles the pioneers of decentralized finance (DeFi) working today.

Milken’s crime was far greater than any other person on Wall Street because he began unhorsing the old-line white-shoe establishment. — Edward Thorp

In 1987, Milken had the most considerable annual income in American history: $550 million. That is over $1.3 billion in today’s dollars. Two…


“Price is a function of trading time, which in turn is a function of clock time,” explains French Mathematician Benoit Mandelbrot. This trading time is similar to the time signature in music. According to Ph.D. candidate Michele Aichele, “music is sound organized through time.” She describes, “time signature refers specifically to the number and types of notes in each measure of music.”

Meter is the measure of how music moves through time. Rhythms represent the lengths of notes within the music. If Mandelbrot’s trading time is the meter, the rhythm is the price movement through the period. Sometimes prices, like…


As far as the laws of mathematics refer to reality, they are not certain, and as far as they are certain, they do not refer to reality.” — Albert Einstein.

Chaos Theory refers to dynamic systems that exhibit random states of disorder governed by deterministic laws that are highly sensitive to initial conditions. It is a mathematical toolkit that extracts patterns from inherently unpredictable systems. A discovery made famous by mathematician Edward Lorenz’s notable quote, “Does the Flap of a Butterfly’s Wings in Brazil set off a Tornado in Texas?”

In 1961, Lorenz was trying to simulate the weather with…


On October 19, 1987, ABC halted the airing of General Hospital with the words, “interrupting our regularly scheduled programming to bring you a special report.” Soon after, news anchor Peter Jennings reported the Dow Jones Industrial Average (DJIA) tremendous fall.

Known as Black Monday, the DJIA plunged over 20% within a few hours. Once graphed, the pattern revealed startling similarities with the first Black Monday of 1929. The one credited with ushering in the Great Depression.

When that October day of 1987 was over, stock markets had fallen by 45.5% in Hong Kong, 41% in Australia, 31% in Spain, 26.45%…


Perhaps the most fundamental discovery in finance came when Benoit Mandelbrot recognized markets have fractal properties. That is that each shorter timeframe is self-similar to the larger whole. Not perfectly so, but enough to analyze them as patterns.

The corner bookmaker has realized this for years. Sports betting relies upon the “spread,” a difference between points made and those against a team for any game. This simple formula ensures a bookmaker maintains a house advantage.

Market spread provides investors with an excellent opportunity to profit from volatility. The highs and lows between two timeframes are the same as the spread…


The Internal Revenue Service (IRS) is taking a more aggressive stance on taxing cryptocurrencies. According to Bloomberg, “the very first question on the standard 1040 Form is whether ‘at any time during 2020 did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency.’” Therefore, it is now more important than ever to understand cryptocurrency tax liability.

Unlike fiat currency such as the United States Dollar, cryptocurrency is considered property by the IRS. Meaning that if one sells or trades it for a profit, they must pay a tax. According to Tax Attorney Kathleen Samanski…


In 2010 Wired Magazine reported that a group of researchers predicted the stock market using Twitter feeds. Computational social scientist Johan Bollen of Indiana University-Bloomington can “foretell the direction of changes to the Dow Jones Industrial Average three days later with an accuracy of 86.7 percent.”

According to the report, Bollen “took 9.8 million tweets from 2.7 million people between February and December 2008, selected the tweets that indicated a confession of emotion (tweets that included the words “I feel” or “I’m feeling,” for instance), and ran the test on the entire data set.” The results were amazing. “I sank…


When the main character from a Michael Lewis book gives advice, it is wise to listen. Investor Michael Burry, made famous by The Big Short, is predicting crypto to plummet. “All hype/speculation is doing is drawing in retail before the mother of all crashes,” tweets Burry.

Burry predicted the housing market crash of 2008 and the subsequent economic trouble that followed. According to Bitcoin.com, he is not alone. Reporting, “Famous author and investor Robert Kiyosaki has predicted that the biggest crash in the history of the world is on the way.”

“The problem with #Crypto, as in most things, is…


In 2001 Jeremy Brown was an overweight catcher playing baseball for the University of Alabama. His batting average was .300 with an on-base percentage of .364. However, due to his bulky frame, major league scouts ignored him.

The consensus of baseball scouts is that players should be tall with athletic builds. Billy Beane, the Oakland A’s general manager made famous by Michael Lewis, thought differently. “We’re not selling blue jeans,” Beane snapped.

A crowd is heavily influenced by the loss of responsibility for the individual and the acceptance of the group consensus. It is the fuel behind the left-right paradigm…


It only took two years for Venmo to exit with over $25 million. A year later, it was worth $800 million. The company started in 2010 when Bitcoin was selling at $0.08. Today, Venmo is part of PayPal and Bitcoin is hovering around $40,000.

Regardless of the foundation laid by Satoshi, crypto has yet to be accepted as a mainstream payment method. Instead, it has become a means of speculation. Meanwhile, everyone from hairdressers to attorneys accepts Venmo. Including groups of twenty-somethings splitting a restaurant check.

The technical reason for crypto not being accepted as payment has to do with…

Todd Moses

The Uncertainty Architect

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