American Gods

This is fourth or fifth time I’ve used Neil Gaiman as the touchstone for an Epsilon Theory note, but it’s okay because he’s that good. Plus there’s Ian McShane in the TV version of American Gods, who is also that good. So don’t @me.

On the surface, American Gods is a fantasy story about Norse gods looking for a comeback, wrapped up in a Gaiman-esque history lesson about the origins of the Easter Bunny myth and the like. Think Joseph Campbell meets Steven Spielberg, which is … pretty high praise when you think about it. But what American Gods is really about, and hence the title, is that our modern attitudes and practices toward the Big Ideas that dominate our personal and social lives, memes like Cancer! and The Market! and National Security!, are EXACTLY like the attitudes and practices non-modern humans had towards Hades and Hermes and Mars. Not kinda sorta like. Not metaphor or simile like. EXACTLY like. We build exactly the same temples, except we call them hospitals and exchanges and TSA checkpoints. We say exactly the same prayers of propitiation, except we call them mammograms and technical analysis and deterrence theory. We have exactly the same professional priestly castes to guide the allocation of our worshipful tithes, except we call them health insurers and economists and lieutenant colonels.

Did you know that there are tens of thousands active-duty colonels and lieutenant colonels in the US armed forces? There’s a statutory max of 650 active-duty generals, in case you were wondering. I find this a fascinating statistic. But I digress.

Cancer! IS a death god. The Market! IS a commerce god. National Security! IS a war god.

I’m willing to wager a large sum that every single person reading this note has said a silent prayer asking for the favor for one of these gods at some point in his or her life.

There’s an Epsilon Theory note published on all this a few years ago, called Magical Thinking. It’s one of my all-time faves, and I think you’ll find it worth your time.

Every idea has a story, but the story is not the idea.

Stories change with the times. They are born, they live, and they die. But if the idea is powerful enough – if it’s a Big Idea like death or commerce or war – then the idea can survive the lifecycle of its story. It can find a NEW story and be reborn.

For the past two years, the idea of crypto has been wrapped in the story of Price.

Price is one of the Old Stories, one of the most powerful and certainly the most seductive. I completely understand why so many crypto adherents came to their faith through the allure of Price, and I completely understand why Bitcoin Maximalists and the various Hodler denominations – like all millenarian sects – will never believe that Price has deserted them. 

But Price is also the most fickle of the Old Stories. It has a very short lifecycle in any single host, and it survives parasitically by sucking out the life in one idea and moving on to the next. Just follow the raccoons if you want to know where Price is hanging out.

I think you can find Price over in the cannabis aisle of the meme supermarket today.

Crypto needs a new story.

Or rather, it needs a better Old Story. 

I think that better Old Story is small-l liberalism. I think it’s an autonomy of mind. It think it’s Clear Eyes and Full Hearts. I think it’s the Old Story of Liberty and Justice for All.

Here’s an example of what I’m talking about.

Kiva, Sierra Leone and U.N. agencies partner to implement ‘credit bureau of the future’

An exciting new partnership between Kiva, Sierra Leone and U.N. agencies is set to bring a nationwide digital identification system to the people of Sierra Leone that is designed to provide citizens with formal identity and control over their own credit information.

Sierra Leone’s President Julius Maada Bio announced the initiative, which could be a promising new model for global financial inclusion, during his address to the Sept. 27, 2018, U.N General Assembly.

The centerpiece of the partnership is the new Kiva Protocol, which will create and establish a national digital identification system using distributed ledger technology (DLT). The system will help ensure that every citizen in Sierra Leone has secure and complete ownership of their personal data and information, with the ultimate goal of helping people access the financial services they need.

“Sierra Leone will now modernize its Credit Reference Bureau and radically transform its financial inclusion landscape,” President Maada Bio said of the partnership during his U.N. address.

The United Nations Capital Development Fund and the U.N. Development Programme are partners on the project.

“Through this implementation, Sierra Leone is setting out to build one of the most advanced, secure credit bureaus,” said Xavier Michon, Deputy Executive Secretary of UNCDF. “It could serve as a model for both developing and developed nations in the future.”

Globally, 1.7 billion adults are unbanked and unable to access the financial services they need to improve their lives and their families’ futures. Two of the major barriers to accessing financial services are a lack of formal identification and a lack of verifiable credit history.

The new Kiva Protocol is designed to address these barriers by issuing digital identification to all citizens and enabling formal and informal financial institutions to contribute to a person’s verifiable credit history.

Currently, unbanked people cannot leverage financial transactions from the ‘informal economy,’ such as credit with a local shopkeeper, to build their credit history. The Kiva Protocol will capture a wide range of financial transactions—from bank loans to credit with a local shopkeeper—to help people access the financial services they need, including loans for businesses, education or basic medical services.      

Kiva is building the system that will record these transactions using distributed ledger technology. For 13 years, Kiva has worked to provide financial access to the unbanked and underserved, becoming a trusted name with strong partnerships across the global microfinance industry. We identified that a systems-level change in identification and credit history has the potential to unlock massive amounts of capital for the populations they serve, so began the hunt for a solution.

“With this partnership in Sierra Leone, we hope to carve a path to a system of global identity and federated credit history,” said Kiva CEO Neville Crawley. “This can unlock capital for the populations who need it most, allowing lenders to massively increase services and the flow of funds to the world’s unbanked.” Rollout of the Sierra Leone project is planned for 2019, after continued ongoing implementation discussions.

For more information, visit

What’s the crypto connection here?

The Kiva protocol is built on distributed ledger technology (DLT), which is the broad category of decentralized database structures that includes the more well-known blockchain technology that underpins Bitcoin. So when I say “blockchain not Bitcoin”, that’s shorthand for “DLT without a monetary application.”

DLT is a data infrastructure model that is in direct opposition to the far more common centralized database model. The centralized model is far more common because it can be directly controlled by a central authority. Like Google. Like the Chinese government.

DLT is a revolutionary tool to promote liberty and justice for all, because it is impossible for a government to edit or shut down a well-implemented, well-distributed ledger. 

DLT is a viable tool to promote liberty and justice for all, because, at least in this case, it is not directly threatening the State by trying to BE money.

There’s another crypto connection here, too. A language connection. The Kiva protocol is built on a cryptographic personal identifier, which means that each individual controls the release of his or her credit history. This is crypto as in “cryptographic”, not crypto as in “cryptocurrency”. You may think this is beside the point. You may think that a language connection is small beer. It’s not. When you look at the history of how Big Ideas merge and transform over time, particularly how religious ideas merge and transform over time (and if you don’t recognize that both crypto and small-l liberalism are religions, you’re just not paying attention), appropriating language and ritual is critically important. Read American Gods if you don’t believe me.

The Kiva protocol is for the unbanked, the hundreds of millions of people around the world who do not have easy access to the monetary goodies that the City of Man can provide, like credit at a reasonable interest rate.

In my opinion, providing cheaper credit to the unbanked is the single most promising initiative to spur global growth available to humankind.

And it’s just a start.

Anyone reading this note is not unbanked. You are almost certainly overbanked. The tools for promoting OUR liberty and justice, however, are the same. It’s a DLT data infrastructure combined with applications that do not directly threaten the State’s sovereign control over money. These are applications that take back our core Identity Data – what we do and where we go and who we go with, both physically and virtually –  from the thieving hands of the little technology kingdoms. 

You can read more about Taking Back Our Data here.

You can read more about our larger civics initiative here and here.

You can join us here.

Because we really are just getting started. 

To learn more about Epsilon Theory and be notified when we release new content sign up here. You’ll receive an email every week and your information will never be shared with anyone else.


  1. Avatar for kennyp kennyp says:

    The difficulty with “DLT” is that it is a database. To have a well-distributed ledger people have to have incentive to run the protocol. Without going down a rabbit hole, there needs to be a form of consensus, and often the incentive for determining that consensus is money. Whether it’s fiat, or bitcoin, or any of the other thousands of tokens/coins. If people aren’t getting paid to have a truly decentralized DLT, what is their incentive to run the protocol. That to me is the fundamental disconnect between the “blockchain not Bitcoin” crowd. Having a company or government or some form centralized group that is responsible for distributing or maintaining this ledger will require money. Often that requires some form of initial capital, it creates chokepoints, it creates attack vectors for the State, or just for bad actors in general. To me, it’s much more efficient to just run a database. Unless, it’s money. Which is the whole purpose of bitcoin, not blockchain.

  2. Avatar for kennyp kennyp says:

    This says it better than I can re:bitcoin.

    This is my favorite starting point for thinking about Bitcoin. It is more than “fiat vs sound money”. Bitcoin proponents are driven by a collective interest in exploring how we can evolve money for a better society, and how we can make the global financial system more stable and distributed. The creators of Bitcoin didn’t see how they could contribute to fixing the holes in the current system, because of powerful incumbents who have a strong interest in preserving the status quo. So they found a way to compete with them.

    But it’s not a hostile takeover attempt. Bitcoin’s purpose is not to destroy, but rather to offer us freedom and choice, and in so doing to spark a conversation about the nature of money and its crucial role in our society.

  3. Another very interesting company looking to address the problems of the unbanked is Tala ( They use machine learning to determine credit scores based off mobile phone use. The currency they leverage is M-Pasa . ( M-Pasa was developed in Kenya as a way to use mobile phone minutes as currency.

    There are great ideas moving forward that don’t get attention. That lack of attention is probably a good thing, in that it allows them to mature before they’re scrutinized.


  4. “if you don’t recognize that both crypto and small-l liberalism are religions, you’re just not paying attention”

    Isn’t “religion” the wrong word here? I recognize “religion” as a subset of “belief systems” but not a proper subset - religious thinking typically depends on appeal to a ‘higher’ or ‘extra-reality’ power. Believing can be based entirely on a perception of reality, on evidence sensed and perceived, whether accurate or not. Claims that atheism is a religion fall into the same trap. I’m paying attention; enlighten me.

  5. Avoiding government knowledge of my use of money defeats taxation. Bitcoin seems to have been devised for such a purpose, unless we include the laundering application as a more general usage.

  6. First of all, I can’t tell you how much I enjoy reading Epsilon Theory and it’s contents.

    I think that there is a misconception here about Bitcoin.

    I bought bitcoin several years ago for all of the wrong reasons.

    But I’ll tell you them anyway.

    When the ‘net first started decades ago, arguably the first viable commerce was done through porn, ie. The buying and selling of it.

    Back then, no one was sure if the ‘net would be a viable way of transacting and selling, and even if one did, buying the right company/companies was in itself problematic.

    A wise friend said, if you see an illicit economy forming, see how they are transacting, and it just might be a viable investment.

    So, when I read that drug runners/arms dealers/ (ie. the most ruthless capitalists in the world) etc were using bitcoin, I read a little bit about it (for the record, I’m not a tech guy) and bought some, less than 1% of my net worth.

    Also, for the record, I am a conservative investor, who might buy or make one trade or sale per year from my portfolio.

    Partly, I liked the potential anonymity, the ease of transaction and the idea that one day it could be used to make transactions world wide with out the involvement of institutions.(I read/listened to Andreas Antonopoulos, please read/listen to this guy before forming a opinion on the subject…)

    But mostly I liked how out of the box the idea in itself was.

    But Ben, for the hodlers etc and INITIAL bitcoin enthusiasts the story was never about PRICE.

    It just wasn’t.

    It was the idea that bitcoin was something different that might help accomplish so much of what you speak of in your writing.

    I agree, that a lot of people were burned, because they got into the story of PRICE way too late in the game.

    And now that story is gone.

    But for most of us who initially bought, and I wasn’t even that early a buyer, the price right now this second isn’t THAT important.

    For us, the story, now that the price has gone down, might just continue in much the same way that tech moved on after the tech crash.

    We might be wrong, if so, oh well.

    And yes, I know a bunch of hodlers are hoping to get rich( I wouldn’t complain if it sky rocketed again either.)

    But many of the rest of us are willing to wait on the sidelines and wait to see what develops.

    Thanks for reading this, I hope it added some insight,


    PS…And yes, when I speak on this, everyone asks “did you sell any…”? Yes, I sold about 1/3 of my holdings at 13.5k(on the way down not up), made about 20 times my original investment on that sale before taxes, and have held the rest since then.

    And yes, I’ve declared each coin bought and sold on my taxes.

    Just because I COULD do these transactions anonymously, doesn’t mean I would.

    So though I am an idealist, please don’t call me crazy.

    PPS, I wrote this some hours ago, and just posted it, but Ken P’s comments below, I believe are in sync with mine.

  7. Avatar for ET82 ET82 says:

    Tim’s story sounds familiar. My early recognition around the idea of bitcoin was thinking of an mp3 for money. Ditto on Andreas Antonopoulos. He’s a gifted communicator and makes some compelling arguments about the need for censorship resistant money. In his words, “Political dissent can be snuffed at the bank.” But his most persuasive knowledge comes from being a long time contributor to the evolution of the internet. As Ken P suggests, there are technical considerations why a blockchain or DLT may not accomplish what it sets out to do if it is being used to try and make the existing walled-garden of banking a little more accessible. To relate back to the early days of the internet, prior to mass adoption of the world wide web there was a broad assumption that the internet would primarily consist of curated private networks (intranets) that were hosted by large corporations. Individuals would then pay to subscribe to those networks because obviously they would have the best content available due to dedicated support. This concept was utter failure and all of the privately hosted garden networks withered against the onslaught of development that took place in the wilds of the open internet. The most interesting development taking place outside hit upon the most value for users. And even today we find that the partially fenced gardens of Facebook, Twitter, and Google have become choked by the weeds of commercialism and divisiveness. So it remains to be seen whether distributed ledger technology can be successfully grafted onto the closed network of legacy banking. Maybe there are some efficiencies it can offer if merchants at every level are empowered to act like mini credit bureaus. But I personally wouldn’t wager any faith on it. Poverty is not a technology problem. It’s political.

    My very first question hearing about any proposed standard is whether or not it will be open source. I do not see any sort of technical description on the Kiva site at present but I assume the project will be supported through private development. I hope it has set aside a substantial portion of the budget for ongoing security because I don’t see how this project would differ greatly from the costs associated with protecting a full-fledged credit bureau from data breaches. Encryption software is not a magical panacea and still requires a lot of persistent support in order to stay ahead of developing cyber attacks. One of the great advantages of open standard protocols is that the security research community can fully audit it for vulnerabilities. Otherwise we end up with never ending difficulties like that of the privately developed protocols put forward by the WiFi Alliance. Every single implementation of wifi standards to date has had nasty security flaws that should never have made it into common usage. Broadly speaking, privately maintained software does not accumulate the same kind of immunity without a lot of expensive support. How a distributed ledger is supposed to bestow the blessings of minimal infrastructure costs while offering robust security is beyond me. My non-expert recommendation for any such project would be to utilize the backbone of an existing crypto network with lots of participation (bitcoin or ethereum being the only likely candidates) in order to provide for its necessary security. That’s the sort of truce between heaven and hell I’d hope to see rather than yet another attempt to create a digital paradise on earth.

  8. Avatar for ET82 ET82 says:

    For good measure, I think it’s worth reminding that bitcoin does not currently offer a robust method to maintain anonymity. The entire bitcoin ledger is a publicly accessible record that can be analyzed by any party that chooses to do so. At best, it seems as impossible to stop someone from transacting over the bitcoin network as it would be to stop someone from using email. Yet that doesn’t afford any guarantee of anonymity. There are supposed to be some roundabout ways of obfuscating a cryptocurrency trail but my general understanding is that use of crypto represents a very small proportion of the overall illegal economy. Why go to the trouble when the existing banks remain very capable of hiding and laundering ill-gotten gains?

  9. I think an interesting Metagame (and this is heresy in the crypto-world) would be Bitcoin becomes Ceasar’s. In fact, it’s already there. It’s highly efficient at creating government knowledge of your use of money, which then goes directly to the taxation authorities. The current chokepoint in the regulatory system in the US are the gateways for fiat to be exchanged into Bitcoin. Every one of those chokepoints requires a license and registration at the federal level (FINCEN, and/or SEC, etc) and usually the State level as well. Each of those licensees are required to know their customers and keep tabs on every transaction they make for the benefit of the regulators (see Bank Secrecy Act, Patriot Act, and a whole host of other laws designed to prevent illicit activity). Long story short, if you transact in Bitcoin and think you’re not being 100% transparent to the taxation authorities then you are not paying attention. We can discuss privacy coins, but they are a very small percentage of the transaction volume relative to Bitcoin.

    Could a “Render Bitcoin to Caesar” Metagame work? Yes. Is it what the corporations are already doing? Yes. Will the idealists and crypto-purists be on board? No. Do they matter? That’s the important question. I think the answer is no. I think the End User is not a crypto-purist. I think the End User is not the predominantly white male 30-40 year old well educated personality that dominate the current market. I think the End User is predominantly poor, and a minority of some sort that does not have a traditional bank account but that lives in an increasingly digital world. A digital world requires digital money, and that creates a chokepoint which becomes a problem for poor or uneducated people. There are a lot more of them out there in the world as Potential End Users than there are crypto-purists.

    I think we need to stop singing songs to crypto-purists and start singing songs to Potential End Users.

  10. Avatar for bhunt bhunt says:

    Plus this fits oh-so neatly into every central bank’s desire to eliminate paper currency. I think you have to launch a new gov’t-sponsored coin, so it’s dollars as crypto rather than Bitcoin per se, and it probably starts as something that’s already fully virtual, like bank reserves. Fedcoin?

  11. Avatar for bhunt bhunt says:

    Thanks for such a thoughtful post, Thomas. I definitely share your concern about grafting DLT onto the banking system, particularly if the data on that ledger IS money (Bitcoin) or provides access to money (credit records and account info and the like). My sense, however, is that the Kiva project in Sierra Leone can work even in a semi-permissioned and less-than-perfectly-secure state, at least for a couple of years, precisely because the credit records of the unbanked are worth nothing to anyone! Even so, I agree that they will need to solve the private-key-on-hyperledger question even at this initial stage, and god knows that there are a million technical and non-technical obstacles to this project. But the game is worth the candle.

    The Kiva project is a special case, though, and I am definitely NOT thinking that this is a model for replacing Western credit bureaus or the like. In fact, the core tenet of what I’ve been writing recently is to get crypto OUT of the money-lending temples in any way, shape or form. As you point out, the security requirements for anything connected to the Western banking system are so enormous that you can’t get across the chasm of mistrust in a series of smaller steps. You either jump it all at once or you fall to the bottom. Put another way, when data of reasonably fungible value is stored on any ledger, distributed or not, to be trustworthy that ledger must be error-proof AND mischief-proof (a few bad actors, including sovereign actors) AND conspiracy-proof (a large group of bad actors).

    Luckily, I have absolutely zero interest in replacing ANY of these Western banking or transactional systems. I have zero illusions that I will be able to take back my taxation-related data from Caesar or my transaction-related data from Amazon. I’m interested in taking back a class of personal data that has ZERO inherent value, meaning that is not money and can never provide access to money. I want to take back my behavioral data, specifically my location and association data - where I go and who I go with, both physically and virtually. I want this data to be collected, because I understand that it is potentially useful TO ME, but I want to maintain full control over this data … read/write/save/publish permissions, if you will. That requires a decentralized system (I think) and a distributed system (I think). It also requires an error-proof and a mischief-proof system, but NOT a conspiracy-proof system. I think.

    Anyway, that’s where I’m going with all this. Comments welcome!!

  12. Got here through a link on the Epstein Common Knowledge/Harvey Weinstein/Kareem Hunt posts. The challenge with the creation of the DLT application to the unbanked is that the creator of the system can (probably) easily retain or build in a back door to track the product. Just because you think people are out to get you doesn’t mean they aren’t. And they got Woody another Common Knowledge playa…

Continue the discussion at the Epsilon Theory Forum


The Latest From Epsilon Theory


This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.

Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.