Bits about Money yearly recap and plans

Happy New Year! I have a housekeeping message (which you will see immediately below, if you’re reading this via email), a review on 2024, and then some updates about Bits about Money as a publication. Spoiler: BAM is not going anywhere; I’d be obliged if readers supported it with money.

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Bits about Money in 2024

We’re up to 53 essays at Bits about Money. Nine of those were new in 2024. This is a bit below my target, assuming typical form factor, which is 2,000 to 8,000 words. However, a few of the 2024 essays were longer-form deep dives, so I was approximately happy with BAM’s delivery in 2024. I am also broadly happy with how the publication has evolved.

The best piece of last year is almost certainly Debanking (and Debunking?). I am told it is still bouncing around the corridors of power. The piece addresses Marc Andreessen et al’s claims that crypto has been discriminated against as a result of intentional action by the government. We examine the procedural history, law, incentives of commercial actors, and political ramifications of these claims in substantial depth.

It is a rare piece about financial regulation of the cryptocurrency industry that is publicly praised by both the crypto VC who came up with the phrase “Choke Point 2.0” (“... the best and fairest treatment of the issue [I] could expect from a skeptic…”) and also by a former federal banking regulator (“This is a tour-de-force. This is absolutely excellent. Anyone interested in this issue should read this piece.”) Citation links.

The experience of writing that piece sort of brought BAM together as a project for me. Publications often have a beat and/or self-conception. BAM is aimed pretty squarely at deep dives into the weeds at the intersection of finance and technology. Blogs/Substacks/etc, however, sometimes suffer from being experienced by readers as disconnected essays unified only by authorial voice and recurring themes. And so it was edifying when, in explaining e.g. why crypto entrepreneurs and bodegas alike experience AML-related debanking, I was able to refer to substantial past dives into related topics, in addition to other reporting, statements of federal agencies, and similar. The substantial discussion of how the crypto industry underrates its own credit risk to banks, which included an extensive worked example of how Voyager Digital’s bankruptcy sunk Metropolitan Commercial’s crypto practice, was improved by many previous discussions of how deposit accounts in the U.S. are actually credit products.

The year also featured some pieces I’m almost uniquely qualified to write, such as the (fast!) postmortem on the Crowdstrike bug bringing down banks nationwide (including an analysis of why regulatory diktat and enterprise SaaS sales motions resulted in a security software monoculture). I also wrote an extended explanation of medallion guarantees, ACATS, and why your brokerage is unlikely to verify with you if another brokerage asks them to send away all your assets. Executive summary: you probably don't need to worry about this, but brokerages certainly do.

All in all, a pretty good year!

Plans for 2025

I’m presently coming up on the two year anniversary of leaving full-time employment. (I remain an advisor at Stripe, my prior employer. Stripe does not necessarily endorse what I write in personal spaces.)

I’ve treated these last two years as something of a sabbatical, after many fairly intense years focused on work to the exclusion of other concerns. This allowed me to relocate my family from Japan to America (mostly for family reasons), catch up a bit on fatherhood and video games, and spend some time thinking of what I want to do next professionally. I do not yet have a high-quality answer to that, but when I do, I’ll let the Internet know.

Professors sometimes use sabbaticals to write books. I likewise used freed up cycles to produce public professional output. BAM is the best known at present.

I also started a podcast, Complex Systems, which is very likely relevant to your interests. Complex Systems is perhaps a 40% overlap with BAM in terms of topics. The remainder involves wide-ranging discussions about various forms of infrastructure with experts in those fields. You can find it in your podcast client of choice or on the above website.

Complex Systems has published 26 episodes since July 2024, and (thanks to my intrepid assistant Sammy and the relative ease of speaking rather than writing book-length pieces) actually sustains a predictable publishing schedule: every week on Thursdays (less holidays).

BAM readers would likely enjoy my conversations with Lars Doucet on property taxation in the U.S., Ricki Heicklen on teaching trading in capital markets, or (my father) Jim McKenzie on commercial real estate development. If you are more of a reader than a listener, you'll be happy to learn that there is a full transcript (and substantial inline notes) with every episode.

An announcement: sometime in 2025, Bits about Money will release a companion audio version. I’m still playing with the exact format, but an experimental episode had me read a classic BAM issue (The optimal amount of fraud is non-zero) aloud and enhance it with essentially live commentary. I’ll let you know once there is a dedicated podcast feed for you to sign up for. This audio product will be free and public, thanks to the generous support of BAM readers. I presently intend audio episodes to follow the publication of BAM issues by a week or so. This product was built in response to requests from members, because apparently some of you e.g. want to listen about financial infrastructure at the gym or during your commutes. I’m happy to oblige.

I’m presently planning on ~12 issues of BAM in 2025, indicatively, but I understand that readers are primarily interested in quality/taste/curation and not word count. Should plans change, I’ll let you know.

Future topics are, as always, both dealer’s choice and heavily informed by suggestions from readers. Sammy and I are (knock on wood) nearing the tail end of an involved investigative journalism project which I’m excited to share, on bank fraud. Investigative journalism is an interesting change of pace from the usual explainers, commentary, and deep dives, but you should expect those to remain the heart of the publication.

Consider supporting this work by purchasing a membership

Bits about Money is supported by its readers. Thank you, again, to those of you who helped me pay the mortgage while writing 53 unpaywalled deep dives about financial infrastructure. I’m particularly committed to keeping Bits about Money publicly accessible for free, which is unusual for professionally-focused writing of its caliber. Your support allows me to do that. It is also essentially an ongoing bid for me spending time and attention on writing focused on this beat specifically.

I sometimes get asked why there is not a paywall. That is certainly not a revenue-maximizing decision. (Many technologists have deeply irrational cherished beliefs on this score.) BAM doesn’t have a paywall because I optimize for its reach and impact over its financial success. That has always mattered because some readers, like students and regulators, either can’t afford a subscription or (for structural/cultural reasons) find it difficult to justify expensing a trade journal. Most of BAM's hundreds of supporting members are professionals in tech and/or finance; support which is cheap to you is useful to many, including in leveraged fashions (e.g. via informing better public policy or educating prospective employees for your company).

The public availability also helps for an emerging use case: when you talk to LLMs about these topics, that actually works pretty well. This didn’t require a special negotiation with the labs; their crawls include the public Internet, in a way that they don’t include most professional writing about finance. When I was younger I would have apologized for this fact, because it means that a user asking an LLM about crypto-oriented debanking might get an answer informed by me, and not by e.g. the Wall Street Journal. As of today, the weakest link in the chain is the LLM, because my writing on debanking is substantially superior to the WSJ’s.

(The WSJ is very, very good at what they do, which is weighted more towards breaking news and not towards expert commentary on why the world works the way it does. I hope they negotiate a side agreement such that LLMs grow up reading the WSJ, much like I did. As I’m less capable of negotiating agreements with every lab in the world, publishing to the open Internet accomplishes the same aim.)

If you already are a paying Bits about Money supporter, thank you for your support. If you aren’t, please consider purchasing a membership. Most supporters are on the annual plan (currently $165 a year). We also have memberships available on a month-to-month basis and a more expensive option, playfully named after my most useful pricing advice to others.

A Bits about Money membership is likely a tax-deductible expense for businesses. It is also likely covered by your education budget if you work in tech or finance. Most of your other questions are answered on the memberships page.

Thanks in advance for your consideration. As always, I read emails sent to me, and particularly welcome comments on topic selection.

See you soon.