Sunday, December 18, 2016

Your Altruism is Selfish

When I defined my morality in an earlier post, I defined it around life, and one's own selfish desire to survive and replicate. Life being of infinite value does not add or multiply. It is one thing to say that someone is a moral monster when they are talking about saving a single life over thousands with no other information, but it is a completely different question to talk about one's own life, or the life of his kin. Our genes are not collectivist, there is nothing wrong with prioritizing yourself and your kin over any amount of other people. This is not a point of semantics, the survival of our species depends on some portion of the population holding up the torch of egoism as it faces the tsunami of altruism.

With that said, we all want the person with our life in her hands to sacrifice herself, because that is in our selfish interest. So we celebrate the hero, we call it "good" because it's good for us. The us who survived while the hero died. A central tenet of egoism is that altruism is non-existent and all actions are selfish, but that gives it too much credit. In fact altruism cannot exist because it is self-contradictory, for it to exist the "altruists" would have to be selfish to even want another person to act in their interests, and in the face of any serious selection pressure the altruists would necessarily die first.

The above linked podcast is fascinating and well worth a listen; there are many topics covered, and one particularly interesting one is the moral value of AI lives in Westworld, but this post is not about that.

This post is about the mutually agreed upon understanding that someone is immoral for choosing to avoid harm vs. having a much larger order of magnitude of harm placed on you. Their example was extreme to be sure, and truth be told I probably would willingly give up a pinky to save 8,000 people, but I wouldn't fault anyone for not being willing to do the same. 

No one wants to be in pain, this coming from someone who has experienced a lot more of it than just about everyone reading. How dare you, Paul Bloom, say that someone is a moral monster for choosing to avoid pain. Now that we have that outrage-outburst out of the way, let's seriously consider the idea that "empathizing" is in any way comparable to experience (really sympathizing but now empathy is cognitive empathy). Thought about it, pain is still WAY worse. In fact I like empathizing with pain sometimes as do many, pretty sure that's why they spend money to see horror movies...

Bloom and I are in many ways coming from the same place of reason as necessarily primary in making decisions in the modern world, but I completely disagree that it is "reasonable" to be willing to kill or maim yourself or someone you know and like; it is totally irrational to choose that. So irrational in fact that none of us would do it and we celebrate those who do it for us. 

Nothing could be more rational than wanting your cake and eating it too, that is why the expression exists. Egoism explains this phenomenon perfectly: the selfish praise the hero selfishly for their own selfish ends. Altruism is merely a false ethic perpetuated for the ends of social control.

Sunday, September 11, 2016

The Value of Immutability

Public immutability is the killer app of Bitcoin. It is literally the only place in the world that you can write a message in a way that anyone can read it without concern for censorship or backlash. In this post I outlined the digital land concept and the value proposition behind that, so in this post I want to focus on how Ethereum really shit the bed by violating that, and as Ethereum Classic begins to make changes I could very well see it overtaking ETH in market size in the future.

As it stands Ethereum is the dominant player in the market, and it makes sense because there are many apps being developed on the forked ETH blockchain. Many of these apps are illegal to build in a centralized way in the US, including a poker app and a prediction market, both of which will be coming out soon. As it stands now these businesses will live on ETH, though technically they could probably be ported over to ETC were ETH to somehow die.

Why would ETH die where ETC survives? Immutability. When ETH forked, they set a precedent for overwriting bad smart contracts. This precedent implies that with enough carrot or stick, it should be possible to do it again. If you are running a decentralized prediction market, it's pretty important to your business that you can trust the immutability of a the blockchain that this market is built on.

The Motivated Despot President
With our election coming up it is natural to imagine that there is a market for betting on the election. As it stands there is a growing bet out there with an opinion, but it's not likely that this represents a legitimate assessment because the numbers aren't really big enough and the weighting really disincents new money coming in. So maybe Gnosis launches in time for the election and maybe a DAO sized amount of money goes into the presidential bet.

Maybe the future president decides to declare war on someone along with a state of emergency, and with the enhanced power of the office decides to confiscate the funds put into the bet, since it is illegal to bet on elections in the US. Given the precedent of the DAO, they have a formula for doing that: threaten to prosecute every American citizen in the contract, threaten to extradite every non-American citizen, put the full weight of the US government behind that threat, and it probably will happen. 

Can ETH survive another hard fork?

You Got Un-forked
Ethereum was a massive undertaking, and credit needs to go where credit is due. ETC straight up stole their intellectual property, but now that it's here that community will have the opportunity to correct a number of things in ETH that need to be corrected. They can cap the coins, they can remove the difficulty bomb, they can avoid the move to proof of stake. They can do that because like Bitcoin, their community doesn't have a central leader with a vision like Ethereum's does. 

It is actually imperative on the ETC community that they demonstrate their ability to improve their code and adopt new ideas if they want to attract projects. As it stands now there are many variables that are keeping ETC down, but were they to demonstrate a vibrant developer community committed to growth of the network, I expect that there would be many projects willing to work with them due to immutability and maybe also cheaper gas.

Sunday, August 21, 2016

Bitcoin's Price is Antifragile to Hacking

I got into a little discussion in this post by Fred Wilson about the Bitfinex hack after a comment from blockchain expert William Mougayar about how bitcoin exchanges need to have deposit insurance. It makes sense on paper, but the truth is that with deposit insurance the best you're getting is a forced liquidation of your cyrpto assets should a hack occur.

In the comments I pointed to Coinbase as they hold 20% of the active bitcoin in circulation and questioned what would happen to the price should those coin disappear overnight. He didn't have a good answer for me, but I suggested a lower end of $100,000. Interestingly, in the previously linked post from Qntra they actually did a similar calculation a full year and a half ago and came to a similar conclusion. Their numbers were 100,000 BTC (Bitfinex was 119,756 BTC) and when they put that on the Bitstamp order book the price was $99,999 and that only got ~12,500 BTC in return.

All of this is to say that when bitcoins get stolen, the price goes up. The price is antifragile to hacking.

Sunday, August 7, 2016

Intellectual Ghettoization and the Rise of Trump

Another interesting term mentioned in the podcast discussed in my last post is the idea of intellectual ghettoization. Intellectual ghettoization is the separation of people by ideas, and as in life where separate but equal is not always equal, so to in the world of ideas is this the case. If news sources were categorized by their normative value based on truth and usefulness, many would not make the cut, but this does not stop millions of people every day from getting their news from these sources.

The only way the rise of Trump makes sense is in the context of intellectual ghettoization. How can someone be so hateful and untruthful and yet still manage to win the Republican nomination? Start by telling people what they wish were true, stir some passion by tapping into their biases and bigotry, and as long as you're using a communication channel that will not contradict your story

Trump's voter base is not fact checking. They don't care if he's right because they want him to be right. It makes them feel good believing that he's right, and they feel like this is their only chance to "take back their country."

For months now on his show Bill Maher has asked anyone he can "how do we stop Trump?" It's a very good question, because when people silo themselves from outside information sources that contradict their beliefs, they are unreachable by facts. I definitely don't have a solution, and nothing I can think of could be enacted over a time frame that is short enough to impact this election. It may turn out that Trump doesn't need stopping because his opinions are minority opinions, but that is to be determined.

For a project that has a longer time horizon, we could ask the same question about global jihad. These terror attacks are getting more and more frequent, Safety from these attacks can only be achieved by winning minds, as this seems to be an antifragile problem that gets worse as we try to attack it with force.

What we need is a war of ideas. This war must encompass not just islamism but all religious beliefs and in fact the very foundation in the idea of "faith." The baby and the bathwater all need to go out the window, and we need to start to come to terms with the fact that life goes around only once so that we can begin to make more practical choices about how to keep our species around and thriving.

Monday, July 25, 2016

Bitcoin is a Complementary Cognitive Artifact

I listened to a fascinating Sam Harris podcast recently that I would highly recommend to anyone. It is a discussion with David Krakauer of the Santa Fe Institute about a wide variety of topics related to information and intelligence. One of these topics is the idea of a complementary cognitive artifact

Cognitive Artifacts
Technology is a very broad term that we use to describe everything from the first hand axes built by homo habilis to open skulls to the most sophisticated computers. The knowledge of how to build this technology gets passed through culture and language, literally manipulating the brain of the person receiving this knowledge and giving the recipient the ability to use that technology in his own life. This knowledge is a cognitive artifact of that culture that in some cases has survived thousands or tens of thousands of years.

There are two broad categories of cognitive artifacts, competitive and complementary. A competitive cognitive artifact is something that replaces the human function in the brain altogether and generally does it much better, like a calculator or a car or a chess computer. When you use these types of cultural artifacts to replace your brain function, that function atrophies.

A complementary cognitive artifact does the opposite, using it expands your brains capacity. Take the abacus vs. the calculator. Using an abacus actually makes you better at calculations, not worse. Expert abacus users can run large calculations in their head because they have the machinery assimilated into their visual cortex. A map is another complementary cognitive artifact, as you can use a map to understand a landscape and even use your knowledge of maps to acquire knowledge of other things; e.g. a graph of revenue vs time makes use of the Cartesian plane.

Another example mentioned tangentially though not discussed at large is mneumonics, Memorizing things is actually very easy if you know how to do it, though it is not taught in school. There are memory competitions all over the world where people use techniques discussed in Moonwalking with Einstein, a book worth reading if you ever plan on memorizing anything in the future.

Bitcoin as a Complementary Cognitive Artifact
The Bitcoin code has a number of different concepts in it that represent complementary cognitive artifacts. Of course it is built on top of previously created artifacts like proof of work, elliptic curve cryptography, merkle trees, game theory, etc. There were also a few created by Satoshi that have since been used elsewhere, the most well known of which is blockchain.

The truth is that we are really just getting started with blockchain. Soon enough blockchain will be incorporated into the data structure everywhere that information is shared between entities that would prefer not to have to trust each other.

The Future of Human Organization
Another item mentioned on the podcast was government structure and how it will necessarily change as a result of modern technology. This is another area that I wish would have been discussed further but too much to discuss!

Krakauer said that the kinds of social networks that we lived in during the development of the nation state are fundamentally different from the types of networks that we have now through technology. I would have been very interested to hear his thoughts on how to do it better.

Sunday, July 10, 2016

Bitcoin and the Future of the World

This blog was started as a way of putting together an internally consistent, secular philosophy of ethics with an eye toward how to build a social structure that upholds these secular values. The primary social structure discussed to this point was a hierarchical government structure, but a lot has changed since this blog's inception.

At the forefront of these changes is Bitcoin. Many have heard of Bitcoin in passing, but only the indoctrinated actually understand how it works, why that is interesting, and how that is valuable. I'm not going to spend too much time talking about how it works because you can read that anywhere, but there are a few key things that Bitcoin does that make it the first step toward the future of government. A future where all is governed by a decentralized code base that people opt into in the same way that you subscribe to Spotify, one that hires people to do things that they are good at and pays them as individuals, all without any agent anywhere in a position of power to take resources. This is the future of companies, the future of cities, the future of countries.

Bitcoin and Why It's Valuable
First and foremost, Bitcoin is a decentralized public ledger of transactions moving small "b" bitcoin (coin for clarity going forward) from one address to another. The code is open source and being run all over the world. The ledger gets updated every ~10 minutes by a "miner" who wins a calculation lottery, collecting all of the transactions it can fit into the "block" since the previous block, preferring blocks with the highest coin per byte ratio.

In addition to the transaction value of coin flow, you have room to include other data into Bitcoin transactions as long as you can pay the fee to get your transaction into the block. What this means is that you can create a scripting language in the transaction and post it publicly and immutably to the blockchain where it will be forever.

The soon-to-be legal inheritance
Imagine that you are the favorite son of a billionaire, and he's on his death bed, you're there by his side taking care of him. His will is drawn up and all of the assets are distributed, but he appreciates your care so he calls you to his side one day to tell you he has a special gift. He has an industrial grow house of marijuana and wants to give it to you. Of course he can't leave it in the will because it is illegal, but he wants to protect you in case it becomes legal someday and his other sons want a piece. So you draw up a contract, you both sign it, and rather than having it legally notarized, you decide you are going to hash the digital file and post the hash to the Bitcoin blockchain. There are services that will do this for you very cheaply, and if you have the know-how you can do it for yourself for mere cents of coin for the transaction fee.

So you've been running this grow house for a couple of years, supplying your heir and heiress friends with the best bud out there. All of the sudden, weed is legal in your state and you want to go big with this thing. You incorporate and get your ducks in a row, now your siblings are coming for your weed farm saying they own an equal share. They take you to court and you show the contract, but the siblings say it's fake. Signature analysis confirms your dad signed it but it's not 100% reliable.

All of the sudden you bring out the Bitcoin transaction. The hash matches the contract. The PGP signature on the contract is a known signature of your father. The court rules that the farm is yours and every Bitcoin transaction is officially legally admissible, every contract notarized on the Bitcoin blockchain legally binding.

Bitcoin is digital land
People like to call coin digital gold because it has a strong store of value property to it with the total supply being controlled by the mining process and a cap of 21,000,000 coin at the end of mining in 2140 or so.

For my money, the better analogy is digital land, Each coin is a 1/21m plot of the Bitcoin blockchain that you can build whatever you want into (a contract notarization in the above thought experiment). Each of these plots can be broken into as many sub plots as the transaction fees will allow, and in the future the limit to this will be 10^8 pieces. Right now it costs 0.0001 coin to send such a transaction and in the future it will be more like 0.0000001 to send such a transaction, with that value being worth maybe $10 in today's dollars. That would be roughly $1.67 million in today's dollars per coin and maybe $35-36 Trillion total market cap.

Darwin Money and the Death of Finance
Where will $35T come from? It will come from USD, GBP, EUR, gold, stocks, real estate. Bitcoin has a survival advantage that will cause it to become the world reserve currency and the default store of value for the majority of the world's wealth. This advantage is that it is decentralized and open source. No longer does China have to trust USD, or any country trust the printing presses of any other country, there is an impartial public option.

The world of finance exists because of inflationary money. If you have savings, you cannot hold it and watch it grow because your money is devalued by the printing press and treasury issuance. Those in power would call this a "feature" of the economy, it stimulates the economy by forcing people to spend. But what it really does is cause the poor to get poorer as their cost of living goes up.

Think of the implications if you could park your wealth in a deflationary asset and watch it grow over time. All of the wealth that would be moved out of the stock market, treasury bonds, real estate, every investment vehicle out there. Maybe a small portion of that money stays in and some of the banks survive, but most of it comes out, because parking your money in the S&P 500 is no longer the best way to protect it.

An "Uber" for Everything
The sharing economy is here, with AirBnB and Uber paving the way. All these services do is match private citizens who provide a service with private citizens who need that service and keep a ledger of trust. In the future, all of these services will be open source decentralized, out-competing the Ubers of the world by saving on fees. Government is just a set of services at the end of the day.

The future of government is decentralized code that triages tasks and wages in a way that runs a functioning society transparently and free from corruption.  All government functions will be carried out by people hired ad-hoc by these services based on reputation and availability

Decentralized is the Ultimate Economies of Scale
In a previous post I talked about the move toward centralization as the natural progression as our communication and transportation improve, because this allows for a increased economies of scale that benefits everyone. On the surface, it may seem like this move toward decentralization will fly in the face of that rule, but in fact it's quite the opposite. Centralizing control on decentralized code actually comes with it massive economies of scale, while also preserving personal freedom that allows us to continue our lives as we see fit.

Decentralization was barely conceivable when I wrote that first post, because no one had done it successfully (or at least, I didn't know about it at the time). Now that it can be done, it will be done, it's just a matter of when.