Month: June 2018
From the comments, Vitalik Buterin
Analyst
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I’ll answer this one here in detail because it’s probably too technical for it to be valuable to put a good answer into a Conversation with Tyler.
> 1. In retrospect, was it a good decision to have ethereum bytecodes executed on every single mining node? And if not, would he have selected sharding and plasma or a different solution?
Ultimately the answer is, yes given the knowledge we had at the time, no given what we know today. If I was doing Ethereum back then with the knowledge that I have today, I would obviously shoot straight for exactly the design that the research team is shooting for today (Casper PoS, sharding), and I would have actively encouraged developers to work on state channels and Plasma from day 1. Layer 1 scaling (sharding) and layer 2 scaling (state channels and Plasma) are complementary; gains from the two are multiplicative with each other, so it’s not a matter of A vs B, it’s A and B.
Ultimately, for a distributed validation system to work, you need to satisfy two properties:
1. There are enough (randomly sampled) nodes on average validating any given piece of data that invalid data will under no circumstances get through.
2. There are mechanisms that can ensure that if bad data *does* get through (eg. because of a 51% attack), then clients can detect this. In a sharded system, there is obviously too much data for clients to verify directly, but there are indirect approaches that can be used that can give equivalent assurances with some additional security assumptions (STARKs, fraud proofs, data availability proofs…)> 2. How confident is he that transitioning to proof-of-stake will be successful? What are the risks of proof-of-stake?
Close to 100% confident that proof of stake is possible in principle; many chains are using (crappy versions of) it already. There’s obviously the question of how strong properties we can achieve with PoS though, and there are some edges of that that are still being worked out. The main risks that I see are (i) weird game-theoretic attacks on the specific design that we end up going with, and (ii) pool centralization.
IMO Satoshi’s PoW is really nice in part because of its sheer simplicity; the simplicity helps with decentralization because pretty much anyone can understand how it works, whereas traditional non-PoW consensus algos like PBFT are far more complex. Casper FFG was designed in part to replicate something close to PoW-style simplicity while still having the safety and liveness properties of traditional BFT consensus algos; and I’m obviously interested in minimizing complexity of the sharding design as well.
Here is the link, he offers several other “highly technical” answers in the comments.
My take on why Singapore works so well
That is the topic of my new Bloomberg column, of course I am considering only one small piece of a larger puzzle. Here is one bit:
I view the development of Singaporean civil service culture as one of the world’s great managerial and political success stories of the last 50 years, though it remains understudied and underdiscussed in the West.
Singapore also mixes many of the virtues of both small and big government. The high quality of the civil service means the country gets “good government,” which pleases many liberals and progressives. The high quality of the decision-making means Singapore often looks to market incentives – congestion pricing for the roads is one example of many – which pleases conservatives and libertarians…
Is Singapore a small government or a big government country? The correct answer is both. Government spending is about 17 percent of GDP, which makes it look small and helps hold down taxes, which is good for business and productivity. (And there are no additional state and local governments.) But if you look at stocks rather than flows, the government owns shares in many critical Singapore businesses, plus it de facto controls lucrative sovereign wealth funds. The government claims ownership of the land, although it allows for active markets for transferring rights of use. All of these resources give the government the ability and credibility to get things done.
I even take on the chewing gum caricature…do read the whole thing.
Monday assorted links
1. “We have every right to hate you.”
2. Land Grant colleges were good for the United States.
3. Eric Weinstein video explains the Intellectual Dark Web.
4. How captured is our economy? (CapturedEconomy.com, a new website resource from Lindsey and Teles).
6. North Korean officials explore Singapore.
7. “Thomas Schelling’s medal went on the block May 31 at a Los Angeles auction house, fetching $187,000. His family donated the proceeds to the Southern Poverty Law Center, a nonprofit that fights hate and bigotry and advocates for civil rights through litigation.” Link here. And: “…his widow, Alice Schelling, says the most influential book he ever read was one for children, the 1927 Newbery Medal winner “Smoky the Cowhorse” by Will James.”
What should I ask Vitalik Buterin?
I will be doing a Conversation with him (no associated public event), what should I ask him?
If you have been living under a rock, here is his Wikipedia page. Here is his Twitter account. Here is his personal website.
We will never disapprove of current levels of animal cruelty
Not fundamentally, no. However terrible our current treatment of animals may be, most of us don’t seem to mind very much, and I suppose that is consistent with what a Darwinian theory would predict. Here are a few facts about the sociologically specific nature of vegetarianism:
They tend to be liberal-leftist politically: in USA, we have a 52% of liberals versus a 14% of conservatives and a 34% of self-styled “neutral” [27];
They display an inclination to secular/atheist views on religion matters (e.g., Humane Research Council [27], where it is shown that about half of the American community of vegans/vegetarians is not religious—a percentage that is considerably higher than that of the general population).
Less predictable may be the fact that a rather high percentage of vegans/vegetarians revert to carnism after a certain amount of time (in US, according to Humane Research Council [27], 2% of the respondents were vegans/vegetarians, while no less than 10% were former vegans/vegetarians)…
Not by chance, of the mentioned 10%, one third dropped the lifestyle after 3 months or less, one half within a year, and therefore only less than 20% “resisted” for more than a year.
That is from a recent article
Artificial meat? Yes, yes I know. But we already have cauliflower, and drenched in yogurt sauce and green cardamom pods and garam masala that is quite delicious, and yet it doesn’t seem to matter. Vegetarian food in India already tastes better than most meat dishes consumed in the United States.
Hat tip goes to Rolf Degen.
The long-run consequences of male-biased sex ratios
From Pauline Grosjean & Rose Khattar, forthcoming, Review of Economic Studies:
We document the short- and long-run effects of male-biased sex ratios. We exploit a natural historical experiment where large numbers of male convicts and far fewer female convicts were sent to Australia in the 18th and 19th centuries. In areas with more male-biased sex ratios, women were historically more likely to get married and less likely to work outside the home. In these areas today, both men and women continue to have more conservative attitudes towards women working, and women work fewer hours outside the home. While these women enjoy more leisure, they are also less likely to work in high-ranking occupations. We demonstrate that the consequences of uneven sex ratios on cultural attitudes, labor supply decisions, and occupational choices can persist in the long run, well after sex ratios are back to the natural rate. We document the roles of vertical cultural transmission and marriage homogamy in sustaining this cultural persistence.
Hat tip goes to the excellent Kevin Lewis.
Sunday assorted links
1. What makes a country good at soccer? (The Economist)
2. The Coasean Koreas. Important.
3. The language of Mister Rogers.
4. “The 43% of Democrats who say the U.S. benefits from having a class of rich people is down significantly from six years ago, and Democrats remain much more negative than either Republicans or independents about the impact of a rich class.” Amazing.
5. Does “musical paralysis” set in after age 28? (not for me)
*Won’t You Be My Neighbor?*
That is the title of the new documentary on the life and career of Mister Rogers. Are there better movies on?:
1. The roots of American greatness.
2. The importance of “will” in building a succcessful career.
3. Toleration and individualism and respect for children.
This has to go down as one of the better documentaries, and it seems Mister Rogers was a better and more important thinker than many of the intellectuals of his time. I had not known that Rogers had been trained and ordained as a Presbyterian minister.
On top of all that, the film is Straussian throughout. Definitely recommended. By the way, the documentary doesn’t mention this, but the show actually had its origins in Toronto on CBC.
What I’ve been reading
Gregory Claeys, Marx and Marxism, a better than expected take on where Marxism came from and how Marx’s different intellectual periods fit into his life. One of the better introductions to Marx, noting that it does not stress issues of economic theory.
Tarjei Vesaas, The Ice Palace. Not well known in the United States, but still one of the better Norwegian novels. Short, readable, concerns a boy who goes missing.
Peter Cozzens, The Earth is Weeping: The Epic Story of the Indian Wars for the American West. Very good overall history of the post-Civil War campaigns against Native Americans, still highly relevant for understanding American foreign policy, and attitudes toward guns, among other things.
David Olusoga, Black and British: A Forgotten History. A very strong work about race relations on the other side of the Atlantic. I had not known that “Ob-La-Di, Ob-La-Da” is Yoruba for “life goes on.” The song as a whole was intended by Paul McCartney as a parable of the possibility of West Indian assimilation and it was a direct response to Enoch Powell. Definitely recommended.
Linda Yueh’s What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today’s Biggest Problems, is probably the closest we will come to having an updated version of Robert Heilbroner.
Joshua Keating, Invisible Countries: Journeys to the Edge of Nationhood looks at Abkhazia, Kurdistan, Somaliland, Liberland, and a Mohawk reservation straddilng the U.S.-Canada border, as well as a Pacific Island that might disappear. An interesting book for fans of alternative governance arrangements.
I’ve now see the page proofs for Steven Pearlstein’s Can American Capitalism Survive?: Why Greed is Not Good, Opportunity is Not Equal, and Fairness Won’t Make Us Poor. His view is not mine, but if you want his view this book is the place to get it…
Income inequality has stabilized as of late
But from 2007 through 2014, the figure stabilized. Looking at market income, inequality increased by only 3 percent. Once you add in cash payments and in-kind transfers from government safety net programs, inequality actually fell over this period.
That is from Michael Strain at Bloomberg.
Saturday assorted links
1. The link between pay and productivity is still largely intact.
2. An exceptionally effective lobbyist.
3. Referenda tend to be anti-business.
4. Mister Rogers fixed old shows if he felt they were wrong.
5. Daniel Lemire’s predictions, none of which cite Mister Rogers.
MAGA?
US exports increased 14.4 percent from YTD April 2016 to YTD April 2018, from $725.8 billion to $830.5 billion.
US imports increased 16.5 percent from YTD April 2016 to YTD April 2018, from $886.2 billion to $1,032.3 billion.
Here is the source, via James Hohman. You don’t have to credit Trump with much if any of that, the broader point is that, as I argued yesterday, the age of trade is hardly over.
The Economic Limits of Bitcoin and the Blockchain
From Eric Budish at the Booth School of Business at Chicago:
The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin’s must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the system’s vulnerability to a “majority attack”, namely that the computational costs of such an attack must exceed the benefits. Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important — e.g., if it became a “store of value” akin to gold — which suggests that there are intrinsic economic limits to how economically important it can become in the first place.
I like the framework of this paper, though I wonder if there shouldn’t be more on the coordination costs of mounting a “double spending” attack, namely how exactly the returns from the attack should be divided. Perhaps the most positive scenario for Bitcoin is if those coordination costs rise with the returns to the attack itself, in which case a much higher market value for Bitcoin still might be stable.
Friday assorted links
1. The regulation of language.
2. Kristof on North Korea and Trump (NYT). And Michela Wrong on Ethiopia and Eritrea (NYT).
3. The gig economy is not a big deal (NYT).
4. When Two Economists Scientifically Ranked New York’s Best Deli Sandwiches.
5. Paternity leave for new pet parents, in the Nordics?
Why we still should be optimistic about free trade
That is the topic of my latest Bloomberg column, here is one bit:
A lot of the recent cross-border migration is planting a hugely positive, pro-trade legacy that will yield dividends for decades to come. The Chinese, Indians, Nigerians and many other groups around the world will continue to build economic connections, even when the countries involved aren’t always so geographically close. I expect the positive trade gains from these connections and personal networks will outweigh the downside from some higher tariffs in the meantime. Ultimately the opportunities are there, and the biggest problem is the lack of human talent to execute on them.
I do however see one big problem:
The internet shows some signs of breaking down into separate networks, connected only imperfectly. The Chinese “Great Firewall” has proved robust, and recently the European Union has moved toward creating its own set of stringent privacy and data protection laws, such as the new General Data Protection Regulation standards. Sitting here in Norway for a conference, I find I am unable to access many American websites, such as the Chicago Tribune, which are not (yet?) GDPR-compliant. There is thus a danger that the internet will become carved into three or more separate systems, to the detriment of trade, data flows and eventually personal connections.
Do read the whole thing.
1. In retrospect, was it a good decision to have ethereum bytecodes executed on every single mining node? And if not, would he have selected sharding and plasma or a different solution?
2. How confident is he that transitioning to proof-of-stake will be successful? What are the risks of proof-of-stake?