Category: Web/Tech
The Cryptography Amendment
I am interviewed for a forthcoming documentary series on the cryptocurrency ZCash which uses zero knowledge proofs to create truly private transactions. In this short clip I argue that the 2nd Amendment is no longer serving one of its key purposes and needs to be supplemented or even replaced by the cryptography amendment.
When your bot is better than you
I expect most written communication will eventually be done by bots. I could train my bot by letting it read all my previous email and other writings. Eventually my bot would answer most of my email directly, though it could hold some aside to ask me whether they merited a personal response.
This sounds convenient, and in many ways it will be. I’ll have more time for taking walks and reading books. But think through the broader equilibrium. If more emails are read by bots, then more emails will be written by bots. Of course that is already the case, but in this new world the bot-composed emails will be at least as good as human emails, and at least as good at getting through whatever filters I set up to protect my time and attention.
A kind of arms race will ensue. Overall, I expect the number of quality messages and emails to rise. Woe unto those who do not have a very good filtering bot.
Imagine negotiating or discussing terms in such a world. I might receive a proposal from your bot. Is it a real, legally binding offer? Or is it simply a ruse to get me to reveal information about my negotiating strategy? In some cases bots might handle these problems smoothly and present both sides with a final settlement. In other cases, negotiators might insist on a face-to-face meeting, both to know they are getting “the real deal” and to limit the potential for back and forth. For some real-world interactions, online written communications will no longer be good enough.
Think about the college admissions essay, for example. Nowadays it is important. But if the bots become good at writing, applicants might have to show up for a personal interview instead. Countermeasures might then evolve. Maybe there aren’t enough admissions officers to conduct all of those interviews. So why not let the applicants spend two days together, tape all the proceedings, and let the bots issue ratings? They might even measure who told the most original jokes.
In this new world, skill at writing will count for much less, and personal charisma for much more. This is not necessarily a positive development. It will be harder to use writing as a measure of broader skill or intelligence.
Here is the rest of my Bloomberg column on the topic.
AI for Emergent Ventures
I am pleased to announce the initiation of a new, special tranche of the Emergent Ventures fund to identify and foster artificial intelligence researchers and talent in emerging economies. This tranche is thanks to a special gift from the Schmidt Futures.
Several factors — including credential requirements, long review times, and ageism — deter AI talent from seeking support for their work. EV will use its usual active approach — a super-simple application form, quick turnaround time, and its existing global network — to find both credentialed and uncredentialed talent across the world, especially in emerging economies.
Click the “Apply Now” at the normal Emergent Ventures site and follow the super-simple instructions and note how your project relates to AI as you answer the questionnaire. There is no application deadline for EV-AI, but applicants are encouraged to apply quickly, as funds are limited.
Those unfamiliar with Emergent Ventures can learn more here and here. Here is the announcement.
If you are interested in supporting the AI tranche of Emergent Ventures, please write to me or to Shruti Rajagopalan at [email protected].
Do founders outperform at venture capital?
In a nutshell, yes:
In this paper we explore whether or not the experience as a founder of a venture capital-backed startup influences the performance of founders who become venture capitalists (VCs). We find that nearly 7% of VCs were previously founders of a venture-backed startup. Having a successful exit and being male and white increase the probability that a founder transitions into a venture capital career. Successful founder-VCs have investment success rates that are 6.5 percentage points higher than professional VCs while unsuccessful founder-VCs have investment success rates that are 4 percentage points lower than professional VCs. While successful founder-VCs do get higher quality deal flow than professional or unsuccessful founder-VCs, observably higher deal quality does not explain the entire difference in performance. Using an instrumental variables approach to separate unobservable deal quality from value-add, we find that the outperformance of successful founder-VCs is consistent with them adding more value post-investment.
That is from a new NBER working paper by Paul A. Gompers and Vladimir Mukharlyamov.
The economics of Twitter moderation
Social media platforms ban users and remove posts to moderate their content. This “speech policing” remains controversial because little is known about its consequences and the costs and benefits for different individuals. I conduct two field experiments on Twitter to examine the effect of moderating hate speech on user behavior and welfare. Randomly reporting posts for violating the rules against hateful conduct increases the likelihood that Twitter removes them. Reporting does not affect the activity on the platform of the posts’ authors or their likelihood of reposting hate, but it does increase the activity of those attacked by the posts. These results are consistent with a model in which content moderation is a quality decision for platforms that increases user engagement and hence advertising revenue. The second experiment shows that changing users’ perceived content removal does not change their willingness to pause using social media, a measure of consumer surplus. My results imply that content moderation does not necessarily moderate users, but it marginally increases advertising revenue. It can be consistent with both profit- and welfare-maximization if out-of-platform externalities are small.
That is from a new paper by Rafael Jiménez Durán, via the excellent Kevin Lewis.
Why isn’t crypto an effective hedge?
That is the topic of my latest Bloomberg column, here is one excerpt:
The last few months of chaos show what Bitcoin and other crypto assets are good for: They are advanced tools of globalization, luxury goods for complex, well-functioning markets — not protections against the depredations of hostile governments.
One common story, especially popular in libertarian circles, has been that when inflation runs rampant and governments confiscate private wealth, crypto will be a vital refuge. It increasingly appears that this story is wrong.
The world has been in turmoil, with a major war, wealth confiscations, and much higher inflation rates. Yet mostly crypto prices have fallen. More theoretically:
Think of some of the possible legitimate use cases for crypto. Perhaps entrepreneurs will build a significant online metaverse, spanning national boundaries and allowing for fruitful interactions, including commercial ones. For many transactions, especially micropayments, crypto transfers might make more sense than trying to process all the trades through current dollar networks. There is at least the promise that crypto will be faster, more reliable and more secure.
In this scenario, crypto is worth the most when global trading networks, and internet connections, are stable. Right now they are moving in the opposite direction, and as a result the price of crypto is falling. The reality is that the crypto world has been a globalized product from the very beginning.
Recommended.
What should I ask Marc Andreessen?
I will be doing a Conversation with him. So what should I ask?
Claims about the evolution of memes
GoodToSell serves up a cyclical/asymptotic model of meme evolution and competition:
This is also an industry dominated by network effects. The forces that lead to such explosive growth, such as the scalability of info-tech, also lead to its downfall, as one or two companies dominate each niche. This means that the profitabilty component of evolution lessens its selective power, as platforms collect monopoly rents once all our attention has been accounted for.
Finally, algo-generated memes competed a little too well there for a minute. The shrillness reached its peak sometime in the past 3 years, and yet here we are, not in a civil war. The ideas were selected, in the inital expansion and takeover of memes, for pure potency and engagement, but not for accuracy or longevity. As people catch on, we will build up a societal defense immune system against purely mimetic viruses. Even now, I see many people simply detaching, having been burned thinking we were entering a societal event horizon—it turns out material reality was still dictated by material necessity, and the old powers that be are still in control, if temporarily perturbed. 4chan may still spin off a potent meme every once in a while, causing people to think that vaccines are population control, but after getting burned enough, and evading fact-checkers and censorship, people will eventually fall into habituation, and learned epistemic helplessness, back into the arms of traditional media, willing and occaisonally able to interpret things accurately…
Here is the entire post.
Yes those new service sector jobs are getting weirder
On Thursday afternoon, 30 top TikTok stars gathered on a Zoom call to receive key information about the war unfolding in Ukraine. National Security Council staffers and White House press secretary Jen Psaki briefed the influencers about the United States’ strategic goals in the region and answered questions on distributing aid to Ukrainians, working with NATO and how the United States would react to a Russian use of nuclear weapons.
Here is the full story, via Bryant Seaman, and several other MR readers.
Emergent Ventures winners, eighteenth cohort
Zvi Mowshowitz, TheZvi, New York City, to develop his career as idea generator and public intellectual.
Nadia Eghbal, Miami, to study and write on philanthropy for tech and crypto wealth.
Henry Oliver, London, to write a book on talent and late bloomers. Substack here.
Geffen Avrahan, Bay Area, founder at Skyline Celestial, an earlier winner, omitted from an early list by mistake, apologies Geffen!
Subaita Rahman of Scarborough, Ontario, to enable a one-year visiting student appointment at Church Labs at Harvard University.
Gareth Black, Dublin, to start YIMBY Dublin.
Pradyumna Shyama Prasad, blog and podcast, Singapore. Here is his substack newsletter, here is his podcast about both economics and history.
Ulkar Aghayeva, New York City, Azerbaijani music and bioscience.
Steven Lu, Seattle, to create GenesisFund, a new project for nurturing talent, and general career development.
Ashley Lin, University of Pennsylvania gap year, Center for Effective Altruism, for general career development and to learn talent search in China, India, Russia.
James Lin, McMaster University gap year, from Toronto area, general career development and to support his interests in effective altruism and also biosecurity.
Santiago Tobar Potes, Oxford, from Colombia and DACA in the United States, general career development, interest in public service, law, and foreign policy.
Martin Borch Jensen of Longevity Impetus Grants (a kind of Fast Grants for longevity research), Bay Area and from Denmark, for a new project Talent Bridge, to help talented foreigners reach the US and contribute to longevity R&D.
Jessica Watson Miller, from Sydney now in the Bay Area, to start a non-profit to improve the treatment of mental illness.
Congratulations to you all! We are honored to have you as Emergent Ventures winners.
Bangladesh YouTube food facts of the day
The channel behind this operation is called AroundMeBD, and its success has created a whole new economy in Shimulia, which has since been dubbed the YouTube village of Bangladesh.
The YouTube village is a prominent example of a niche but is also part of a growing online trend across South Asia: As the internet reaches villages, rural societies are finding ways to showcase and monetize their unique food cultures to audiences across the world, using platforms like YouTube and Facebook. In India, Village Cooking Channel, which posts videos of large-scale traditional cooking, has over 15 million subscribers. In Pakistan, Village Food Secrets has 3.5 million subscribers. Villagers who previously had little presence in media are now using these platforms to take ownership of the way their culture is portrayed — and building businesses that support dozens, and occasionally hundreds, of individuals.
Here is the full story, via Zach Valenta. The article is interesting throughout, and yes YouTube remains underrated.
My Conversation with the excellent Sam Bankman-Fried
Here is the audio, video, and transcript. Here is part of the summary:
He joined Tyler to discuss the Sam Bankman-Fried production function, the secret to his trading success, how games like Magic: The Gathering have shaped his approach to business, why a legal mind is crucial when thinking about cryptocurrencies, the most important thing he’s learned about managing, what Bill Belichick can teach us about being a good leader, the real constraints in the effective altruism space, why he’s not very compelled by life extension research, challenges to his Benthamite utilitarianism, whether it’s possible to coherently regulate stablecoins, the implicit leverage in DeFi, Elon Musk’s greatest product, why he thinks Ethereum is overrated, where in the world has the best French fries, why he’s bullish on the Bahamas, and more.
And an excerpt:
COWEN: Now, for mathematical finance, as you know, we at least pretend we can rationally price equities and bonds. People started with CAPM. It’s much more complicated than that now. But based on similar kinds of ideas — ultimately arbitrage, right? — if you think of crypto assets, do we even have a pretense that we have a rational theory of how they’re priced?
BANKMAN-FRIED: With a few of them, not with most. In particular, let’s talk about Dogecoin for a second, which I think is the purest of a type of coin, of the meme coin. I think the whole thing with Dogecoin is that it does away with that pretense. There is no sense in which any reasonable person could look at Dogecoin and be like, “Yes, discounted cash flow.” I think that there’s something bizarre and wacky and dangerous, but also powerful about that, about getting rid of the pretense.
I think that’s one example of a place where there is no pretense anymore that there is any real sense of how do you price this thing other than supply and demand, like memes versus — I don’t know — anti-memes? I think that more generally, though, that’s happened to a lot of assets. It’s just less explicit in a lot of them.
What is Elon Musk’s greatest product ever, or what’s his most successful product ever? I don’t think it’s an electric car. I don’t think it’s a rocket ship. I think one product of his has outperformed all of his other products in demand, and that’s TSLA, the ticker. That is his masterpiece. How is that priced? I don’t know, it’s worth Tesla. It’s a product people want, Tesla stock.
COWEN: But the prevalence of memes, Dogecoin, your point about Musk — which I would all accept — does that then make you go back and revisit how everything else is priced? The stuff that was supposed to be more rational in the first place — is that actually now quite general, and you’ve seen it through crypto? Or not?
BANKMAN-FRIED: Absolutely. It absolutely forces you to go back and say, “Well, okay, that’s how cryptocurrencies are priced. Is it really just crypto that’s priced that way?” Or maybe, are there other asset classes that may claim to have some pricing, or purport to, or people may often assume it does, but which in practice is not exactly that? I think the answer to that is a pretty straightforward yes.
It’s a pretty straightforward answer that you look at Tesla, you look at a lot of stocks right now, you think about what determines their market cap — the discounted cash flow? Yeah, sort of, that plays a role in it. That’s 30 percent of the answer. It’s when we look at the meme stocks and the meme coins that we feel like we can see the answer for ourselves for the first time, but it was always there in the other stocks as well, and social media has been amplifying this all over the place.
COWEN: Is this a new account of how your background as a gamer with memes has made you the appropriate person for pricing and arbitrage in crypto?
BANKMAN-FRIED: Yeah, there’s probably some truth to that. [laughs]
Interesting throughout, and not just for crypto fans.
Holden Karnofsky emails me on transformative AI
Here is Holden, our discussion started with this post of mine, for his words I will use quotation marks rather than dealing with double indentation:
“…debates about specifics between climate scientists get incredibly intricate (and are often very sensitive to parameters we just can’t reasonably estimate), and if you tried to get oriented to climate science by reading one it would be a nightmare, but this doesn’t mean the big-picture ways in which climatologists diverge from conventional wisdom should be discounted.
I think the broad-brush picture here is a better starting point than an exchange between Eliezer, Ajeya, me and Scott.
Even shorter version:
- You can run the bio anchors analysis in a lot of different ways, but they all point to transformative AI this century;
- As do the expert surveys, as does Metaculus;
- Eliezer’s argument is that he thinks it will be sooner;
- The most naive extrapolations of economic growth trends imply singularity (or at least “new growth mode”) this century;
- Other angles of analysis (including the very-outside-view semi-informative priors) are basically about rebutting the idea that there’s a giant burden of proof here.
- Specific arguments for “later than 2100,” including outside-view arguments, seem reasonably close to nonexistent; Robin Hanson has a (unconvincing IMO) case for synthetic AI taking longer, but Robin is also forecasting transformative AI of a sort (ems, which he says will lead to an explosion in economic growth and a relatively quick transition to something even stranger) this century.
So I ultimately don’t see how you get under P=1/3 or so for this century, and if you are way under P=1/3, I’d be interested if there were any more you could say about why (though recognize forecasts can’t always totally be explained).
P=1/3 would put “transformative AI this century” within 2x of “nuclear war this century,” and I think the average “nuclear war” is way less likely (like at least 10x) to have super-long-run impacts than the average “transformative AI is developed.”
That’s my basic thinking! It’s based on numerous angles and is not very sensitive to specific takes on the rate at which FLOPs get cheaper, although at some point I hope we can nail that parameter down better via prediction markets or something of the sort. Prediction markets on transformative AI itself are going to be harder, but I’m hopeful about that too. I think a very fast transition is plausible, so it could be very bad news if folks like you continue thinking it’s a remote possibility until it’s obviously upon us. (In my analogy, today might be like early January was for COVID. We don’t know enough to be sure, but we know enough to be highly alert, and we won’t necessarily be sure very long before it’s too late.)”
End of Holden, now back to TC. And here is Holden’s “most important century” page. That is our century, people! This is all a bit of a follow-up on an in-person dialogue we had, but I will give him the last word (for now).
The U.S. is really good at destroying things
If a country is really good at X, and along comes social change Y, you ought to figure there is a pretty good chance Y will feed into X.
So for instance the United States is really good at retail. So along comes Wokeism, and, lo and behold, Wokeism slots wonderfully into retail, whether you like that fact or not. The Woke is marketed all the time, and so you can find “green” versions of so many products, even if organic food costs more energy, etc. Or if you invent a new app, with anti-corporate purposes in mind, don’t be surprised if you wake up one day and the app has been co-opted by retail corporations. And so on.
What we are now observing is that the recent innovation of “The Woke’ has been co-opted for the purposes of destroying things, in this case the economy and possibly the society and polity of Russia. The lining up of European allies, the mobilization of sentiment on Twitter, the inducement of Visa and Mastercard to pull out, and you could go on and on and on. The Woke campaign against Russia has turned out to be extremely powerful, well beyond what I had been expecting to happen. Energy purchases might be next to go.
To be clear, sometimes we are good at producing or threatening destruction in very beneficial ways (WWII, 1973 airlift to Israel, ending the post-Yugoslavia wars, stopping Saddam from taking Saudi oil, etc.), and sometimes we are good at destruction in very harmful ways (you can supply your own list, but it is extensive). In this post I am not going to try to assess the net expected value from the ongoing destruction of Russia, only to say that the final outcome is uncertain.
Nuclear power, airplanes, computers, GPS and much more all have been co-opted into destroying things, again noting these effects may be net positives on the whole. They have been co-opted into retail purposes as well, nuclear power excepted.
Make no mistake about it, many of the most important “contributions” of Wokeism are to feed into, and enhance, those capabilities that America already is good at.
Which include retail and yes, destruction as well.
The Coase theorem, combined with the force of increasing returns to what a country is really good at, will see to this.
The same feeder tendencies may well be true for other innovations you might have in mind, be they practical or intellectual in nature. Whether you like it or not, they will contribute to both American retail and to the American capacity to destroy.
Some people observe these trends and think the Woke is transcendent and all-powerful. But under another reading, it is actually the Woke that is somewhat being pwned.
NFT markets in everything
Ukraine plans to become the first developed country to issue its own collection of non-fungible tokens, as it looks to capitalise on a flood of crypto donations to back its war against Russia.
Mykhailo Fedorov, Ukraine’s vice-prime minister, announced the plan in a tweet on Thursday and said Kyiv would reveal details of its NFTs soon.
The move is the latest sign of the Ukrainian government embracing digital assets as a way to fund its armed forces in their battle, and comes after it raised more than $270mn in “war bonds”.
One for each Russian tank destroyed? Here is the full FT story, via Natasha.