Thread by @leashless

Fixing the global economy is the key to fixing the world.

The best tool to fix the global economy is the blockchain.

In this thread I'm going to discuss why the blockchain age is just starting, and how AI factors into the creation of a new economy on-chain.

#Thread

Let's start with the problem statement. There is a #polycrisis which is, broadly speaking, caused by a single problem: the human race is asking more of nature than nature can sustain. Nature is dying under the load. When it breaks it will take us with it.

https://twitter.com/leashless/status/1586759630482464769

The secondary problem: most humans are still dirt poor, and concepts like "degrowth" threaten to trap them in poverty forever.

A billion people live in permanent want, Americans can't afford health insurance, and the richest are working on biological immortality if possible.

Most thinking people look at this situation and think "there's no f**king way" and get overwhelmed, or pick some specific problem area and narrow their focus to just that, trusting that *somehow* all the rest of it is going to "just work out."

Nothing could be less true.

What we have is a set of problems caused by an inability to get a really solid global overview of the situation, and to make and implement policies which optimize against that global overview.

We can fix the world's problems, but we must know them first.

Many complex problems can come from a single origin. Like a one-character bug in a device driver which makes a computer system unstable for months, or a slow oil leak, or a mole in a spy organization, a single root cause can show up as bad chaos on all sides.

I'll name the cause

The cause is lying.

You can broaden it a little to include errors, omissions, imprecise sensors, sensitive dependence on initial conditions and a bit more, but *the cause is being wrong about the facts*.

How much of your energy is tied up in worrying about what is true today?

More than none. In venture capital, the decision something is worth investing in takes a few hours but the diligence to make sure you aren't being lied to can take months.

When shopping online, "what size is this really?" is normally thought of as "will this fit me well?"

Let's take a few big world stories:

* is Elon Musk lying/wrong about Mars?
* is Sam Altman lying/wrong about AI?
* what is *really* happening in Ukraine?
* is China bankrupt?
* is the American banking system collapsing (again?)

This is two factors: *intent* and *accuracy*.

Take Musk. Four scenarios.

1 he wants to tell the truth, and is technically accurate in his forecasts
2 he lies, but he actually knows the truth
3 he tells the truth, but his model is wrong
4 he lies, and his model is wrong

It's not 1: Mars is hard + he's stuck in a rigged game

So we know that when Musk says "Mars by 2026" or whatever it is today, he's probably both wrong (he's guessing on the timeline) and lying either by glossing the slack on his Gantt charts (2026Q4 - 2029) or by simply saying 2026 because it's what the market is ready to hear today.

Now that's not just Musk.

That's 100% of the people who lead us.

I was the project manager for the launch of Ethereum, among other roles at the Foundation.

We launched a fraction of what was expected, and we launched late. There was a lot of grind and pushback from community.

Here's the post I wrote which calmed down a lot of the ire in the early Ethereum community about late delivery and delayed features:

blog.ethereum.org/2015/03/03/eth…

The reason this post worked was because it was the absolute truth that I had when it was written.

I also wrote this the morning of the Ethereum launch and it was on the home page of Hacker News most of the day, introducing Ethereum to the world medium.com/humanizing-the…

I'm still very proud of this piece of writing. I think it helped get us off on the right foot.

Now here's the paradox. If the original Gang of 8 had told people in 2013 this is what would be delivered, and the real timeline, Ethereum would probably never have happened.

What was delivered was short of the dream, and grew over time.

But the truth wouldn't have built it.

I worked on some energy policy books in the years after 9/11, including the famous Winning the Oil Endgame.

foreignaffairs.com/reviews/capsul…

That book is credited with downgrading fossil fuels as a long term strategic priority for the US Government.

Lot of very rough estimates in there

So I want to make the point clearly: the world is run by people that lie, bend the truth, guess, exaggerate, and then delivery better than half of their original claim.

And we accept that as normal because we believe it is the only way the game can be played.

This just popped up on my feed.

https://twitter.com/Heidi_Labour/status/1661467855253041158?s=20

"Dark days on this project in 2018 and 2019" == somebody had completely misestimated or over-sold what was going to happen, and delivering something workable looked impossible for the team at the time.

One day at a time.

So now let's talk about what it would take to fix this, and where the blockchain, AI, the internet, satellites, and everything else come together to solve our real problems.

Consider this to be part two of the #thread -- solutions!

Our objective is to extract *actionable truth* from a very chaotic and difficult environment filled with liars.

Let's define that term first.

"Actionable truth" is accurate, and tells you how accurate it is. I say "not more than 11 months" or "11 to 14 months" and *it is so*.

So it doesn't have to be "this will take 341 days" to be "actionable truth". It's not about a standard of precision. "11 to 14 months" *if it is true* is actionable truth.

You get the truth not a "builder's estimate."

This kind of truth is very very rare in this world. But why?

It's not more expensive to tell people "11 to 14 months" than "9 months*" (* a lie). Only those who tell the truth relentlessly go broke

Why? Because they're competing with liars. The honest builder is priced out of the market by cowboys, and it's not as simple as true and false

Now, if you remember one thing from this thread, make it this: "systemic underpricing of risk is the root of all evil." Read it back. Say it aloud. Say it with me. #SURRAE

The lying builder *sometimes* completes in 9 months. It's within the realm of possibility. Average is 12.

What you have is a normal distribution. The smart builder says "11 to 14 months". The idiot says "9" because they once worked on a job where it got done in 9.

Smart thinkers are being probablistic. And that mindset comes in (infinitely deep) layers up to Bridgewater Associates.

The people who think probabilistically describe the risk envelope in which the event occurs: a range, data with error bars, the greeks. Different fields use different models of risk.

But everybody in the real world just wants a number. Ideally lower than all other bidders.

See?

We have a social construct which systematically obscures and punishes telling the truth about the fundamental nature of reality in areas as simple as building houses or fixing cars.

How much more intense is this effect when we try and dig a cross-channel tunnel or start a war?

So what I want to frame is this: the vast majority of the absolute energy in our civilization is going into dealing with the consequences of people intentionally lying to each-other, or presenting bad data as accurate truth unintentionally.

Actionable truth is scarcer than gold.

Let's look at a few examples.

In buying shoes, both the shoe and your foot have precise physical measurements. Fit should be a science.

The same is true of clothing. Endless clothes are shipped in three sizes, with two being returned, often to the landfill.

Why is this?

In buying houses, there's a forest of opaque paperwork which can conceal a variety of surprises so nasty that they carry their own insurance and *still* items can slip through the cracks resulting in horrifically messy litigation.

https://twitter.com/DeadScrump/status/1660944094791647232

it's a disaster zone.

All that happens in the economy is that as standards of truth drop, other people have to pay:

* people who buy badly and get burned
* extra costs to double check stuff
* litigation, litigation, litigation

All because people start lying as a common way of doing business. Ghastly

So here's my thesis: the number one source of economic inefficiency that the blockchain can fix in the global economy is people lying.

Pretty simple, huh?

But then... why so many ponzis? Why "blue chip NFT"?

Why rug pulls WHEN SNART CONTRACTS COULD PREVENT PEOPLE DOING THAT?

And the answer is: I don't know why a technology which is perfect for telling the truth and proving you did is over-run by monstrous liars ripping each-other off and dragging the whole project into disrepute.

This is not the blockchain I envisaged or helped to launch. Not this!

So what my company @mattereum does is add a layer of truth-oracles to the blockchain.

For better compatibility with legacy legal systems we call them "Certifiers".

But really they're Oracles. They make promises on-chain with real-world legal consequences off-chain.

Powerful.

Now these things are functional, first, as bridges: you wind the oracles around a physical thing so that its valuable attributes are defined by the sum of all the Certifiers / Oracles statements about the object.

Basically people *real world stake* on the object's value data.

Now that mechanism is unique. It's a side-effect of some reforms to English law produced by the UK Jurisdiction Taskforce. I won't get technical here, but the UK is now unique in offering an arbitration forum in which *legal* and *financial* settlement both happen on chain. Huge.

These real-world stakes are enforced by an arbitration tribunal, a real-world alternative to court. The awards, the slashing of stake / payment of damages (it's the *same thing*) can happen on-chain using escrows or off-chain using court orders.

Pure unification physical-digital

So these oracles, certifiers, insurers, underwriters change the basic structure of trade as it has stood for 6000 years or so

Instead of "buyer, seller, court" we now have:

* buyer
* seller
* third party Oracle, with stake
* court

And technology keeps the transaction costs low

Introducing these additional third parties to keep trade honest changes the relationship between buyer and seller at least as much as the introduction of e-commerce or even the credit card does.

It provides the protection you need to trust the information you have about products

This economic zone in which you can get accurate product information -- in which nobody lies to you when you are buying things, because it is no longer economically advantageous to do so -- is like a special economic zone or a stock exchange with strict rules.

A virtual country.

Mattereum is obviously not dressed as a "network state" or a "micronation" or any of that stuff.

No, we're where those concepts roll up their sleeves and get to work. We're dressed for business: arbitration contracts and real estate and bullion sales. Minimal political story.

But you better believe that under the hood the goal is to create a pocket universe for high value transactions, with the best courts and insurers in the world, so that you can do trade in very high value assets indeed with complete security, privacy, and trust.

That's the goal.

As we get that pocket universe established, get the first few hundred million and then billions in assets trading (and that could be later this year, we have some spectacular deals coming in) then we can expand to change the business norms all over the world.

Truthful is better.

To me, the blockchain was always meant to be a pocket universe inside of the global economy where it was *impossible to get ripped off* rather than being what it has become: a fraud-infested wasteland where it is almost impossible NOT to get ripped off.

The blockchain needs law.

And I don't mean that in the sense of "we have to put the governments in charge of the blockchain."

No, what I mean is that we need to make written contracts *with real consequences for breach* the norm on the blockchain. Dox everybody, OR make sure there's always stake to slash

Similarly with rug pulls: there's simply no reason that unsold tokens which people promise not to sell can't be locked.

Why are people apeing into things which are clearly configured as bull traps?

We're talking codes of conduct here. Track records. Histories. Know the team.

It's particularly critical right now because -- frankly -- everybody outside of the blockchain industry is wondering if the blockchain is dead.

But our finest hour is ahead of us, not behind us.

AI makes it impossible to know the truth.

An automated flawless liar.

And that automated flawless liar can only be defeated by putting things on-chain: "here is the on-chain digitally signed video of the Premier's speech" (and no, she didn't call for the bombing of Miami to make up for Spring Break being crappy this year.)

The world needs us now.

But to get into the position that the world needs us to be in - where the blockchain is the arbiter of truth, the place you go to know *for sure* that you are looking at reality and not a politically-motivated deep fake - we have to shape up the community and deliver our promises

It is *incredibly* important to the future of the world that AI systems aren't used to manufacture fake truths so powerful entire segments of the population get lost in them and act irrationally and potentially violently.

There's only one technology to face down that threat.

So that's the future I see for the blockchain:

* @mattereum and similar projects provide absolutely trustworthy environments for trade, on chain, and

* The blockchain starts to provide things like permanent tamper-evidence for resources like @Wikipedia and news sources

FAST!

We've endured 8 years of frauds, scams & bullshit in the blockchain ecosystem, piled high and sliced every which way.

There's also a set of absolutely world class incorruptible infrastructure which has never been compromised and has never compromised.

Separate wheat from chaff.

The @mattereum system should finally bring some much-needed real world load to the blockchain: real estate, gold, luxury goods flowing back and forth over NFT exchanges, DEXes and so on. Things that provide real value for all this fine exchange infrastructure.

A big year awaits.

@mattereum @threadreaderapp unroll