Balaji Srinivasan Profile picture
Immutable money, infinite frontier, eternal life. #Bitcoin
Jeremy Pinnix ☧ Profile picture otaria123 Profile picture 🙈🙉🙊 Profile picture Tricia🌊🌊🌊 Profile picture Matthew 𝕊t◎tts 🇺🇸☀️ Profile picture 232 added to My Authors
26 Jul
In any voluntary transaction, both sides gain. How to quantify this?

The seller of a good measures their marginal profit: the price-per-unit minus the cost of production.

The buyer could measure *their* marginal profit by subtracting the price-per-unit from their reserve price.
At first this is just standard consumer surplus. Gains from trade and all that.

But the interesting point is that the reserve price is usually an unobserved variable in most transactions, while the unit cost-of-production is usually known.

Could we measure more reserve prices?
For every transaction where we can measure the reserve price *and* the cost-of-production, we can prove that it was wealth creating.

Because at least at that moment, both buyer & seller profited from the trade to a *quantifiable* extent.

A provable positive-sum relationship.
Read 13 tweets
25 Jul
Automate form filling

For every government form in every country, autosuggest inputs. Or at least show worked examples. Crowdsource new forms from users, SEO for the form name, and make it one-click to submit.

Start with the most popular, then work your way down.
This is a classic schlep business (paulgraham.com/schlep.html). Pieces of this already exist, but no one to my knowledge has done this for all forms across all countries.

It's immediately monetizable, and at scale it's a kind of API to governments. DM me with a link if you do it.
Thoughts:

1) this has broad appeal to many demographics
2) you'll attract many professionals too
3) once you put data into one form, the service can autopopulate other forms
4) once you get N submissions on one form, some basic stats will reveal common errors and best practices
Read 4 tweets
15 Jul
Current social networks don't have great tools for dispute resolution. They're a combination of anarchy (people yelling) and tyranny (arbitrary deplatforming).

An alternative approach is a global moderator hierarchy. In the event of dispute, the lowest common ancestor mediates.
The moderator hierarchy: a possible implementation

- founder is moderator 0
- founder sets up initial hierarchy, appoints mods 1-N
- mods recruit new users
- new users choose a mod upon signup
- new users can be promoted to mod
- mods are comp'd via token
1729.com/network-union
Choosing a mod has aspects of both friending & following.

Like following, it's asymmetric: when A moderates B, A has privileges that B does not.

But like friending, it's symmetric: you may require both A *and* B to opt in for A to take on the responsibility of moderating B.
Read 7 tweets
14 Jul
The corporate stack now includes three layers.

1) Legal entities
Delaware C-Corp, Wyoming LLC, bylaws, contracts, etc

2) Centralized services
Stripe, Coinbase, Gusto, SVB, etc

3) Decentralized services
Bitcoin, USDC, defi, private key custody, etc
The legal layer is official filings and local PDFs. The API is lawyers.

The centralized layer is both fiat banking and cloud services. The API is the website.

The decentralized layer is everything crypto related. The API is private keys.
These three layers have an increasing amount of interoperation.

Stripe Atlas bridges the legal and centralized layers.

Coinbase's exchange bridges the centralized and decentralized layers.

And Wyoming's DAO law bridges the legal and the decentralized layers.
Read 5 tweets
6 Jul
At first I thought this was a bad idea, but now I think there is the kernel of something very interesting here.

Random selection of moderators could, in theory, be a way to implement "you cut the cake and I choose the piece" for governance issues.

Rawls' veil in real life?
Divide & choose is a procedure for fair division of a continuous resource between two parties. The protocol proceeds as follows: one person cuts the cake into two pieces; the other person selects one of the pieces; the cutter receives the remaining piece.
en.wikipedia.org/wiki/Divide_an…
The veil of ignorance concept: choose a rule as if you had no knowledge ahead of time as to whether you'd be ruler or ruled. Ideally, this would incentivize participants to select rules impartially and rationally.
fs.blog/2017/10/veil-i…
Read 4 tweets
5 Jul
If there are 1000 people at someone’s door, they could call the police. Assuming they haven’t been abolished.

But if there are 1000 mobbing them online, there is currently no police force. Only slow reports and counter-mobs.
I wrote about this just prior to the social media-fueled disorder of 2020.

I think I correctly apprehended that online madness would soon translate into offline chaos.

But it didn’t need TikTok (video tweets were enough). And it happened faster than I expected.
There are two resolutions to the situation of online madness and offline sanity.

The first is what we have seen: the mindless translation of media- and social media-fueled madness into the physical world.

The second is to set up online polities with physical levels of civility.
Read 8 tweets
3 Jul
From seeing like a state to learning like a machine.
A state can only make rectilinear decisions based on paper forms. Scalable but binary.

A machine can make curvilinear decisions based on digital data. Scalable and statistical.
Of course, some states have partially adapted & have some of their data online (albeit in often insecure databases).

But it’s just a retrofit. It’s not like the leaders are looking at metrics on the health and wealth of their constituents. Nor are they making decisions via code.
Read 9 tweets
2 Jul
File sharing was once huge, and may become huge again.
The fundamental new primitive that blockchains offer for protocol design is tamper-resistant global shared state.

With this, someone could do a crypto Napster, KaZaa, or PirateBay. Probably pseudonymously, or in a country like Denmark with a "Pirate Party". Maybe not in music…
P2P, MVC, CBC

Blockchains allow us to combine the decentralization and programmability of the P2P era with the global state and monetizability of the MVC era.

For protocols with global state, the new architecture is then client-blockchain-client, or CBC.
Read 4 tweets
1 Jul
The creator economy is becoming part of the cryptoeconomy. Because legacy social media platforms have no real concept of digital property rights.
Substack, Twitter Revue, and Facebook Bulletin are all great. But they are in a sense intermediate steps.

Ghost goes further. You can run it at a domain you control.

Decentralized social media platforms go further still. You hold the private keys.
Under communism, there was no such thing as personal property. Everything that transpired in the PRC & USSR was downstream of that economic illogic, the root cause.

The restoration of private property was one of the keys to unlocking the Chinese economy.
npr.org/sections/money…
Read 6 tweets
29 Jun
Longevity has the potential to be to traditional medicine what crypto is to traditional finance. It changes the terms of the debate.
Starting with Bitcoin's rejection of central banking & endless inflation, the cryptoeconomy has challenged virtually every premise of the state-controlled, paper-based financial system that we've inherited.

So far? Plenty of risks, plenty of loss — and undeniable progress.
The conventional macroeconomic wisdom is that high inflation is bad, but that deflation is also bad, so a little inflation is good.

But there's bad deflation, often due to contraction of money supply. And then there's good deflation, due to genuine productivity increases.
Read 12 tweets
28 Jun
Good news: the reduction [1] in Bitcoin mining hashrate from China is visible but survivable. There's a lot of mining capacity elsewhere.

Bad news: blocks may be slower for a while [2]. But holders are unaffected.
[1] bitinfocharts.com/comparison/bit…
[2] bitinfocharts.com/comparison/bit…
Notes:

1) One day charts are highly volatile and we need to see where everything averages out. Some kind of drop looks real, but capacity may come online in other places.

2) The first chart (hashrate) is over years, the second is over months - otherwise you can't see the blip.
One somewhat vexing thing:

(a) when hashrate drops a lot, you want a quick difficulty adjustment
(b) but when hashrate drops a lot, blocks take longer to mine, so difficulty adjustment takes longer to come

Not ∞ time. This site *estimates* 26 days.
bitinfocharts.com/bitcoin/
Read 5 tweets
27 Jun
Fiat company
- paper incorporation
- paper contracts
- paper payments
- paper accounting

Crypto company
- on-chain incorporation
- on-chain smart contracts
- on-chain payments
- on-chain accounting
Yes, those "paper" forms are currently being sent electronically as PDFs. But we've just taken the paper workflow, scanned it, and put it online.

That was fine as a first step, but it isn't the inherently digital version. Crypto companies are.
archive.is/aP2hv#selectio… Image
Internetification is like electrification. We're still digesting it. The digital native era is just beginning.
slate.com/culture/2007/0… Image
Read 7 tweets
22 Jun
Keep your identity small by keeping your identity invisible. The pseudonymous economy.
To exit from a currency, you need to be able to move your digital wealth to a new identity.

To exit from a community, you need to be able to move your digital reputation to a new identity.

This is the only way to really keep your identity small. See:
One of the reasons people get radicalized by Twitter is that they're locked into their communities.

Reputation is real, and as quantifiable in some ways as currency - by backlinks, karma, sentiment, & other metrics.

Portable, pseudonymous reputation could reduce radicalization.
Read 6 tweets
20 Jun
Proof-of-work is absolute truth, proof-of-stake is relative truth. Both have their role. But for the most important transactions it's better to produce more clean energy than to give up on the undeletable history that accumulated work provides.
It's hard to express this compactly to a non-technical person, but basically: it's harder to fake the results of a massive calculation done over ten years with datacenters full of hardware than it is to convince a fixed set of humans to change their minds and rewrite history.
This is what we get when there is no absolute truth.

Using Merkle trees, we can prove the existence of arbitrary amounts of data using just one tx on the Bitcoin blockchain.

Data availability is nontrivial (IPFS?) but proof that the original photo existed would be feasible.
Read 9 tweets
18 Jun
Thesis: coin market caps encourage mimesis.

Google didn't *initially* compete with other companies *primarily* on its stock price but on its product.

Assets should likewise have unique features. Good example: Zcash's privacy sets & shielded transactions. electriccoin.co/zcash-metrics/ ImageImageImage
> Google didn't *initially* compete with other companies *primarily* on its stock price but on its product

Note: yes, when raising capital you're competing with other companies based on your stock. But the customer for your stock isn't identical to the customer for your product.
Now, it's true that customers of product (users) are increasingly becoming customers of stock (shareholders). Robinhood makes it possible to buy stock in products you use. Crypto makes this default.

That's powerful, but also turns many off. More product culture will be helpful.
Read 5 tweets
11 Jun
Bitclout actually has an interesting possible counter to cancel culture.

Long-term holders of someone’s creator coin now have a financial incentive to defend them if attacked unfairly.

All holders suffer downside if a cancellation crashes a creator coin price, so they defend.
Blockchains take us from the slippery slope to the crypto cliff.

An attacker can no longer pick off one party at a time; attempted seizure (or, now, cancellation) is an attack on all holders.

This gives a monetary incentive to defend another’s rights.
This is what *some* of the defense of Elon is about.

I generally support Elon’s work in rockets & cars because I think it’s technologically pioneering. I hold no TSLA.

Others support in part because they are TSLA holders, so attacks on the CEO can hit them too financially.
Read 7 tweets
11 Jun
An important question when thinking about the El Salvador bill is what counts as receiving BTC.

On-chain? Sure.
Lightning? Ok.
Off-chain? Probably, or else popular wallets from exchanges wouldn’t count.

But if off-chain counts, then the $8B of wrapped BTC will count... 🤔
If off-chain BTC transactions count, such as Coinbase-to-Coinbase or Binance-to-Binance, then wrapped BTC transactions will count.

If wrapped BTC counts, then you can wrap BTC on Ethereum — or any of the new chains. Just like USDC is now present on four chains, including Solana.
If wrapped BTC counts, which it likely will, then every wallet for every chain which wraps BTC is a candidate for satisfying the law — so long as it also has L1 (and perhaps L2) interoperability.

So Polygon & Solana could be handling millions of wrapped BTC transactions.
Read 5 tweets
10 Jun
Communist Capital: you must submit.
Woke Capital: you must sympathize.
Crypto Capital: you must be sovereign.
As the rising third power in the world, India has the potential to be the center of a new Aligned Movement — an upgrade to the Non-Aligned Movement that aligns every neutral country behind Bitcoin and decentralized crypto protocols. balajis.com/add-crypto-to-…
Crucially, Crypto Capital isn't anti-American or anti-Chinese for that matter.

There are Woke Americans & Crypto Americans, Crypto Chinese & Communist Chinese.

The Crypto American is much closer to the average Chinese hodler than to Warren, Trump, or Xi Jinping.
Read 4 tweets
9 Jun
The El Salvador experiment will be interesting to watch.

My hunch is that scaling will be “solved” by de facto custodial wallets with peering agreements and infrequent L1 events.

But so long as redemption is feasible, this is like a digital-gold-backed digital currency.
Here’s one scenario for the logistics:

N custodial wallets are hubs and the M citizens are spokes.

If a user of wallet 1 sends a transaction to a user of wallet 2, then the transfer looks instant on their screens.

Bulk settlement happens later on-chain between wallet 1 and 2.
Let’s say there are N=10 popular custodial wallets & they all do bulk settlement with each other every 24 hours. That’s N*(N-1)/2 = 45 pairwise on-chain Bitcoin L1 transactions per day, which is feasible.

Also, add in N daily on-chain transactions with the state’s Bitcoin fund.
Read 9 tweets
9 Jun
Wokes try to get you to say "Latinx".
Chinese nationalists get mad about Taiwan.
And coin maximalists want you to be a billboard for their coin.

All these social media religions devolve to language policing. But I believe in free speech.
All these social media religions (wokeness, MAGAism, maximalism, Chinese nationalism, etc) are just variants of Twitterism.

Ever notice their behavioral similarity despite the ostensible difference in ideology? They're taking direction from the algorithm.
If you walk up to someone on the street and randomly yell "FU!!!", you might get punched, jailed, or even shot. There's downside.

But if you do it online, you might get attention. There's upside.

This social reinforcement drives anti-social behavior.
Read 4 tweets
9 Jun
Amazing.

If I’m reading this right, all economic agents that are technologically capable of receiving BTC as payment *must* accept it as payment — though instant conversion to USD is made available to anyone who doesn’t want to take price risk.

A mandate for Bitcoin!
See my earlier post on “sovereign apps”.

The state of El Salvador has just mandated that all merchants in a country of 6.4M people accept BTC (with instant conversion for those who don’t want price risk).

This is a legal flippening. From “banning” Bitcoin to mandating it.
How does this interact with the ethics of voluntarism?

So long as vendors can opt out by instantly liquidating, they still have free choice. The onus on them boils down to installing an app to receive BTC.

The move shifts El Salvador’s defaults to robustify against inflation.
Read 4 tweets