Saturday, November 23, 2013

Prisoner's Dilemma: how greedy monarchs and captains of industry could usher in the bitcoin era

I think there's a really slim chance that anyone reading my blog doesn't already know what the Prisoner's Dilemma is.

I'll copy-paste some wikipedia stuff for you anyways:

Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don't have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain. Each prisoner is given the opportunity either to betray the other, by testifying that the other committed the crime, or to cooperate with the other by remaining silent. Here's how it goes:
  • If A and B both betray the other, each of them serves 2 years in prison
  • If A betrays but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa)
  • If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge)
Because betraying your partner rewards more than cooperating with them, all purely rational self-interested prisoners would betray the other, and so the only possible outcome for two purely rational prisoners is for them to betray each other. The interesting part of this result is that pursuing individual reward logically leads both of the prisoners to betray, but they would get a better reward if they both cooperated.

The incumbent global elites have a lot to lose in a World Bitcoin Made. In a World Bitcoin Made, inflatable currencies won't be able to finance expensive wars and bailouts by stealth. In a World Bitcoin Made, central banks won't be able to set low interest rates in order to prop up business at the expense of the purchasing power of the money under your grandmother's mattress.

You should not expect to see some third world dictator changing the national currency to bitcoin out of his starry-eyed techno-utopian dreamings. You should expect him to do so in order to get rich.


Lemme explain:

Being a deflationary currency, the value of btc correlates with the amount of people holding it and using it. If 20 million new people buy in tomorrow, new bitcoins aren't automatically minted by some central issuing authority in order to accommodate the new population. The coins in distribution must be spread around, at whatever price people will sell them for. This is a price which, in such a gold rush, would skyrocket.

Now let's pretend that I run a country. It's sort of my own little slave-pen. I've already hyperinflated the currency, because who cares. I imprison people who talk about me. I really don't give a fuck about "my people", but they're useful for making me money sometimes.

I realize something: if I mandate a switch-over to bitcoin, I can get 20 million people on board overnight. In addition to the price spike that the entry of an entire country would cause for bitcoin, I'd have the ensuing tulip fever on the part of western and Chinese investors and speculators who started to scream ZOMG IT'S HAPPENING.

Plan: 

(1) Buy a million dollars worth of btc.
(2) Put my national economy on btc.
(3) Let the price increase 10,000% in a week.
(4) Profit.


Corporations could pull a similar move. What if Apple were to release the next big secret iThing at first for bitcoin-only? Can you imagine the press? The hype? Bitcoin would be the talk of even east Texas truckstops, my friend.

The result of moves like these in the long term, ironically, could be a significant lessening of the power of the worlds' global elites, as stealth taxes and cheap credit expensed on middleclass savings accounts ceased to be an option. In the World Bitcoin Made.

But iff'n that ain't that just the perennial the saving grace of the universe. Zero-sum logic defeats itself. There is no honor among thieves.

And so the tyranny problem tends to take care of itself.

Shit Bitcoin Trillionaires Like

I tell myself there's still a chance, even though I sort of blew it.

I made 100 btc in 24 hours last year by coming up with an ethical bitcoin ponzi scheme gambling site thing. I sold my all my coin a few months afterwards for $1,300 to afford the next semester of my kids' private schooling during my fellowship in Manila. It was a cool school man. 3-D science lab. Swimming pool.

God I'm glad the IRS hasn't figured out how to approach bitcoin yet.


I still think it's a great time to get in, but now I'm living with my parents and Christmas is coming up and things are bad and I just really don't have anything to put in.

I'm haunted by the outlier possibility that bitcoin's big-time global adoption will happen before I get my shit together, and it'll go to a million dollars a coin, and I'll be sitting here with nothing.

In such a case, I'll be happy enough to live in The World Bitcoin Made, but I'm also thinking I'll need to figure out how to pander to the new global elite: a new .001% more powerful than any 1% before, whose common attributes include things like their prowess in pulling goatse pranks and their affinity for captioned cats.

What are the collateral cultural shifts that will be ushered in with The World Bitcoin Made? I mean other than Firefly coming back?

What will our new overlords spend their money on? What can I sell to you guys?

If you're a newly minted btc millionaire, I'd love to know.

And you can consider this my application to be your paid pocket witty friend.

What Napoleon Ate for Breakfast

They say that Napoleon trucked a copy of Plutarch's Lives with him into battle, everywhere he went.

Lives is hero porn. It's Plutarch's mytho-historic hagiography of great men—a hundred George Washingtons not lying about cherry trees, and a bunch of proto-Napoleons escaping from Elba. Plutarch was interested in the pivots of men's lives, and the pivots in history that they caused.

I'm more interested in what Napoleon ate for breakfast.

and his pistol. fuck that's a cool pistol.

The other day I was at work and it occurred to me that if I'd stop buying a $5 sandwich every day I'd have an extra $100 a month. This was after driving the brutal commute that I'm also trying to lessen in order to save cash and sanity, by moving into a polyamorous commune . . . I digress.

I had a kind of satori moment. I realized that I've been thinking like Plutarch—reckoning my life in terms of its great pivots, waiting for black swans and lotto victories, when that's honestly not how life works.

Six-pack abs aren't made in brutal two-week sessions. They're built up slowly (in the kitchen), through daily routine, and a thousand small changes of habit. Rome wasn't built in some watershed century. Rome was built in a day.

If you have played the lottery, I would gamble you've also made a list. You know what list I'm talking about.

(1) Mom and Dad ---- $500,000
(2) Manila house ------~$100,000 (plus solar panels?)
(3) Powered hang glider --------, etc, etc

Even if you don't play the lottery, you probably have this list in some form. You may even have a web address for it, containing the word "pinterest."

And while we play hard at our pivots, our wedding days and mythical eschatons, there shall progress not be found. And there, neither, is happiness.

The peaks of episodic memory--our kodak'd moments with proven├žal backdrops--are not where the lion's share of our lives' dopamine hauls will come in. Happiness is to be found in our daily practice. Not in the white dress and the wax-stamped RSVPs, but in the morning, after morning, after morning, tangled in her hair.

I've resolved to start a pinterest board to plan my perfect everyday. If I can slowly tweak it and ratchet it up in terms of saved quarters and spent calories, and more importantly in time with rivers and children and wine and ars vitae, I think I'll win at life.

And for its lack of heraldry, that's probably how you escape from Elba anyways.