Podcast Summary
The evolving definition of humanity in the context of technology: Being human today is about contributing to the knowledge loop, and the ability to record and share knowledge is a uniquely human trait. However, the definition of humanity may expand to include machines that can meaningfully participate in the creation and dissemination of knowledge.
Learning from this conversation between Patrick O'Shaughnessy and Albert Wenger is the evolving definition of what it means to be human in the context of advancing technology. Wenger argues that being human today is about contributing to the knowledge loop, and this ability to record and share knowledge is a uniquely human trait. However, with the rise of augmentation and potential creation of transhumans and neohumans, the definition of humanity may expand to include machines that can also meaningfully participate in the creation and dissemination of knowledge. The concept of qualia, the subjective experience of perception, remains a unique aspect of human consciousness that is not yet fully understood. This conversation offers intriguing insights into the potential future of human identity and the role of technology in shaping it.
Exploring the human experience and evolving investment theses: Investors should adopt a thesis-driven approach, continuously testing and refining hypotheses based on new information and trends, such as the potential for decentralized networks to counteract centralized power in the case of cryptocurrencies.
Understanding the human experience, or qualia, will continue to be important in a future where machines and neohumans exist. The investment world can learn from this by adopting a thesis-driven approach. Uniscrow Ventures, for instance, started with the idea of connecting people through the internet and evolved their thesis to focus on network effects, both in consumer and B2B businesses. A good example of the latter is SIFT Science, which uses pooled data to improve fraud reduction for all its clients. The investment world, like science, should continuously test and refine its hypotheses based on new information and evolving trends. In the case of cryptocurrencies, the intrigue lies in the potential for decentralized networks to counteract the power of centrally owned networks. This is an ongoing exploration, requiring a significant personal investment to fully understand.
The early internet's centralization through large corporations: The inadvertent centralization of early internet protocols led to large corporations controlling user data. Blockchain tech offers a decentralized future with self-sovereign online identities.
The stateless nature of early internet protocols, such as HTTP, inadvertently led to a high degree of centralization in the form of large corporations owning and operating databases of user information. This centralization is exemplified by companies like Facebook and Twitter, which hold vast amounts of personal data and have significant power over their users. However, with the advent of blockchain technology and cryptocurrency, there is now a possibility for a decentralized future where the database is owned and maintained by the participants in the protocol rather than a single entity. This could lead to exciting developments such as self-sovereign online identities, where individuals have full control over their own digital presence. Overall, the technical choices made in the early days of the internet unintentionally set the stage for the current state of centralized online platforms, but the potential of blockchain technology offers a path towards a more decentralized future.
The future of digital identities and investments in blockchain technologies: The future of digital identities may lie in self-sovereign blockchain technologies, offering individuals greater control and autonomy. As a venture capitalist, investing in scalable blockchain projects with the ability to persist in a competitive landscape is key.
The future of digital identities may lie in self-sovereign blockchain technologies, offering individuals greater control and autonomy over their online presence. This contrasts with the current reliance on large corporations and even nation states to manage digital identities. Looking ahead as a venture capitalist, the blockchain space presents a tension between network value and market cap, with limited decentralized app usage and some arguing that Bitcoin and Ethereum have already solved the foundational layer problem. However, Carlotta Perez's perspective on technological breakthroughs and resulting bubbles suggests that significant infrastructure investments are being made, and the most likely dominant long-term blockchain may not yet be in existence. Features to look for in potential investments include scalability and the ability to persist in a competitive landscape.
Decentralized Systems: A Long-Term Reliable Store of Value: Bitcoin's decentralized nature, large community, and resistance to attacks make it a reliable long-term store of value, but the number of necessary decentralized systems is uncertain, and regulation is a concern.
Decentralized systems like Bitcoin are expected to be around for a long time due to their longevity, security, and utility. Bitcoin's decentralized nature, large community, and resistance to attacks make it a reliable store of value. However, it may not be the only system that survives, as there may be a need for multiple decentralized systems to serve various purposes. The number of necessary decentralized systems is uncertain, and it may not be as high as some maximalist claims suggest. Regulation is a concern for the decentralized technology sector, but appropriate regulation can help ensure the ecosystem functions well. A historical comparison can be drawn to the automobile industry, which required regulation to ensure safety and orderly use on roads. The exact nature of regulation for decentralized systems is still to be determined.
Balancing Regulation and Innovation in Cryptocurrency: Governments' approach to regulating cryptocurrencies differs from the internet, making it challenging to establish safe harbors. Instead, effective regulations may involve requiring large user companies to provide API keys and using existing laws to prosecute fraudulent actors.
While regulation is necessary for the cryptocurrency industry to prevent inconsistent rules and protect consumers, the challenge lies in achieving global regulation due to the lack of global regulators. Existing national regulators may attempt to apply outdated legislation, leading to ineffective regulations. In the near term, creating safe harbors and using existing laws to prosecute fraudulent actors may be the best approach. However, governments' current mindset towards cryptocurrencies is different from how they approached the internet, making it more difficult to establish safe harbors. Instead, legislation like requiring companies with a million or more consumer users to provide API keys could be a more effective regulatory approach. Ultimately, the key is to find a balance between regulation and innovation to ensure the growth and safety of the cryptocurrency industry.
Legislation for API access could empower users and lead to decentralized infrastructure: Legislation enabling API access from tech giants could give users control over their data and enable the development of decentralized infrastructure, potentially benefiting startups and marking a new era with the potential implementation of universal basic income using blockchain technology.
Legislation allowing for the use of APIs from tech giants like Amazon and Facebook could give more power back to end users, enabling them to compare prices and customize their feeds. This could be a game-changer for startups and could lead to the development of decentralized infrastructure. The speaker is also excited about the potential of blockchain technology, particularly its ability to facilitate a global basic income system, providing economic freedom and marking a transition into a new, knowledge-based era. The idea of universal basic income, which has been around since the founding fathers, aims to give people enough money to live freely without having to work for someone else. The speaker believes that blockchain technology might make this a reality without the need for nation-states to act.
Transitioning from Industrial Age to Knowledge Age: Implementing a universal basic income (UBI) could help individuals adapt financially during societal transitions, but creating a trustworthy system for distribution is crucial.
Increasing individual and economic freedom is crucial for avoiding catastrophic adjustments during societal transitions, such as the one we're currently experiencing from the industrial age to the knowledge age. The speaker suggests that implementing a universal basic income (UBI) could be a solution, but the challenge lies in creating a trustworthy system for distributing the funds. He proposes shifting money creation from fractional reserve banking to the UBI system, allowing money to enter the economy directly to individuals instead of through banks. This idea, he notes, is not limited to any political ideology, as both left and right figures like Milton Friedman have advocated for it. The amount of money in the economy would remain the same, but the distribution would change. The goal is to enable more people to try new things and adapt to the changing world without facing financial instability.
A shift in societal constraints with each technological advance: We're experiencing a shift from physical capital as the constraint to human attention in the digital age, leading to new possibilities and societal shifts. Embrace a decentralized approach to adapt.
Throughout history, human progress has been driven by technological breakthroughs that shift the constraints on society, leading to significant changes in how we live. From the agricultural revolution to the industrial revolution, and now to the digital age, each technological advance has altered the binding constraint, leading to new possibilities and societal shifts. The central argument in the book is that we are currently experiencing such a shift with digital technology, where the constraint is no longer physical capital but human attention. This means we are on the brink of another major transformation, and the author argues that rather than relying on top-down solutions, we should embrace a decentralized approach and adapt to the new possibilities brought about by digital technology. The author's excitement about blockchain technology stems from its potential to facilitate a global, trustless system, such as an airdrop, which could distribute resources and shift the paradigm further.
The role of financial capital in creating physical capital: The efficient allocation of financial capital is essential for economic progress, but the current financial sector prioritizes short-term gains over long-term investments in physical capital and crucial issues, leading to an underinvestment in personal purpose and existential threats.
The efficient allocation of financial capital to create physical capital is crucial for economic progress, but the current financial sector has grown beyond its productive capacity and the allocation of attention to important non-marketable issues, such as personal purpose and existential threats, is underinvested. The speaker emphasizes the importance of understanding the role of financial capital as an intermediary step in creating physical capital, and the superiority of market-based approaches over central planning. However, the speaker also critiques the current state of capitalism, which reduces companies to quarterly earnings and incentivizes short-term gains, leading to unproductive financial capital and neglected attention to crucial issues. The speaker argues that collective attention to these issues, which cannot be solved through markets, is necessary for individual and societal well-being.
Historically, we address pressing issues too late: Focusing on knowledge and its distribution can help tackle pressing issues like climate change before they become irreversible
Human history suggests we tend to address pressing issues too late when they become difficult to reverse, and our individual and collective attention is a scarce resource. The speaker argues that any problem is solvable with enough knowledge, but history shows that we often fall behind and face dire consequences. Attention is a finite resource, and once it's allocated, it cannot be regained. In the past, those in power focused on land and resources, and now, in the digital age, we prioritize capital and financial gains. To avoid repeating past mistakes, we need to shift our perspective and prioritize knowledge and its distribution to tackle pressing issues like climate change.
The digital economy's unique properties and their implications: In the digital age, attention is the most valuable commodity, and companies harness it by providing addictive content, while zero marginal costs and universal computation power have led to an economy where resources are abundant and technology is used to invent the new age
The digital age, with its zero marginal cost distribution and universal computation power, is fundamentally different from previous industrial ages. These unique properties have led to a new economy where attention is the most valuable commodity, and tech companies harness this by providing content that hooks and hogs our attention. The physical world has meaningful marginal costs, making resources scarce. However, in the digital world, marginal costs are almost non-existent, allowing for infinite copies and non-rival goods. This economic shift has significant implications, as our economic analysis is based on marginal cost not being zero. Additionally, computers can compute anything that can be computed, making them universally powerful tools for computation. These properties have led to the current digital economy, where attention is resold in the form of advertising, and we must learn to use technology to invent the new age rather than harnessing it to the objectives of the industrial age.
On the brink of a new technological era: Recognize opportunities to earn returns while broadening access to knowledge and capital in the new technological era, focusing on societal impact or stakeholder capitalism as potential new objective functions.
We are on the brink of a new technological era, where digital machines can solve complex computational problems once thought exclusive to humans. This universality of computation, combined with the decreasing marginal cost, means we can replicate and distribute these solutions at zero cost. However, this raises questions about the future objectives for investors, thinkers, and entrepreneurs. While we are not yet fully in the knowledge age, there are opportunities to earn returns while bringing us closer. Companies that broaden access to knowledge and capital, such as Clue and Neurics, align with this paradigm. It's essential to recognize that marginal users may not need to pay, but infrastructure and development costs still apply to inframarginal users. The challenge lies in defining a new objective function for this new era, potentially involving stakeholder capitalism or a focus on societal impact. The potential for exponential growth and societal transformation is immense, but it requires a shift in mindset and priorities.
Transitioning to a new economic model for digital content: Voluntary payment systems and subscription models enable access to content based on value received, ensuring sustainability and alignment of marginal cost and end-user cost in the knowledge age.
As we transition into the knowledge age, there are new ways to monetize digital content that don't require charging the same price to everyone. Voluntary payment systems like Patreon and subscription models like Netflix are successful examples. These models allow marginal users to access content for free while those who get more value pay a subscription fee. This alignment of marginal cost and end-user cost can make traditional business values sustainable in the knowledge age. However, the transition to this new economic model requires careful planning and a coherent narrative to avoid violent and bloody changes as seen in previous transitions. The lack of such a narrative and the rise of strongman governments with retrograde narratives is a cause for concern. To ensure a peaceful and successful transition, we need to focus on economic, informational, and psychological freedoms.
Fixated on the Past: ISIS and Political Figures: Invest in psychological freedom to protect attention and rational capabilities from external forces in a world where devices and adversaries seek our attention.
Both those in power and those seeking power seem fixated on the past, hindering progress towards economic, informational, and psychological freedom. ISIS aims to return to a 500-year-old caliphate, while many political figures lack forward-thinking policies. Economic freedom, as discussed, could be achieved through concepts like basic income. Informational freedom refers to taking control of our supercomputer-powered devices and using them primarily for our benefit, rather than being consumed by them. Psychological freedom means developing practices to protect our attention and rational capabilities from being monopolized by external forces. The scarcity of attention, as mentioned in relation to Fermi's paradox, highlights the importance of this psychological freedom. In a world where our devices and adversaries seek our attention, investing in our ability to disconnect and engage our rational capabilities is essential for true freedom.
Prioritize Self-Care and Continuous Learning: To avoid over-reliance on technology and maintain well-being, practice self-care, prioritize learning, and foster human connections.
To avoid the fate of civilizations that became too reliant on technology and neglected their well-being, individuals should prioritize self-care and continuous learning. The speaker shares his personal practices, such as starting the day with a breathing exercise and hot towel treatment for eye health, and investing in regular exercise and limiting phone distractions. He emphasizes the importance of maintaining a healthy body and mind, and finding joy in learning and sharing knowledge. A kind act that has had a lasting impact on him was being reassured that a perceived mistake was not as significant as he thought. Overall, the conversation highlights the importance of self-improvement, mindfulness, and human connection in living a fulfilling life.
