Thinks 392

FT reviews “The Power Law” by Sebastian Mallaby: “The question is, as Mallaby writes, “Did the VCs create the success, or did they merely show up for it?” In the early days, they played a big role. There were fewer investors then willing to stake money on risky ideas, and funds often worked “with entrepreneurs in an entrepreneurial way”, as Tom Perkins of Kleiner Perkins phrased it. In other words, they dispensed a lot of advice. Mallaby attributes this alchemy to a “combination of laid-back creativity and driving commercial ambition” boosted by “a frank lust for riches”. A key venture capital insight was to invest in founders as much as technology, since the latter was impossible to assess. It was easier to identify individuals, often ambitious immigrants, who would not tolerate failure.”

WSJ, in a review of “Get It Done” by Ayelet Fishbach: “According to Ms. Fishbach, an effective goal should “pull us toward our ultimate desires, energizing us to put in the work we need to do to get there.” It should be ambitious, measurable and, to the extent possible, intrinsically motivating. Suppose you want to start exercising more. To say “I’d like to run a 5k in 30 minutes or less by June” sets a more effective goal than simply saying “I’d like to start running.””

David Perell: “Make One Person Responsible: If you want to get something done, it’s tempting to put a huge number of people in charge. But often, when too many people are in charge, nobody accepts responsibility. This saying is illustrative: “A dog with two owners dies of hunger.”

UVI: A Blockchain Political Platform (Part 6)

Five Star Movement – 1

Italy’s Five Star Movement (Movimento 5 Stelle, in Italian) rose to power on the back of a digital platform targeting disillusioned voters with a fresh new alternative and a vision of a digital model of participative governance. From Wikipedia: “The M5S was founded on 4 October 2009 by Beppe Grillo, a comedian and blogger, and Gianroberto Casaleggio, a web strategist. In the 2013 general election, the M5S was the second-most popular single party, though it was only the third-most popular grouping, behind the centre-left and centre-right coalitions. The M5S subsequently turned down a coalition offer with the centre-left coalition and entered opposition. In the 2018 general election, the M5S became the largest party in the Italian Parliament and entered government led by Giuseppe Conte.”

Wikipedia’s briefing on Five Star Movement elaborated on its use of technology: “The movement bases its principles on direct democracy as an evolution of representative democracy. The idea is that citizens will no longer delegate their power to parties (considered old and corrupted intermediates between the state and themselves) that serve the interests of lobby groups and financial powers. They will succeed only by creating a collective intelligence made possible by the Internet. In order to go in this direction, the M5S chose its Italian and European parliamentary candidates through online voting by registered members of Beppe Grillo’s blog. Through an application called Rousseau reachable on the web, the registered users of M5S discuss, approve or reject legislative proposals.”

Marco Deseriis wrote in a 2017 paper: “Central to [the] shift from politics as a profession to politics as a form of service is the network, which M5S activists routinely refer to as the ultimate source of decisional power.  Although the network of M5S members is dispersed throughout the Internet, Rousseau is the hub where the network coalesces in what the party rule book describes as the “assembly of the members”. In this context, the term assembly is to be understood metaphorically for two distinct reasons. First, as with any Internet-based community, the members do not meet in a physical location. Second, if Rousseau could support in theory the formation of a virtual assembly, the platform lacks in practice any tool for real-time or asynchronous communication among the members. Such choice is deliberate. As Members of Parliament Manlio Di Stefano, Nunzia Catalfo, and Danilo Toninelli noted, Rousseau has been designed to function as an “operational tool” rather than an outlet for extended discussions among party members. In this context, operational means that Rousseau allows members to make decisions via majority voting and to develop a relationship with their representatives that is ostensibly unmediated by party structures … This Web-based parliamentarization of the M5S is in line with the process of institutionalization that the M5S has undergone since 2012. Indeed, the extension of parliamentary processes to the Web occurs almost exclusively via a “crowdsourcing” of bills of law that channels the activism of the party base within specific boundaries.”

Writing in Washington Post in 2018 after FSM’s electoral success, Davide Casaleggio, who conceptualised Rousseau, had this to say:

The Five Star Movement, which launched in 2009, has now achieved a landmark success among Western democracies by using the Internet to play a crucial role in the electoral process. The first major digital political organization in the world, it was born and raised online, supported exclusively by donations from ordinary citizens. Its objectives and priorities are defined by citizens, not the old moribund parties, with a mission to end corruption, fight tax evasion, reduce taxes, protect the environment, improve education and accelerate innovation.

…The platform that enabled the success of the Five Star Movement is called Rousseau, named after the 18th century philosopher who argued politics should reflect the general will of the people. And that is exactly what our platform does: it allows citizens to be part of politics. Direct democracy, made possible by the Internet, has given a new centrality to citizens and will ultimately lead to the deconstruction of the current political and social organizations. Representative democracy — politics by proxy — is gradually losing meaning.

Our parliamentarians who stood for election were chosen through online voting on the Rousseau platform — not inside a smoke-filled room like the established parties. Since it is the citizens who finance us though micro-donations, it’s the citizens who choose our program and representatives. In the last online vote to choose our parliamentarians, 8,000 candidates were picked from 40,000 nominees.

Five Star Movement’s Rousseau was thus one of the most successful pioneering efforts to upend the traditional power structure by putting people, rather than the politicians, at the centre.

Thinks 391

Kelly Dedman on martech and adtech: “Marketing technology and email marketing developed around known addressable customer data — the house file. Email marketing was a logical internet-age successor to direct mail and, combined with e-commerce, created an efficient and measurable direct response mechanism. Email marketers inherited the disciplines and practices of their direct mail maternal ancestors and focused on core tenets required to build, maintain, and optimize the value of their house file – registering subscribers, collecting email addresses, building out progressive profiles, collecting survey data, aggregating data from disparate sources, creating a unified view of the customer, learning how to use past customer transactions to predict future behavior, and calculating customer value through analytical models. Advertising technology emerged to contend with new challenges of targeting vast anonymous online audiences, along with how to attribute response, optimize and measure campaign effectiveness. Much like the pre-Internet form of advertising, digital advertisers were still unable to directly address known, individual consumers due to regulations around the use of third-party data, which was the only way to build targetable audiences at scale.”

Rita McGrath: “Here is the definition I find helpful, following a classical definition of strategy created by Don Hambrick and James Frederickson. It defines strategy as the “central, integrated, concept of how you plan to meet your objectives.”…Strategies are not about iron-clad unchanging five year plans. They are about making the best hypotheses with imperfect information, providing clarity to people and founding an environment in which people up and down the organization are at liberty to make smart choices.”

Brian Caplan: “Free markets are awesome because they give business incentives to do good stuff that sounds bad. Governments are awful because they give politicians incentives to do bad stuff that sounds good.”

UVI: A Blockchain Political Platform (Part 5)

Blockchain and Politics – 2

A 2018 Wired story about Democracy.Earth: “At the center of the project is the creation of what [Santiago Siri] calls “political cryptocurrency”— blockchain-generated tokens that users of Democracy.Earth’s software can spend as votes … Siri dreams of a new kind of social media platform on which we spend “vote tokens” that can do anything, from electing politicians and passing referendums to enacting the bylaws of a social club or establishing the business plan of a corporation. It’s democracy by click…In this perfect world, Siri argues, the supposedly unhackable and absolutely transparent blockchain will ensure that no centralized election authority is required to tabulate a vote, and no corrupt politician or gridlocked legislature can interfere with the popular mandate. But coming up with a superior form of voting technology is just the beginning; the larger, far more revolutionary goal is to devise a decentralized decision-making process that eliminates the necessity for any kind of central government at all.”

Andrey Sergeenkov on the idea of a DePa (Decentralised Party): “A DePa would essentially function like a decentralized autonomous organization (DAO) as the entirety of the protocol relies on predefined rules set in codes and launched as smart contracts. Therefore, the protocol responds to the activities of users or verified party members based on its underlying code. And so, all operations are fully automated and devoid of the influence of third parties or central authorities. Whenever sets of conditions are met, the DePa executes actions that are in turn recorded on the blockchain and open for verification by any member of the party. In essence, DePa is a party that reflects the views of all its constituent members and not just the selfish interest of the few. To ensure that the activities of each party member conform with the unified goals of the decentralized party, the protocol will incentivize positive contributions by distributing its native token as rewards. It is important to mention that the ultimate goal of the protocol is to achieve consensus and at the same time preserve the individuality of each member. The token accrued by each member would also determine the individual’s voting power.”

Comistar writes about tokenising political parties: “While the politics and the social system is a wide topic and blockchain technology can’t fix it all, it could definitely be useful, at least in theory, when it comes to funding and the governance of the political parties. Could we create more transparency in the shady funding shenanigans of the politics? How about the inclusion of the voters?.. The party token could have voting rights. What if the people who own the token could, to limited capacity, of course, have some sort of voting rights on the (important) decisions which the party does? For example, let’s say the party has an important political decision to make and to do that they have to get an opinion of the token holders as well (via token sale agreement or any other type of document highlighting the responsibilities of the party).”

Marta Poblet, et al: “Oracles were trusted sources of knowledge for public deliberation in classical Athens. Very much like expert and technical knowledge, divine advice was embedded in the deliberation and decision-making process of the democratic Assembly. While the idea of religious divination is completely out of place in our contemporary democracies, oracles made a technological comeback with modern computer science and cryptography and, more recently, the emergence of the blockchain as a “trust machine.””

In summary, while the ideas have been discussed, there has been no successful implementation of a blockchain based political party (or platform). The only example of a digital-centric party coming to power has been Italy’s Five Star Movement, but that experiment eventually failed.

Thinks 390

The Generalist on Decentraland: “The virtual world has grown its users by 3,300% over the past year and reached a peak market cap of $12 billion. It may prove the best challenger to Meta’s long-term ambitions.”

Economist: “Health care consumes 18% of GDP in America, equivalent to $3.6trn a year. In other rich countries the share is lower, around 10%, but rising as populations age. The pandemic has made people more comfortable with online services, including digitally mediated care. Venture capitalists detect a sector that is uniquely ripe for disruption. CB Insights, a data provider, estimates that investments in digital-health startups nearly doubled in 2021, to $57bn (see chart 1). Unlisted health-care startups valued at $1bn or more now number 90, four times the figure five years ago. Such “unicorns” are competing with incumbent health-care companies and technology giants to make people better and prevent them from getting ill in the first place. In the process, they are turning patients into consumers.”

Shane Parish: “Being contrarian isn’t hard – anyone can say the opposite of what most people believe. But being contrarian *and* right is extremely difficult. Those who can both go against the crowd and be correct achieve outsized rewards. This is called Advantageous Divergence and it’s a mental model for thinking through ideas.”

UVI: A Blockchain Political Platform (Part 4)

Blockchain and Politics – 1

There have been many announcements and writings about political parties and public participation in decision-making via the blockchain. (I have not tracked the most recent updates of these.)

From a press release in Oct 2019: “ Æternity, the next-generation, open-source blockchain for building decentralized applications, today announced a collaboration with the Uruguay Digital Party to optimize the participation processes of citizens through the use of blockchain technology in internal voting. This initiative aims to make decisions more transparent, thus building a new system in which citizens, and members of the Digital Party in particular, can participate in a decentralized manner in the political decisions of their community. For that, Æternity will work in two main areas. The first phase of the project will focus on the development of a decentralized application based on the “liquid democracy” model, which operates with tokens using a basic set of smart contracts that the Digital Party will use for its internal governance. A technological solution will also be developed for the collection and validation of adherent identities. This will allow the Digital Party to create a secure and transparent database. In this way, each citizen can vote on proposals and give ideas directly and safely, thanks to encryption techniques that ensure a verifiable process separating the identity of the vote, which is kept secret.”

More on Liquid Democracy from Wikipedia: “Liquid democracy is a form of delegative democracy whereby an electorate engages in collective decision-making through direct participation and dynamic representation. This democratic system utilizes elements of both direct and representative democracy. Voters in a liquid democracy have the right to vote directly on all policy issues à la direct democracy, however, voters also have the option to delegate their votes to someone who will vote on their behalf à la representative democracy. Any individual may be delegated votes (those delegated votes are termed “proxies”) and these proxies may in turn delegate their vote as well as any votes they have been delegated by others resulting in “metadelegation”.” More from Chiara Valsangiacomo: “The core idea behind LD is that, for each issue to be decided, each citizen has a single vote that can be transferred to a trusted person (or ‘proxy’) at will. In other words, citizens can freely decide whether to cast their vote directly or to delegate it, with a given citizen potentially choosing different proxies for different topics. Anyone can become a proxy, meaning that the number of ‘elected’ representatives is potentially unlimited.”

Mariana Todorova: “Liquid democracy gives the opportunity to combine the advantages of direct and representative democracy, while neutralizing to a great extent their disadvantages…DG Agora is a P2P system for providing confidence and organization of power. It may serve not only for the establishment of new social organizations, movements, parties, and cooperatives, but also for democratic structuring and organization of already existing power organizations of private, state or cooperative characters, as well.”

Australia’s Flux: “Flux is a political movement promoting a new system of democracy called ‘Issue Based Direct Democracy’ (IBDD) which enables voters to influence how an elected Flux representative will vote on legislation in Parliament … Flux is a gateway Australians can use, to participate directly in parliament, making the need for trust in elected officials a thing of the past. Elected Flux MPs and Senators give up their autonomy and use their votes in line with the outcomes produced by the Flux ecosystem; an ecosystem comprised of ordinary Aussies…IBDD has three main aspects: Voters get to have a say on any issues they want to, but can abstain from voting if they don’t want to; instead of voting directly, voters can choose to delegate their vote to someone else – like a specialist, politician or just a trusted friend; and voters can assign priority to the issues most important to them.” Flux uses an idea termed as “liquidity tokens.”

Thinks 389

Anna Wiener: “If the metaverse materializes, it will probably look and behave like a video game, at least for a little while. For millions of people, video games already serve as everyday, immersive virtual experiences; gaming companies provide infrastructure for Hollywood films, spatial visualizations, and live performances. Aesthetically, the metaverse could have the gauzy realism of 2019’s “The Lion King,” the anesthetized cheerfulness of The Sims, the pixel-art graphics of the sixteen-bit era, or any other vibe. Physically, it will probably be accessed through headgear—V.R. headsets, A.R. glasses—or simply a computer screen. Financially, it could look something like FarmVille, in which players spent millions of dollars on virtual windmills, fertilizer, farm animals, and water, tending to what Alenda Y. Chang, an associate professor of film and media studies at U.C. Santa Barbara, has called an “ecologically absurd” landscape, in which dying crops could be revived by “unwither” spray, and sheep produced wool sweaters after eating tomatoes.”

Shankkar Aiyar: “India’s biggest challenge is to shift its workforce to productive domains. Reconfiguring growth calls for sequencing and speed in reforms. The rise of China illustrates this. In 1990, China’s GDP was $360 billion and India was at $320 billion. China modernised agriculture followed by rapid opening up of its economy in the Deng Xiaoping era. India was slow off the block. The much praised ‘1991 liberalisation’ came in the wake of a crisis, and reforms have been in fits and starts. Economic growth demands the leveraging of the factors of productivity — land, labour, capital and now technology.  Attempts to liberate productivity have been shackled by parochial partisan politics at the Centre and the states. Leverage of technology is constrained by inadequacies in the regulatory landscape. In 2021, China’s GDP stands at $ 16.8 trillion while that of India is $2.95 trillion.”

Read: 2 books by Toshikazu Kawaguchi in the “Before the Coffee Gets Cold” series. A total of 8 short stories. 

UVI: A Blockchain Political Platform (Part 3)

Blockchain – 2

From “Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved…A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end-to-end, giving you greater confidence, as well as new efficiencies and opportunities.”

The Economist describes blockchains as databases which represent an immutable shared history: “A blockchain is a database that contains the history of whatever information it was designed to store. It is made up of a string of “blocks” of information that build on top of one another in an immutable chain…What distinguishes a blockchain from other databases is that its ledger is distributed, publicly available and replicated on thousands of computers—or “nodes”—around the world. Rather than a centralised entity, like a bank or a tech platform, ensuring that the ledger is accurate, it is verified by a decentralised network of individuals… Unlike private networks, open, public blockchains are transparent (anyone can view them), permissionless (anyone can use them) and censorship-resistant (no one can stop them).”

Tim Roughgarden: “Blockchains are not about payments per se. They’re about a new computing paradigm—a programmable computer that lives in the sky, that is not owned by anyone (or rather, is owned by thousands of people all over the globe, including yourself if you like) and that anyone can use. (There might be a usage fee you have to pay, but there’s no access control—you don’t need anyone’s permission.) When thought of this way, how could blockchains not unlock a totally new generation of applications?”

He describes the blockchain stack thus starting from the bottom: “Layer 0 [is] the Internet. That is, it provides at least a semi-reliable method for point-to-point communication between untrusted parties…Layer 1 is the consensus layer, and its job is to keep a bunch of computers (potentially scattered all over the globe) in sync, despite possible network failures and attacks…Layer 2 [is] the scaling layer. Essentially the goal here is to implement the same functionality exported by a layer-1 protocol, but a lot more of it…Finally, on top there is an application layer (as there is in the Internet stack), which refers to the applications built on the functionality provided by the previous layers.”

Builtin elaborates on a key innovation that has taken blockchain beyond just being a platform for cryptocurrencies: “Originally created as the ultra-transparent ledger system for Bitcoin to operate on, blockchain has long been associated with cryptocurrency, but the technology’s transparency and security has seen growing adoption in a number of areas, much of which can be traced back to the development of the Ethereum blockchain, [which] lets developers create sophisticated programs that can communicate with one another on the blockchain.”

Jesse Frederik: “Blockchain generalises the bitcoin pitch: let’s not just get rid of banks, but also the land registry, voting machines, insurance companies, Facebook, Uber, Amazon, the Lung Foundation, the porn industry and government and businesses in general. They are superfluous, thanks to the blockchain. WIRED made a list of 187 things that blockchain could supposedly fix .”

Decentralisation, transparency and trust are the fundamental ideas in the blockchain. Indian politics needs all three of them.

Thinks 388

Vanita Kohli-Khandekar on Indian media: “At 468 million unique visitors a month, digital’s reach is just a little over half of TV’s 892 million. Print has been at a steady 421 million a month. On the revenue side — TV brings in roughly half the Rs 138,300 crore (pay and advertising) that Indian media and entertainment (M&E) made in 2020. In second place is digital at 17 per cent.”

WSJ: “Latin America suffers from too much government. Taxation, regulation, weak property rights and corruption conspire against entrepreneurship and self-discovery. Yet in the 1980s most of the region returned to democracy, giving the struggle for liberty a fighting chance. That chance is slipping away. In the past two decades, the institutions necessary to ensure political and ideological competition have been destroyed in several countries. Freedom dies when this happens…The problem isn’t any one election in which a politician, who prefers socialism over individual freedom, prevails. It’s the extremist view—left or right—that an electoral victory is a mandate to dismantle the institutional framework that protects minorities and blocks the ambitions of absolutism…Nations don’t vote for despotism. But looking back at Lenin and Hitler, Mr. Hinds shows that when a nation is seduced into handing over broad discretion to a messianic figure, that nation seals its fate. “Leaders play a crucial role in unifying people around a destructive idea. But such leaders emerge in response to a demand from the people,” Mr. Hinds writes.”

Donald Boudreaux: “Smithian economists – those who research, write, and teach in the tradition begun by Adam Smith – make their livings by exposing the many economic fallacies embraced by the man-in-the-street and peddled by vote-hungry politicians and click-crazy pundits. These economists will never want for work. The reason is that they are opposed by anti-Smithian economists who give to the man-in-the-street seemingly credible assurance that each and every one of his untutored instincts about the economy reflect his genius.”

UVI: A Blockchain Political Platform (Part 2)

Blockchain – 1

In the past few years, interest in crypto-currencies has skyrocketed. As per CoinMarketCap, over 9000 currencies are now valued at $2 trillion. Just five years ago, this was at just $10 billion. While the currencies are many (bitcoin and ether being the most prominent), the underlying technology is similar in all cases: the blockchain.

Wikipedia explains: “A blockchain is a growing list of records, called blocks, that are linked together using cryptography.  It’s also described as a “trustless and fully decentralized peer-to-peer immutable data storage” that is spread over a network of participants often referred to as nodes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree). The timestamp proves that the transaction data existed when the block was published in order to get into its hash. As blocks each contain information about the block previous to it, they form a chain, with each additional block reinforcing the ones before it. Therefore, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks. Blockchains are typically managed by a peer-to-peer network for use as a publicly distributed ledger, where nodes collectively adhere to a protocol to communicate and validate new blocks.”

Tyler Cowen: “Centralized services typically are run by companies or institutions, such as Facebook, Twitter or Amazon. There is a command structure and a boss, and changes can be made by deliberate decision. In this parlance, even Wikipedia counts as centralized, though the editors and contributors are scattered around the world. Decentralized services are harder to define, but two simple examples may be helpful. The first is email, which consists of networks of rules and interconnections not owned by any one company or institution, even though your email provider might be. The second is the World Wide Web itself, a series of protocols with a huge amount of stuff built on top of it. Bitcoin also operates in a decentralized way, unless a majority of the blockchain miners decide otherwise, which is very difficult to pull off.”

Investopedia adds: “One key difference between a typical database and a blockchain is the way the data is structured. A blockchain collects information together in groups, also known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are chained onto the previously filled block, forming a chain of data known as the “blockchain.” All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled…In a blockchain, each node has a full record of the data that has been stored on the blockchain since its inception. For Bitcoin, the data is the entire history of all Bitcoin transactions. If one node has an error in its data it can use the thousands of other nodes as a reference point to correct itself. This way, no one node within the network can alter information held within it. Because of this, the history of transactions in each block that make up Bitcoin’s blockchain is irreversible.”