The Bleeding Edge: The Human Brain Often Ignores Second Order Effects

By HanseCoin/KJA Digital Investments on ALTCOIN MAGAZINE

By Dr. Chris Kacher of Hanse Digital Access, KJA Digital Investments and Virtue of Selfish Investing on ALTCOIN MAGAZINE

Cryptotechnologies… Cryptonite for Governments™

Cryptocoffin

Mainstream media is designed to shock. This comes at the expense of ignoring deeper truths. The mainstream typically only provides cursory first order levels of understanding. The closer one gets to revolutionary, bleeding-edge technologies that defy the way things have always been done, the greater the deep thought that is required so one can understand the second and third order effects of such game-changing technologies.

We attended Cryptofin, a blockchain conference here in Tallinn, Estonia. While Tallinn is becoming increasingly used in the same headline with Tel Aviv due to Tallinn being billed as the world’s first digital city, Cryptofin should maybe have been called Cryptocoffin. While some of the attendees were very bright, accomplished individuals, the panel discussions brought to light how many of these so-called experts and thought leaders sitting on panels have failed to deep think when it comes to bleeding-edge technologies in the blockchain/crypto space. While some thought leaders are legitimate, others are the leaders of lemmings so get elevated to the status of a guru despite their thoughts being of the old school, flat-earth variety. One need not look far to see many such gurus in the investment space who lead their flock to ruin, or at least underperformance.

Shocking statements have been made such as:

“There are almost no exponential growth technologies. CRISPR? Nothing there.”

Hello? Technologies abound — AI, 3-D printing, AR/VR, trillions of sensors/IoT, CRISPR, and smart cities among numerous others that are all on the S-curve. As one example, CRISPR enables high school students to perform synthetic bioengineering in their homes. An excellent documentary on CRISPR was released called Unnatural Selection. Indeed, biohacking is moving from the physical into the digital domain. But all technologies are double-edged swords. Unlike computer viruses which control or crash computers, controlling or crashing a human with a CRISPR-engineered virus has far darker implications. There’s no reboot. On the other hand, just as with a computer, a human being can be reprogrammed or anti-viral CRISPR technologies designed to effectively remove the offending engineered virus. Most anything can be undone.

There is also exponential diminution. The Human Genome Project cost $3 billion. Today, the same can be achieved for about $1000 by a high school kid working with the proper gear in the span of a day or two.

Indeed, the exponential rate of improvement we have across numerous industries is clear.

“Apps are pretty pointless. I only need a few apps on my phone.”

Meanwhile, the world thrives on app usage. Apps are essential to efficiency and efficacy. Around one billion Chinese use WeChat and Alipay for many everyday tasks including paying for groceries. Apps simplify while making life far more efficient. There’s a reason why there are millions of apps now in existence and why the renowned, deep thinker Naval Ravikant said app coders are the gatekeepers. Businesses often live and die by the apps that platforms such as Apple and Android allow.

“The days of bitcoin and decentralized exchanges (DEXs) are numbered. The most powerful governments have always maintained control.”

Deep failure to connect the dots here. Decentralized tech such as p2p file sharing has thrived. No reason why bitcoin and DEXs won't. Just because governments have had a monopoly on the control in the past does not mean this will be true in the future. We saw how the U.S. government could not stop p2p file sharing. We know what happened to bitcoin when various countries including China and Russia attempted to ban it. I have been a proponent of bitcoin since Jan-2013 when I bought my first bitcoin just above $10. I have discussed its strengths, weaknesses, and price projections HERE. A growing number of DEXs tap into deep pools of liquidity so they can approach or even improve on price compared to large centralized exchanges. Here is a report by highly regarded Kyle Samani that underscores the importance of DEXs — the network effect is the capital, not the code. Open source code/smart contracts enable 10x growth over conventional methods. “When all forms of value transfer — currencies, commodities, bonds, equities, etc. — are powered by a permissionless and censorship-resistant API on an open ledger with generic, universal, reusable, and composable smart contracts, it becomes at least 10x easier to build financial services.”

“Decentralized technologies are overrated.”

While the word ‘decentralized’ has been abused and overpromised, decentralized platforms remain one of the largest evolutionary tsunamis on the horizon. They will empower the individual while taking power away from a central authority. We have already seen this with p2p BitTorrent file sharing, bitcoin, Wikipedia, decentralized publishing, and alternative news media sources among many others. Decentralized tech puts power into the hands of the individual while removing power from authoritarian control as well as making things far more efficient thus will win the economic race. As a few of many examples, in the future, you will be able to lend out the hard drive space (Filecoin), CPU processing power (Golem), and wifi bandwidth you aren’t using for tokens which can then be exchanged for bitcoin.

How many times have you needed an internet connection but the only available networks were private wifi networks? Private wifi networks are closed. You need the password. But what if the hundreds of millions of private wifi networks (home, office, etc) were incentivized via tokens to keep them open? Anyone wanting to use your wifi would pay a tiny fee in wifi tokens.

Why not create a company that puts wifi networks on the blockchain so each owner can choose to participate in charging a small fee for the usage of their network?

Eventually, centralized companies such as Uber and Lyft will become decentralized via DAOs. In the first wave, a ride-sharing coin platform can exist around the planet where anyone offering a ride with the car they drive would earn tokens. YoUber™ (my trademark) coming soon! In the second wave, self-driving cars that are privately owned or decentralized will exist on this decentralized platform, make money for their owners or, in the case of a DAO, know when to get an oil change, fuel, recharge, and use the funds to do so. While this may be many dots to mentally connect, think of how useful some platforms exist on their own. Examples? The internet for one! BitTorrenting for another. www.localbitcoins.com for a third. While the internet (Web 1.0) started out decentralized, it has since become more centralized (Web 2.0). But as we shall see, Web 3.0 will return the internet back to a more decentralized state where both centralized and decentralized platforms co-exist, though eventually, decentralized shall dominate since it is economically superior. People “vote” with their pocketbooks.

Decentralization overrated? LOL

Government And Law — Slow Herd Animals, Ethics In Question

At Cryptofin, a question was put to the audience as to whether the audience thinks the law fails to keep up with the pace of technology. A number of hands went up which was met with disdain from some of the panelists which, in turn, was met with disdain from us at some of the panelists.

Bobby Lee who started the first crypto exchange in China appeared on this panel. His brother Charlie Lee started Litecoin. One of the panelists claimed that laws are written out in a way so there is no misinterpretation. While that certainly is the goal, reality speaks differently. The Patriot Act in the U.S. as a consequence of 9/11 has been used to remove the Bill of Rights in certain cases. One’s act of transacting bitcoin may be perfectly legal but the individual, under the Patriot Act laws, could be labeled a terrorist or a money launderer without the right to legal representation. While the stated purpose of the Act is to “deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes,” one of the many criticisms of the Act is that “other purposes” often includes the detection and prosecution of non-terrorist alleged future crimes.

Edward Snowden illustrates another poignant example of how the government manipulates laws to their advantage. In this recent interview at 1:15:50, Snowden cites how the White House will implicate certain members of Congress in illegal acts, so when the White House gets in trouble for it, Congress has to run cover for the White House. Incriminating documents are said to be classified which absolves the lawbreaker. In one such case called Stellarwind, journalists had uncovered illegal wiretapping activities committed millions of times a day by major phone companies. They were handing over everyone’s records to the government because the President asking them to do this. So Congress passed an emergency law in 2007 called the Protect America Act which retroactively immunized all of the phone companies in the U.S. In reality, the Protect America Act protected the President, the White House, and the phone companies.

But the U.S. government was still able to continue its mass wiretapping program in a different manner with the excuse that this is being done to protect Americans against terrorist attacks. Manipulative appeals to fear are standard when it comes to governments that control mainstream media. As a consequence, the Foreign Intelligence Surveillance Act/FAA of 2008 was passed. This served to make the law comply with what U.S. intelligence agencies wanted instead of making the agencies comply with the law.

The director of the NSA knew these programs were not constitutional. The President of the United States then asked the director if he would continue this program on his say-so alone, both knowing that it is unlawful. The director said he would if that is what is required to keep the country safe.

At that moment, Snowden realized they don't care about the law, the constitution, or the people but the power of government. “National Security” was meant to mean public safety but instead has been warped over time to mean state security which empowers the government by enabling them to create powerful forces unbeknownst to the public. Snowden says citizens are being deceived. In consequence, the public has become subordinate and subservient to the government.

Snowden goes on to say the public version of the classified warrantless wiretapping document had so much blacked out that it no longer resembled the classified version. It was tailor-made to deceive the people and the Congress of the United States. This is what real-world conspiracies look like. It’s lawyers, politicians, management, and others in the chain of command that understand if they don’t explain such and such in a certain way, they may lose their jobs or not get that promotion.

Some of the most senior officials work together to undermine the rights of the American people by giving themselves expanded powers. In their defense, they say they were seeking these powers to keep the country safe. But that’s the line of reasoning used by every government including Russia and China. If they are truly keeping us safe, why wouldn’t they instead just put it to a vote? The Patriot Act was one of the most rights-crippling pieces of legislation ever passed. Why didn’t we get a vote on this act before it passed?

In any event, the panel discussion got heated as Bobby Lee argued that some of the panelists were supporting a dictatorial regime by believing laws are written in a clear manner, thus allowing justice systems to decide whether or not a person has committed a crime. Lee should know since he comes from a controlling, authoritarian regime. Kudos to Lee for being one of the voices of reason on that panel.

This position taken by some of the panelists surprised me as countless examples abound of how justice systems are partially corrupt. We all know why Satoshi created bitcoin. Meanwhile, the government is the slow animal in the herd when it comes to innovation. Law is always playing catch up. Many lawyers not of the patent law persuasion are notorious for failing to be tech-centric. Let’s not forget how a private company by the name of Celera Genomics mapped the human genome far quicker at a much lower cost than the U.S. government back in the year 2000. The $300,000,000 Celera effort proceeded at a faster pace and at a fraction of the cost of the roughly $3 billion publicly funded project.

The next day’s panel CRYPTO INDUSTRY- UNREGULATED, REGULATED OR OVERREGULATED? was no better. A colleague summed things up quite nicely. 😹

Meanwhile, some of the panelists, while highly intelligent, harbor old school views possibly because they are unable to connect the dots when it comes to bleeding-edge tech which introduces major differences into the way things have always been done. Warren Buffet, Nouriel Roubini, and Jamie Dimon anyone?

Decentralized Tech: P2P BitTorrent And Bitcoin

As for the belief that bitcoin will eventually meet its demise, that DEXs are strictly fringe, and that DAOs and dApps are questionable at best, failing to see how such technologies are revolutionary to the way things have always been done. I have noted that peer-to-peer file sharing since Napster was shut down in 1995 continues to thrive despite billions of dollars of taxpayer money thrown at court cases aimed at shutting down Pirates Bay equivalents. I was told that this was just copyright law, not having to do with control of fiat which the U.S. government would take far more seriously. Well, the U.S. government has its heavy artillery at illegal file-sharing since 1995 yet p2p is a multi-headed hydra. Cut off one Pirates Bay and ten more materialize.

The same is true of bitcoin which is more likely an infinite headed hydra as I wrote in a recent piece. We saw what happened to bitcoin when China banned various aspects of bitcoin. Instead of plummeting out of sight, bitcoin eventually hit new highs… again.

U.S. Government Not Infinitely Powerful

Despite what some think, the U.S. government is not the end-all, be-all entity with infinite control. If they were to illegalize bitcoin, bitcoin is decentralized so good luck with that. Even lawmakers in the U.S. are starting to realize an effective ban on bitcoin would be incredibly difficult if not impossible. The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on cryptocurrency and blockchain technology regulation earlier this year. The conclusion was that the U.S. would not be able to succeed in banning bitcoin because it is an open-source, decentralized, global innovation that moves borderless and frictionlessly everywhere on the planet. Anyone can use it where there is an internet connection.

The way to have an impact on bitcoin usage is the same way Netflix and iTunes reduced illegal p2p file sharing. One economist suggested governments should offer more financial freedom and a better monetary policy. Certainly, that would be a step in the right direction but remains to be seen since governments have always controlled and restricted the transfer of value.

Old School Beliefs On Bitcoin

In the meantime, despite the positive conclusions cited above made during the U.S. Senate Committee’s hearing earlier this year, one remaining old school Congressman Brad Sherman went on an anti-bitcoin and cryptocurrency rant at Facebook CEO Mark Zuckerberg’s congressional hearing regarding Libra.

Echoing sentiments of Nouriel Roubini, Sherman dismissed crypto technology as only useful for criminals and had called for an outright ban earlier this year. Sherman still harbors the mistaken old school belief that the dollar is resistant to criminal behavior, contradicting numerous reports by Europol et al that physical forms of fiat such as the dollar, not cryptocurrencies or bitcoin, are the most vulnerable to criminal activity.

Dollar’s Reserve Currency Status At Risk

Sherman also voiced his concerns that the U.S. dollar will lose its reserve currency status due to bitcoin, stating reserve currency status enables the U.S. to influence other countries’ policies and actions through the use of economic sanctions. I wrote in a prior piece that petrodollars are one of the key ingredients to the dollar maintaining reserve currency status. The U.S. dollar has been the world’s dominant currency since the 1920s. But central banks are investigating how national digital currencies can allow for faster, cheaper money transfers across borders thus are viable alternatives to the U.S. dollar. Such would be embraced by nations concerned about the dollar’s outsized influence on the global economy.

While digital fiat could also blunt competition from bitcoin and its peers, should bitcoin ever hold reserve currency status or used as a fixed supply backstop to a reserve currency which can be inflated away, its valuation will certainly be orders of magnitude greater as a consequence. And this is just one of many tailwinds. My $1,000,000/BTC by 2023 still stands.

Blockchain DAOs, DApps, And DEXs

As concerns platforms, while centralized platforms offer more convenience than decentralized ones, both will co-exist as decentralized platforms make more economic sense with each passing year. Still, when it comes to privacy and economics, if history is any guide, only a smaller subset of people want privacy over convenience and lower cost. The Chinese are willing to give up their privacy for convenience via centralized apps such as Alipay used by 900 million Chinese and WeChat used by 1.1 billion Chinese to make digital payments instantly among other common tasks. Likewise, Amazon’s AWS centralized services offer both convenience and cost with customer service, at least for now.

Nevertheless, decentralized exchanges, or DEXs, are becoming more liquid in a hurry and will co-exist with centralized exchanges. Already Trust Wallet and Exodus offer slippages of 2–5% even on sizable orders because both tap into deep liquidity pools thus can even get a superior price over centralized exchanges depending on the order and time of day. Further, the hacking of wallets and exchanges will diminish greatly in time so both centralized and decentralized exchanges will benefit. That said, the peace of mind in putting one’s funds on a centralized exchange that does not require the safekeeping of keys will appeal to the older generations that did not grow up with the internet or p2p file sharing. But a growing number of the current and future generations who embrace bitcoin over gold, and privacy over cost and convenience, where the differences between privacy, cost, and convenience will become increasingly small, are likely to prefer both, putting some of their capital into centralized exchanges where they dont have to worry about their keys and some of their capital into DEXs where they have total control over their funds.

Even today, tens of millions still prefer to use p2p file exchange as well as Netflix and iTunes. More options mean more utility. I myself continue to use both centralized and decentralized exchanges depending on the type of trade, though cold storage in a safety deposit box is the safest way to store coins, thus I strongly suggest this method.

Comic Relief — How To Stop Bitcoin

In a comical display of argument ad absurdum, old school types may still believe that you cant trade bitcoin if there’s no electricity. Well if we have no electricity, we are in a lot more trouble than worrying about bitcoin. Even so, such views fail to realize that bleeding-edge tech already addresses the no-electricity issue. The same goes for ISPs that would be instructed to block bitcoin usage. One can just use a VPN to overcome any ISP blocking. Such old school types have even suggested a global government ban on the internet to get rid of bitcoin. No problem. Mesh networks that can provide an open-source software initiative solve that issue. In fact, mesh networks have been the solution during natural disasters when mains points of communication go down.

In other words, when the government tries to control, there are always workarounds. We have seen this with p2p file sharing and bitcoin. Trying to control a fully decentralized technology is tilting at windmills. The tech will just go to jurisdictions and platforms which are more allowing. And given the exponential growth of cutting edge S-curve technologies, workarounds to anything that stands in the way will not just exist for the few but will enable mass adoption via user-friendly platforms. Indeed, in our lifetimes, we will witness the transfer of power from centralized entities to the individual. As I have trademarked, The Revolution Will Not Be Centralized™.

A number of highly regarded individuals including Peter Thiel, Naval Ravikant, Nick Szabo, Fred Wilson, Barry Silbert, Kyle Samani, and Joey Krug, all who hold stellar long-term track records in terms of having vision when it comes to bleeding-edge technologies, belief in bitcoin, decentralized platforms, DEXs, DAOs, and the rest. Some of the “old school” panelists thought leaders that attended the Cryptofin event do not. Maybe this is why the Buddha always laughs. ;)

New Vs. Old School Thinking

But such has always been the way. Fresh, creative minds often are more likely to connect the dots in a way the old-schoolers fail to do. At the World’s Fair in the year 1900, old-schoolers were antagonistic and fearful towards the latest that technology had to offer. The brain tends to become more set with age, thus the adage “you can't teach an old dog new tricks” well applies. Not to be ageist but the stereotype holds true. The biggest breakthroughs in technology and the world of art are often made before the age of 40. That said, a growing number of today’s 50–70-year-olds were yesterday’s 30–40-year-olds as vast improvements in health, nutrition, and biohacking reign down o’er us. Halting and even regressing age both physically and mentally are here NOW and are only improving… with age. ;)

Old School Government Vs. Stem Cell Pioneer

Unfortunately, game-changing innovations have typically been met with fear and disdain, subjecting the inventors to ridicule, ruin, incarceration, and even death. Galileo anyone? Yet the number of old school flat-earthers are abundant in today’s world as public education breeds those who can't think for themselves thus can be easily controlled via mainstream media.

In the year 2000, a pioneering friend of mine made breakthrough discoveries using embryonic stem cells before the world knew what a stem cell was. Among her many discoveries, she found a way to remove the need for chemotherapy in more than 9 out of 10 cases. Embryonic stem cell research was not allowed back then. Further, chemotherapy has always been a huge business for big pharma. Her discoveries represented a massive threat. The state went after her with a vengeance when she refused to stop her research, ruining her reputation via mainstream media, then slamming her with trumped-up charges. The lies reported about her pioneering technologies were shocking. Since the U.S. government could not extradite her after trying for many years, she eventually was “removed” via nerve agent in her drink at an event.

Over the years, stem cell research has become more accepted. In the year 2018, the same breakthroughs that she had already discovered back in the early 2000s were finally reported by mainstream media as fresh, new discoveries thus legitimized. Of course, her name was never mentioned.

Sadly, Not The Exception

Those on the fringes with major breakthroughs when it comes to a bleeding-edge tech who overstep their bounds when it comes to big business and big pharma can end up in a 6-foot cell or 6 feet under. A few friends of mine in this class who are still okay who made or are making their own discoveries which threaten big pharma or big business work under the radar. Fortunately, the eventual transfer of power from centralized entities to the individual will enable all brilliant minds to shine.

(͡:B ͜ʖ ͡:B)

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