Eth: 0x00cce8E2e56a543abc084920eee3f88eFD0921ea

Wednesday, July 12, 2017

Founding: Blockchain Ideas for a New Government


If you had the opportunity to found a new country today, knowing all that you have learned in the last 200 years following the founding of the USA, what would you do differently from the baseline US system?


Introduction: 

Governments are problem solving organizations and as such can be considered solvers in an optimization problem. The speed at which problems are solved and the solutions that are created are a measure of the efficiency of government. Governments that take a long time to make even the smallest changes would be considered "inefficient solvers". Any government that can solve problems faster will have an innate advantage over ossified governments that cannot implement change.

Many governments try to solve problems by choosing the answer that gives the largest short term gain. This typically causes trouble in the long term because to get where they really wanted to go, they had to suffer first. For example, if you were on a mountain range blindfolded and you wanted to go to the beach, you would probably start walking downhill, even though the beach could be on the other side of the mountain range. To make government a better solver, we need to make good use of the last 200 years of  advancements. 

Technology allow us to improve quite allot on the systems the founders first proposed. Remember, they did all this without having the internet and blockchain. While we don't have any new countries that will be founded on Earth soon, Mars may present the nearest opportunity we have to put these in practice (assuming that we have sufficient number of people there to actually found a new country).

Proposed Changes:

  • Liquid Democracy: This can now be easily implemented with blockchain and digital signatures. This did not exist in 1776 which is why we have districting.
    • Pros: Uses Math and the Internet to solve the Jerrymandering problem. Allows Barbara to make a small decision (do I trust Matt and does he have good ideas on how to improve society) and enables the empowerment of proxies (Barbara gives Matt her proxy vote. Now everything that Matt votes on he has two votes).
    • Cons: You don't need to be associated with a "political party" to get "elected"?
  • Cryptocurrency: Automate the FED thanks to blockchain
    • Pros:  Safe and Secure. People that take risks gamble without possibility of bailout because the FED is run by algorithm. Solidifies monetary policy (gets away from looking at brief case sizing )
    • Cons: Government can't print money on demand and thus works with more constraints.
  • Nuclear Weapons: No need to have a single finger on the button, this can be managed easily through the blockchain and digital signatures
    • Pros: No need to man missile stations (they could be automated?). No need to pay for a dedicated military network for command and control. Just connect to any cell tower and sign that smart contract (requires 3 of 5 signatures)!
    • Cons: One person can't destroy the world anymore. DDoS vulnerable. Make sure to pay your gas cost!
  • Property Rights: Blockchain enabled
    • Pros: Easy to verify who owns what and allows everyone to see who has a lien on the property. Cuts down on title fraud.
    • Cons: Government can't randomly give away your property to someone else.
  • National ID System: Blockchain anyone?
    • Pros: Department of Motor Vehicles (DMV) ceases to be useful for anything other than driving tests. Leaves behind the Roman era of paper documents and wax seals / embossing.
    • Cons: No "one place to go" if you need to revoke / renew ID's if you lost your key?
  • Randomized Holidays: Practice what you preach as far as federal government religious impartiality. Average one federal holiday every 33 days fit to an exponential distribution. Roll a year in advance for the holidays of next year.
    • Pros: No Religious favoritism
    • Cons: No Religious favoritism

Your Ideas? 

Sunday, April 9, 2017

Shankar, Re: Scarcity Trap


TLDR: Short term gain causes long-term loss, examples: politics, asteroids. Change your mind, save the world!

In mathematics we think of the scarcity trap as an optimization problem where you are focusing on short-term gains. Due to the complexity of some mathematical problems, this often leads to a long term loss. It's like being on a golf course blindfolded and you're trying to find the lake. Every time you go down hill you think, 'hey I'm getting closer to that lake', but what you don't realize, because you can't see, is that you're actually headed strait for a sand dune at the bottom of the little valley. This happens most often in problems with “lots of valleys”. In the business we call this “manly local optima”, optima being the lowest point in the valley. To find the lake in the case above, you often have to “go uphill”, before going down hill again.

I often think of our society having the same penchant for short-term optimization, especially in our election process. We are dominated by the two main parties, but it was not always so. One explanation for why we were reduced to two parties is that every election year, people are focused on winning that election that year. Thoughts of what happens in 20 or 30 years are far outside the scope of how the average person votes. Thus, after decades of making the short-term optimization choice, we are reduced to just having two major parties that have the highest probability of winning. One of typical ways of peer-pressuring people into voting for a candidate from those two parties is that friends and family members often say: “X candidate cannot win”, as an explanation for why you shouldn't vote for them. However, what they neglect to say is that if you never vote for someone else, someone else will always have a reduced chance to win during the election after this one.

My thesis research for my Master's program was based on analyzing an issue who's devastating effect appears only when society solves the problem through short-term thinking. Asteroids impacting planets are naturally occurring phenomenon. Many of the beautiful craters on the moon and mars are formed by impact strikes. Asteroid strikes are a statistical problem meaning that is is only a matter of time before an asteroid hits a major city. My researched looked at the side-effects of dealing with an asteroid impact with little warning time. Short warning time only happens if society does not place value in asteroid detection programs, or refuses to invest in asteroid deflection missions. Technologies like gravity tractors and mounting thrusts to the asteroid can only work if scientists are given steady funding and public support for decades. If society refuses to make these investments, then the only method left to deflect an asteroid is the nuclear option.

Unlike the figurative use we've heard of in the last few days, the nuclear option means using a nuclear device to blow the asteroid into little bits. This prevents large chunks from piercing through the atmosphere.* The problem with this approach is that you're taking one big rock and breaking it up into a bunch of smaller rocks. All those rocks are still heading for Earth. While they may put on a spectacular light show for people on the ground, satellites, which we have come to depend on, will be having a very bad day. Satellites are very delicate, very expense, very important things. They are considered critical infrastructure by the US government. They make your GPS maps work, they keep your cell towers working, and they allow the US military to coordinate all around the globe. All those little rocks that we created with our short-term optimization to save ourselves, will now have the opportunity to hit our satellites and destroy all the services we've come to rely on. Not only that, all those destroyed satellites will stay in space, flying around and around the Earth, destroying any healthy satellites that survive.

This type of problem, loosing satellites and all the services they provide, can only happen with a society that constantly makes short-term decisions. A society that can successfully make long term decisions won't have this problem because they will have spent the time and the effort to develop better deflection technology and know-how.

It is possible that this is a clear example of Fermi's paradox which deals with the problem of, if intelligent life exists in the universe, why haven't we heard from it yet. One of the explanations proposed to explain this is that intelligent life has a tendency to destroy itself. I would have to agree with this position. We have understood celestial mechanics since Martin Luther nailed his manifesto to the church door. We have nightly evidence of the impacts that have scarred the face of the moon. And yet, as an “intelligent species”, we are more concerned with taking the shortest path to the lake than we are with realizing that we might be headed into a sand dune.

Does this mean our society is doomed? Definitely not! Humans are an adaptive species. We are experts at solving problems large and small. And just like a recovering addict must first admit that there is a problem, once we admit that our decision making process is biased towards short-term gain, we can become more cognizant of long-term loss caused by our decisions. This will help us overcome problems with asteroids and problems with politics. Who knew long-term decision making could be so useful?

Thank you for your time.



* Typically at this point, we are forced to make the obligatory Bruce Willis reference and people in the audience start giggling. “The Giggle Factor”, as we like to refer to it, is odd because this is a real issue that very much has the capability of leveling an entire metro area. The Tunguska asteroid strike in 1908 leveled an area larger than the city of Los Angeles.

Sunday, June 26, 2016

AMD RX 480 & RX 470 - Hashing Performance for Ethereum

A statistical analysis of the performance of the new AMD RX 480 (R9 480?) and RX 470 (R9 470) video cards. Please Submit your individual card performance metric.

Performance Estimates:

Card Average
MH/S
Confidence Interval (3σ) Sample Size Power Usage (W/MH)
RX 480 23.7  +/-4.9 7 6.3
RX 470    -  - 0  -

RX 470 is not being released on 6/29/2016 therefore we have no data for this unit!

Wednesday, June 22, 2016

The DAO and Optimizing 'Theft'

The likelihood of a soft or hard fork should be correlated to the amount of ETH that was 'unexpectedly transferred' due to edge case scenarios. We posit that larger the quantity of ETH 'transferred', the more willing the community will be to institute hard and soft forks.

Exceptions to the rule happen everywhere. How a society deals with those exceptions speak wonders about the people in it. The 'lost stone' on the island of Yap is an excellent example of an exception. The islanders used the stones as currency and one stone was unexpectedly transferred into the sea, an edge case of moving a large stone from one island to another. The islanders had two choices, they could insist that the stone be hauled up from the sea floor in order to be counted as currency, or they could make an exception to their rule and allow the stone to lie at the bottom of the sea and still count as currency. Their society was able to reach consensus on this issue, most likely because it took a great deal of effort to harvest the stones.

The DAO fiasco can also be considered to be and edge case. Originally, designed as an investment vehicle to stimulate growth in Ethereum, it is now a liability. The quantity of effort that was put at risk due to this edge case is very large, around 1/10th of all the ETH created is. Based on the lost stone example from above, we would expect that if something that took allot of effort to make was 'lost', the community overall would support some remedy to the situation. We believe this is even more likely in the scenario of the DAO where vested interests are far reaching and touch many community members including small time miners like myself.

Based on that knowledge, we put together an estimate of how likely people were to support a fork based on how much ETH was 'transferred'. Essentially we'd expect that for small losses, not enough people would care to support a fork because it probably didn't affect them and systematic risk was small. And with large losses, community support would increase significantly due to the increased likelihood that more people were affected and the perceived systematic risk increase which leads to questions like: Will PoS actually work when one 'entrepreneur' siphons off a huge amount of the currency? Furthermore, we'd always expect more people to support soft forks than hard forks.




 

We then polled the community, and from the few responses we received we found a similar trend:





There is a noticeable rise between 5% 'transferred' and 10% 'transferred' and we generally do see a greater percentage of people supporting a soft fork than a hard fork.

What does this suggest for successful 'entrepreneurs' of the future? If you find an opening that allows you to 'transferred' a small amount of ETH, you'll probably get to keep it. However, if you find a big opening which causes allot of ETH to be 'transferred', you may end up with nothing. This is because the likelihood of community response to remedy problems increases as the % of ETH 'transferred' increases. Where exactly that transition region between community disinterest and community action appears to lies around the 7% region.



RAW DATA:

Tuesday, May 24, 2016

Things You Don't Want To Hear

Don't Panic! Censorship is alive an well:



No sooner did I post this simple comment than it was taken down. Do you find this comment offensive? Bad taste perhaps?

NPR's title for this piece was delicately constructed to hide the real heart of the matter: Congress raided the TSA fund, then decided to fire the head of TSA for long wait lines.

If we can't have discussion on how the issues are framed to the public, what can we talk about?

Wednesday, April 27, 2016

Annuities, a Questionable Investment During US$ Fade

A recent NPR article highlighted a reasonable strategy to hedge risk of outliving your savings. But it's dollar-based payout system will leave many seniors paying the bill if the dollar declines. The dollar is the undisputed world reserve currency, for now, with many smart people at the Federal Reserve managing it. However, new challengers have emerged to the dollar. These challengers are backed by advances in mathematics and cryptography. The challengers use computer algorithms to manage them, instead the 'little grey cells'. The challengers are fundamentally more efficient, adaptable, and less arbitrary than the dollar. The one saving grace, so far, is that the dollar has been more stable than the challengers.

Investors buying a 15 year deferred fixed annuity are betting that they will: (A) be alive and (B) dollars will hold their value until they die. That is a rather large bet in favor of the incumbent. If the dollar transition happens while they are alive, they are going to be impoverished.

What is really going to drive this transition? The IMF has detailed that these challengers "... will likely be more widely adopted in countries with less credible monetary policy." (source) Now how could that be the US dollar? Look at what happened in 2008. Too big to fail and implied federal loan guarantees will happen again. Look at how the Federal Reserve manages the currency. Two words in a long technical talk cause major ripples in the economy. Look at the way the Federal budget is managed.  History tells us there are three ways out of a debt hole you vote yourself into: Inflation, Haircut, or Monetary unit change. None of those ways works out well for people holding dollars or expecting to receive dollars.

Maybe you think you will pass away before the transition. For me, I am in my 30's. I am going to have to live through it. I am betting on the challenger.