Can the World Computer Save the World? Part 1: Wicked Problems

We all know the world is burning. The certainty of death has always been a part of humanity’s shared heritage. But now things are different: forests are on fire all over the world. Canada’s boiling, Siberia is melting. Every few weeks some new horror: now the Amazon is emitting more CO2 from burning than it soaks up from growing. The serious ecologists are all completely traumatized, watching the whole thing unfold. It is clear that things are just trashed and it’s getting worse year on year.

Also we are being profoundly ineffective on the solutions side. The solar panel conversion is fast. But it’s a quarter as fast as it would be if we redirected defense budgets to the actual threats we face, rather than being scared of other humans. We have worse problems than other humans now. Or, rather, the dangerous thing that other humans do now is not invade our countries and steal our stuff. Other humans are now dangerous to us simply by existing. They eat food. They drink water. They grow crops. They work in factories.

Their collective impact is killing the world. Our collective impact is killing the world.

The system accounts for money down to the penny. The system can tell you the protein grams and calorific content of every piece of food in the store. But the system will not tell you how much your new car speeds up the death of the world.

The system lies by omission. It measures what is good for the money people, but only when the world was made of empires and exploitable natural resources. Now we have to measure different things for even the money people to survive.

The system is rigged. The system is unable or unwilling to change fast enough to leave us with a working world.

And I mean us. Even at 50, I’m going to be fully impacted by the whirlwind we are mid-way through unleashing. By the time I’m 70 or 80 the entire world will be fully reaping what we have sown.

I’ve been with the bitcoin story since the beginning — since the prehistory of crypto currency, in fact. Unlike most of the people in the space I have never owned or held a significant amount of bitcoin: a series of defense jobs made me uncomfortable with the idea of having poorly-understood cryptographic software running on my laptop. I also have some religious prohibitions about speculative finance and zero-sum economic activities like gambling. I’m not going to explain those right now, but it is sufficient to say that I am not crypto rich, and am a fairly neutral observer: I am not talking up my own book right now.

People completely forget the first iteration of bitcoin. In 2010, bitcoin was mined on laptops.

Mined. On. Laptops.

It was essentially a basic income scheme for laptop owners. A person could download the bitcoin mining software and run it on their machine at night and have a few bitcoin in the morning. As more people did it, the mining reward was spread thinner and thinner. Bitcoin was, at that point, libertarian socialist (which is to say Anarchist) if it had any politics at all. Very broad participation in economic production was possible, and the rewards were distributed evenly.

There was no particular return to capital because people were mining on laptops they had already owned. Nobody was buying hardware to run bitcoin on.

This was a radically different period in history. Nothing worked the same way that it does now. I remember railing against the arrival of ASIC mining, because as far as I was concerned, it ended the revolutionary potential of bitcoin.

I was wrong, but not in the way you think.

In the early phases of bitcoin, the workers owned the means of production.

After ASIC mining was invented there was a role for capital in the bitcoin ecosystem. Commissioning production of ASICs is extremely expensive. It takes a ton of up front investment.

The reward is to be able to mine bitcoin cheaper than anybody else can.

Once that role for capital was established, bitcoin went from being libertarian socialist with workers entirely owning the means of production (because they owned their own laptops) to something else. Bitcoin became anarchocapitalist. The line between libertarian socialism and anarchocapitalism has always been thin.

Gupta’s Libertarian Observation states:

Free people create free markets. Free markets do not necessarily create free people.

Because there is no doubt that if people have political freedom they will engage in trade. But if that trade creates a situation in which workers do not own the means of production — that is to say, the profit created from labour is returned to capital and not to labour — then markets move from being an expression of liberated circumstances to being just another instrument of oppression.

For people who have a hard time grasping this: there is a difference between a road and a toll road.

Since bitcoin was invented there have been several distinct stories about how bitcoin is going to change the world:

• Maximalism/Hyperbitcoinization
  Bitcoin will change the world by overtaking the dollar and bankrupting the world’s governments by making it impossible to tax the citizenry. As this became less probable a new narrative emerged…
• Banking the Unbanked
  Bitcoin will change the world by banking the unbanked, and bringing sophisticated financial infrastructure to the entire world. People in developing world countries will be able to trade globally. Facilities like microfinance will be administered largely by machines making it economically efficient to deploy capital in villages and farms all around the planet. But this turned out to be hard, nearly intractable. Progress was slow and even the remittance market largely refused to convert to a bitcoin-by-default configuration.
• Store of Value
  Bitcoin will change the world by transforming the centralized financial institutions like pension funds and ETFs into bitcoin holders, providing a “store of value” which cannot be inflated out by governments. Bitcoin is in some sense “digital real estate” in that, like land, there is only so much to go around and if you own it, you own it. Note that this theory of change is confined to bitcoin holders: it’s not a dream of global transformation in the way the first two stories were. Bitcoin has begun to mainstream, but at the cost of its world-transforming values.
• Maximalism 2.0
  There is a potential future phase of the Bitcoin story, which is the inflation hedge story. Right now inflation is pretty low, or being passed off as a very temporary situation. If this changes and the US economy sees sustained inflation and people watch their savings shrink year on year then things will become extremely dramatic and not in a good way. The “store of value” argument will go from being relatively esoteric to being a mainstream lived experience for an enormous number of people, and bitcoin will be back at phase one all over again: a threat to the primacy of government in the currency market.

Now pause for a moment here.

Climate change is trashing the planet. Bitcoin is hugely CO2 intensive to produce. It has no environmental value system built into it. It creates no environmental benefit by existing. There are some weak arguments about how bitcoin mining is accelerating the transition to renewables in some way. But at the end of the day, electricity is being consumed, and those renewable resources could be powering anything. It’s just shilling.

I believe that crypto is an integral part of the human future: I think it’s the necessary backbone for fixing a lot of the world’s problems.

But not like this. Not like this.

Bitcoin inside of the existing narrative is probably a very, very good thing for bitcoin holders in the event of inflation inside of America. But even if those people thrive the world still burns.

The correct value of many of our most “valuable” financial assets is zero.

Ski towns in places with no snow. Island fortresses in hurricane belts. Almond orchards in areas with no water to feed the crops. Real estate in flood plains. All of the oil and coal in the ground. All of it.

It’s worth nothing because in the future it will be illegal, uneconomic (carbon taxes) or both. The people who hold those assets currently hold nothing but that’s not what they report to their shareholders. The size of this financial catastrophe cannot be overstated. But it is a direct result of mismanagement by fund managers and boards who chose to ignore climate change. They have wound up as “bag holders” with portfolios stuffed with worthless coal, oil and gas “assets.”

They’d have done better to buy bitcoin. At least bitcoin might be worth something in future.

Even with scenarios like geoengineering most of these assets remain completely worthless: we are not going to wind up in a world where we geoengineer the entire climate and then continue burning oil and coal like nothing ever happened. At the very least the costs of the geoengineering will be passed directly on to the coal, oil and gas producers.

Have I mentioned the continuing catastrophic subsidization governments are doing of their own fossil fuel industries, while making vague noises about unenforceable climate targets? That’s a topic for another essay.

But if we take out all the assets which are wiped out in a fully scale climate change scenario there is basically nothing left of the current economy: the oil companies are gone, coal, natural gas wiped out. Entire industries like almonds. Fishing. You can just go down the list: gone, gone, gone, wiped out, worthless, gone. Other industries rocket into existence: solar, wind, renewables, batteries, energy efficient construction, you name it. An entire universe goes, and a different one is created.

But the pension funds, the behemoths of the financial landscape, are gigantically underwater to climate change. That’s another way of saying the old people who are relying on those pension funds to provide them money to live on further into their old age are not going to get paid. The money they saved their entire lives was pumped into worthless assets in nearly every future scenario. By the time they are old enough to pull the money out of the pension fund, the pension fund is worth 20% of what it was worth because the economy that it invested in is gone.

The lifestyle you have ordered is out of stock.

Part Two:

Source: https://medium.com/humanizing-the-singularity/can-the-world-computer-save-the-world-part-1-wicked-problems-a186c4860bc3?source=rss——-8—————–cryptocurrency