Crypto autopsy reply

by alexei 2 min read6th Feb 20188 comments


(X-posted from my FB post:

Reply to Eliezer's post on crypto:
Which itself is a response to Scott Alexander's post:…/Ma…/a-lesswrong-crypto-autopsy

One thing I haven't seen discussed in either of the posts is the social aspect. When Bitcoin was created, LW was a hub for a lot of pretty smart contrarians. Just with that info alone, I'd give any crazy-seeming idea that surfaced there and wasn't immediately debunked pretty good odds of being vaguely correct and likely ahead of its time. (I think there is a good chance LW 2.0 might become that again.)

So I agree with Scott, the tragedy is that our very smart peers brought this idea to the community, and the community vaguely agreed that it's a good idea, but failed to execute. (Just like our community mostly agrees that cryo is a good idea, but also gave birth to the term cryostination.)

Eliezer's counter-claim about efficient markets seems weak to me. It was clear at the time that this was a very niche idea, and that not a lot of people have looked into it. It was also a difficult idea to digest: it required a solid understanding of the economics and the technical parts. Many people who care about making money are not technical, and can't evaluate cutting-edge technical ideas. I think Bitcoin was very clearly out of reach of efficient markets. (By Eliezer's reasoning, AGI would be a bad idea around 2010, and so would be cryo even now. Because if they were as good as they seemed, surely people who were interested in power/money would be putting way more effort into AGI, and people who were interested in not dying would be doing cryo right now.)

I don't think I saw those early Bitcoin posts on LW. My own story was that my brother asked me around 2012: "Hey, have you heard about this Bitcoin thing? I just read about it on Reddit. Seems cool, we should buy some!" And I laughed and said it was the dumbest thing ever.

Less than a year later he brought it up again, and it was clear by that time that I made a mistake. That's when my rationality training kicked in. "Ouch, I though. He was totally right, and I completely dismissed this idea. I should not make the same mistake again!" By that time my social network was talking about it too. Getting a consistent signal like that from multiple sources to me means it's something worth paying serious attention to. So, I bought some Bitcoins back in 2013. Of course, I held it in Mt. Gox, so that did me no good. After I lost it all, I bought more on Cryptsy, which met the same fate.

Then came Ethereum. By that time I had sufficient interest in crypto to take the time to read and understand what it was about, and how it was different. (This was before there were 100s of ICOs each day, but there were still a good number of new coins being launched.) But Ethereum had a clear strong social signal! So while I didn't totally trust myself to evaluate this opportunity solely on my own, I listened closely to what my network was saying about it. Most people thought it was a great buy and their reasoning made sense to me. In my mind this was very similar to the original Bitcoin scenario. And this time I didn't make the same mistake. (I wonder what other rationalists did regarding Ethereum. Surely most have heard about it. What prevented them from buying it? Did they not learn their lesson with Bitcoin?)

Then came Tezos less than a year ago. And, again, my social network was talking about. And, again, I looked into it and it seemed solid. Even though by that time there were a *lot* of ICOs going on, this one had a very clear signal through my social network. So I invested even more than I did in Ethereum's ICO. Too early to say for sure how this will turn out until it's actually launched, but so far it's a 10x return. (And I actually posted about this ICO:

My point is: if you're a rationalist, you've surrounded yourself with some *very smart* people. Listen to them. In aggregate, take their ideas seriously even when they might not take their own ideas seriously. Like Eliezer wrote in his recent sequence: in any given field, it's much easier to find the people with the correct contrarian opinion than it is to develop a correct contrarian opinion on your own. There is no reason why that couldn't have (or still can't) apply to the crypto space as well.