Perspective 5: Software for wetware
The society is not programmed through software or ideas, but through incentives.
Wetware is used most often in the context of brain-computer interfaces. However, both the brain and the ideas in it may be impacted more indirectly and subtly. For example, we know that the pen is mightier than the sword, and even mightier may be incentives ([1], [2], [3]).
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” — Upton Sinclair
Crypto provides clear incentives in a number of ways, and they may be very specific at times. Some examples:
- A deflationary coin incentivizes holding it. An inflationary coin incentivizes spending it. Both impact money velocity and the general perspective (on money) for people holding those coins, e.g. try to teach children to save with one or another.
- Gamification is about incentive design, Vitalik mentions Slashdot1 as an example. Crypto is just accounting for the points in the game, making them worthwhile2, and granting them based on a set of rules, e.g. smart contracts.
- Protocols offering yields have a greater granularity in incentives, in exactly what kind of behaviours should be incentivized, e.g. locking assets in a vault for an extended period of time.
- Fees count as negative incentives, to discourage some actions or behavior. If they are not burned, the receiving end is incentivized.
These incentives may be designed to avoid multipolar traps, without a central authority. By designing the incentives, the design of this software is more similar to programming a reward function in a reinforcement learning3 approach than to the usual set of instructions in imperative programming.
Cypto is meant to be decentralized, and without an enforcing authority4, the way in which it can program and reshape society is indirect and subtle. Therefore, it is challenging, but it should not be underestimated.
If you are interested in crypto beyond trading and money, reading everything Vitalik Buterin has publised in his blog makes for a good starting point. He has a massive brain, if you do not understand something, ask over the Internet, your friends, or me.
Having an economic value may make them more appreciated than just a highscore in a game. If nothing else, when exchangeable for necessary goods and services, they provide the means to quit the rat race to focus on the “game B”.
It is in fact like shaping a garden by controlling the irrigation and sunlight in different areas, or shaping evolution by terraforming the environment. Programming agents by modifying the environment in which they operate. A new kind of programming, to the best of my knowledge.
In contrast, the Chinese social credit system seems to be centralized and with significant potential for punishment replacing rewards.
Cross-posted from the Sigmoid newsletter
