Crypto-tragedy: “Now I am a believer” or history repeats itself

in philosophy •  2 years ago 

Those with weak hardware like myself can only jealously look at the beast rigs of professional miners. For some time, I couldn’t help thinking, however erroneous and illogical it was, that there was something very unfair about people earning money to buy equipment to make more money. Where did that leave me, late to the party with a budget well under 1000$?

As I started my crypto-adventure a little under two months ago, I stumbled upon different concepts behind crypto-currencies. Proof of Work was the obvious first, but then it turned out there were others – proof of stake/importance, delegation/master nodes and variations of the three.

As clearly naive as it is in hindsight, my initial impression was that decentralized currencies – and especially a community like Steemit - would be able to address a few socio-economic issues, one of them being that of unequal distribution of wealth. Needless to say, the rose-tinted perception was only a pleasant, but short-lived intoxication with self-induced excitement. If a remedy for inequality existed, it would likely be the wise thinkers of the past and not computer nerds who would discover it. Right?

Steemit: Crypto-parody of life (that you probably hate already)

Where does Steem belong in the crypto-world? Steem’s economic structure is an interesting case. It is a mix of proof of stake and delegation with all their beautiful promises and inevitable ugly consequences.

Proof of Stake and Delegation

You only need to glance at the trending tab to see who gets most of the weekly payouts while at the same time holding most of the money in their wallets. “Steemit is a social media platform where everyone gets paid for creating and curating content.” We all know how that has worked out. Of course, you don’t sell “a social media platform where everyone gets breadcrumbs off the table of the established users”. That won’t fly.

There is, however, an additional issue unique to Steemit. While in a typical proof of stake scenario one has to only hold onto the coins to gain profit, Steemit allows its whales to have a powerful say in who will get paid and how much. Introducing a social element to the proof of stake concept has led to a repetition of tired and expected life patterns: it is a who you know against what you know situation on Steemit. Did you come here tired of the Facebook and Twitter buzz? Maybe Steemit is for you. Or did you come here tired of life imbalances? Well then, welcome back!

Delegation comes with its own set of downsides. It may give you the right to choose, but it won’t give you options. Delegates, that undoubtedly worked hard investing both time and money to get in the spotlight, will lure you over with incentives it will be hard to say no to. You will vote for them, and the richer will grow richer.

Redemption point

One thing Steemit does right, in my opinion, (correct me if I am wrong) is not letting your witness vote be influenced by your fortunes. If there is something I don’t approve of in the way my currently favorite altcoin Lisk does, it is weighing your vote power against the amount of coins you hold. While absolute centralization is unlikely, there is a “whale” element to the system. I think it won’t be long before different incentives will be offered to voters with different voting power there.

Hard work is not an equalizer.

The proof of work concept is susceptible to the same ailments of the previous two – it is a first come first serve principle with a compounding interest on top. Each serving gets you a larger serving in the future. Give it some time, and if you are not the minority top, then you are the majority bottom.

Crypto may save you from banks, but not from life.

If academics and thinkers of the past discovered something about life, it is that inequality is part of its essence. See the Pareto distribution and Price’s Law for some statistics on that and read philosophers for an intellectual breakdown of life. They would all agree, although on the grounds of different analyses, that there is no haven from inequality (and, frankly, that equality is not a haven at all, but I digress). Just like freshly minted coins are a by-product of mining, so is inequality an unavoidable sediment of human interaction.

As early birds enter a new market and as the market takes off, those people reap the greatest benefits of being first. Their fortunes grow, and with them grow their ability to grow even bigger. More money will buy you a better mining rig, will give you a higher return on your holdings, and will make you an influential figure in the community likely to get you elected as a delegate. This is the natural order of things, whether you like it or not. You may be entitled to your opinions about what constitutes an ideal world, but life won't hesitate to bulldoze through them.


Join me and many others in DeepThink at @steemdeepthink. Our combined intellectual power may as well be able to save the world from its greatest flaw - our stupidity.

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Well-said and quite true.

I think the problem isn't inequality per se, but rather 'abject inequality', as in 'X is 0.00001% better than me at doing Y, therefore it's only fair that he earn a salary of a million per month while I work 3 jobs to scrape by'. Yeah, we're not all equal, but is there any person on earth who is literally 1 million times better than anyone else, to justify the same differences in income?

Nope. I remember an executive from Google, I believe, came under fire after retiring around the age of 40. He explained that he worked crazily hard, away from his family, and deserved that time. People were not very happy to hear that. What he said sounded to everyone like an implication that those working 3 jobs 7 days a week trying to make a living for themselves and their families are not working hard enough.

I see their point there.

👍

Seriously if everyone retired once they made their first million, there'd be enough money for all of us: we'd all be millionaires!

That's right. You can't stop people from earning more when they can, right? And you sometimes can't force others to put the minimum possible effort in doing something that would earn them at least enough money to survive.

On that note:

  ·  2 years ago (edited)

If everyone was a millionaire then nobody would be a millionaire because monetary value would flat out. A value of a million exists due to its unequal distribution.

economics 101. highschool level.

I actually didn't know the value of the money goes down the more times you split it. So thanks for informing me.

So, to understand it better, economics apparently says this: I got $100. I split it into 2 piles. Now I got $50 + $50. However, it's not actually $50 + $50, it's more like $49 + $49 (splitting it made it lose its value a bit). If I continue splitting the money into more piles, then eventually I would end up with possibly even zero money ("monetary value would flat out"). Is that correct? I'm just trying to wrap my head around economics 101.

Note: I wasn't talking about printing money. And also I didn't literally mean every single person in the world, I was thinking about western countries (there's not enough money in the world to make literally everyone a millionaire, though I think if money was more equally distributed, the value it brings would go up, because that unnamed Indian Einstein who doesn't even know he has talent, would get to express it, and make inventions that would significantly add value in the world - unfortunately talent isn't equally distributed, and the best way to catch it with the money-net is to make the net as wide as possible).

Ofcourse there is enough money in the world to make everyone a millionaire. You can print as much as you want. Countries do this all the time.

Money is a representation of value for something else. If everyone has a million (which is possible) then items would correlate people's buying power. For example, in Switzerland things are more expensive because people have wealth that raise the overall value of specific areas. In contrast in Venezuela the opposite is true. Wealth is always correspondent to something else. In our case "buying power" in respect to things, either tangible (food, land) or intangible (futures, stocks, bonds).

You don't get it because you think money has an intrinsic value. It doesn't. Money are debt notes. Nobody has the corresponding value to anything. Most money are numbers hidden in things like 'futures'. When everyone has the same buying power then nobody can leverage on anyone for anything.

basic economics Alexi. Research something before you try to play smartass. Economics are not a philosopher's journal where every single thing can be perceived correct. The dream of "if everyone had a million then everyone will be better of" belongs to the realm of teenage fantasy, not economics.

to answer your first part. If everyone had $50 then all the things around you would cost around $50. Money were invented to calculate different values..otherwise you are as good as exchanging one thing with another.

I think your comment that "Ofcourse there is enough money in the world to make everyone a millionaire." shows exactly the fact that we're talking about different things (you're talking about printing, I'm talking about distributing, more fairly, but not absolutely equally). All the things you said are, like you said, 101, you can get it from documentaries, you don't even have to a read a book. According to what you said above, Norway doesn't exist. Cyprus doesn't exist. London doesn't exist. The only countries that exist are ones like Brazil or Russia, where you have abject poverty and very rich people.

I get that, if a person is a millionaire, he won't be too eager to go work as a waiter, so in order for him to do so, he'd have to be paid quite a lot, and so the value of drinks would go up. OR I could just poor my own fucking drink, if the job is so stupidly simple. Or we could build machines to poor our drinks. Or build robots. I know this talk of robots plays into your 'teenage la-la-land' scenario, but in a world where everyone is a millionaire, I think building robots would be one of the more entertaining things to do!

But anyway the issue is complicated once you get into the nuts and bolts of it. For instance we fail to estimate what a person who's a millionaire would do with his free time. Like I said, maybe he'll use it to create inventions, which would increase absolute value, and therefore make the world richer in absolute terms. Maybe he'll use it to create art, which again would make the world a better place to be. Tim Berners-Lee gave us the world wide web for free. Maybe many of those millionaires would do the same: invent stuff and give it for free. Or maybe they'd just be lazy bums. That's why I say: economics collapses into psychology at the end of the day. We don't know enough about people right now to be able to predict these things.

You still don't get it. This is not about all being a millionaire and thus not being able to do a job. This is about buying power. In the countries you mentioned there is still a vast gap in the distribution of wealth.

Not all Norwegians are millionaires. Not all Cypriots are either. There are a few millionaires, a thick middle class and a poor class. Same exact scenario plays in almost every country.

Automation won't make everyone sit on their asses for the very reason that new industries will be created. If you lived back in the 1800's you would probably be one of those who complained that the steam engine would replace horse carriers, causing unemployment. The matter of fact is that the steam engine and further technologies lead to a thing called "social media manager" ..a job you couldn't fathom but still has a function in society. Same will happen with automation. There are still creative jobs like graphic design that cannot be completed from simple A.I. Those jobs would be more and more in demand. Other jobs will also come in play. Humans always create value and distribute wealth amongst themselves based on the same capitalistic principles. Heck, even during feudalism same concept applies. Even in bonobo monkeys there is a similar distribution of power. The reason is simple. Tribalism.

Tim Berners-Lee gave us the world wide web for free.

not really. that's a common myth. The world wide web was a step by step process that can be said to be started even from the time of Alan Turin and cryptography. Again. A common fallacy that stems from parroting encyclopedia pages without realizing that innovation is a process. In the same way the special theory of relativity was not invented by Einstein. Einstein was the tipping point of an idea that was building for many decades. That's how the world works.

Maybe many of those millionaires would do the same: invent stuff and give it for free. Or maybe they'd just be lazy bums.

This is actually true. Most billionaires spread most of their wealth for free because they understand that after they become rich, giving back is all that gives them satisfaction. Bill Gates does that, many other billionaires follow the same path. Still though, this does not eliminate the wealth gap that is getting bigger and bigger every year. We all become richer but the wealth gap is widening.

economics collapses into psychology at the end of the day. We don't know enough about people right now to be able to predict these things.

You don't need to predict these things. You can observe them right now in nature and in economies. You can even take all the attempt of communism and marxist ideologies that believed to exactly what you were saying. Every single attempt failed. injustice though works perfectly because this is exactly how nature is structured.

Why is leverage necessary? What benefit does leverage serve? As opposed to, say, trading based on people's needs? Is it leveraging me if I have excess bread but need meat while you have excess meat but need bread and the both of us combine our resources to make sandwiches?

How much the sandwich will be and who will make it? how much will he be paid?

If everyone had $50 then all the things around you would cost around $50. Money were invented to calculate different values..otherwise you are as good as exchanging one thing with another.

With respect, this is getting into narrowminded ideologous thinking on your part. If everyone had $50, there would still be things they would trade at $5, $1, or $0.10. Where do you even get locked into this mindset that they wouldn't? What's your argument?

I am talking about a system of equal distribution. If everyone had capital that averaged 1 million dollars then the products, land, cars and everything else will be averaged based on that amount. There wouldn't be a measure for actual price other than the one set by the seller/buyer. Stock exchanges set prices based on the difference of value. If every single stock traded a million it would be hard to sell one to buy another. Everything will be around that 1 initial 1 million.

If everyone was a millionaire then nobody would be a millionaire because monetary value would flat out. A value of a million exists due to its unequal distribution.

economics 101. highschool level.

This is a fallacy. Actually more than one. It's a strawman in that the premise was not "everyone" being a millionaire at once. The suggestion is that there be a limit, at which point everyone can reach a point of retirement and financial self-sufficiency. As long as there is an influx of new members of the society to work hard enough to merit this comfortable retirement, there's no necessity of such a system collapsing. This is the lie that some must starve so that others can eat. We wouldn't have a functioning economy if that were the case.

The second fallacy is just that, where there exists an ideal balance of work force to retirement, you've generalized that no value of balance will do. As long as everyone eventually retires, you assume that the economy collapses. Yet everyone DOES retire. They just don't always do so comfortably. I have a hard time imagining that the reason that an elderly individual with no family or fortune who is homeless because they are suffering from dementia in their old age is living on the streets because the economy can't afford to care for them when at the same time, there's plenty of people who would want the work and the wealthy are just sitting on their coffers of money rather than creating new jobs and taking risks to build the economy further.

The suggestion is that there be a limit, at which point everyone can reach a point of retirement and financial self-sufficiency.

Actually that is completely different. You don't have to have 1 million dollars for this. You are the one committing a fallacy now by taking it to a completely different topic.

As long as there is an influx of new members of the society to work hard enough to merit this comfortable retirement, there's no necessity of such a system collapsing.

Everyone that is reach having 1 million dollar won't have the same incentive to work and rather prefer to put it in the bank to gain interest. You ASSUME that people would work hard for others.

This is the lie that some must starve so that others can eat. We wouldn't have a functioning economy if that were the case.

Not true. Didn't say it was a zero sum game. Also, most people of earth do not have food, shelter and clean water on a daily basis. This is not starving and it is much better than any other point in time in history but that gap is evident.

The second fallacy is just that, where there exists an ideal balance of work force to retirement, you've generalized that no value of balance will do. As long as everyone eventually retires, you assume that the economy collapses. Yet everyone DOES retire.

nonsense. never implied or said anything like that.

The suggestion is that there be a limit, at which point everyone can reach a point of retirement and financial self-sufficiency.

Actually that is completely different. You don't have to have 1 million dollars for this. You are the one committing a fallacy now by taking it to a completely different topic.

Now you're just gas lighting. Either read from the beginning and understand what people are saying or don't even bother. Principle of charity <-- learn it.

Everyone that is reach having 1 million dollar won't have the same incentive to work and rather prefer to put it in the bank to gain interest. You ASSUME that people would work hard for others.

You assume that people would stop working at all. I never assumed a need for people to even work hard. Just do what benefits you and those you exchange with mutually. Why do you think people retire in their old age? People stop working because they can't work anymore. The wealth who sit on more than enough to retire on don't stop working before they are physically unable to. They keep trying to make more, because it's their obsession. No different than someone spending hours of every day playing World Of Warcraft. It's work that stimulates them.

nonsense. never implied or said anything like that.

Please read from the beginning and stop spinning a new story just to avoid admitting a flaw in your reasoning.

Why do you think people retire in their old age?

Because this is how the law covers it. they are allowed for full pension up to an age. People follow the rules. Do you know who works for money? Poor people. Rich people have money work for them. This is hard to explain to poor people. If everyone was rich and having the same mentality nobody would really work or even try to produce an equal amount of value to everyone else. You are arguing in favour of a utopia that anytime has come close to this it collapsed. History is a great example.

They keep trying to make more, because it's their obsession.

Now you are being a psychologist? a poor one.

No different than someone spending hours of every day playing World Of Warcraft. It's work that stimulates them.

Just stick to "people like having something to do".

Thing is the millionaire toilet cleaners will have a completely different idea from the millionaire CEO's.

Read my post. I put everything there in case you are lost.

Principle of charity <-- learn it.

This is actually 'the first rule of logic' I was asking @kyriacos about as soon as I signed up to steemit and we started debating. He couldn't answer. Nobody can answer the question 'what is the first rule of logic' unless he studied philosophy. You must interpret everything someone says in the most generous way, and only when you've tried your best and still fail to make sense, only then do you conclude they're wrong. At uni they actually deducted points if you failed to do everything you could to interpret an author's argument in the best possible light. In the real world it's even more essential to apply this rule of logic, because people aren't trained to avoid fallacies. So they make arguments that are full of them. But it's your job as a philosopher to reconstruct their argument on their behalf, just like when you're a receptionist at a hotel and a foreigner comes up to the desk and makes a request, you don't play the fool and say "your sentence is not well-constructed, and your tenses are all over the place, therefore I can't help you". A philosopher's job is to search for truth, and sometimes he must look behind the words, behind the fallacy, at the truth hiding in the background. If you don't have the principle of charity guiding your logic, you'll only make a mess. You'll be seeing fallacies everywhere. This is what happens to people who've just started learning formal logic. This is how you can tell someone's an amateur reasoner. Basically, without the principle of charity, what you got is not a philosopher, but a lawyer, or a sophist (which is where lawyers came from I guess).

Yeah, we're not all equal, but is there any person on earth who is literally 1 million times better than anyone else, to justify the same differences in income?

That is the real point I think. At a certain level of reward, one should feel that it starts to become less of a reward and more of a burden of responsibility. If were were acting with optimal strategy, no one would need to be told that. If you get a huge benefit while others involved are hindered in the process, then the ONLY way you should feel like the rightful owner of that excess is if you used it to solve the problems of those who suffered as a result. The unemployed, the employees given part-time work just to deny them benefits, the janitors paid slave wages because you looked the other way as their non-citizen status was taken advantage of. This will ALL come back to bite you in the ass. The only reason you don't see it is because you might still die happy anyway. Whatever you gained from that excess at the expense of others, you would have had more if you didn't forsake your responsibility to them.

I think that the solution to the problem of inequality is not technological innovation, but changing the matrix upon which man interacts with man.

"For he that hath, to him shall be given, and he shall abound: but he that hath not, from him shall be taken away that also which he hath" (Matthew, 13:12). The inherent unfairness of life need to be first recognized before society can examine possible remedies. There is no such person who is "self-made," despite the social propaganda of US mercantile elite. Much of a man's success derives from his class upbringing, genetics, socio-cultural circumstances, political stability, etc.; all aspects of life that are beyond human control.

The "successful," or rather the fortunate, need to reflect on the gift of their lot the universe has granted. "Such pride undeserved, great conqueror, when your whole being is borrowed. Credit where it is due, and dues where payment is demanded." (Baldur's Gate, 1998)

Actually, the position of witnesses is determined by sp. Witnesses with the most votes (in which case each individual vest can be counted as a vote), rise to the top.

I enjoy your writing style, and depth of thought into the issues at hand. Looking forward to seeing more of your posts!

A lot of stimulating conversation going on here in the comments section.

Thank you for the kind comment and thanks for the correction. That makes the situation a little gloomier.

I don't think I said something new there, but it is the obvious things that often remain untold. And I notice that as obvious things remain untold, they start to become not so obvious.

well, I strongly believe that the developers will work a solution to all the insanity... in time. for now, feel blessed. there is a lot of opportunity here. it's all about hard work and building relationships... or not caring about the money and just enjoying the community. if you really work hard, and make friends, and do the thoughtful comments thing, you will continue to grow.

We will see about that. Frankly, I don't expect much, and I won't be surprised if Steemit lives on on the enthusiasm of the community rather than its own merits of being a good SNS platform or a good blockchain concept.

Call me a skeptic. =)

Well, it's easy for me to be optimistic.. my blog is doing far better than I expected a little more than month after sign up, and I've had some good conversations with a few witnesses.

Well, I am sure socializing helped you more than hard work. It surely did in my case. Look at the history of my payouts. The recent "success" is thanks to organizing a group of support, not thanks to an increased quality of my work. Which didn't, by the way.

So I think it is mainly about socializing and finding support. My modest success (I won't speak for you) is more "despite" the system than thanks to it because I poured most of my time resources into organizing DeepThink rather than writing posts. =)

That's great! I'm glad you are finding community. No doubt the social skills I'm just beginning to develop have had a huge role to play in my success, thus far.

More to the point for me, is that nobody gets paid just to show up, here. However, as you were saying, all the hard work goes only so far.

As far as all the work goes... I set a standard, "from day one", that that if my posts were going to be worth money, then they we're going to be properly cited, nicely edited and I had a vision in place of what I wanted to accomplish, regardless of "rewards". I want to creat material that will be valuable for the rest of all our lives, fuck the currency (but, no, I need that too!). Because no one knows me, it's not because I'm cool or or friends with everyone, it's about the writing, for me. So yeah I want to get paid, but that's really just my incentive system to bust ass and actually do the damn thing.

Previously, i got trapped in this situation where my success in life revolved around the fact (among other things) of knowing the right people, people knowing who I was, and looking the part (and just being around so long everyone was newer than me).

That was exactly what caused my ability to "produce" to suffer. It's good to start over, and I hope I don't have to make too many of the same mistakes again.

Well, that's a great attitude. I can say it applies to me as well.

How come you're not with @steemdeepthink yet? Or am I missing something? =)