A study in the working of free markets, with application.

A few months ago a blogger who had been largely pseudonymous up to that point took the step and announced, launched, unveiled, whatever you wish to call it - his pet project.

This is an important step to take. As you've perhaps noticed by now, the world consists of dorky geeks and cool guys, of basements and the public square, of the light of day and the darkness in the corners. The cool guys have all the money, all the attention and all the women while they bask in the sun ; the dorky geeks get to sulk in the shadows while they wring their spunk-caked, oversized hands (in a process they call "tinkering", or even "creating" or "engineering" if they feel particularly spunky). This is as it should be, the cool guys are cool for a reason, and that reason is simply that they are better people - in fact, they are the only actual people. So, for some shadow dweller to step forward, asume a name and announce his thing to the public forum is indeed a big deal, it marks a definite change in his life. No longer a mouse, henceforth a man.

A project, pet or otherwise, can linger forever in the dark, as a shared secret among a group of guys that don't matter. Their own private joke, faux confidence-building totem, whatever. Apparently the particular thing we're discussing had so lingered for at the very least three years. Nobody (of any import) cared, and everybody would have gleefully continued not to care for an indefinite future. Nevertheless, late September the thing was brought forth in the open, and by this process ceased to be the empire of the nobodies, and required people who actually are people to make a call. Is it or isn't it worth attention, resources, importance ?

For reasons perhaps best summarized by Popehat, who laudably took the pains to document that entire argument in quite excruciating detail, and in spite of my better judgementⁱ I made the call that perhaps there's something there, and consequently offered a prize for a simple task. This is it, always : a first task. As Samuel L. Jackson well put it,

Well, the way they make shows is, they make one show. That show's called a pilot. Then they show that show to the people who make shows, and on the strength of that one show they decide if they're going to make more shows. Some pilots get picked and become television programs. Some don't, become nothing. She starred in one of the ones that became nothing.

So now : as long as it stays in the shadow the act will be seen by nobody. Once taken into the market, it will perhaps one day - if it gets lucky - be seen by a producer. One of those guys that are actual people, that actually matter, that make the calls. Odds are he's not going to understand anything. One may think this makes the rainmaker "stupid", and in so thinking one would be missing the point : it's not his job to "understand" the fluid retardedness composing all the things that aren't things yetⁱⁱ, nor is that actually even a job, nor could it ever be a job. It is however his job to make exactly such calls.

And so for these reasons at t₀ = October 6th, when evil me, despicable me, arrogant me, unbearable me, intolerable me, affreux me and so on and so forth saw the act and issued a task, the alternatives on the table were strictly that

1. the thing was brought out of the shadow prematurely, and it really needed a lot more tinkering. This is bad project management, and shame on whoever.
2. the thing can't actually accomplish the task, and that's the end of it. This is bad nothing, it happens. Most stuff born of the shadow dies there, as it should.

That's it, there's not a third.

Ten weeks later I took notice that the act had failed to deliver anything - or indeed even make any sort of measurable progress towards delivery - and pulled the plug. That's the most ass-burning part of it all, I suppose : no matter how unique-snowflake-y a teen sees himself through the distorted mirror of his inferiority complexes, no matter how tight he grips the pink bunny dildo with "you can do anything" engraved on the battery case, no matter how often his mommy hugs him he will be given a task. He will be given a task, and his success or failure to complete the given task is him. Period, unmitigated, indeniable, him. How unfair and how dare I, right ? A well.

Ten hours later othersⁱⁱⁱ took notice of my position and proceeded to divest themselves.^iv

The imediate response to this was that one of the members of the team acquired the item, at a price slightly above the going rate^v. Considering that plenty of the items in question remain unsold in the hands of their creator, it would seem at least to this superficial observer that said acquisition is motivated by political rather than plainly economical incentives.^vi

So now to summarize the process :

1. Act is brought into the open. It thus now exists.
2. Rainmaker sees it. Call is made as to whether it has absolutely no reason to exist.
3. Valuation is placed upon act^vii and task is issued.
4. If task is completed, valuation is increased and further tasks are issued ; if task is failed valuation is decreased.

That's the whole story, simple and sweet. Inescapably simple and sweet.

And now, consider the following earlier point^viii :

mircea_popescu Have you read the girl's explanation of why multiforks resolve and aren't a problem economically ?
BingoBongo I might have, I'll recheck her post history.

mircea_popescu In short : suppose chain forks into 3 different chains today, A, B and C.
midnightmagic On the same network?

mircea_popescu If you had 10 Bitcoins today prefork, you will have 10 A 10 B and 10 C Bitcoins after the fork. If you sell B and buy A the price of A will go up and the price of B down. Eventually the fork resolves economically simply because mining costs money. End of story. Money itself is a centralising factor, and as such the slightest flicker amplifies.
midnightmagic Bleah.. the crosschatter would be ridiculous..

mircea_popescu So ? More drama, more market cap.
BingoBongo Ah, this is kind of what I was thinking. I must have read without expressing the sentiment. I believe I've read similar on Trilema as well.

This is exactly the same principle at work : as a new thing shows up, curiosity at the very least leads people to move a little out of Bitcoin^ix into the new thing. This gives the people involved a little leeway, practically speaking resources, or if you prefer the terminology, power. If confidence builds, which is to say if said power is used efficiently more and more movement occurs. Eventually, perhaps, unlikely but certainly possible, the new thing takes over as the reference. Much more likely, the thing missteps, and so there's a little withdrawal, which in turn puts a draw on the resources of those involved : they have to pay good Bitcoin in order to maintain the thing. If they continue to misstep, that draw will sink them - whether they are willing to admit it or not, simple as pie, invisible as the fabled hand, unerring like rain.

So there you have it, laid plain. It's not really so difficult to understand, even if it may be very very hard to accept. It's in fact quite intuitively obvious, should one allow his intuition to work... freely. The only reason this may appear shocking, outlandish or improbable is simply due to bad education, or growing up in a bad environment. Such as, you know, California, or generally speaking the civilised socialist Western White World.

The thing is however that no environment, no matter how carefully constructed and painstakingly insulated, could ever be immune to the power of free trade. Much like the fate of the ancient Greeks, it will find its way, and often enough use for its fulfillment the very instruments intended to guard against it.

1. Retrospectively better. At the time it was based on the fact that the very vain if grossly incompetent rat in question failed to confront reality as a man when challenged to do so, which is absolutely never a good sign. [↩]
2. As the little known Bob Balaban aptly put it,

   "So why am I watching it ?"
   "Because it's on TV!"
   "Not yet."

   You'll perhaps excuse the deluge of TV quotes with the explanation that it's really fucking hard for me to connect and communicate with young males - I only personally know young females, and in their fortunate case communication is well lubricated by ready whip and stocks. [↩]

3. You may imagine this was pre-arranged in some way. It was not pre-arranged in any way. [↩]
4. Perhaps a little excursion into minutia is needed here. The "dukedom" (meanwhile renamed to something fancier or other) in question is one of a limited set of signatures, which are supposedly going to be very valuable through their rarity "in the future". Originally they were offered to the interested public at the cost of $4`096 per. Of the limited set of 256 very valuable (in the future) secret numbers, a dozen or two were sold and given away, in some proportion. [↩]
5. Unless I'm mistaken 4.5 BTC is a shade over $4`096 on the markets. [↩]
6. If the guy just wanted a signature, he could have bought any of the open ones, for about the same price. If the guy wanted to avoid the situation where the item is relisted at a lower ask price, thus lowering the mark-to-market value of all the unsold inventory he would buy this one specifically. [↩]
7. The fact that it is not at any point the creator that values his creation could not possibly be overstated enough. I get with some regularity offers for various listings on MPEx from people who wish to list for a specified price, which price is not the result of accounting but projection daydreaming, carefully selected comparison and sheer imagination. This, needless to say, is not how reality works. [↩]
8. March 12th, so it predates #bitcoin-assets published logs [↩]
9. The universal measure of everything from now on. Forever. [↩]