I have a problem which I don't know how to resolve. So do you.

Monday, 22 April, Year 5 d.Tr. | Author: Mircea Popescu


The problem is simply this : dooglus does something absolutely usefuli for which he's currently not getting paidii. This is in my view immoraliii, inasmuch as what he is doing is useful he should be paid for it. The problem is that what he's doing is principally useful to S.DICE, and him being on S.DICE's payroll is singularly the one thing that'd damage the credibility of his work.

This creates a painful dilemma, whereby highly qualified work that takes time and effort creates a product which is valuable mostly to the degree those chiefly benefiting from it aren't also the ones paying for it. As such this is a more acute restatement of what's known in literature as "the disaster of commons", which is an unfortunate state of affairs with no known good solutionsiv.

This problem isn't by any means limited to the convenient example I chose, everyone benefits from dooglus' work just as everyone benefits from Gavin's work, and from a lot of similar such efforts. Paying for the burnt coal however is pretty difficult to arrangev yet an inability to arrange for it significantly hampers the quality of everyone's bitlife and coinenvironment.

Even if any further meaningful bitcoin development will be done by professional teams on miner payroll, which is probably a good solution for that anyway, and so that particular subset of the problem (which also happens to be the largest part of it) isn't very pressing, this problem still looms. One solution I'm currently experimenting with is the pay-to-read model, right here on Trilema. The uptake is pretty decent and the model is perhaps workable, but the only thing I can say definitely about it is that we need more data.

Another solution (mostly implemented in the fiat world) is to just bite the bullet and pretend like the interested party paying for the service doesn't corrupt the service provider. Fiat world scandals like Arthur Andersen etc would seem to indicate this solution is mostly wishful thinking, and its continued application strictly depends on the use of the reality-suppressing set of governmental tools & apparatuses (which, of course, are unavailable in Bitcoin).

At any rate, I would like to humbly solicit the best and brightest minds of our generation to consider this problem. Who knows, maybe a solution emerges. Together with the (still unresolved, but much more technical) payments problem these are pretty much the only considerations of any import in any field of research currently. Nobody cares about a cure for cancer - and I say this from the bottom of my heart - and the hungry of Africa, Asia and Bumfuck generally may all die in agony to the last man if only either of these actual, important, real problems of humanity are ever so slightly advanced towards a solution. Thank you.

  1. He processes about half the blockchain transactions (ie, the ones to and from S.DICE) in order to calculate actual site income, expenditure and net revenue and then publishes the result with daily regularity. The proof that his work is indeed useful is that the graphs he plots and summaries he releases are pretty much the standard used in any S.DICE discussion. []
  2. I'm in a position to absolutely confirm he's neither on MPEx' or S.DICE's salary, so. []
  3. This entire issue of work and pay is discussed in detail in an older Romanian article titled Ce ma intereseaza pe mine intr-un proiect. []
  4. The only known solution, and a pretty poor one at that, is government intervention - something particularly unuseful in Bitcoin. []
  5. And the arrangements people have tried so far are particularly dysfunctional and have little hope of lasting past the effort of their proponents. In a sense stuff like the Bitcoin Foundation are extraction engines - they do resolve the problem of paying one (small) developer salary at the cost of creating significant credibility problems for those involved and generally taking more work and resources to administer than the benefit in the first place. As such they can only continue through wilful inefficiency and consequently won't likely last and can't possibly scale. []
Category: Bitcoin
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12 Responses

  1. This is a special case of a more general problem: we (as a civilization) simply don't know how to pay for certain things. And so we can't have them (or sometimes we can, but only accidentally and sporadically) - any more than a Down's syndrome sufferer could buy shares on MPEx.

    For instance, quite a few people might like a decent computer system.
    (What the hell is a decent computer system? Here's my take on it: http://www.loper-os.org/?p=284)

    But nobody wants to pay for what it would cost to re-do the last 25 years of digital idiocy. (See Rob Pike for what exactly it is that no one knows how to pay for: http://herpolhode.com/rob/utah2000.pdf - and as for the idiocy, it is discussed in some of my articles: http://www.loper-os.org/?cat=23)

    The other day, yet another confused person wrote to me and asked why I don't fund my efforts using Kickstarter. I had to patiently explain to him that the price of my project is my never having to think about money again - a little too high for most people; no hard guarantee of a useful result within my natural lifespan; etc. I get "fan mail" quite often and have to explain these basic things again and again. It gets boring fast.

    So with regard to the things that we can't pay for, either we are stuck convincing ourselves that nobody seriously wants them (easy enough, in most cases) - or a True Aristocrat funds the work "for the motherland" (but really, because it tickles him in the right place.) I don't see a third way here.

  2. Mircea Popescu`s avatar
    Mircea Popescu 
    Monday, 22 April 2013

    Funny you should mention Kickstarter, because.

    Good links. In the end it's not really a problem to which I honestly expect to see a good solution within my lifetime. Space colonisation is likely, this however is not.

  3. And the flip side of this is what Taleb calls the "skin in the game problem", that some people are positioned to benefit from the upside of certain events without risking any downside.

  4. Mircea Popescu`s avatar
    Mircea Popescu 
    Monday, 22 April 2013

    Also true. In fact this minor point I've picked to use as an example is the equivalent of a root tip that happens to go straight to Ygdrassil.

  5. Ah yes, and the ancient Midgard Serpent perpetually chewing its roots...


  6. What we have here is a perceptual problem.

    " dooglus does something absolutely usefuli for which he’s currently not getting paidii. This is in my view immorali"

    The problem is in the definition and perception of what 'getting paid' means. If the action produces something useful it raises the prosperity of all participants. Your example got 'tipped' a few bitcoins, bitcoin price went up. The reason we arrive at the problem is in our current complex world the far reaching aspects of what we do are far from obvious.

    A time was that if a man built a road and he owned a tavern on that road we could all see clearly what his 'angle' was, there was no need for him to make it a toll road. In fact if he got greedy and made it so, chances were he would lose. Complexity has made it a lot harder to see and understand even our own motives much less those of others.

    Anything that each of us does to 'make the world a better place' from writing a bit of code to sweeping the sidewalk benefits first ourself (if just to make us feel good) and second ourself in that we now live in a 'better world'.
    (the fact that we disagree on what would be a better world does complicate it - I am sure a lot of stuff others would see as improvements strike me the opposite)

  7. Mircea Popescu`s avatar
    Mircea Popescu 
    Tuesday, 23 April 2013

    Perhaps this is true, but in a closed and small community such effects are stronger and more predictable, sort-of like if a few families are sharing a small pool, anyone taking a piss is probably pissing at least a little on his or her own children. If the small pool is the ocean and the people in it the population of an entire metropolis suddenly that effect is a lot less obvious.

    As a result people don't (mostly) take a piss in small pools, don't (usually) fart in elevators and certainly do paint the benches and mend the fences in small communities. The Internet however... In other words, a disaster of commons occurs only if there indeed commons exist.

    Nevertheless your comment suggests a possible solution that I've omitted in the main article, to wit : yesterday I rated dooglus, which for whatever reason I never had done before. A WOT rating from mircea_popescu is certainly valuable, even if it can't be purchased. This suggests a secondary exchange may very well exist, of services that can't be paid for versus goods that can't be purchased.

    This is in the end how society functions, a girl will go to bed with you "in exchange" for a few compliments, even if technically you can't pay for her genuflexions and she can't buy your compliments. Perhaps this is the actual solution, and even if there will certainly appear those trying to game the entire system - so what! They've been with us irl for millenia and it doesn't seem to have hurt anything.

  8. pizzaman1337`s avatar
    Wednesday, 24 April 2013

    It's arguable that the charts dooglus makes draw more attention to S.DICE, drawing in more buyers, increasing its share price, and dooglus gets his "payment" from that. Even though the price is below where he bought, it's possible it could have been lower without his efforts. Would he still be making those charts if it were not possible to buy S.DICE shares? He wouldn't have as much of an audience, so he might not consider it. But, I don't know what his motives are.

    Also, the work increases his reputation as a "good guy" in the Bitcoin world. This could help him down the road.

  9. Mircea Popescu`s avatar
    Mircea Popescu 
    Wednesday, 24 April 2013

    Iirc he was doing it before the IPO.

  10. "He processes about half the blockchain transactions (ie, the ones to and from S.DICE) in order to calculate actual site income, expenditure and net revenue and then publishes the result with daily regularity."

    Obviously the benefit here goes to the trading stockholders of s.dice mainly and to some extent to the "media". While non stockholders could use the graphics from "media" as a support ... i think there is close to no value there. The trading stockholders however may find useful this rapport as it allows to value the business and trade the stock. It is therefore for them to value it as a service. The "shareholder's" voice is expressed by the general assembly. The high transaction cost on individual shareholder bargaining and freeloaders make any solution other than
    GA determined fee
    A s.dice trading platform fee on s.dice transactions
    an unsuitable choice.

  11. Mircea Popescu`s avatar
    Mircea Popescu 
    Wednesday, 24 April 2013

    This is all true. On the other hand however :

    1. MPEx shares are nonvoting. I suppose you could substitute the management for the GA in that case and still make it work, but this arrangement reduces to the guy being hired by the company, just like any PR.

    2. MPEx already takes some fees. Redistributing this income towards that end is probably a better solution than 1, but it is not fundamentally distinct (and in fact it's pretty much the play-pretend thing going on in the fiat world).

  1. [...] two months ago I was saying : The problem is simply this : dooglus does something absolutely useful for which he’s currently [...]

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