Let's read together from Samuel Clemens, a man you probably know as Mark Twain, and if no novelistⁱ still certainly one of the better wordsmiths of the English language.

Part A. Work is hard.

But we went to work. We decided to sink a shaft. So, for a week we climbed the mountain, laden with picks, drills, gads, crowbars, shovels, cans of blasting powder and coils of fuse and strove with might and main. At first the rock was broken and loose and we dug it up with picks and threw it out with shovels, and the hole progressed very well. But the rock became more compact, presently, and gads and crowbars came into play. But shortly nothing could make an impression but blasting powder.

That was the weariest work! One of us held the iron drill in its place and another would strike with an eight-pound sledge—it was like driving nails on a large scale. In the course of an hour or two the drill would reach a depth of two or three feet, making a hole a couple of inches in diameter. We would put in a charge of powder, insert half a yard of fuse, pour in sand and gravel and ram it down, then light the fuse and run. When the explosion came and the rocks and smoke shot into the air, we would go back and find about a bushel of that hard, rebellious quartz jolted out. Nothing more. One week of this satisfied me. I resigned. Clagget and Oliphant followed. Our shaft was only twelve feet deep. We decided that a tunnel was the thing we wanted.

So we went down the mountain side and worked a week; at the end of which time we had blasted a tunnel about deep enough to hide a hogshead in, and judged that about nine hundred feet more of it would reach the ledge. I resigned again, and the other boys only held out one day longer. We decided that a tunnel was not what we wanted. We wanted a ledge that was already "developed." There were none in the camp.

We dropped the "Monarch" for the time being

Part B. Fatlogic is fatlogic. Who're you ?

Meantime the camp was filling up with people, and there was a constantly growing excitement about our Humboldt altcoin. We fell victims to the epidemic and strained every nerve to acquire more "coins." We prospected and took up new chains, put "notices" on them and gave them grandiloquent names. We traded some of our "coins" for "coins" in other people's chains. In a little while we owned largely in the "Gray Eaglecoin," the "BitColumbiana," the "Branch Mintcoin," the "BitMaria Janecoin," the "Coinverse," the "Root-Hog-or- Die Coin," the "Samson Coins Delilah," the "BiTreasure BiTrove," the "Golcoinda," the "Co InSultana," the "Buttmerang," the "Great Republicoin," the "Grand Mogulbit," and fifty other "chains" that had never been molested by a developer or scratched with peer review. We had not less than thirty thousand "coins" apiece in the "richest altcoins on earth" as the frenzied cantⁱⁱ phrased it—and were in debt to the butcher. We were stark mad with excitement—drunk with happiness—smothered under mountains of prospective wealth—arrogantly compassionate toward the plodding millions who knew not our marvellous canyon—but our credit was not good at the grocer's.

It was the strangest phase of life one can imagine. It was a beggars' revel. There was nothing doing in the district—no mining—no milling—no productive effort—no income—and not enough money in the entire camp to buy a corner lot in an eastern village, hardly; and yet a stranger would have supposed he was walking among bloated millionaires. Prospecting parties swarmed out of town with the first flush of dawn, and swarmed in again at nightfall laden with spoil—rocks. Nothing but rocks. Every man's pockets were full of them; the floor of his cabin was littered with them; they were disposed in labeled rows on his shelves.

Trade is a social phenomenonⁱⁱⁱ. How do you suppose the various mines were evaluated ?^iv So a bunch of kids - perhaps young enough to have never even seen cunt, let alone taste it, prod it, torture it, impregnate it and what else men do to that part of a woman - a bunch of kids sit around and talk about how great they are. Because this is socialising in primates, other than picking lice off each other. So they split up in groups according to the topic which they'll follow in their braggarty, and start. "My dad could beat your dad" "Nu uh I have a brother that was in the Marines" "But my mine's 90% silver and some wool!" etc etc etc. It's what people do.

Suppose you had a square meal aside for the express purpose of aquiring some of this stuff. Your 10k pizza, as it were. You're, basically, the cunt in this discussion. How do you pick ? Which feet do you want ? Maybe you go by name a little, right ? Maybe you go by which guy's more muscular, by which guy's hair looks healthier, by which guy's face is cleaner or more symmetric. By which guy gets your cooch the hottest, basically.

So there you have it. Trade is a social phenomenon, and risk is the result of the divorce between what we understand of the world and what the world is. To expect trade to mitigate risk is not unlike hoping that your daughter is smart enough to find herself a good husband. Statistically, this doesn't ever work, and practically that's okay.

It must be okay, because theory proposes and practice confirms that attempts to force the point only result in more risk. If you don't believe it, feel free to try it, but please try it on your daughter rather than voting for stuff like "more market oversight".

Part C. Statistics is hard.

I met men at every turn who owned from one thousand to thirty thousand "feet" in undeveloped silver mines, every single foot of which they believed would shortly be worth from fifty to a thousand dollars—and as often as any other way they were men who had not twenty-five dollars in the world. Every man you met had his new mine to boast of, and his "specimens" ready; and if the opportunity offered, he would infallibly back you into a corner and offer as a favor to you, not to him, to part with just a few feet in the "Golden Age," or the "Sarah Jane," or some other unknown stack of croppings, for money enough to get a "square meal" with, as the phrase went. And you were never to reveal that he had made you the offer at such a ruinous price, for it was only out of friendship for you that he was willing to make the sacrifice. Then he would fish a piece of rock out of his pocket, and after looking mysteriously around as if he feared he might be waylaid and robbed if caught with such wealth in his possession, he would dab the rock against his tongue, clap an eyeglass to it, and exclaim:

"Look at that! Right there in that red dirt! See it? See the specks of gold? And the streak of silver? That's from the Uncle Abe. There's a hundred thousand tons like that in sight! Right in sight, mind you! And when we get down on it and the ledge comes in solid, it will be the richest thing in the world! Look at the assay! I don't want you to believe me—look at the assay!"

Then he would get out a greasy sheet of paper which showed that the portion of rock assayed had given evidence of containing silver and gold in the proportion of so many hundreds or thousands of dollars to the ton.

I little knew, then, that the custom was to hunt out the richest piece of rock and get it assayed! Very often, that piece, the size of a filbert, was the only fragment in a ton that had a particle of metal in it—and yet the assay made it pretend to represent the average value of the ton of rubbish it came from!

On such a system of assaying as that, the Humboldt world had gone crazy. On the authority of such assays its newspaper correspondents were frothing about rock worth four and seven thousand dollars a ton!

Obviously, an assay works on the premise that whatever you're assaying is representative. If you select the sample, what the assay is saying is not "each ton of the material you selected from", but "each ton of material similarly selected". Unless you mean to go about handpicking rocks and so on, the results of an assay carried over handpicked rocks are uninteresting to you.

Perhaps you imagine this is obvious. Let me show you how it's not :

fluffypony: Reddit humour: http://imgur.com/a/33Qpw (some guy setup a fake Tinder profile with some stock photos, and proceeded to canvas girls for their opinion on Bitcoin)

That guy set up a fake Tinder profile with some stock photos and proceeded to canvas FAKE TINDER PROFILES WITH STOCK PHOTOS. Right ? Because logically, he has absolutely no reason to suspect there's girls there, right ? After all, he isn't what he claims to be, why'd he expect the others are any different ?

Not so obvious anymore, is it. Yeah, that's right, you're doing it all the time and every time, the only reason you're not constantly being bitten by it at every turn is that a) you actually are, and yes at every turn and b) the people who do it for a living (governments, banks, etc) are organised together to b.1) keep the biting to a low roar so you can keep feeding them, because you can shear a sheep many times and b.2) keep others out. Which is why "the free market" is so "unfriendly" to "normal people". The curve's pretty well thrown by now, very few "normal people" left in the bezzle world that aren't incredibly stupid after a century or so of selecting for stupidity.

Part D. Since work is hard, it's really for other people.

We never touched our tunnel or our shaft again. Why? Because we judged that we had learned the real secret of success in silver mining—which was, not to mine the silver ourselves by the sweat of our brows and the labor of our hands, but to sell the ledges to the dull slaves of toil and let them do the mining!

[...]

And does the reader remember, a few pages back, the calculations, of a quoted correspondent, whereby the ore is to be mined and shipped all the way to England, the metals extracted, and the gold and silver contents received back by the miners as clear profit, the copper, antimony and other things in the ore being sufficient to pay all the expenses incurred? Everybody's head was full of such "calculations" as those—such raving insanity, rather. Few people took work into their calculations—or outlay of money either; except the work and expenditures of other people.

NeoBee mismanaged its capital horribly, but a fraction of it was in fact spent to advertise Bitcoin. Bitpay bankrupt its investors by buying advertising that made no economic sense. Now it has to do layoffs and yes it will sink into the night. But it is on the backs of such well meaning if improvident actors that the more prudent raise and conquer the world - the early losers mentioned maybe, if the latter lot's feeling generous.

Striking a sustainable balance between work efficiency and production capture is perhaps the hardest challenge in business management. Generally it's regarded as a marginal point, something under theft, with tired out old schematics like "If I let people steal pens, then we'll be out the pens. If I push on them then they'll have low morale." That's not a good way to look at the problem. A better way to look at the problem is to say that Time Warner spent a billion dollars it never recovered to create in the minds of idiots the expectation of a certain usage of the web, which Facebook is still exploiting to this day - and will, for a few years more perhaps before it "completely unpredictably" collapses into its own void. IBM spent a ton of money to make Microsoft possible - money that it never saw again. Pets.com spent a ton of money it will never see again to make uber possible and so on and so forth.

The moral of all this would obviously be that equity is a poor approach to controlling the wealth of the future, and one's much better served by instead cultivating social relationships with the sort of people that will be making that wealth of the future. Which is why VC budgets have generally ballooned to the degree that they have (once what's being offered by the squares, ie money, is no longer particularly useful they have to cut each other's necks competing for the trickle of relevancy they still hold), and how stuff like the Y-combinator circus ever came to be. The problem with this is that once you move your focus to the social you're basically selecting for con men, and that's exactly what Graham is accomplishing : building a large and ever growing stable of roadside acts, tramps, scamps, cheap prostitutes, snake oil salesmen and the assorted gunk of the road^v.

Plainly put, approaching the future is not a solved problem. That said, the WoT and #b-a are better general purpose solutions than anything else currently available.

1. It's a sad fate that his nonsensical Connecticut Yankee thing is still being presented as in any way representatitve or worth anyone's time. It's not either. This is, both :

   On the morning of the sixteenth day out from St. Joseph we arrived at the entrance of Rocky Canyon, two hundred and fifty miles from Salt Lake. It was along in this wild country somewhere, and far from any habitation of white men, except the stage stations, that we came across the wretchedest type of mankind I have ever seen, up to this writing. I refer to the Goshoot Indians. From what we could see and all we could learn, they are very considerably inferior to even the despised Digger Indians of California; inferior to all races of savages on our continent; inferior to even the Terra del Fuegans; inferior to the Hottentots, and actually inferior in some respects to the Kytches of Africa. Indeed, I have been obliged to look the bulky volumes of Wood's "Uncivilized Races of Men" clear through in order to find a savage tribe degraded enough to take rank with the Goshoots. I find but one people fairly open to that shameful verdict. It is the Bosjesmans (Bushmen) of South Africa. Such of the Goshoots as we saw, along the road and hanging about the stations, were small, lean, "scrawny" creatures; in complexion a dull black like the ordinary American negro; their faces and hands bearing dirt which they had been hoarding and accumulating for months, years, and even generations, according to the age of the proprietor; a silent, sneaking, treacherous looking race; taking note of everything, covertly, like all the other "Noble Red Men" that we (do not) read about, and betraying no sign in their countenances; indolent, everlastingly patient and tireless, like all other Indians; prideless beggars—for if the beggar instinct were left out of an Indian he would not "go," any more than a clock without a pendulum; hungry, always hungry, and yet never refusing anything that a hog would eat, though often eating what a hog would decline; hunters, but having no higher ambition than to kill and eat jack-ass rabbits, crickets and grasshoppers, and embezzle carrion from the buzzards and cayotes; savages who, when asked if they have the common Indian belief in a Great Spirit show a something which almost amounts to emotion, thinking whiskey is referred to; a thin, scattering race of almost naked black children, these Goshoots are, who produce nothing at all, and have no villages, and no gatherings together into strictly defined tribal communities—a people whose only shelter is a rag cast on a bush to keep off a portion of the snow, and yet who inhabit one of the most rocky, wintry, repulsive wastes that our country or any other can exhibit.

   [...]

   Let us forget that we have been saying harsh things about the Overland drivers, now. The disgust which the Goshoots gave me, a disciple of Cooper and a worshipper of the Red Man—even of the scholarly savages in the "Last of the Mohicans" who are fittingly associated with backwoodsmen who divide each sentence into two equal parts: one part critically grammatical, refined and choice of language, and the other part just such an attempt to talk like a hunter or a mountaineer, as a Broadway clerk might make after eating an edition of Emerson Bennett's works and studying frontier life at the Bowery Theatre a couple of weeks—I say that the nausea which the Goshoots gave me, an Indian worshipper, set me to examining authorities, to see if perchance I had been over-estimating the Red Man while viewing him through the mellow moonshine of romance. The revelations that came were disenchanting. It was curious to see how quickly the paint and tinsel fell away from him and left him treacherous, filthy and repulsive—and how quickly the evidences accumulated that wherever one finds an Indian tribe he has only found Goshoots more or less modified by circumstances and surroundings—but Goshoots, after all. They deserve pity, poor creatures; and they can have mine—at this distance. Nearer by, they never get anybody's.

   This, incidentally, is important. Lest you forget that some are high and some others are low for reasons. [↩]

2. This is important. Cant names exactly what I was discussing under "Variety Speak". Every activity that attracts its own group develops its own speech. This is how English came to be in the first place.

   That some cants are stupider than others is merely a testament of the general human quality of the people involved. Because yes, there is such a thing as losers, and if you group them together you don't magically get a group of "human beings", they're still losers. And the language they develop is the language of idiocy, which is how Filipinos ended up dropping Tagalog. Which is why you're learning Chinese if you want to eat. Which is generally why imperialism and colonialism are culturally beneficial and socially productive phenomenons, for which the colonised shoud fucking pay the colonizers (as they do). [↩]

3. This is important. Trade as perceived through observation is not an economic behaviour, it is a social behaviour. The differences between the two are exactly the differences between thermodynamics and quantum mechanics : the latter includes a whole lot of strange, is pure nonsense on the face and can't actually be easily proven, nor is it of much general interest ; the former's a statistical approach, more practically useful but unfortunately requires the satisfaction of presuppositions that can and occasionally do get contradicted. Obviously the ready solution is to cleave a "real" trade and name it "unseen hand" or whatever, and pretend like all the social mess is merely epiphenomena on top of it. This intellectual stance is sustainable, but not really obligatory. [↩]
4. If only these brave redditors had had Conde Nast back then to "Revolutionize" things for them, how exactly the same everything would have been! [↩]
5. Review the cereal box story, and more amusingly, the response to that story, to illustrate this point. [↩]