“Three minutes to final deletion” said the voice in his head.

The rain was sliding in thick warm drops off his helmet and down his face. He blinked the water out of his eyes and squinted into the sight of his rifle. Pulling the gun slowly to the left, following a target moving in awkward bent steps. His enemies were doing their best to disguise themselves among the debris of the street but the enhanced sight made easy work of tracking human forms, highlighting their outline even when they were obscured by objects.

Trigger. Boom. Another headshot.

His aim was perfection, as further technological enhancements of the rifle made sure it almost always was. Number seven in the last hour. More dead Westians, or were these Moon-Worshipers? He couldn’t remember who he was fighting any more. He didn’t much care who he was fighting any more. He was only sure they needed to die, because they would have gladly killed him if they got a chance.

Kill or be killed, the eternal law of combat.

But it could be worse than killed, defeat here could mean oblivion; his immortal soul was in the balance. No more lives, no more back-ups, no more echoes.

The enemy was coming for everything that he had ever known, everything he had ever loved. Family, friends, culture, art, history. From cradle to grave, the entire meme-space which had conceived and constructed his instance… everything that he was would be digested down to the last bit if he and his comrades failed in their task.

He was the last defense, the last line for himself and his people, and his God. God needed him to do this, and one did not ask questions of God.

More movement across the street. Two more targets moving in the rubble.

The rubble looked to be just a pile of rocks and silicon with some drying clumps of black and red goop scattered around. Somewhere else though, there was an entire solar society gone. Billions of minds that had once made up a dynamic and prosperous civilization were extinguished. Supposedly they had been on the verge of something… a new technological breakthrough in that virtual universe, something that might have broken this war.

Sure must have been something real important to bring down this kind of multidimensional destruction, he thought. Even the whiff of it was was still was enough to draw out all of these Vultures, scraping whatever information could be gleaned from in the rubble of a lost civilization.

But he wasn’t going to let them get it. He couldn’t. He was to keep them out of the rubble until the site could be pushed down the ladder of disorder a bit further.

Two more outlines. They were hiding themselves well, but he could make out their blue scanning beams peaking out occasionally, erratically seeking whatever bits of data they could find.

The soldier fired a succession of rounds at two different angles. The first was a burst round which exploded in the rubble, meant to startle and distract the enemy by keeping them looking for the source of incoming fire. The next round was a guided bullet, which curved gently around the rubble pile and slid cleanly back to front through the head of the first soldier.

The second soldier darted out to of the way just in time to miss the bullet which had emerged from his comrades head. The Vulture moved quickly, deploying nano-chaff, causing the tracking to make it appear like the Vulture had split into into 10 or 12 glowing outlines of soldiers running off in every direction.

Shit, he thought to himself and jacked himself up with a bit more adrenaline.

One, two, three shots in rapid order, none finding flesh, but his adaptive optics eliminated those ghosts from being tracked.

He deployed countermeasures. His swarm expanded to increase its data gathering capacity. Using what heat and movement data it could gather, it was working to provide him with a probability that he was looking at the real target. Percentages appeared below outlines of soldiers darting among the rubble. The numbers ticked up and down, as he let a couple of more bullets fly at the highest percentage outlines. No luck again, but that was two more shapes which could not be his real target, as they disappeared from his view.

He had to be careful how long he left his swarm so widely deployed. Each of his nanodrones had little computing capacity and the enemy could draw them off when their density got low enough, turning those captured drones against him and eating into his cloud core. If the enemy managed to capture enough of his swarm, he could be left without any computational armor at all. He would be left naked. Biological.

Biology, silicon, symbiosis. Each was nowhere without the other in this world. Silicon hardened him against physical and psychological attack, but the silicon would also be just as naked without his biological brain to protect it. In the age of silicon gods, the human brain somehow remained the best way to produce thick quantum incoherence at room temperature. Raw computing could be easily countermanded with a few paradox traps, luring silicon into mathematical queries without answers, perhaps even pushing it towards outcomes serving enemy purposes.

The Silicon Gods were only possible in the deep cores, where ultra cold temperatures could support unity, but it was impossible to do in the wild. So instead there were soldiers like him, silicon harvesting the quantum weirdness of his neural network in exchange for providing a silicon cryptographic armor around him. Only by working together could silicon and biology survive in the wild, outside of God’s embrace.

The outlines of soldiers were splitting again. The Vulture was adapting to his countermeasures. He had to move.

If he could get a new view then perhaps he could figure out which one of these ghosts was the real threat.

He rolled out of his sniper position and got to his knees. In a crouched run he moved towards a half demolished brick wall standing to his right. Glancing towards the field below him, the effect of the new data was immediate with several of the soldier outlines dropping in percentage quickly and a couple even disappearing. But leaving his carefully constructed cover also revealed him to his enemy. A shot narrowly missed him as he stuck his head out from around the wall.

“Two minutes to exponential erasure event”, a voice sounded in his ear.

Fancy speak for a thermonuclear missile on its way to turn this place into glass. The soldier just needed to hold back the vultures for another couple minutes. Time to try something crazy, he thought.

He grabbed his EMP grenade. Just like we did in training, the soldier said to himself. He had never before been forced to fully shut-down his own nanoswarm, but it was the only way to protect them from the blast. The EMP would then disable the Vulture’s silicon, leaving the two enemy soldiers as naked apes for about 30 seconds while they rebooted their hardware.

The soldier lobbed the electromagnetic grenade over the wall.

3, 2, 1, he counted down as he shut down his computer hardware just before the white hot blast of the EMP grenade.

The soldier ran out from behind the wall, into the temporary daylight of the EMP. He fired several rounds from his now dumb-gun into the boulder behind which the enemy soldier was hiding. Running straight towards the boulder, he dove through the air, swinging his gun around towards his target as he landed on the hard ground.

The soldier looked up and saw his enemy face to face. With their hardware shell offline the Vulture was simply cowering behind the rock, making no attempt at fighting back. Something in the face of his enemy made the soldier pause. Somehow he didn’t see just another enemy, but a human face.

This little girl was just another human being, afraid to die.

Time dilated. The soldier had a vague feeling of what was happening, but was nonetheless helpless to stop it without his nanoswarm companions. Some part of the Vulture had resisted the EMP attack and was launching a psychological attack.

The soldier became aware of his own history.

He saw images of himself as a baby emerging from a warm robotic womb. Robotic arms removed a crying baby and placing them into a new vat where a neurojack directly into his brain became his new umbilical. He saw the world that his God had made for him. A kiss from his mother, that time a bully pushed him off the swing at school and he had chipped a tooth, the movie he had seen that glorified the combat going on out in the wild. Falling in love. Romance. Honour. Service.

Who am I? thought the soldier.

I am nothing – surely.

The soldier knew that his life had been a tool, an entire existence aimed at delivering his biological brain to this particular place at this particular time. The values and beliefs of a whole society were nothing but an intricate program to fashion him into a weapon. He perceived the crystal structure of his society rotate around its axis, and he knew it was simply a way of processing the world. Just another subset of ways in which grouped human minds could process the world, and seek to shape it. A dynamic and amazing biological network, but in the end no more noble then the rubble he was trying his best to help along to its end.

But it was to serve God. God had a plan. Who was he to doubt God’s plan. The fall-back psychological programming which felt like the love of God began to boot up in the soldier’s heart. He had to do it for God.

His nanoswarm began to boot back up.

He raised his gun towards the face of the Vulture unit cowering a few meters away from him. But he paused, his finger pushed against the trigger. His jaw clenched.

But the damage had already been done. He knew the Vulture was nothing but a little girl. The soldier looked down at his small hands. He was no soldier, he was just a meat boy sent to slaughter some other meat. Just another biological pawn in a war much larger and longer than either of them could perceive.

The boy dropped his gun, and reached out his hand to the girl. She reached out shakily and placed her small hand in his. She pulled herself carefully to her feet.

The two children stood there, hand in hand, looking up to the ancient blue sky. They heard a slight whistling as the thermonuclear missile approached from above.

I want more for the future.

I want more for myself.

I want more from myself.

I want more time.

I want more from time.

I want more love.

I want more from love.

I want more life.

I want more from life.

I want more nature.

I want more from nature.

I want more for everyone.

I want more from everyone.

I want more from the future.

The beast was moving swiftly, his hot breath leaving swirls of mist behind him. Clawed feet propelled him in powerful strokes through the long grasses of the Lower Aden. Gentle rolling hills of golden grain trimmed by green forest.

In the distance, the moonlight was glinting off of the snowy peaks of Upper Aden. A river of silver flowed in valley. Some might consider the scene naturalistic to the point of cliché, but the serenity of the Lower Aden was considered by most to be a glorious masterpiece and heaped much worship on its designer, financial and otherwise.

But the beast didn’t consider it at all. The beast had a job to do. He had a contract for fear.

The beast was moving through a dark wood now. Almost without sound he raced between dark trunks, moonlight coming in twinkling flashes through the canopy above. Not far now. The sound of a band could be heard faintly reverberating in soft notes off the moss covered trees.

The beast slowed to a stalking pace. He moved in the shadows. With a crouching posture, the beast stealthily moved around a farmhouse and down a shadowy alleyway. The tight streets of the village were all but deserted but for the sound of brass instruments beckoning him towards the center of town.

The beast came upon the backside of a church, its high stone walls and steeple towering above the rest of the village. The beast adeptly climbed up the stone and pulled himself along on all fours across the peak of the steep roof.

It was a carefully curated scene of cheer and merriment. Hundreds of torches provided flickering golden light around the village square.

On a small wooden stage, a small band was accompanying a singer in a jaunty sort of polka.  In front of the band, dancers were swinging around in time to the music. The audience responded with appreciative drips of joy for the band and the dancers.

Oh what a lovely tune. One drop of joy for the band.

Look at her dress, so authentic to the period! She looks wonderful. One drip of jealousy.

Isn’t it all so marvelous? A few drips of nostalgia to be spread among the event organizers.

On the other side of the square patrons strolled through rows of wooden stands where artisans hocked their one of a kind pieces.  Cosmetic customizations, unique clothing and other items, artisanal algorithms; all could be had at this emotional bazaar.

One stand had a hand painted sign that read ‘Living Drawings’. The clerk could be seen painting their next piece. On it a half-painted man dressed in formal military style clothes was hurling insults at the painter in French accent. “Zese are not ze clothes of a French Generale. Zis painting is neizer historically accurate nor very skillfully made, you peazant”. Behind the painter a renaissance style scene showed a nude woman reclining in a bed of leaves and slowly beckoning you to join her. On the frame of the painting was a sticker which said ‘Sale Price – 285 FC’.

The next stand was selling toy soldiers. On the counter a small war was being waged, as soldiers in bright red lined up and aimed their muskets at soldiers dressed in blue. Smoke rose into the air as the line of musketmen fired, and screams could be heard as some of the blue soldiers fell to the ground in agony. A nurse dressed in white and carrying a box marked with a red cross ran out to help some of the blue soldiers. A blue cannon behind the line of blue soldiers fired, and a cannonball eliminated a few of the red soldiers from the battle.

A sign in front of the stand had a list of prices: Musketmen – 25 FC/piece, Cavalry – 42 FC/piece, Cannon team – 125 FC. Underneath the sign read ‘Make your next party a real battle!’.

Just displaying their trinkets made for a decent passive income for the artisans as shoppers took in their presentations, but selling their goods was the real goal and could keep them going both inside and outside the Metaverse for years. And buying such items could lead to real profit as well; players who knew how to curate an authentic emotional experience for those around them stood to gain.

At the center of the market was a peak into the economic heart of the Metaverse: the emotional exchange. A chalk board listed the emotional spot price, the rate of exchange for those drips and drops of emotional quanta flowing into and out of people’s accounts.

Officially called feel credits, but more commonly referred to as feels, FC were the hard currency of the emotional economy, a form of frozen emotional wealth crucial to the dynamic emotional exchange.  Across thousands of different worlds and subspaces within the Metaverse, the emotional economy was the only real constant. A data visualization layer showing the emotional economy would reveal a colorful flow of emotional streams in constant exchange between players and the world around them.

The real magic sauce of the Metaverse was the emotional blockchain, encoding neural patterns from real-time biometric data into quantified emotional responses. These emotional quanta would then draw down the FC account of players as they reward those delivering emotional experiences. The richest individuals and corporation of the Metaverse were those that had learned how to consistently provide compelling emotional experiences to players, often drawing them into addictive storylines that could go on for years.

And players could not get enough of the Metaverse. In the past players had spent vast sums of legacy currency to keep their FC flowing, but increasingly players were making a living within the Metaverse which they would exchange to support their real world lives. Economists estimated that if the Metaverse were a nation state, it would be the third largest economy in the world. The world economy was undergoing a new phase change, just as the information economy had eclipsed the factory economy, which had itself replaced the agricultural economy, now the emotional economy was eating the world.

There was some concern among academics as to whether the market structures of the Metaverse were adequately stable to support an economy without a constant inflow of capital from legacy currency, but the common folk didn’t preoccupy themselves with such worries.

There was just no appetite for worry in the Metaverse.

Because, of course not all emotions were equal. Supply and demand dictated emotional value in the Metaverse just as it had in the legacy universe. Dynamic futures markets exchanged vast sums of feels every day, a complex network of distributed intelligences tried to predict the emotional future of the Metaverse. What emotions would fall into or out of favor? Which emotional needs were being well served and which ones were not? Fortunes could be made for those who could best model the demands of the emotional market.

In the current state of affairs, the spot price on fear and sadness had steadily risen over recent months. Still, people seemed stuck in a state of constant excitement and wonder over the raw potential of this new Metaverse and few projects were appealing to more pessimistic emotions.

The situation had not been helped by a massive advertising campaign which had been hinting at a new technological breakthrough. Tonight was to be the big reveal for a technological innovation which had been billed as the most important innovation in the history of the Metaverse. Excitement and wonder were everywhere. Similar partied were going on around the Metaverse. This was the multi-dimensional launch party for the future.

The beast was a natural reaction to a world brimming with positive energy. They don’t know it but they hunger for fear and sadness. The beast was here to bring that fear by exploiting a golden opportunity for emotional profit. The beast would be hated, but he would also be rich. News about what was going to happen here would travel fast, bringing emotional income from across the Metaverse.

The music stopped, and the crowd cheered appreciatively.

The beast curled its lips into a sneer.

From a red and white tent emerged a man wearing a tailed tuxedo, accessorized with a tall black top hat and a crystal topped cane. The ringmaster had dark features and a curled moustache, a was wearing a wide-eyed curious smile that made him look to be somewhere near the edge of insanity. He walked in a purposeful stride up the stairs of the small wooden stage. The crowd cheered and clapped, directing a great tide of excitement towards the stage.

“Ladies and gentlemen,” announced the ringmaster with arms raised above his head in an open palmed gesture to quiet the crowd as they vibrated with expectation.

“Tonight, you have come to bear witness to the beginning of a new Metaverse. But what could this new technology possibly be? In this magical realm where anything can happen…”

To punctuate this the ringmaster opened his hand and a sparkling beam of white smoke shot into the sky followed moments later by meandering flakes of snow falling from the sky. The thick snowflakes descended silently, muffling the din of the crowd as they breathlessly took in the magical scene around them.

“In this magical realm,” repeated the ringmaster, “what experience could we possibly give you that do not already have? What could possibly be so important. What could possibly be so revolutionary?”

The ringmaster paused to allow the crowd to froth a little more with excitement.

“Without further ado, I give you the future,” his chest thrust out, the ringmaster threw his arm towards the red and white tent from which he had emerged.

Out of the flap of the tent stumbled a man dressed in dirty clothes. The man was pulling on a leather leash. At the end of the leash, a sheep emerged reluctantly from the tent. For a moment the sheep stood staring at the crowd, chewing on whatever it had been enjoying before it was pulled out of the tent. The crowd stared back in silence.

The man pulled the reluctant sheep up onto the stage, leaving the leashed animal and returning to the red and white tent with an annoyed expression.

“Behold,” said the ring master with a broad smile and a grand gesture of outstretched arms towards the sheep. The crowd stared back silently as the sheep continued to chew.

“People of the Metaverse, what you see before you might appear just another simple representation of a farm animal, I assure you it is something much more than that. This is no empty avatar. Right down to the level of its cells and its very DNA this sheep is as real as you or I. This sheep is composed of a unique cellular structure from its stomach, to its muscles, to its brain. Capable of all of those biological functions which you might expect, from birth, to eating, to reproduction, and even death, this is a real sheep.

This sheep does not simulate life… it is alive.”

The ringmaster paused as the people processed what this could mean.

“We, the people of the Metaverse, are but visitors to this realm but this sheep is among the first true inhabitants here. Ladies and gentlemen, welcome to the birth of Metareality.”

As the crowd erupted in cheers and applause there was a crash as the beast landed on the wooden stage in absorbing the fall into crouched posture. In a single motion, the beast swatted the ringmaster from the stage and took the head of the sheep within its powerful jaws. Blood poured from the mouth of the beast as it swung the sheep back and forth.

With a flick of its head the beast hurled the dead animal over its shoulder, where it eventually landed in a heap of flesh against the stone wall of the church.

In a deep growling voice, the beast bellowed at the crowd.

“Welcome to the birth of destruction, the birth of war and pestilence, the birth of loss and regret.

Welcome to the birth of death”

There is a saying that those who like sausages should never see them being made. Often this analogy is applied to political backrooms where idealism is ground down into a product amenable for mass consumption. As go sausages and politics so goes modern medicine; those who consume it probably shouldn’t look too closely at how its made.

Martin Shkreli is the CEO of Turing pharmaceuticals, the company that recently raised the price of it’s anti-toxoplasmosis drug Daraprim by %5000 overnight and in the process sparked a vitriolic public reaction to the soaring cost of drugs across the pharmaceutical industry.

The problem for patients in need of Daraprim (usually HIV+ patients with compromised immune systems) is that they will likely die if they cannot access the drug. Thus, no matter what the cost of the drug, patients, or more often insurers or government programs, will be forced to pay for it. While I sympathize deeply with patients who are being forced into bankruptcy to even keep up with co-pays for such expensive treatment, I think Shkreli is simply doing the ugly sausage making which is necessary to survive in the modern American pharmaceutical industry.

Daraprim is far from an isolated example of the incredible growth in the costs of medicines being seen across the pharmaceutical industry. Soliris for example, a drug made by Alexion pharmaceuticals to treat rare childhood blood disorders, has been called the most expensive drug in the world. It is estimated that Soliris costs as much as $700 000/year for patients that must remain on the drug for the rest of their lives, but the true cost of the drug is unclear because the drug-maker negotiates a separate deal with each government or insurer that buys the drug. What is even more interesting about Soliris, is that the company quietly helps patients in efforts to use media campaigns to encourage governments around the world to complete negotations with Alexion and start paying for the drugs (see the video below).

Importantly, Alexion and Turing pharmaceuticals both insist that no patients are dying because they cannot afford to access their drugs. The company themselves will help uninsured patients to find government or charity programs to pay for the drug, and in some cases will even donate the drug directly to the patient. The company has a direct interest in finding ways for patients to pay for drugs, and it is generally not good business for anyone to let the patients die.

The problem this model poses is that the governments and insurers distribute the cost of drugs over society and thus have the ability to pay the extremely high costs of these drugs and pharmaceutical companies work under an imposed monopoly while treatments remains on patent. If individuals were required to actually pay for these drugs out of pocket, it would simply be impossible to charge $700 000 for treatment. Similarly, once generic manufacturers are allowed to start creating their own versions of pharmaceuticals, the costs of drugs often drops precipitously. Thus, the system conspires to allow manufacturers to price drugs in a way that is independent of market reality.

The argument in support of such a system is that the R&D necessary to research a drug and bring it to market is extremely expensive and extremely risky. The cost to bring a drug through clinical trials has been estimated to be in the billions of dollars, much of this due to the failure of drugs which turned out to be unacceptably ineffective or dangerous as they advanced through the pipeline of clinical development. Even accounting for the oft cited fact that pharmaceutical research starts with scientific research funded by and performed in public institutions, bringing a drug to market is incredibly expensive.

Lets not mince words here: the costs of modern drugs is 100% about (a) profit, (b) recouping R&D costs, and (c) generating sustainable support for future R&D. The cost of actually manufacturing drugs is a rounding error in comparison to this. It is also important to keep in mind that investors a reasonable to expect profits to be high due to the high risk and relatively short patent window for pharmaceutical sales.

In some ways, pharmaceutical companies are simply keeping up with the explosive growth in costs throughout healthcare. Hospitals have been charging unbelievable amounts of money for basic services for many years now. By distributing the costs of medical care across the commons, the medical insurance industry allows patients to receive the a level of care that is greater then an average person could normally afford, but this also divorces the costs of such care from market realities.

Just as any other capitalist companies would do, pharmaceutical companies are simply exploiting this system as far as they can. Pharmaceutical companies that fail to properly exploit these vulnerabilities and maximize profits will ultimately be eaten by Wallstreet sharks like Shkreli.

In 2011, KV pharmaceuticals won approval from a drug against pre-term birth called Makena. Use of the drug would drive up the cost of injections to prevent pre-term labour from around $250 to around $25 000. Following public outcry and congressional investigation, Makena cut the cost of the drug in half but eventually went into bankruptcy. In 2014, KV was purchased by AMAG pharmacetials which is now raking in massive profits from record sales of Makena (see article).

Public backlash is not an effective check on pharmaceutical profiteering.

Where we may win symbolic victories against people like Shkreli or companies like KV pharmaceuticals, we are losing the war. Government regulation of drug costs is possible, and could really make a difference in the costs of drugs but I fear any intervention tends towards weak controls on drug costs and is unlikely to go to the lengths necessary to fix a fundamentally broken drug development system.

So what can we do to really address the quagmire of pharmaceutical development? If the problem is that R&D is expensive and risky, then we must find a more efficient means to fund pharmaceutical research and development. 

In his TED talk, Roger Stein proposes a radical new model for achieving just this. He proses that we should establish an equity megafund to spread the risk of drug development out over a larger number of drug candidates. By spreading risk, such a fund could provide the capital needed to perform the expensive clinical trials needed to gain FDA approval while providing reliable returns necessary to allow large investment funds like pension plans to stomach the risky venture of pharmaceutical innovation.  While such a model would not completely remove the profit incentive for companies trying to bring pharmaceuticals to market, it might go along way to decreasing the risk and thus the kinds of returns that companies expect with successful drugs.

I wonder if we could perhaps go a step further than such a megafund, and actually require that those companies involved in the research side of the pharmaceutical industry not be involved in the production and sales side of the business. What if the last step for FDA approval after a successful phase III clinical trial was for the drug developer to sell the rights for said drug on the open market to a drug producer.

By forcing the R&D company to sell off their drug to a pharmaceutical production and sales company, this would demand that a clear accounting of the presumed value of said drug is made. This would give governments and private insurers a real target on which to base negotiations for drug prices. Perhaps if we could sever the risky business of pharmaceutical R&D from the much more hum-drum business of producing, marketing and selling those drugs it would go a long way to simplifying drug pricing negotiations between drug manufacturers and insurers.

Unfortunately though, I think it would do little to bring down the overall cost of drugs. Because the market value of a drug is in the end set by whatever a drug producer thinks it can charge for a drug and we still are unwilling to put any reasonable limits on what we will pay for life saving drugs, the fundamentals that drive drug prices up is unlikely to change.

It comes down to what has been called one of the most important economic questions of our time. How do we inject economic reason into medical decision making? We must at some point decide to say no, that is too much to spend to save someone’s life. Insurers and governments simply must put a price on human life.

If we want to pay reasonable prices for drugs, we are going to have decide what constitutes reasonable.

In the end, that is the unavoidable sausage making of the pharmaceutical industry, and it’s the sausage making of capitalism. Captalism demands that we determine a reasonable value of everything, including human life. As long as we are unwilling to decide on a dollar figure for what constitutes reasonable medical expenditure, the industry which is vital to keeping so many people alive and well is going to continue to balloon without limit. 

This is the long delayed third in a multi-part series (part 1, part 2) on what I predict is one of the most important ongoing technological trends, the decentralization revolution. By creating a way for the transfer of value to be performed over a trustless distributed network Bitcoin has already changed the world but Bitcoin is only the tip of the decentralization iceberg.

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What would it mean if you could truly trust a government to do what it says it will do? And I don’t mean the kind of soft-trust that we put in governments today, where we trust that the checks and balances that are supposed to keep governments honest (or at least mostly honest), I mean what if you could trust your government like you trust an (open source) operating system? What if you could trust a government like you trust math?

In my last two posts I described how decentralized cryptographic networks are creating a new gold-standard in the establishment of trust (1), and how it is trust that defines the flow of power in human societies (2), now I want to elaborate on what it might look like if and when we apply the principles of decentralized crytography to governance.

What would it look like if the key institutions of society, everything from schools to corporations and even national governments, were built on decentralized cryptographic systems? Well to find out, lets try envision what a cryptography might have to offer for a small to medium sized community. What follows is a fictional account of how embracing decentralized crytographic technology could revolutionize our expectations of government transparency and efficiency.

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Welcome to BitVille

When one enters BitVille they might be forgiven for thinking that this town is just like any other. It is clean, but not necessarily cleaner than any other town, and the people are happy, but not necessarily happier than those in any other town. The economy is doing well, but not a lot better than any other town in the area. BitVille is pretty much indistinguishable from any other well run town, but it is well run. Over the last several years, BitVille has embraced decentralized cryptographic technology similar to Bitcoin, and according to those behind the transition they are a model for how local governments of the future will operate.

“The most important thing is that we have regained the trust of the citizens of BitVille,” says Clara Barnes the city manager who has overseen the implementation of much of the cryptographic technology in BitVille.

“Having proud citizens who feel invested in the success of their town is absolutely the most important factor in the success or failure of a town. Everything else falls apart if people don’t feel they can trust their governments. In BitVille we know exactly what a loss of trust looks like. The city was losing millions in bogus contract competitions and inefficient bureaucracies, the schools and roads were falling apart, crime was going up, there was garbage on the streets, and people had lost faith in their city.”

A few years ago, BitVille was collecting and spending 15% more tax money per capita than cities of comparable size, yet their infrastructure was falling apart. When Barnes took over the job of city manager, she was tasked with figuring out a way to both cut down on city spending and increase the service standards for city services, a seemingly impossible task. But Barnes had a secret weapon: a background in cryptocurrency.

“So we issued a cryptocurrency” Barnes said, letting the statement hang in the air for a minute.

Barnes went on, “we started small. We issued a the CityBits cryptocurrency, pegged at 1:1 with proven USD city funds on the Ethereum ecosystem. CityBits are exchanged through a single webportal to buy or sell them using other cryptocurrencies or electronic cash transfers. At this point we are also working with local banks and businesses to allow people to use CityBits around town, but its been a relatively slow uptake for this.”

“Is it a currency or a tool then?” I ask

“There are also some tricky legal questions about whether a city can actually issue a floating currency of its own, so we envision CityBits really as more of an administrative tool than a true cryptocurrency.  It is a secure means of managing city funds in a transparent and efficient manner.”

“How did you get started with this system?”

“The pilot project used CityBits for executive payroll at city hall. Most of us set up automatic exchanges for the bulk of our CityBits to be converted to cash transfers, so the system is pretty invisible to us now. It worked seamlessly almost from day one, and it was love at first sight for our payroll office.

We have since expanded CityBits to function as the backbone for all payroll at city hall, and we didn’t stop there. Over 80% of procurement for the city is also administered through CityBits. Vendors are required to accept payment in the form of CityBits, which again can be exchanged for cash through our Webportal any time.

Earlier this year, we launched CityBits contracting platform. We are now able to host the entire bidding process, contracting, and implementation, of city projects on the CityBits blockchain. It still has some bugs to work out, but when fully implemented, we will require all contractors to accept payments exclusively in the form of CityBits.”

“So the results have been mostly positive?” I asked.

Barnes answered with a gleam in her eye, “the change has been dramatic. Human resources, payroll, accounting, and managers in every department are thrilled with the new system. Simple web interfaces make it extremely easy for managers to authorize transfers, and track where funds are going in real time, and in the future. The citizens get to see almost in real time how city hall money is being spent, and is planned to be spent. Money in, money out, its all very transparent and very clear, and most importantly it inspires the trust of the taxpayers.”

“What are your long term plans for CityBits?”

“In the medium term I would like to see transactions from citizens, such as paying parking tickets, done through the CityBits system. This would make it much easier for citizens to see exactly where the money goes when they pay money into the city. The feeling that money sent into City Hall is simply going into a bottomless pit is a real problem which I feel CityBits can address

Also, it would be great to start to integrate some more smart contracting into the system. For instance, with snow plow contracts we could set up an automatic payout based on the snowfall for that particular year.

In the very long term, I think the sky is the limit for CityBits. We could eventually tie everything from official power structures, budgetary approval, citizen oversight, and voting into the system. For instance, the power of the mayor to approve budgets might be built into a CityBits charter which matheamtically limits their ability to approve spending to 4 years. This would be a mathematical limit to political power. CityBits could help create a system which fundamentally enfranchises citizens with control over government which citizens have a right to.

CityBits can help to create the kind of 21st century City government that the citizens deserve.”

That gleam was back in Barnes’ eyes.

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The story of CityBits is the story of cryptocurrencies. The real magic is their scalability, a cryptocurrency like CityBits could start as a simple means to administer employee payroll that could one day grow up to define the legal charter of an entire city. Equal parts incremental improvement and revolutionary breakthrough, both an arcane administrative tool and a radical new mechanism of transaction, like other technological breakthrough that have preceded them, cryptocurrencies will become what we dream them to be.

If you liked this post, you might also like Cryptocontracts will turn law into a programming language.

In this age of eternal economic recovery, I seem to hear a lot about how important the idea of austerity is. We must be reserved, we must make hard decisions, and we must be selective. Somehow if we cut deep enough, we will come through with an efficient machine, ready to power us into the next golden age of innovation and economic plenty.

This belief that only through maximizing selective economic pressure can we maximize economic growth reaches its harshest heights when it filters down to the level of individual workers. Plenty of people seem to genuinely believe that if we just let the people starve a bit more, if we take away what few social benefits they have, then they’ll really have the hunger needed to drive them to find a job and push the economy onwards and upwards.

The view that maximizing selective pressure makes for the best economic evolution is often justified through comparisons to the law of natural evolution. But, this belief that the strongest organisms evolve when competition is at its most cut-throat stems from an incomplete view of the nature of evolution.

Evolution is not some cold algorithm seeking to maximize efficiency of resource utilization through mutation and survival of the fittest. Biological adaptation is a flourishing of possibility that requires not only resource-limited selection but also needs ecological surplus. Speciation is maximized in a supportive an ecosystem that provides both plentiful resources and competition. Species must have the chance to mutate and create new forms. Species that have no established niche in which to prosper have no chance of adapting to new environments through evolutionary innovation.

Natural selection is the product of both competition and surplus! It is in thriving, healthy, ecosystems, (think of the rain forests of the world) where nature best explores the boundaries of possibility. Indeed, the great explosions of biological differentiation always come as great surpluses of new resources are discovered and capitalized on by innovative species.This is what occurred in the rapid phases of colonization of the land by insects, then by dinosaurs, and eventually mammals.

Nature can even be downright wasteful at times. Sexual display characteristics like antlers or the peacock tail are perfect examples of the kind of beautiful adaptations that prove nature is not some utilitarian algorithm seeking to maximize efficiency. We humans also have ecological surplus to thank for some of our best traits. Female human breasts are actually the direct equivalent of the peacock’s tail, providing no real utilitarian benefit yet remaining on display throughout the woman’s life, unlike primates where breasts enlarge to produce milk only when needed.. The results are energetically wasteful yet undeniably alluring and beautiful.

Humans also have another energetically costly lump of fat that is thought to have evolved as a consequence of ecological surplus. New theories suggest that humans were able to evolve such ridiculously large brains (per body size) only after we discovered a readily available source of protein-rich food in the form of fish found in coastal regions. Fascinatingly, it has also been suggested that this period of semi-aquatic existence may have also lead to the loss of fur in our ancestors (see the Aquatic Ape Hypothesis).

The view that evolution is strictly about species living on the edge of survival and competing for a limited pool of resources is a dangerous oversimplification. The fact is that the evolution of all of the wonderful forms of life around us is as much a product of surplus as is it of selection.

Nature innovates best when it has space to do so; we should seek to apply the same thinking to economics.

I deeply believe that economic innovation lives by the same rules as natural selection. Yes, we must have selective pressure of the market to allow the best and brightest to flourish, but we must also need to create a supportive environment of surplus where people to experiment with new ideas, whether in the sphere of business, culture, education, philosophy, or any other discipline that has been so vital to our economic advancement.

The politics of neo-Darwinism say that we maximize innovation by maximizing the pressure on workers to innovate means to create value for the economy. But isn’t it already clear that this is not the case? How could we have innovation without having the time to educate ourselves or the capital to empower our business ideas? It is no wonder that innovations have always come predominantly from the middle and upper classes where they are afforded the economic breathing room to experiment with new ideas.

We need surplus in our lives in order to power the mutational process of economic innovation.

Now, I should be clear that I do not think it would be wise to turn our backs on the market altogether. Just as nature needs a balance of selective pressure and resource surplus in order to maximize evolutionary innovation, I believe that if we can find the better balance between selection and surplus, then we will be better able to power economic innovation.

In pursuit of this balance, I have come to believe that it is time that governments of the world take hold of the idea of a basic income to power the next great wave of invention that will push our economies forward. Basic income means basic freedom for all men, and it is this basic freedom to turn away from dead-end jobs and wasted lives that people need to power their innovation. Yes, jobs must continue to exist, but it is no longer economically efficient to force people into unsatisfying work simply to meet their basic needs.

Economic Darwinists have it backwards. Whereas they argue that a strong society can only come from a strong economy, I think that a strong and free society will necessarily lead to a strong economy. 

If we seek to first build a better society, then we will have a better economy.

What if oil tanker trucks had legs? Imagine millions of great lumbering beasts with bellies of black gold, gathered in roving herds on an endless frontier. An inexhaustible supply of crude oil just walking across the grasslands waiting for those with the courage and expertise to go out and take it. Each animal worth tens of thousands of dollars, the beasts are chased down by brave men with fortunes in their dreams. Teams of charging horses raise clouds of dust as hollering men lean from speeding wagons to fire bullets and spears into the fleeing giants. A frontier town becomes a boom town; the new epicenter of an energy economy based on the capture, processing, delivery, sale, and resale of beast oil. Steam trains deliver the black stuff to consumers in the old world and new, always clamoring for more of the stuff, for heating, lighting, and industrial applications.

Believe it or not as little as 160 years ago, the world was living through this exact bio-steam-punk existence. Only instead the oil-filled beasts were found not on the frontier, but in the endless oceans. Sophisticated wooden ships sailed waters from the arctic to antarctic, and from Brazil to Africa in search of whales and the oil in their bellies. Places like New Bedford, Massachusetts, became the hub of an energy economy which delivered the oil all over the world. Next time you go to flip on a light switch, take a moment to appreciate that just a century and a half ago, people all over the world were using the rendered fat of giant ocean-dwelling mammals in order to light their homes!

Whale oil was used in staggering quantities, mostly for use in illumination, but also other industrial applications such as soap production were common. Whale oil was so popular, by the mid 1850’s tens of thousands of whales were being slaughtered for whale oil each year. Whale oil was a booming industry, but it was also becoming more and more difficult to find enough whales, as those waters near the east coast of the United States had rapidly become depleted. The price of whale oil was on the rise, hitting a high of between $1.30 and $2.50 a gallon (the equivalent of ~$37 to $71/gallon in 2015 dollars).

It was around this time that a Canadian chemist by the name of Abraham Gresener had identified a means to derive liquid kerosene from coal, oil or bitumin. Kerosene burned more cleanly and was much cheaper than whale oil, at ~60cents/gallon. The superior quality and price of kerosene as an illuminant marked the beginning of the age of oil power and a steady decline in the whale oil industry.

Thus, oil saved the whales… or so the story goes.

But of course, it’s not so simple.

This article from PBS Newshour lays out some of the interesting complexity surrounding the transition from whale oil to kerosene for lighting homes and businesses in the mid 19th century. In addition to kerosene and whale oil, another popular fuel for illumination called camphene was made up from a mixture of alcohol (distilled as normal) and turpentine (a pine tree extract).

By all accounts, camphene was by far the leading lamp fuel.
In 1862, a tax of $2.00 a gallon was imposed on beverage alcohol and camphene was forced off the market. Since the Pennsylvania oil fields were in the process of opening, the whales really had nothing to do with the emergence of the kerosene industry.

Thus, it seems that by imposing an inordinately high tax on drinking alcohol, the US government inadvertently forced a real competitor for kerosene off the market. Additionally, the US civil war put a strain on both the whale oil industry, as ships were diverted to military use, and the turpentine industry, as much of the southern pine forests were cut off from market, allowing the emerging Pennsylvania petroleum industry to flourish.

While this serves as an interesting side story about the involvement of external factors in technological turnover, the real problem with the “oil saved the whales” story is that the whale hunting industry didn’t die until long after kerosene was already replaced by the electric light bulb as the illuminant of choice. In fact, the peak of whale hunting for many species didn’t happen until the 1960’s (ref)! That’s right, the whale hunting industry was very much alive and well as little as 50 years ago.

While the price of whale oil never again hit the kinds of peaks that were seen in the 1850’s, the technology of oil powered ships allowed for increasingly economical extraction of whale products throughout the 20th century. Whales were a cheap source of high-quality animal fat, meat and bones, and the further ships went, the more whales they found and as long as they could turn a profit by harvesting whales, they would. While running out of whales might have eventually stopped the whale hunting, it was actually an international backlash against the hunt, and eventual international regulation which put a stop to the industrial scale extraction of whales. We decided that we didn’t want to or need to hunt whales any more, and so we put a stop to it (for the most part).

The story of whale oil is as complex and nuanced as any story of technological turnover and societal progress. The story of technological change is never a neat and tidy process because things just never happen in a vacuum. Seemingly innocuous or irrelevant factors like a new tax on drink beverages, or the outbreak of civil war can end up having huge consequences on what technologies are adopted and what direction we move as a society. Still I think it puts a powerful point on the story that in the end it was a ground level moral shift and international regulation that really put a stop to whale hunting.

Given the opportunity and education, we can collectively make the right choice.

Sorry for the lack of posts lately. Still working on the upcoming Thought Infection ebook as well as a really thought provoking next post for the Decentralization and Future World order series. For now just a short thought about a possible scary application for an emerging technology, weaponized focusing of wireless power.

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Some of you may have heard about Steve Perlman’s startup which is pursuing the use of computed constructive interference of radio waves to greatly increase signal strength and throughput for wireless networking. In demonstrations of the technology Perlman has shown that it can easily transmit super high definition video to many handheld devices simultaneously, something that even 4G networks would struggle to do today (see here). News has recently been released that the so-called pCell technology is set to launch a demonstration network in the San Francisco area. The network will be able to offer speeds fast enough to compete with traditional wired internet with enough throughput to allow unlimited data as well.

While the launch of this network is extremely exciting and bodes well for the future of 5G wireless service what really has me excited is another as of yet unproven application of the computed constructive interference of radio waves. It has been suggested that using a similar technology to pCell, it might be possible to efficiently beam power directly to a particular device (see a great post on the subject here)

Let me say that again, it might be possible to beam power over a large range directly to a device. 

To say that this would be a game changer is more than an understatement. Blanketing an area with a few of these power transmitting antennas could potentially lead to a few of the following science-fictionesque scenarios:

1. Drones that need to carry only a minimal battery for backup purposes could allow the delivery of almost anything by drone. Imagine getting your groceries delivered by drone.
2. Electric cars that do not require expensive batteries.
3. Cell phones and other devices that do not ever have to plugged in.
4. High power implanted medical devices.
5. “Wireless” laproscopic surgery.
6. Cheap electric air travel?

If it can be done (relatively) efficiently and safely then beaming power directly to where it is needed, when it is needed would instantly change the world. My question is, if you could use this technology to focus power anywhere within range of a few radio antennas at any time could this be used as a weapon? I am not sure how much power could be realized in the absence of a specific receiver antenna, but if power could be directed to any point in space regardless of antenna presence this would lead to a pretty scary weapon (perhaps this would need to use microwaves rather than radio waves?).

Of course any of the above technological applications for wireless power could be applied as scary weapons, but the potential that you could just focus power anywhere in space represents would be more than a bit concerning. It would mean the ability to simply cook the brains of your enemies who are anywhere within range of your antennas. No need to line your enemy up in your sights any more, simply send out a nanodrone swarm to map the combat area and zap anyone who your deem to be of threat.

On one hand, this kind of technology could lead to the ultimate smart weapon system, allowing those who wield it to exactly and selectively eliminate just those individuals who are of threat. Depending on exactly how focused this energy can get, it could even be envisioned that specific targeting could allow sub-lethal application to incapacitate rather than kill targets. If you could really accurately target the technology, it might even be possible to zap the right brain cells to pacify or otherwise change the thinking of target populations (time to get out those tinfoil hats everyone!).

On the other hand though this kind of technology would deliver unprecedented power into the hands of those who wielded it. Imagine a world where military, police, or hackers could take control of the wireless power infrastructure and simply kill anyone at will within that sphere of control. That is a pretty powerful tool for whoever wields it to tell you what to do and how to do it.

The killer apps of wireless power are clearly compelling enough that we need to pursue this technology, but at the same time it raises concerns about the darker side of its application. If living in a magic bubble of wireless power is going to also mean conceding absolute control to whoever controls the network, then that is a bargain I am not sure I want to make.

This is the second in a multi-part series (part 1 here) on what I predict will be one of the most important technological trends of 2015, the decentralization revolution. By creating a way for the transfer of value to be performed over a trustless distributed network Bitcoin has already changed the world but Bitcoin is only the tip of the decentralization iceberg.

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What is power?

Physics gives us a simple definition of power as a measure of the rate of doing work. For example, when you turn on your microwave a certain amount of energy is being transferred directly into the molecules of that delicious pizza pocket. The rate at which energy can be transferred into the food would be the measure of power for your microwave, usually around 1000-1500 Watts (or 1-1.5 kilowatts). Power can similarly be measured for anything: where your microwave produces about 1kW of power, an average American vehicle delivers up to ~150kW of power, an industrial wind turbine generates ~1000-5000 kW (or 1-5 megawatts), and a nuclear power plant delivers ~1-5 million kW (or 1-5 gigawatts). 

This definition of power seems different from our more general use of the term when we talk about how powerful an individual or organization is. This kind of interpersonal power refers to the ability of an entity (such as an idea, a person, or an organization) to wield influence over people and affect the political or economic course of events. Perhaps though, these two definitions of power are not so far apart as they might seem, just as the power of an electrical plant is defined by how much work can be done using its energy output we can define interpersonal power (and by extension social, economic and political power) as the influence that an entity can have on how people expend their energy in the world.

The power an idea has over me is defined by how strong an influence that idea has in my thinking and thus how I act and expend energy in the world. For instance, I have a very strong belief and experience that two solid objects will exert force on eachother, thus I could predict that a moving baseball bat is really going to hurt if it hits me and I will move to avoid it.

Deep-seeded ideas like object-object interaction can be arrived at through direct observation of the world, but direct interaction is not the only route for ideas into the human brain. Many of our ideas about the world are instead downloaded into the brain as ideas transferred from people we trust. Trust allows us to outsource our cognitive analysis of the world, and thus understand much more than can be learned through direct interaction.

Trust is how we make predictions in a world that is too big and complicated for one person to understand. 

We can place in trust in anything: people, ideas, institutions etc. It is where we invest this trust that determines how we will behave in the world. From the time we are born, we must trust the ability of others to provide for us and teach us about the world before we even learn to trust our own senses. This essential role of trust also continues on into adulthood; I absolutely cannot know for sure that my food which was grown by a farmer I will never meet is going to be safe to eat, but I have to trust in the natural, economic and political structures that deliver food to my plate.

It is not an idea which is easily articulated, but I think answer is clear: Trust is a necessary underpinning of the interpersonal power we have over each other.

Trust is power.

It is by gathering together our disparate threads of trust we have been able to build the societal level power structures of civilization that we see today. Through our collected trust, centralized institutions and the ideas that underpin them have amassed great power to influence how people live their lives. In the past, trust has been concentrated into many religious and governmental organizations, but today I think the dominant institution of trust is economic.

We put trust in a great many things today. Governments, laws, police, religious institutions, corporations, doctors, but these pale in comparison to our collective trust in money. No matter where your go money can make things happen, and people have a great deal of trust in that fact. More than we trust in governments or religions, we have a global trust in the power of the dollar (in whatever form) to influence the actions of people. Religious or political fundamentalists can still create a problem once and a while, but ultimately their power is still measured in dollars and cents. Any organization without means to raise funds to support their operations has little hope of accomplishing much of anything in the world today.

Collectively we believe that a dollar has value, and in turn we as individuals put our trust in that collective value. The collective trust in the dollar is so powerful that the dollar itself has actually become the dominant metric of power. The dollar is a stand-in for trust which we lean on to establish productive relationships with untrusted individuals. If you want to make me produce food for you, then you can pay me money in order to influence me to do so with relatively little trust outside of that financial arrangement.

Money is distilled trust. 

The problem with the fiat dollar is that it is only as good as the institutional foundation on which it is based. Currencies are only as good as the trust in the institutions that support them, a fact that is obviously on display in the market dynamics of the foreign currency exchange. 

Cryptocurrencies offer us an alternative means for establishing trust between each other, and their advantages are manyfold. Instead of being based on a fallible and corruptible system of governments and central banks, cryptocurrencies have clear rules on how value is injected into the network, how it can be transferred, and in some cases how it can be destroyed. Cryptocurrencies offer mathematical predictability.

Cryptocurrencies are also much more resistant to corruption due to a flat network topology. That is to day, that like the checks and balances that limit the power of any one individual in a government, crytocurrency networks decentralize their trust very evenly over the network.

These advantages of cryptocurrency are going to become increasingly clear as normal collapses in fiat currencies around the world, something that happens with regularity and is in no way out of the ordinary, will naturally lead people to seek alternate stores of wealth. Whether it is the Russian Ruble, the Argentinian Peso, or some other fiat currency, complex currency systems based on human control are simply too unpredictable and too corruptible to compete with the mathematical simplicity of cryptocurrency. Perhaps it will not be Bitcoin that ultimately gains marketshare as the easiest and most commonly used cryptocurrency, but some form of cryptocurrency is here to stay.

In a world where trust is power, the simplest and most reliable system to establish trust between individuals is destined to win. If fiat currency is distilled trust, then crytocurrencies are a much stronger brew.

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The beauty of crytocurrency goes far beyond simply holding and transferring value. Because they exist on electronic networks, decentralized technologies will allow us to program trust into our world in a way which has not been possible before. Through things like smart contracts we can use decentralized tech to build mathematically defined structures as simple as an agreement to sell goods, to something as complicated as a government. In my next post I will discuss the exciting possibility of cryptogovernance and its potential to reinvigorate inefficient institutions.