Saturday, December 23, 2017

"The Bitcoin Paradox: Why cryptocurrency will always be political."

You are an inmate in a luxury hotel. [no, your name is not Al-Waleed] Locked in your soundproof suite, you hear nothing and see nothing. Liveried butlers bring you meals on silver carts. You have plenty of time to read, think, and listen to music. All the riches of culture can be called down at your whim. But you are trapped, too, and desperate to talk.

One day, you look under your dinner service and discover a note. ARE YOU THERE? You write back, tucking your reply under the plate. YES, WHO ARE YOU, WRITE SOON. In the morning you find replies. It doesn’t take long before you realize that notes are being shared, passed, and shuffled, among perhaps dozens of inmates being held in dozens of rooms.

Communication is easy, but it’s hard to tell who knows what. Messages pass one another in corridors; conversations fragment. When A replied to B, had she received your message yet, or was she reading C’s? Did she ignore what you said because she didn’t like it, or because it had yet to be delivered? When D proposes a simultaneous attack on the wardens as they deliver dinner, how many people received it? When A confirms to D that she’s in, will D see the message in time? Will D know that B saw it?

Here’s one solution, if a strange one. Write a message with a very difficult mathematical problem on it—a problem so hard that it would take a month of concentration to solve. Now wait.
Perhaps nothing happens. But perhaps, just perhaps, you find the answer under breakfast one morning.

There’s a room sunk into the ground at the Bandelier National Monument, a few miles from Los Alamos, New Mexico. In plain view for seven centuries, among the ruins left behind by the native peoples who lived there, the circular room, about the size of a high-school classroom, is called a Kiva. A bench formed out of straw and mud used to run around the perimeter.

One thing Kivas were used for is politics. The circular floorplan made it possible not just for everyone to be heard, but to be seen. When someone spoke in the Kiva, he could see his fellows and his fellows could see him. The circle also meant that his fellows could see each other seeing him; at a glance they could take in not only the speaker, but the faces of their colleagues doing the same.

That matters because politics is not just what you think and believe. If I’m trying to do something that requires your cooperation I need to do more than say I’m willing. I need to know that you know I’m willing.

In cognitive science, we call this common knowledge. To know something is one thing; but to know it with others, know that others know it, and know that they know that you know it, and all the way up the tower—this is another thing altogether. It’s what you need for costly cooperation. What teammates on the field and business partners in the boardroom signal when they look each other in the eye is a mental moment at the origin of society
Common knowledge is power. It is not enough to dislike a government; you need to know that others do too. When you’ve built that common knowledge in secret meetings and basement cafes you might go out into the street. In a crowd, common knowledge is obtained without needing to look: The roar of a crowd is the roar an entire crowd can hear.

Totalitarian societies know the power of common knowledge very well. When Gary King’s Institute for Quantitative Social Science reverse-engineered the Internet censorship practiced by the Chinese government, they found that the government cared less about insults and criticisms than one might expect. What it censored aggressively were social media posts making plans to meet in person. Online, talk is cheap: but face-to-face people can build common knowledge.
Back in your luxury hotel prison, the moment comes:...