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Okay, we're going to get started. Thank you everyone for coming out.

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I think I know most of you. For those I don't know, hi, I'm Hannah. I'm one of the
organizers.

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We also have Ian here, and Chris, who I think has exited the room, but he's around
somewhere.

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So we're going to talk about prediction markets today with Paul.

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But first, last chance to participate in the raffle if you want to win any of the
cool stuff back on the table over there.

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The Don't Trust, Verify, Hats, Cold Cards, Open Dimes, that good stuff.

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You can go to that website right there, bob.shy.org, slash donate, and buy some
raffle tickets.

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We're going to do that after the talk.

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So we are recording this, so if you don't want to be on video, just stay back there.

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I don't think we're going to record Q&A. Are we, Ian, we're going to stop it there?

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Yeah, okay. So the Q&A, when we get to the Q&A section, you will not be recorded.

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Pizza will be coming later. We got some really generous donations today, so thank
you to people who donated.

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So we have the budget for pizza. Yay.

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So that will be here soon. Please leave it there until we get to the Q&A, and then
we'll all get up and chat and eat pizza.

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We are going to mosey on down to the bar after this if anyone would like to join us.

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And we do do lightning talks before the talk.

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So that's – anyone can come up and tell us, you know, about some project you're
working on,

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whatever the case may be, for two minutes.

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So do we have any takers today? Does anyone want to come up and tell us about
something?

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No? Shy crowd? Oh.

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I just really want to quickly announce the conference is coming up.

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Okay, we'll make that –

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In case anybody doesn't know.

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Do it properly.

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I'm shy.

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Keep it brief. Come up here.

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Yeah, we'll be very brief.

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So for anybody who doesn't know, we have a large conference coming to Chicago called
White's Blockchain.

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It's the second year.

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It's going to be at Benju 610 on September 30th and October 1st.

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That's Monday and Tuesday.

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There's three stages over two days, 200 speakers, Fidelity, TD Ameritrade, Deloitte
are among the sponsors.

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And we have speakers from – everything from researchers with Monero and Enigma,
SDGrad,

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to the corporate side where we have, like, Samsung, SAP.

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I think it's falling asleep.

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And a bunch of corporate stuff, and then there's a track for the digital assets and
markets as well,

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obviously with TD Ameritrade and Fidelity.

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And if anybody wants a discount, there's a code, BOB100, all caps, B-O-B-100, for
$100 off tickets.

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So I just want to make sure everybody knows it's happening.

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All right. Thank you.

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Anyone else want to come up and tell us anything?

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No? All right. Cool.

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On to the main event then.

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So I think probably most of you are here because you're already familiar with Paul's
work, but in case you're not,

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we'll run through it briefly.

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So you've been interested in market governance and prediction markets your entire
life.

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That's true. Yes.

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Yeah, if you can stop it from falling asleep, that would be great.

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That would add a lot of suspense for me.

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I think.

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That got lots of attention and lots of interest, and he left his statistician job at
Yale to go build that.

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That's true.

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And then in 2016 started working on Drivechain, which is another really cool
project.

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We're not talking about that one so much today.

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We're talking more about prediction markets, and you also do a lot of research,

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which you publish on your website, Truthcoin.info.

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That's it.

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And he's going to be talking to us today about prediction markets.

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We're going to do a bit of Q&A during the talk, and we'll also have a Q&A session
afterwards.

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You have to unlock it.

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Unlock what?

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Oh, yeah.

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Slight technical difficulties.

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Standby.

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This is a very secure event.

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All the projectors and the Wi-Fi, everything is extremely secure here.

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Yes.

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There we go.

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Okay, good.

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That would have added a lot of suspense to the talk if I had to move the slide once
every one minute

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or whatever that was before it shuts off the thing.

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That would have been something.

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Welcome, Paul.

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Okay.

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Thank you.

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Thank you very much.

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Thanks, guys, for inviting me.

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Chicago is a super cool place.

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Yeah, so we already kind of went through this, so I guess I'm not sure if I really
should.

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I'm from Summit, Connecticut, and I have a background in economics and some math and
statistics.

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I did work for the Yale Department of Economics.

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The guy I worked for, Bill Nordhaus, won the Nobel Prize.

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He was the most recent winner of the Nobel Prize, which is kind of cool.

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So I feel like I should take credit for it by mentioning it.

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And then I have a bunch of Bitcoin.

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You know, I speak at Bitcoin conferences, especially the scaling conferences

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and some other conferences, and that's really great.

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But this is a talk about – oh, this is not sure.

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Can we zoom maybe?

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I don't think we are getting it 100%.

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It's not like full screen.

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Do you know what I mean?

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Like it's kind of –

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Oh, there we go.

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Oh, yeah.

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There we go.

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Oh, they made it much worse.

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All right.

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Let's see.

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Yeah.

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What is it?

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Yeah.

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I don't see that.

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Oh, there we go.

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Okay.

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Nice.

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This is a very – okay.

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No problem.

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Okay.

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So this is a – the topic of this presentation is an idea for getting the public
sector

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– and it's this scary red democracy blob –

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to substantially inherit some of the reasonableness of the private sector.

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So it's not about replacement, which most crypto cypherpunk stuff is.

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It is not about replacing the public sector with the private sector somehow.

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So it's about importing some features.

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And here's the talk in one slide.

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The problem is that politicians install bad policies into society and they get away
with it.

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And the solution is to make it easy to detect the imperfect politicians and get rid
of them.

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And specifically, we're going to create some blockchain assets whose ultimate
valuation reflects a politician's competence.

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So citizens are just going to glance at some prices right before they vote,

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and they're going to pick the – they're going to vote for the person who has better
numbers.

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So people might have this information, for example, just before they vote.

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And for every person running, those are the columns.

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They're going to give forecasts about how life could be if the person is elected.

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So you just compare.

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The first row gets how much the government will cost.

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And most people know that they're paying for that.

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And the second row is how economically prosperous the citizens are.

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The third row can cover all kinds of things like invasion, health care, mental
health, gun safety, whatever.

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That's kind of a macabre one, but this is just an example.

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A person will just – a voter will just look at the two columns and they'll just say,

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well, this is a better number, cheaper government, and I might earn more or someone
will earn more.

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And these numbers are kind of like the same.

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I mean, this one's better, but, you know, they're similar.

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So the talk is where do these numbers come from and why is anyone going to take them
seriously?

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Because it's easy to just put up a table here, but this is the –

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so the talk is going to give – there's going to be some background knowledge,

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and then I'm going to talk about why I think elections don't – you know, why they
have trouble working, let's just say.

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And then I'm going to talk about event derivatives, and then I'm going to combine
all this.

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And then the last point, we'll just ramble on and on for as long as it takes,

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but it will be about how to get this idea to be persuasive enough to actually make a
difference.

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So – but the meat of it will be the first four points.

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So the background knowledge that you need to have is that this idea is very old.

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I even have a slide later.

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This goes back – the general version of this idea goes back almost 1,000 years,

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and there's even a quote about betting on who will be elected pope.

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And this idea having been described as very old and widespread as of like the year
1507 or something.

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But even this specific idea of futarchy for democracy is also pretty old,

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and it's actually a favorite of a – well, okay, let me just stick to my notes here.

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This is why I always do this.

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Anyway, so the second thing is that I basically already implemented the idea,

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and the third thing is that there's no kind of weird scam ICO or any other kind of
weird scamming here.

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So I'm going to drop some names.

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This idea is a favorite of Hal Finney's.

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Hal Finney wrote this post.

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A lot of people think that Hal Finney was Satoshi Nakamoto.

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He received the first Bitcoin transaction.

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The idea is also a favorite of Robin Hanson's, who was endorsed by Ralph Merkle.

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Ralph Merkle built most of the technology that ended up in Bitcoin.

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This is a paper that was put out in order to convince the government to stop
interfering with prediction markets

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or event derivatives, as I prefer to call them.

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It's signed by a ton of people, and a lot of them have won the Nobel Prize or will
win the Nobel Prize,

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or they're just these huge names.

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So Hal Varians, chief economist at Google, Tom Schelling, Ken Arrow, these people
all won the Nobel Prize.

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This is just like a big – it's a big widespread list of extremely elite people.

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Put out a little two-page paper to try and get some types of gambling less
regulated,

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but they didn't succeed, hence the blockchain strategy for this project.

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So this talk assumes that someone will solve the so-called blockchain oracle problem
in order to make these assets.

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And I think that I've solved it, so there's nothing for you to worry about.

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I wrote this paper about it a long time ago.

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And here are some reviews of the paper, because going into that paper, that would be
a lot of work

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and it would make for a terrible talk, but you just have to take some of these
people's word

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and just kind of roll with it as being whether or not it's still worth your
attention to pay attention in this talk.

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But yeah, you can see there's Roger Ver, but there's also Adam Back, and then
there's Peter Todd and Andrew Polster.

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I think Andrew Polster is probably the brightest mind in the space, his critique of
design-wise.

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And so the paper spawned many, I would say all of the projects in this area,

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some of which I'm more proud of than others.

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But this one I like is the one at the top, which is that I oversaw its development
personally.

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It's a fork of Bitcoin Core, and it was assembled by two Bitcoin Core developers
over a period of about 24 months.

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And I run the project website where I put all the content.

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Like today's presentation, we'll eventually end up there.

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And here are some screenshots.

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I just provide these to give you an idea that this is all test, fake information,

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but there's still a lot of Vaporware projects in the space,

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and so I just thought it would be cool to have some screenshots for people to look
at.

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This information here, this price data, will be ultimately where those numbers from
the table come from.

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Here's some cool screenshots.

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So theoretically the project could be live with real Bitcoin by the end of this
year,

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but that's how software works.

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Probably it'll take another 100 years in reality, but it's almost there.

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But that's what everyone will say when they work on software.

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And I finally have to mention that there's no ICO or utility token.

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There is a second token, which often leads to misunderstandings,

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but the second token is more analogous to mining.

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So in Bitcoin, if you transact, you don't need to mine.

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In this project, the users don't need to know anything about the second token,

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and they don't need to own the second token.

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So only if you want to go into that line of work would you care about it.

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So the customers use Bitcoin only to create and trade in all the markets.

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It's a Bitcoin-only project.

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Okay, so that was some background information.

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So why is the public sector so disappointing?

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It's not like everyone hates it. I have a congressional approval slide later, I
think.

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But it's not just like libertarians are weird cypherpunks.

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This is a mainstream culture that the public sector is terrible.

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And it's really funny. You've got to watch.

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YouTube has Best of Mayor Quimby.

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It's really so funny if you are a libertarian person,

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and you just watch the things he says,

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and he blames problems on immigrants for no reason.

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It's really funny. And people just eat it up.

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And then, of course, the famous South Park episode,

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the giant douche versus the turd sandwich.

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I couldn't put that up.

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But it's just so funny.

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And when Eric Carpman rolls into the scene,

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and he's trying to get people to vote for the candidate he likes,

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and he just says,

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this is the most important election of our lives.

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And then you're just like, do people fall for that?

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But then in the real world, people always fall for it.

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It's very funny.

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So you have to have a theory.

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In order to improve something, you have to say, why is it broken?

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So my theory is really about feedback.

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So this is a basic feedback loop in the free market.

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You have a terrible product being sold.

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Customers hate it, and they stop buying it,

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which punishes the merchant.

230
00:14:26,000 --> 00:14:31,000
You've got to make or sell something that carry goods that people want.

231
00:14:31,000 --> 00:14:34,000
So a free market doesn't mean instant utopia, right?

232
00:14:34,000 --> 00:14:36,000
But it does mean that things improve.

233
00:14:36,000 --> 00:14:38,000
You have some recourse if stuff isn't good.

234
00:14:38,000 --> 00:14:42,000
Things improve basically as fast as they possibly can.

235
00:14:42,000 --> 00:14:49,000
So the public sector also has feedback, which is called voting.

236
00:14:49,000 --> 00:14:52,000
And when the government is too unsatisfying in any way,

237
00:14:52,000 --> 00:14:57,000
it can be dismissed with a majority vote.

238
00:14:57,000 --> 00:14:59,000
Now, it's a little more complicated than that,

239
00:14:59,000 --> 00:15:02,000
but it's not important to really go into the details of it.

240
00:15:02,000 --> 00:15:04,000
This is basically the gear of the machine.

241
00:15:04,000 --> 00:15:07,000
So you're firing people with this secret ballot.

242
00:15:07,000 --> 00:15:13,000
So the free market feedback differs from electoral feedback.

243
00:15:13,000 --> 00:15:15,000
We know that's the case because one of them works pretty well

244
00:15:15,000 --> 00:15:18,000
and the other one doesn't really work that well.

245
00:15:18,000 --> 00:15:19,000
Frequency is one difference.

246
00:15:19,000 --> 00:15:22,000
The market feedback fires every time a merchant loses a sale.

247
00:15:22,000 --> 00:15:24,000
That's millions of times per day.

248
00:15:24,000 --> 00:15:27,000
But the electoral feedback fires once every four or two or six years,

249
00:15:27,000 --> 00:15:30,000
however often the election is.

250
00:15:30,000 --> 00:15:32,000
But I think that difference is very small.

251
00:15:32,000 --> 00:15:35,000
The real difference is this idea that I'm going to call research

252
00:15:35,000 --> 00:15:39,000
because I couldn't think of another name for it.

253
00:15:39,000 --> 00:15:42,000
And there's more feedback than you originally thought

254
00:15:42,000 --> 00:15:45,000
because when a disappointing sale is completed,

255
00:15:45,000 --> 00:15:50,000
the consumer suffers and the desire to avoid suffering

256
00:15:50,000 --> 00:15:54,000
stimulates the consumer's search for alternatives.

257
00:15:54,000 --> 00:15:58,000
And I call that search effort research, for lack of a better word.

258
00:15:58,000 --> 00:16:04,000
And the interesting thing is that in both sectors, public and private,

259
00:16:04,000 --> 00:16:07,000
you have to do your own research and you have to pay for it.

260
00:16:07,000 --> 00:16:10,000
Research consumes your scarce resources, especially your time,

261
00:16:10,000 --> 00:16:12,000
but not limited to your time.

262
00:16:12,000 --> 00:16:14,000
And the important thing is you research a lot.

263
00:16:14,000 --> 00:16:17,000
So if you're buying a house, you research a lot.

264
00:16:17,000 --> 00:16:19,000
But if you're just picking out a hotel room,

265
00:16:19,000 --> 00:16:22,000
you still do a little bit of research, but you don't do that much

266
00:16:22,000 --> 00:16:23,000
because it doesn't matter as much.

267
00:16:23,000 --> 00:16:25,000
You'll be out of the hotel room soon.

268
00:16:25,000 --> 00:16:27,000
But if you want to do some cosmetic surgery or something,

269
00:16:27,000 --> 00:16:29,000
you would do a ton of research.

270
00:16:29,000 --> 00:16:33,000
But if you're just buying a new pair of shoes, less research.

271
00:16:33,000 --> 00:16:37,000
The problem with elections is that your single vote will almost never affect the
outcome.

272
00:16:37,000 --> 00:16:41,000
So people pretend that their vote matters in order to feel important,

273
00:16:41,000 --> 00:16:43,000
but really they know it doesn't matter.

274
00:16:43,000 --> 00:16:47,000
So if you master the issues and the candidates, you just wasted a bunch of your
time.

275
00:16:47,000 --> 00:16:50,000
It won't actually change your life in the slightest,

276
00:16:50,000 --> 00:16:53,000
so there's no reason to really look into it.

277
00:16:53,000 --> 00:16:55,000
This is obviously a big oversimplification,

278
00:16:55,000 --> 00:16:58,000
but I think it is the main thrust of what's going on.

279
00:16:58,000 --> 00:17:02,000
Voters usually admit that they don't know what they're doing,

280
00:17:02,000 --> 00:17:06,000
and 71% of people can't even name their congressional representative.

281
00:17:06,000 --> 00:17:10,000
You only have one of those, so it's even easier than remembering your senator's
name.

282
00:17:10,000 --> 00:17:12,000
There's two of those.

283
00:17:12,000 --> 00:17:14,000
But if you can't remember the name,

284
00:17:14,000 --> 00:17:20,000
how are you supposed to compare that person's performance with the rival?

285
00:17:20,000 --> 00:17:21,000
It's very funny.

286
00:17:21,000 --> 00:17:24,000
A lot of people, they do these gotcha questions where they ask people,

287
00:17:24,000 --> 00:17:26,000
like, who was Hillary Clinton's running mate?

288
00:17:26,000 --> 00:17:29,000
And people, like two or three weeks after the election,

289
00:17:29,000 --> 00:17:31,000
people just forget.

290
00:17:31,000 --> 00:17:34,000
People just don't even remember.

291
00:17:34,000 --> 00:17:37,000
But I don't blame them because it's rational, as I've just indicated.

292
00:17:37,000 --> 00:17:40,000
There's no reason to look into it at all.

293
00:17:40,000 --> 00:17:42,000
It's just a waste of your time.

294
00:17:42,000 --> 00:17:45,000
So on election day, if you go and get breakfast somewhere,

295
00:17:45,000 --> 00:17:49,000
you're going to weigh all the costs and benefits of different breakfast foods,

296
00:17:49,000 --> 00:17:51,000
but when you go in to vote,

297
00:17:51,000 --> 00:17:53,000
you won't really know anything about the costs or the benefits.

298
00:17:53,000 --> 00:17:55,000
You just haven't looked into it at all.

299
00:17:55,000 --> 00:17:58,000
And I know people who have admitted they go in there and they're like,

300
00:17:58,000 --> 00:18:01,000
this person had a nice name or whatever.

301
00:18:01,000 --> 00:18:03,000
They can't remember a single thing about it.

302
00:18:03,000 --> 00:18:04,000
Or they have no idea.

303
00:18:04,000 --> 00:18:06,000
You go in to vote for president,

304
00:18:06,000 --> 00:18:08,000
but then you have to vote for city council or something.

305
00:18:08,000 --> 00:18:10,000
And you're just like, I don't know who these people are.

306
00:18:10,000 --> 00:18:13,000
People make a zigzag pattern or something.

307
00:18:13,000 --> 00:18:15,000
So that's what we're dealing with here.

308
00:18:15,000 --> 00:18:18,000
It's just like controlling society.

309
00:18:18,000 --> 00:18:22,000
But an implication of this theory that the research is the issue

310
00:18:22,000 --> 00:18:26,000
is that the strategy of educating people in order to make them libertarians,

311
00:18:26,000 --> 00:18:31,000
which is very popular, or make them experts in economics,

312
00:18:31,000 --> 00:18:35,000
which is also, you know, that strategy won't work

313
00:18:35,000 --> 00:18:37,000
because it will never solve the problem.

314
00:18:37,000 --> 00:18:43,000
It's noble and worth doing in the same way that chemistry and music are worth doing

315
00:18:43,000 --> 00:18:45,000
and like bird watching is a real skill

316
00:18:45,000 --> 00:18:48,000
and mastering the skill of bird watching can be fun.

317
00:18:48,000 --> 00:18:50,000
But ultimately, if persuasion were effective,

318
00:18:50,000 --> 00:18:53,000
then the elections themselves wouldn't be so problematic.

319
00:18:53,000 --> 00:18:57,000
The lay person is never going to be as smart as a specialist by definition.

320
00:18:57,000 --> 00:19:01,000
The specialist has looked into it with their spare time.

321
00:19:01,000 --> 00:19:05,000
So, you know, if you think that Friedrich Hayek is right

322
00:19:05,000 --> 00:19:08,000
and that knowledge is diffused among lots of different people,

323
00:19:08,000 --> 00:19:13,000
then it's actually going to be tough for you to have the experts be as smart

324
00:19:13,000 --> 00:19:16,000
as the 51% of lay people who will be voting.

325
00:19:16,000 --> 00:19:21,000
And teaching them is just another way of saying that you can't solve the problem

326
00:19:21,000 --> 00:19:25,000
because the research incentives are the whole problem in the first place, as I've
argued.

327
00:19:25,000 --> 00:19:28,000
So that's me complaining about what I think the problem is,

328
00:19:28,000 --> 00:19:32,000
but now this is where the solution starts to take place.

329
00:19:32,000 --> 00:19:36,000
And as I've said, the solution is to have people show up on election day

330
00:19:36,000 --> 00:19:39,000
and open their cell phones and check some prices.

331
00:19:39,000 --> 00:19:42,000
And it should be as easy as checking an NFL score or the S&P 500

332
00:19:42,000 --> 00:19:44,000
and then they just vote for the candidate with better prices.

333
00:19:44,000 --> 00:19:47,000
But the question is, prices of what?

334
00:19:47,000 --> 00:19:49,000
And this is an example from InTrade.

335
00:19:49,000 --> 00:19:51,000
So we have the InTrade example.

336
00:19:51,000 --> 00:19:55,000
One of the first of many, maybe.

337
00:19:55,000 --> 00:20:01,000
This is a graph of prices of something called a prediction market or an event
derivative.

338
00:20:01,000 --> 00:20:04,000
And it's an asset that pays you money if something happens.

339
00:20:04,000 --> 00:20:06,000
If it happens, you get paid.

340
00:20:06,000 --> 00:20:09,000
If it doesn't happen, you don't get paid.

341
00:20:09,000 --> 00:20:14,000
And so this was created in 2011.

342
00:20:14,000 --> 00:20:17,000
It ran from 2011 to the end of 2012.

343
00:20:17,000 --> 00:20:24,000
The bet would have been worth $1 if the year 2012 had been the warmest year on
record,

344
00:20:24,000 --> 00:20:29,000
as reported by these NASA satellites that measure surface temperature.

345
00:20:29,000 --> 00:20:32,000
And they put it on a website where anyone can look at it.

346
00:20:32,000 --> 00:20:34,000
If that doesn't happen, the asset's worth zero.

347
00:20:34,000 --> 00:20:36,000
If it does happen, the asset's worth $1.

348
00:20:36,000 --> 00:20:40,000
This is the price in cents on the right.

349
00:20:40,000 --> 00:20:50,000
And the asset traded at 40 cents in January 2011, over here, 40 cents.

350
00:20:50,000 --> 00:20:54,000
But then as 2012 went on, this is January 2012,

351
00:20:54,000 --> 00:21:01,000
it became clear that 2012 would not be the warmest year on record.

352
00:21:01,000 --> 00:21:02,000
And so the price collapsed.

353
00:21:02,000 --> 00:21:07,000
But 2014 was the warmest year on record for those of you who are interested.

354
00:21:07,000 --> 00:21:12,000
So this topic often shows up, betting on elections,

355
00:21:12,000 --> 00:21:15,000
in a way that is slightly interesting but annoying for me

356
00:21:15,000 --> 00:21:21,000
because people are interested in the least subversive aspect of it,

357
00:21:21,000 --> 00:21:29,000
which is that people like to do this type of betting, betting on who will win.

358
00:21:29,000 --> 00:21:31,000
Oh, excuse me, I had a pretty good note and I'm going to go back to it.

359
00:21:31,000 --> 00:21:34,000
The big difference between this and betting,

360
00:21:34,000 --> 00:21:38,000
with betting, the odds are fixed, usually at 50-50.

361
00:21:38,000 --> 00:21:40,000
But that's not very interesting.

362
00:21:40,000 --> 00:21:46,000
With these assets, the market price is going to co-vary with everyone's behavior.

363
00:21:46,000 --> 00:21:53,000
And so that is why it can change and reflect the objective likelihood of the event
in question.

364
00:21:53,000 --> 00:21:57,000
Anyway, as I was saying, people like to use election betting in this way,

365
00:21:57,000 --> 00:22:00,000
and this is the type that is popular for many hundreds of years.

366
00:22:00,000 --> 00:22:02,000
There are assets that pay out of the candidate.

367
00:22:02,000 --> 00:22:09,000
These assets pay out if the candidate wins the 2016 Republican presidential
nomination.

368
00:22:09,000 --> 00:22:17,000
After the Iowa Stroup poll, Trump's price plummeted and Rubio's did very well.

369
00:22:17,000 --> 00:22:22,000
But eventually, when Trump won, whatever, South Carolina,

370
00:22:22,000 --> 00:22:27,000
yeah, it surges up to, and this is about 80%,

371
00:22:27,000 --> 00:22:35,000
so you can see that various events happen and make certain candidates more or less
likely to win.

372
00:22:35,000 --> 00:22:40,000
But this is not what I suggest that we do, and I think I put, yeah, I put a big N,
no,

373
00:22:40,000 --> 00:22:44,000
because this is very boring.

374
00:22:44,000 --> 00:22:47,000
And I'm going to describe what we should do instead.

375
00:22:47,000 --> 00:22:53,000
This certainly makes election years more fun, but it only tells us who is likely to
win,

376
00:22:53,000 --> 00:22:59,000
and that's not what this idea is, the Hal Finney, Robin Hansen idea, my idea,

377
00:22:59,000 --> 00:23:04,000
is to change the outcome.

378
00:23:04,000 --> 00:23:05,000
We want to change who wins.

379
00:23:05,000 --> 00:23:09,000
We want the bad people to lose, and we want the good people to win.

380
00:23:09,000 --> 00:23:14,000
And so in order to explain that, I have to explain just a tiny bit of statistics,

381
00:23:14,000 --> 00:23:17,000
and this is nine slides.

382
00:23:18,000 --> 00:23:25,000
The first two are super easy, and four of them are really one slide that is just
broken into four pieces.

383
00:23:25,000 --> 00:23:30,000
Anyway, so on the left, I have a series of coin flip events.

384
00:23:30,000 --> 00:23:36,000
In this table, we are describing the behavior of the 303rd coin flip event,

385
00:23:36,000 --> 00:23:43,000
which we can't see because it's in the future, or it's unknown for whatever reason.

386
00:23:43,000 --> 00:23:46,000
We don't know what will happen in the flip, but we know that we can fill it in.

387
00:23:46,000 --> 00:23:48,000
50-50, it's so easy.

388
00:23:48,000 --> 00:23:49,000
It's the easiest example ever.

389
00:23:49,000 --> 00:23:52,000
That's why everyone uses it first.

390
00:23:52,000 --> 00:23:55,000
This is the same thing, but with a dice roll instead.

391
00:23:55,000 --> 00:23:59,000
There's some list of dice rolls somewhere in the universe,

392
00:23:59,000 --> 00:24:02,000
and we don't know what the outcome will be,

393
00:24:02,000 --> 00:24:06,000
but we know that there are six, and not one is more likely than the other,

394
00:24:06,000 --> 00:24:09,000
so each has one sixth probability.

395
00:24:09,000 --> 00:24:11,000
So those are the first two that are super easy.

396
00:24:11,000 --> 00:24:15,000
This one starts to get a little difficult.

397
00:24:15,000 --> 00:24:19,000
This example is the previous two examples smushed together.

398
00:24:19,000 --> 00:24:22,000
So we have the coin flipping green along the left vertical edge.

399
00:24:22,000 --> 00:24:26,000
We have the dice roll across the top horizontal edge,

400
00:24:26,000 --> 00:24:30,000
and I have some probabilities circled in red.

401
00:24:30,000 --> 00:24:34,000
The probability that two will be rolled is one sixth,

402
00:24:34,000 --> 00:24:38,000
and the probability that our tail will be flipped is still one half.

403
00:24:38,000 --> 00:24:42,000
It's all the way over there.

404
00:24:42,000 --> 00:24:45,000
Those are called marginal probabilities because they're written in the margin, so to
speak,

405
00:24:45,000 --> 00:24:49,000
and the probability that both of those events will happen is one twelfth,

406
00:24:49,000 --> 00:24:53,000
so probabilities multiply together.

407
00:24:53,000 --> 00:24:56,591
Now we'll talk about relationships among events.

408
00:24:56,591 --> 00:25:00,591
I'm going to draw a contrast between these two tables here. The first table has coin
flip 305 and coin flip 304.

409
00:25:02,591 --> 00:25:07,591
They're both about unknown future coin flips, but in the second, something very
unrealistic has happened,

410
00:25:08,591 --> 00:25:14,591
something very bizarre, which is that someone has plotted coin flip 304 against
itself.

411
00:25:17,591 --> 00:25:21,591
It's only useful for teaching purposes. This would never happen in the real world.

412
00:25:22,591 --> 00:25:26,591
But if it did, what probabilities would we write in the table? We know what we would
write,

413
00:25:26,591 --> 00:25:34,591
and it's not 25, 25, 25, 25. It's 50 along the diagonal and zero because 304 is
either going to be heads or it's going to be tails.

414
00:25:35,591 --> 00:25:38,591
And then I have the example again with the dice.

415
00:25:38,591 --> 00:25:43,591
Say that some crazy person again is plotting the same dice roll against itself.

416
00:25:43,591 --> 00:25:46,591
Well, if the dice is either going to be four or it's not,

417
00:25:46,591 --> 00:25:50,591
so the probabilities are one sixth across the diagonal and zero.

418
00:25:50,591 --> 00:26:00,591
So what I'm getting at is that there are a lot of values that are logically
impossible if the events are related.

419
00:26:00,591 --> 00:26:04,591
So the more related the events are, the more they clump up along this line.

420
00:26:05,591 --> 00:26:09,591
So relatedness equals clumping is the point.

421
00:26:10,591 --> 00:26:14,591
So all we do is measure these two things at once, and we look for the clumping.

422
00:26:14,591 --> 00:26:19,591
So you build assets that only pay out on the entangled information.

423
00:26:19,591 --> 00:26:23,591
So you say instead of just will candidate X be elected,

424
00:26:23,591 --> 00:26:27,591
and separately, instead of just will American voters earn higher incomes,

425
00:26:27,591 --> 00:26:32,591
you build something that only pays out if they both happen, if the candidate is
elected and people win.

426
00:26:33,591 --> 00:26:35,591
So it's zero otherwise.

427
00:26:35,591 --> 00:26:40,591
It's very likely to be zero now because there's three ways of it being zero and only
one way of it being worth a dollar.

428
00:26:40,591 --> 00:26:43,591
So of course, as you divide the probability space, they all get smaller,

429
00:26:43,591 --> 00:26:48,591
but you can buy them in pairs or sets and things like that.

430
00:26:48,591 --> 00:26:53,591
And so what you ultimately do is you make these four different markets,

431
00:26:53,591 --> 00:26:56,591
and you divide them by the probability space.

432
00:26:57,591 --> 00:27:03,591
And so what you ultimately do is you make these four different markets for each,

433
00:27:03,591 --> 00:27:06,591
and you just look for the clumping.

434
00:27:06,591 --> 00:27:07,591
If it clumps, then they're related.

435
00:27:07,591 --> 00:27:11,591
So then it would be candidate X is causing American incomes to go up.

436
00:27:13,591 --> 00:27:16,591
So that is how you get to...

437
00:27:20,591 --> 00:27:22,591
Anyway, this is the synthesis.

438
00:27:22,591 --> 00:27:24,591
I think I'll skip this part.

439
00:27:24,591 --> 00:27:26,591
So this is where these numbers come from.

440
00:27:36,591 --> 00:27:38,591
Anyway, the laypeople never have to see anything complex.

441
00:27:38,591 --> 00:27:40,591
They just have to see this table.

442
00:27:40,591 --> 00:27:43,591
And that is how you get these numbers to show up.

443
00:27:43,591 --> 00:27:46,591
Maybe I should actually emphasize this.

444
00:27:46,591 --> 00:27:50,591
You have these, and you just do a little adding and dividing,

445
00:27:50,591 --> 00:27:53,591
and you get whatever the situation is.

446
00:27:53,591 --> 00:27:57,591
You can just reduce it down to this one conditional likelihood.

447
00:27:59,591 --> 00:28:04,591
So here it's like Elon Musk has basically no chance of being elected.

448
00:28:04,591 --> 00:28:07,591
His odds of winning are less than 1%.

449
00:28:07,591 --> 00:28:13,591
But if he is elected, the economy is not going to do poorly.

450
00:28:13,591 --> 00:28:18,591
All of his, 100% of his .009 points are in the yes.

451
00:28:18,591 --> 00:28:22,591
The value that he's got, all of them are in the yes.

452
00:28:22,591 --> 00:28:24,591
But regular voters wouldn't need to do that or do any arithmetic.

453
00:28:24,591 --> 00:28:27,591
You could just show them this table.

454
00:28:27,591 --> 00:28:30,591
And this is where all these numbers come from.

455
00:28:30,591 --> 00:28:36,591
Now there's a lot to say about why would anyone ever care about this.

456
00:28:36,591 --> 00:28:41,591
So the plan collapses if no one cares enough to trade in the markets

457
00:28:41,591 --> 00:28:44,591
or look at them on election day,

458
00:28:44,591 --> 00:28:48,591
something I call no trade and no attention.

459
00:28:51,591 --> 00:28:55,591
So no trade, how do we get knowledgeable people to trade?

460
00:28:55,591 --> 00:28:57,591
It's actually a pretty severe problem.

461
00:28:57,591 --> 00:28:59,591
There's more in trade.

462
00:28:59,591 --> 00:29:03,591
We've got three more in trade screenshots.

463
00:29:03,591 --> 00:29:05,591
So this is what happened on in trade.

464
00:29:05,591 --> 00:29:07,591
There were low trading volumes.

465
00:29:07,591 --> 00:29:13,591
As someone who loved the site, it was my favorite site really on the internet at the
time,

466
00:29:13,591 --> 00:29:16,591
more than half the markets had zero trading as far as I can remember.

467
00:29:16,591 --> 00:29:18,591
This was pitifully low.

468
00:29:18,591 --> 00:29:21,591
Here's just a few that I could find on the internet.

469
00:29:21,591 --> 00:29:25,591
And the volume is these bars and I deliberately changed the saturation

470
00:29:25,591 --> 00:29:27,591
because it was almost invisible before.

471
00:29:27,591 --> 00:29:32,591
But maybe you can still see some of them a little bit, these lines here.

472
00:29:32,591 --> 00:29:35,591
And this is the volume scale.

473
00:29:35,591 --> 00:29:37,591
It's quite pitiful.

474
00:29:37,591 --> 00:29:39,591
In trade is so long ago that I couldn't remember

475
00:29:39,591 --> 00:29:42,591
if this is number of contracts or notional value.

476
00:29:42,591 --> 00:29:46,591
Since the price on in trade always ranged from $0 to $10,

477
00:29:46,591 --> 00:29:49,591
you can only be off by half an order of magnitude.

478
00:29:49,591 --> 00:29:52,591
And the price here is $150.

479
00:29:52,591 --> 00:29:56,591
Anyway, the point is that this is on its best day,

480
00:29:56,591 --> 00:30:02,591
something about whether or not Obamacare is declared unconstitutional.

481
00:30:02,591 --> 00:30:06,591
That was like $1,000 in volume in a day

482
00:30:06,591 --> 00:30:10,591
for something that affected obviously trillions of dollars in healthcare
expenditure.

483
00:30:10,591 --> 00:30:13,591
And then this is something about Hamas and Israel

484
00:30:13,591 --> 00:30:15,591
that apparently no one cared about at all.

485
00:30:15,591 --> 00:30:18,591
It had like $40 of trading in a day.

486
00:30:18,591 --> 00:30:20,591
And here's something important.

487
00:30:20,591 --> 00:30:25,591
The U.S. entering a recession in 2012,

488
00:30:25,591 --> 00:30:28,591
but no one cared, $60 per day on its absolute best,

489
00:30:28,591 --> 00:30:32,591
assuming that it's notional value instead of number of contracts.

490
00:30:32,591 --> 00:30:35,591
These are the only markets that I was popular enough for someone

491
00:30:35,591 --> 00:30:37,591
to screenshot them and write like a blog post about them

492
00:30:37,591 --> 00:30:39,591
so I could even find them.

493
00:30:39,591 --> 00:30:41,591
This is an issue.

494
00:30:41,591 --> 00:30:44,591
It's greatly, I think I'll come back to this.

495
00:30:44,591 --> 00:30:48,591
It's greatly exacerbated when you split the market into more states.

496
00:30:48,591 --> 00:30:51,591
So you need at least four buyer-seller pairs of people

497
00:30:51,591 --> 00:30:56,591
to get a full table of prices.

498
00:30:56,591 --> 00:30:58,591
And the problem is, oh, here we go.

499
00:30:58,591 --> 00:31:01,591
And yeah, and I want there to be many states

500
00:31:01,591 --> 00:31:06,591
because then we can get many conditional probabilities as I explained.

501
00:31:06,591 --> 00:31:08,591
So we want to like make this thing really big.

502
00:31:08,591 --> 00:31:10,591
But this is something with 24 states,

503
00:31:10,591 --> 00:31:13,591
and you'd really need people to be buying and selling each of those.

504
00:31:13,591 --> 00:31:16,591
So this is a big problem.

505
00:31:16,591 --> 00:31:18,591
Yes.

506
00:31:18,591 --> 00:31:21,591
The problem gets much worse

507
00:31:21,591 --> 00:31:25,591
because prediction market transactions have no consumption element.

508
00:31:25,591 --> 00:31:27,591
They're 100% synthetic.

509
00:31:27,591 --> 00:31:29,591
They're like artificial markets.

510
00:31:29,591 --> 00:31:31,591
So in a prediction market, you're only betting

511
00:31:31,591 --> 00:31:33,591
when you think everyone else has it wrong.

512
00:31:33,591 --> 00:31:35,591
You're a speculator.

513
00:31:35,591 --> 00:31:38,591
So you need to believe that you're smarter than all the other traders.

514
00:31:38,591 --> 00:31:41,591
In contrast, when you buy milk over here,

515
00:31:41,591 --> 00:31:43,591
it's just because you want to buy milk.

516
00:31:43,591 --> 00:31:46,591
You don't like go look around the supermarket and think,

517
00:31:46,591 --> 00:31:49,591
aha, all these suckers think they know milk pricing,

518
00:31:49,591 --> 00:31:52,591
but they don't know what they're talking about.

519
00:31:52,591 --> 00:31:55,591
This milk's a steal at $2.99.

520
00:31:55,591 --> 00:31:58,591
They're going to regret this later or something or whatever.

521
00:31:58,591 --> 00:32:02,591
You just want to buy the milk because you want to consume it.

522
00:32:02,591 --> 00:32:04,591
And it's actually, I think it's the same

523
00:32:04,591 --> 00:32:06,591
if one person invests in the stock market for retirement.

524
00:32:06,591 --> 00:32:09,591
Obviously, you prefer to get the best price you possibly can,

525
00:32:09,591 --> 00:32:11,591
just like you prefer to get the best price for milk.

526
00:32:11,591 --> 00:32:16,591
But really, you just want your portfolio to have a certain risk-reward thing.

527
00:32:16,591 --> 00:32:19,591
So you have a reason for buying them.

528
00:32:19,591 --> 00:32:22,591
And prediction markets do have some consumption elements.

529
00:32:22,591 --> 00:32:25,591
You can use them for insurance or for recreational gambling.

530
00:32:25,591 --> 00:32:27,591
If you use them just to have fun,

531
00:32:27,591 --> 00:32:30,591
then you're just having the fun that you wanted.

532
00:32:30,591 --> 00:32:32,591
And you can use them for insurance.

533
00:32:33,591 --> 00:32:35,591
I'm going to bet that Trump wins the next election

534
00:32:35,591 --> 00:32:38,591
because I don't know what I'm going to do with my life if he wins,

535
00:32:38,591 --> 00:32:41,591
so I want at least to get a ton of cash if he does win.

536
00:32:41,591 --> 00:32:44,591
And in that case, it's more like a consumption thing,

537
00:32:44,591 --> 00:32:46,591
but in general, it's very synthetic.

538
00:32:46,591 --> 00:32:51,591
It's this very kind of artificial thing that's happening.

539
00:32:51,591 --> 00:32:53,591
And so this all makes it much worse.

540
00:32:53,591 --> 00:32:58,591
But fortunately, there's a way of solving that problem completely,

541
00:32:58,591 --> 00:33:00,591
and it's actually the same solution as the second problem.

542
00:33:00,591 --> 00:33:03,591
So I'm just going to ramble about this second thing and then get to the solution.

543
00:33:03,591 --> 00:33:07,591
But I think this type of thing that does interest me tremendously,

544
00:33:07,591 --> 00:33:10,591
this is the second problem of no attention.

545
00:33:10,591 --> 00:33:12,591
So how do you get people to care on election day?

546
00:33:12,591 --> 00:33:14,591
Why would it actually make any difference

547
00:33:14,591 --> 00:33:17,591
when lots of other people have tried to make a difference in the past

548
00:33:17,591 --> 00:33:21,591
and try every four years using everything they can to push for their side,

549
00:33:21,591 --> 00:33:23,591
and they don't make a difference?

550
00:33:23,591 --> 00:33:25,591
Well, we have to consider some facts,

551
00:33:25,591 --> 00:33:28,591
which is that election outcome is very sensitive to voter turnout,

552
00:33:28,591 --> 00:33:33,591
and voter turnout is very sensitive to this lack of knowledge or this frustration.

553
00:33:33,591 --> 00:33:36,591
And prediction markets provide knowledge which can influence outcomes.

554
00:33:36,591 --> 00:33:38,591
So I have some slides about this.

555
00:33:38,591 --> 00:33:41,591
One is that people will be on their phones because they'll be in line.

556
00:33:41,591 --> 00:33:44,591
So this is the first Google result for election line,

557
00:33:44,591 --> 00:33:47,591
and there's two people who are on their phones in the screenshot.

558
00:33:47,591 --> 00:33:50,591
So we've got them on their phones. That's the easiest part.

559
00:33:50,591 --> 00:33:53,591
But the other thing I wanted to list of things that I want to mention

560
00:33:53,591 --> 00:33:56,591
is that the victory margins are actually very narrow.

561
00:33:57,591 --> 00:34:00,591
This is the presidential popular vote.

562
00:34:00,591 --> 00:34:03,591
It's actually pretty narrow,

563
00:34:03,591 --> 00:34:08,591
and you can see the red and blue bars are about the same length.

564
00:34:08,591 --> 00:34:11,591
And voter turnout is very low.

565
00:34:11,591 --> 00:34:13,591
You can see how low it is here.

566
00:34:13,591 --> 00:34:18,591
For the midterm elections, which are the congresspeople who actually make all the
laws,

567
00:34:18,591 --> 00:34:24,591
Congress is more important than the president for, like, good policy, I think, in my
opinion.

568
00:34:24,591 --> 00:34:27,591
But you see for president it's like 60%,

569
00:34:27,591 --> 00:34:31,591
and for the midterm congressional elections it's like 40%.

570
00:34:31,591 --> 00:34:33,591
It's very low.

571
00:34:33,591 --> 00:34:35,591
If all the people who didn't vote formed their own political party,

572
00:34:35,591 --> 00:34:38,591
they could beat the other two parties combined.

573
00:34:38,591 --> 00:34:40,591
So it's actually quite low.

574
00:34:40,591 --> 00:34:45,591
And you may think that maybe it's low just because everyone's okay with what's
happening.

575
00:34:45,591 --> 00:34:48,591
Everyone's just like, everything's going great, so it doesn't matter because I won't
vote.

576
00:34:48,591 --> 00:34:53,591
But actually, everyone really hates Congress particularly.

577
00:34:53,591 --> 00:34:58,591
This is actually the low, the one with the low turnout.

578
00:34:58,591 --> 00:35:01,591
And you can see it's in our modern era.

579
00:35:01,591 --> 00:35:05,591
I actually do think it was below 10% for at least,

580
00:35:05,591 --> 00:35:08,591
I remember Jon Stewart making a joke about it before he went off the air.

581
00:35:08,591 --> 00:35:11,591
Someone, he had Nancy Pelosi on or something,

582
00:35:11,591 --> 00:35:13,591
and then right before I cut the commercial he said,

583
00:35:13,591 --> 00:35:17,591
good luck getting that approval rating back up to 9% or something,

584
00:35:17,591 --> 00:35:20,591
and then she tried to say something and it just cut away.

585
00:35:20,591 --> 00:35:23,591
That's funny. That's funny. He's a funny guy.

586
00:35:23,591 --> 00:35:28,591
Anyway, so why, when people are surveyed anyway, why don't they vote?

587
00:35:28,591 --> 00:35:30,591
They say, well, you know, they hate both the candidates

588
00:35:30,591 --> 00:35:32,591
and they don't know which candidate is worse.

589
00:35:32,591 --> 00:35:35,591
I mean, that's the reasonable position to take.

590
00:35:35,591 --> 00:35:39,591
And they just think, they don't know what to do.

591
00:35:39,591 --> 00:35:44,591
But that's exactly where this project could help.

592
00:35:44,591 --> 00:35:49,591
So at this point, the critical, I have to say, the FUD agent here,

593
00:35:49,591 --> 00:35:53,591
I have to say, ignore all prediction markets because they're stupid,

594
00:35:53,591 --> 00:35:56,591
or prediction markets are great, sure,

595
00:35:56,591 --> 00:36:00,591
but this one in particular about my favorite candidate, whatever,

596
00:36:00,591 --> 00:36:03,591
is one you should ignore.

597
00:36:03,591 --> 00:36:05,591
So I'm going to do these one after another.

598
00:36:05,591 --> 00:36:07,591
The first, though, is going to be tough because it actually has

599
00:36:07,591 --> 00:36:09,591
a strong track record of accuracy.

600
00:36:09,591 --> 00:36:15,591
Since they do work, people will learn over time how accurate they are.

601
00:36:15,591 --> 00:36:18,591
The other thing that interests me is that it's actually a very old idea.

602
00:36:18,591 --> 00:36:21,591
I have this and I have this other one about Google Trends for InTrade

603
00:36:21,591 --> 00:36:23,591
and some CNBC appearances.

604
00:36:23,591 --> 00:36:29,591
But in general, this idea of betting on elections and obsessing about it

605
00:36:29,591 --> 00:36:31,591
is actually extremely old.

606
00:36:31,591 --> 00:36:33,591
And I have this quote here about whatever,

607
00:36:33,591 --> 00:36:37,591
wagering on selection for offices in the Catholic Church.

608
00:36:37,591 --> 00:36:41,591
Odds on papal succession appear as early as year 1503

609
00:36:41,591 --> 00:36:45,591
when such wagering was already considered an old practice.

610
00:36:46,591 --> 00:36:49,591
There's a bunch from the U.S. I have two down here.

611
00:36:49,591 --> 00:36:52,591
Well, I'll just read this last one.

612
00:36:52,591 --> 00:36:54,591
This is from Andrew Carnegie in 1904.

613
00:36:54,591 --> 00:36:58,591
From what I see of the betting, I do not think that Mr. Roosevelt will need my vote.

614
00:36:58,591 --> 00:37:00,591
I am sure of his election.

615
00:37:00,591 --> 00:37:01,591
Andrew Carnegie in 1904.

616
00:37:01,591 --> 00:37:04,591
The New York Times used to publish the prices.

617
00:37:04,591 --> 00:37:07,591
So actually, I think it is.

618
00:37:07,591 --> 00:37:09,591
People will warm up to it.

619
00:37:09,591 --> 00:37:11,591
I think they already like it, actually.

620
00:37:11,591 --> 00:37:14,591
The strategy is to ramp it up over time by betting on things

621
00:37:14,591 --> 00:37:16,591
that people already love betting on,

622
00:37:16,591 --> 00:37:22,591
like Super Bowl, March Madness, Oscars, Tonys, whatever.

623
00:37:22,591 --> 00:37:24,591
So you can get people familiar with the institution

624
00:37:24,591 --> 00:37:27,591
in a context that is not as subversive.

625
00:37:27,591 --> 00:37:30,591
And then they'll eventually have to say that prediction markets are great.

626
00:37:30,591 --> 00:37:32,591
So we're still...

627
00:37:32,591 --> 00:37:35,591
Oh, I skipped two slides, but that's okay.

628
00:37:35,591 --> 00:37:38,591
What I wanted to finish my thought is we'll still have this second problem

629
00:37:38,591 --> 00:37:41,591
where someone will say, sure, prediction markets are great,

630
00:37:41,591 --> 00:37:43,591
but this is one you should ignore.

631
00:37:43,591 --> 00:37:45,591
So let me get back to that, though.

632
00:37:45,591 --> 00:37:49,591
I do want to mention that eventually almost every source of information

633
00:37:49,591 --> 00:37:55,591
will be biased or captured by people who want to use it.

634
00:37:55,591 --> 00:37:58,591
It's like how they get Bruce Springsteen to endorse someone,

635
00:37:58,591 --> 00:38:02,591
which is like, I love Bruce Springsteen, but what difference does it make?

636
00:38:02,591 --> 00:38:04,591
He endorses a Democratic candidate.

637
00:38:04,591 --> 00:38:06,591
What does it mean?

638
00:38:06,591 --> 00:38:08,591
But the point is that...

639
00:38:08,591 --> 00:38:11,591
So one example is debates.

640
00:38:11,591 --> 00:38:13,591
Everyone, when a Democrat watches a debate,

641
00:38:13,591 --> 00:38:15,591
they're certain that the Democratic candidate won.

642
00:38:15,591 --> 00:38:17,591
And when a Republican watches a debate,

643
00:38:17,591 --> 00:38:20,591
they're certain that the Republican candidate won.

644
00:38:20,591 --> 00:38:25,591
And that's because this source of information about the candidates

645
00:38:25,591 --> 00:38:27,591
requires some kind of interpretation.

646
00:38:27,591 --> 00:38:30,591
But in these prediction markets, there's only one interpretation.

647
00:38:30,591 --> 00:38:32,591
It's just what numbers the people are probably going to hit.

648
00:38:32,591 --> 00:38:34,591
And it's the same interpretation for everyone.

649
00:38:34,591 --> 00:38:37,591
So people have to fold and say that these markets are unhealthy

650
00:38:37,591 --> 00:38:41,591
or manipulated or something, which is what I'll get to.

651
00:38:41,591 --> 00:38:46,591
Another thing is that it's tiresome to listen to all these politicians speak

652
00:38:46,591 --> 00:38:48,591
and all their supporters speak about things,

653
00:38:48,591 --> 00:38:52,591
because everyone knows that it's all nonsense,

654
00:38:52,591 --> 00:38:54,591
but we sort of put up with it anyway.

655
00:38:54,591 --> 00:38:58,591
Like people will say, oh, my favorite candidate is Andrew Yang,

656
00:38:58,591 --> 00:39:01,591
but he came out for a higher minimum wage,

657
00:39:01,591 --> 00:39:03,591
even though I'm a libertarian or whatever.

658
00:39:03,591 --> 00:39:05,591
But he didn't mean that.

659
00:39:05,591 --> 00:39:07,591
And it's like, well, what does anyone mean then?

660
00:39:07,591 --> 00:39:10,591
It just becomes kind of nonsensical.

661
00:39:10,591 --> 00:39:13,591
But in this paradigm, things are very different.

662
00:39:13,591 --> 00:39:15,591
Politicians would start competing on the metrics.

663
00:39:15,591 --> 00:39:17,591
So in order for their number to go up, though,

664
00:39:17,591 --> 00:39:19,591
they have to actually hit the target in reality.

665
00:39:19,591 --> 00:39:21,591
It doesn't matter what they say.

666
00:39:21,591 --> 00:39:23,591
It makes absolutely no difference what they say,

667
00:39:23,591 --> 00:39:24,591
just what the market believes.

668
00:39:24,591 --> 00:39:26,591
So as a kind of crazy example,

669
00:39:26,591 --> 00:39:29,591
a politician could announce that they want everyone to die

670
00:39:29,591 --> 00:39:31,591
and that if elected, they'll kill everyone.

671
00:39:31,591 --> 00:39:34,591
But if traders don't actually believe that,

672
00:39:34,591 --> 00:39:36,591
traders survive, will survive somehow.

673
00:39:36,591 --> 00:39:38,591
They'll kill everyone except the traders.

674
00:39:38,591 --> 00:39:40,591
But if the traders don't actually believe that,

675
00:39:40,591 --> 00:39:43,591
then the death number, that third row from before,

676
00:39:43,591 --> 00:39:46,591
that won't actually move.

677
00:39:46,591 --> 00:39:49,591
Because it's only about,

678
00:39:49,591 --> 00:39:51,591
the asset only pays out much later

679
00:39:51,591 --> 00:39:53,591
when the event is actually measured.

680
00:39:53,591 --> 00:39:55,591
So this is just a different world

681
00:39:55,591 --> 00:39:57,591
where you just don't have to listen to.

682
00:39:57,591 --> 00:39:59,591
I mean, it's possible that,

683
00:39:59,591 --> 00:40:01,591
I mean, in the ideal, my sort of ideal world,

684
00:40:01,591 --> 00:40:03,591
the ideal world of this idea,

685
00:40:03,591 --> 00:40:05,591
the politicians would just kind of put out

686
00:40:05,591 --> 00:40:07,591
some PDF document of their plan

687
00:40:07,591 --> 00:40:09,591
and then they just wouldn't speak again

688
00:40:09,591 --> 00:40:11,591
and then the election would just happen.

689
00:40:11,591 --> 00:40:13,591
And there would just be no speaking at all

690
00:40:13,591 --> 00:40:15,591
and none of these weird rallies or this weird other stuff.

691
00:40:15,591 --> 00:40:17,591
So that's kind of the idea.

692
00:40:17,591 --> 00:40:20,591
But we still haven't addressed these two lingering issues,

693
00:40:20,591 --> 00:40:21,591
which we will now,

694
00:40:21,591 --> 00:40:24,591
which is about how do we get people to,

695
00:40:24,591 --> 00:40:26,591
I'm sorry, this paragraph I didn't read

696
00:40:26,591 --> 00:40:29,591
is about what I was saying about the strategy involving,

697
00:40:29,591 --> 00:40:31,591
how it's different from milk and stuff.

698
00:40:31,591 --> 00:40:33,591
So it's not really that important.

699
00:40:33,591 --> 00:40:35,591
But yeah, you can have,

700
00:40:35,591 --> 00:40:37,591
many of the in-trade markets

701
00:40:37,591 --> 00:40:40,591
had very little liquidity and very few trades.

702
00:40:40,591 --> 00:40:42,591
Some had no trading, literally.

703
00:40:42,591 --> 00:40:44,591
And so we're going to solve that

704
00:40:44,591 --> 00:40:46,591
with this sort of standing army of automatic traders

705
00:40:46,591 --> 00:40:48,591
that I'm going to explain.

706
00:40:48,591 --> 00:40:50,591
And then you have people

707
00:40:50,591 --> 00:40:52,591
try to stigmatize one market and say,

708
00:40:52,591 --> 00:40:54,591
this market is a bad one, this is a bad egg,

709
00:40:54,591 --> 00:40:56,591
don't pay attention to it.

710
00:40:56,591 --> 00:40:58,591
But we can actually make it,

711
00:40:58,591 --> 00:41:00,591
it's the same solution for both points,

712
00:41:00,591 --> 00:41:02,591
we can make it so that,

713
00:41:02,591 --> 00:41:04,591
you can create a market such that X dollars

714
00:41:04,591 --> 00:41:07,591
can always be earned by betting in it.

715
00:41:07,591 --> 00:41:09,591
You know, if the prices are wrong,

716
00:41:09,591 --> 00:41:11,591
you disagree about the price,

717
00:41:11,591 --> 00:41:13,591
you can always extract X dollars out of it,

718
00:41:13,591 --> 00:41:15,591
even if no one else on earth is trading.

719
00:41:15,591 --> 00:41:18,591
And then the plan is to make X like a million dollars or something.

720
00:41:18,591 --> 00:41:22,591
That would be very persuasive to a layperson voter.

721
00:41:22,591 --> 00:41:25,591
Someone living in a swing state,

722
00:41:25,591 --> 00:41:27,591
in like Ohio or whatever,

723
00:41:27,591 --> 00:41:29,591
they're going to be like, really?

724
00:41:29,591 --> 00:41:31,591
There's millions of dollars at stake if the prices are wrong,

725
00:41:31,591 --> 00:41:34,591
but this guy is saying that I should ignore this?

726
00:41:34,591 --> 00:41:36,591
Even though there's millions to be won?

727
00:41:36,591 --> 00:41:38,591
I mean, as much as possible, ideally.

728
00:41:38,591 --> 00:41:40,591
But, okay.

729
00:41:40,591 --> 00:41:42,591
So, yeah.

730
00:41:42,591 --> 00:41:44,591
This is Robin Hanson's response to this critique,

731
00:41:44,591 --> 00:41:47,591
which is that you don't have to get the information for free,

732
00:41:47,591 --> 00:41:49,591
you can buy it,

733
00:41:49,591 --> 00:41:51,591
and you're going to use this sort of sacrificial trade

734
00:41:51,591 --> 00:41:54,591
that loses against all the outcomes at once,

735
00:41:54,591 --> 00:41:56,591
using something called the market scoring rule.

736
00:41:56,591 --> 00:41:58,591
And this presentation is almost over,

737
00:41:58,591 --> 00:42:00,591
there's a million things in it,

738
00:42:00,591 --> 00:42:01,591
but it's winding to its end.

739
00:42:01,591 --> 00:42:03,591
This is the last part.

740
00:42:03,591 --> 00:42:07,591
So, this market scoring rule is very different

741
00:42:07,591 --> 00:42:10,591
from the way trading usually happens.

742
00:42:10,591 --> 00:42:13,591
And I'm just going to go through it.

743
00:42:13,591 --> 00:42:16,591
And I don't know, this is like the first time I've tried to explain it,

744
00:42:16,591 --> 00:42:18,591
but it has many differences.

745
00:42:18,591 --> 00:42:21,591
One is there's no offers, there's no bids, asks.

746
00:42:21,591 --> 00:42:23,591
Stuff just happens immediately.

747
00:42:23,591 --> 00:42:26,591
Let me see, I should put some of my notes.

748
00:42:26,591 --> 00:42:28,591
So, everything just happens.

749
00:42:28,591 --> 00:42:30,591
There's no bids or asks, you just start with someone,

750
00:42:30,591 --> 00:42:33,591
and then a trade happens, and, oh well.

751
00:42:33,591 --> 00:42:34,591
Okay.

752
00:42:34,591 --> 00:42:37,591
Another difference is there's no interaction between buyer and seller,

753
00:42:37,591 --> 00:42:42,591
you just interact with this one fixed thing in a big line.

754
00:42:42,591 --> 00:42:44,591
And there's no limbo.

755
00:42:44,591 --> 00:42:46,591
So, this limbo is this thing here.

756
00:42:46,591 --> 00:42:47,591
So, this is a usual timeline,

757
00:42:47,591 --> 00:42:49,591
it's called a double auction market,

758
00:42:49,591 --> 00:42:51,591
where some people do bids and some people do asks,

759
00:42:51,591 --> 00:42:52,591
and they overlap,

760
00:42:52,591 --> 00:42:54,591
and you have to wait until they overlap for a trade to happen.

761
00:42:54,591 --> 00:42:56,591
So, this is how everything normally works,

762
00:42:56,591 --> 00:42:59,591
probably that you've ever seen in your entire life.

763
00:42:59,591 --> 00:43:02,591
And it's, someone creates this market, and the market exists,

764
00:43:02,591 --> 00:43:04,591
and trader one submits a bid,

765
00:43:04,591 --> 00:43:07,591
and this bid is hanging in limbo.

766
00:43:07,591 --> 00:43:10,591
And trader two sees this buy wall,

767
00:43:10,591 --> 00:43:11,591
and they see the bid,

768
00:43:11,591 --> 00:43:13,591
and they say, okay, I'll take it.

769
00:43:13,591 --> 00:43:15,591
I accept it.

770
00:43:15,591 --> 00:43:18,591
And then, it transacts for both of them.

771
00:43:18,591 --> 00:43:20,591
This person sells, and this person buys.

772
00:43:20,591 --> 00:43:24,591
So, the thing goes here, and the money goes up to there.

773
00:43:24,591 --> 00:43:27,591
But, in this scoring rule thing,

774
00:43:27,591 --> 00:43:28,591
you create a market,

775
00:43:28,591 --> 00:43:33,591
and you put some sacrificial cash up front immediately.

776
00:43:33,591 --> 00:43:35,591
And then, when this person wants to buy,

777
00:43:35,591 --> 00:43:37,591
they can just do so immediately,

778
00:43:37,591 --> 00:43:38,591
without interacting with anyone.

779
00:43:38,591 --> 00:43:40,591
It's just very atomic, it just happens.

780
00:43:40,591 --> 00:43:43,591
And then, the market changes state.

781
00:43:43,591 --> 00:43:44,591
So, the market's gonna change state

782
00:43:44,591 --> 00:43:46,591
in a big line of state changes,

783
00:43:46,591 --> 00:43:51,591
and the latest state will be the real state.

784
00:43:51,591 --> 00:43:54,591
So, it fits really well with the blockchain.

785
00:43:54,591 --> 00:43:56,591
And then, when the person wants to sell,

786
00:43:56,591 --> 00:43:57,591
they just interact with the market directly.

787
00:43:57,591 --> 00:43:59,591
So, they don't have to do anything,

788
00:43:59,591 --> 00:44:03,591
and there's a, this is a weird example,

789
00:44:03,591 --> 00:44:05,591
but to try and give you some example,

790
00:44:05,591 --> 00:44:08,591
some instance of what happens here,

791
00:44:08,591 --> 00:44:10,591
is that the first thing that happens in the timeline

792
00:44:10,591 --> 00:44:12,591
is that you put some money here,

793
00:44:12,591 --> 00:44:14,591
in this sort of seesaw.

794
00:44:14,591 --> 00:44:16,591
So, you have this election that has two states.

795
00:44:16,591 --> 00:44:19,591
Normally, you'd create a market for like a no asset.

796
00:44:19,591 --> 00:44:20,591
In this case, there's only two,

797
00:44:20,591 --> 00:44:22,591
so the no and yes would be exactly the same,

798
00:44:22,591 --> 00:44:23,591
so you'd only have one of them.

799
00:44:23,591 --> 00:44:27,591
But, the point is, you could have a bunch of stuff,

800
00:44:27,591 --> 00:44:30,591
no shares, stacks of paper that are worth a dollar,

801
00:44:30,591 --> 00:44:32,591
if Hillary Clinton is elected,

802
00:44:32,591 --> 00:44:35,591
and worth nothing if she is not elected.

803
00:44:35,591 --> 00:44:36,591
And then, here would be the reverse.

804
00:44:36,591 --> 00:44:38,591
They'd be worth a dollar if she is not elected,

805
00:44:38,591 --> 00:44:42,591
and nothing if she was not not elected,

806
00:44:42,591 --> 00:44:45,591
if she was elected, so.

807
00:44:45,591 --> 00:44:47,591
Anyway, then you'd have these markets here

808
00:44:47,591 --> 00:44:49,591
that have these prices.

809
00:44:49,591 --> 00:44:51,591
Each of them would have their own price,

810
00:44:51,591 --> 00:44:55,591
and you'd swap money for little receipts,

811
00:44:55,591 --> 00:44:56,591
little pieces of paper.

812
00:44:56,591 --> 00:44:57,591
That is how it would normally work.

813
00:44:57,591 --> 00:44:59,591
But here, you start it off,

814
00:44:59,591 --> 00:45:01,591
and you put some money in the center.

815
00:45:01,591 --> 00:45:04,591
The trader, and then the trader could buy some

816
00:45:04,591 --> 00:45:06,591
by putting money on the left side.

817
00:45:06,591 --> 00:45:07,591
And as they buy,

818
00:45:07,591 --> 00:45:10,591
they'll be bidding up the price of no up,

819
00:45:10,591 --> 00:45:11,591
so these are reversed.

820
00:45:11,591 --> 00:45:14,591
It's from zero to 100%,

821
00:45:14,591 --> 00:45:16,591
or 100 cents on the dollar.

822
00:45:16,591 --> 00:45:18,591
So, as you buy, you'll be tilting.

823
00:45:18,591 --> 00:45:20,591
You'll eventually be betting against yourself,

824
00:45:20,591 --> 00:45:21,591
if you put too much money on here.

825
00:45:21,591 --> 00:45:24,591
And you'll be buying something for $1 a share

826
00:45:24,591 --> 00:45:28,591
that could be worth, at most, $1 a share.

827
00:45:28,591 --> 00:45:31,591
But then, if you buy, the price of yes will go down.

828
00:45:31,591 --> 00:45:35,591
This, in Euclidean space, it will go up,

829
00:45:35,591 --> 00:45:38,591
but this price of it will go down.

830
00:45:38,591 --> 00:45:42,591
And traders over here would then maybe buy more shares.

831
00:45:42,591 --> 00:45:44,591
When you put some shares on this at a lower price,

832
00:45:44,591 --> 00:45:46,591
there's like an automatic machine off the side

833
00:45:46,591 --> 00:45:47,591
that's printing out receipts.

834
00:45:47,591 --> 00:45:49,591
It watches people put money and take money off of this,

835
00:45:49,591 --> 00:45:50,591
and it gives them receipts.

836
00:45:50,591 --> 00:45:53,591
If you want to sell, you put receipts back in the machine,

837
00:45:53,591 --> 00:46:01,591
and it lets you pull money off of the seesaw, so to speak.

838
00:46:01,591 --> 00:46:03,591
This is an example

839
00:46:04,591 --> 00:46:07,591
describing the market state.

840
00:46:07,591 --> 00:46:09,591
This is in Microsoft Excel.

841
00:46:09,591 --> 00:46:11,591
If any of you want this, it's on the website,

842
00:46:11,591 --> 00:46:13,591
along with a lot of other examples.

843
00:46:13,591 --> 00:46:17,591
But you start out with zero shares issued of each.

844
00:46:17,591 --> 00:46:20,591
So, like, Hillary wins, Hillary loses.

845
00:46:20,591 --> 00:46:25,591
You start with zero, but it costs 485 units,

846
00:46:25,591 --> 00:46:27,591
45 Bitcoin, $45, whatever.

847
00:46:27,591 --> 00:46:30,591
But it costs that much to create this in the first place.

848
00:46:31,591 --> 00:46:33,591
That's the hippo money in the middle.

849
00:46:33,591 --> 00:46:34,591
And then someone buys.

850
00:46:34,591 --> 00:46:39,591
They have to pay .51, but they get one share.

851
00:46:39,591 --> 00:46:43,591
And it alters the prices.

852
00:46:43,591 --> 00:46:45,591
And then when this person wants to buy six,

853
00:46:45,591 --> 00:46:47,591
they have to pay 3.4.

854
00:46:47,591 --> 00:46:49,591
And so this time is flowing down this way,

855
00:46:49,591 --> 00:46:52,591
and you just keep updating these states.

856
00:46:52,591 --> 00:46:54,591
At the end, no matter what happens,

857
00:46:54,591 --> 00:46:56,591
you can never need more than this.

858
00:46:56,591 --> 00:46:58,591
No matter how many shares are bought and sold,

859
00:46:58,591 --> 00:47:00,591
you'll always have enough.

860
00:47:00,591 --> 00:47:03,591
It's fully collateralized to redeem

861
00:47:03,591 --> 00:47:07,591
when A equals zero actually happens.

862
00:47:07,591 --> 00:47:09,591
42 people have shares somewhere,

863
00:47:09,591 --> 00:47:12,591
and you need 42 units, $42 or whatever,

864
00:47:12,591 --> 00:47:16,591
to pay them back.

865
00:47:16,591 --> 00:47:19,591
So, now the cool thing is,

866
00:47:19,591 --> 00:47:22,591
the math is totally indifferent to the number of states.

867
00:47:22,591 --> 00:47:25,591
So I said before, it's terrible with a lot of states.

868
00:47:25,591 --> 00:47:27,591
But in this case, it's actually completely fine.

869
00:47:27,591 --> 00:47:29,591
And in fact, something grows.

870
00:47:29,591 --> 00:47:32,591
The required amount of capital grows logarithmically

871
00:47:32,591 --> 00:47:33,591
with the number of states.

872
00:47:33,591 --> 00:47:35,591
So you have a seesaw in the example I gave,

873
00:47:35,591 --> 00:47:38,591
but if you wanted to do the cross that I described

874
00:47:38,591 --> 00:47:40,591
with four states,

875
00:47:40,591 --> 00:47:41,591
then you just have some money in the middle,

876
00:47:41,591 --> 00:47:45,591
but it's in the middle of a four-way pyramidal seesaw.

877
00:47:45,591 --> 00:47:49,591
And then this is kind of like a plate on a pin or something.

878
00:47:49,591 --> 00:47:51,591
And you can have as many states as you want,

879
00:47:51,591 --> 00:47:54,591
all with the same initial money in the middle.

880
00:47:54,591 --> 00:47:57,591
And that means that everyone will be able to...

881
00:47:57,591 --> 00:48:00,591
this solves the problems I mentioned before,

882
00:48:00,591 --> 00:48:06,591
because someone will always be able to trade at any time,

883
00:48:06,591 --> 00:48:11,591
and you can have huge amounts of money in the center

884
00:48:11,591 --> 00:48:14,591
that's a small amount of money in the grand scheme of things,

885
00:48:14,591 --> 00:48:16,591
maybe like $1 million or $2 million,

886
00:48:16,591 --> 00:48:19,591
but would be very persuasive to someone.

887
00:48:19,591 --> 00:48:20,591
You say, ignore this market,

888
00:48:20,591 --> 00:48:22,591
but you say, actually, if the prices are wrong,

889
00:48:22,591 --> 00:48:26,591
if the price is off by 5 percentage points or something,

890
00:48:26,591 --> 00:48:30,591
someone could make $100,000, $200,000, $300,000, $1 million,

891
00:48:30,591 --> 00:48:34,591
then people will be like, I'm not going to ignore it,

892
00:48:34,591 --> 00:48:36,591
because there's a lot of money I could earn if it was wrong,

893
00:48:36,591 --> 00:48:39,591
and there's a lot of money that anyone could earn if it were wrong.

894
00:48:39,591 --> 00:48:41,591
So that is...

895
00:48:41,591 --> 00:48:44,591
and as again, this section of the talk could probably go on forever,

896
00:48:44,591 --> 00:48:46,591
but I think it's winding down at this point.

897
00:48:46,591 --> 00:48:47,591
Let me see.

898
00:48:47,591 --> 00:48:51,591
So, yeah, I'll just skip all this.

899
00:48:51,591 --> 00:48:53,591
So, yeah, this is the very last part.

900
00:48:53,591 --> 00:48:54,591
I think two slides.

901
00:48:54,591 --> 00:48:57,591
So it's like, where would you get the money?

902
00:48:57,591 --> 00:49:00,591
But actually, I think when the time comes,

903
00:49:00,591 --> 00:49:01,591
if the money is needed,

904
00:49:01,591 --> 00:49:04,591
like if there really is someone creates the markets

905
00:49:04,591 --> 00:49:05,591
and they're stalling out

906
00:49:05,591 --> 00:49:09,591
because there's not enough trading activity,

907
00:49:09,591 --> 00:49:12,591
I think it would actually be pretty easy to get the money,

908
00:49:12,591 --> 00:49:13,591
because you can draw a comparison

909
00:49:13,591 --> 00:49:15,591
to three other types of donation activity.

910
00:49:15,591 --> 00:49:18,591
So we have donations to presidential candidates,

911
00:49:18,591 --> 00:49:20,591
super PAC donations,

912
00:49:20,591 --> 00:49:22,591
and donations to, like, a charity

913
00:49:22,591 --> 00:49:24,591
that helps keep politicians honest,

914
00:49:24,591 --> 00:49:29,591
for example, the Annenberg Political Fact Check.

915
00:49:29,591 --> 00:49:31,591
And you can see that actually,

916
00:49:31,591 --> 00:49:32,591
just in terms of money raised,

917
00:49:32,591 --> 00:49:35,591
it's unbelievable as much as Bernie Sanders

918
00:49:35,591 --> 00:49:38,591
raised $18.2 million in just six weeks,

919
00:49:38,591 --> 00:49:43,591
Kamala Harris raised $12 million in quarter one of 2019,

920
00:49:43,591 --> 00:49:45,591
Pete Buttigieg $7 million,

921
00:49:45,591 --> 00:49:47,591
Elizabeth Warren $6 million.

922
00:49:47,591 --> 00:49:49,591
The super PACs in fiscal year 2016,

923
00:49:49,591 --> 00:49:52,591
they had $1.79 billion in donations.

924
00:49:52,591 --> 00:49:54,591
That's a ridiculous amount of money.

925
00:49:54,591 --> 00:49:56,591
And just this one tiny little charity

926
00:49:56,591 --> 00:50:02,591
that helps to check what politicians say for accuracy,

927
00:50:02,591 --> 00:50:09,591
even they got $1.16 million in total donations in a year.

928
00:50:09,591 --> 00:50:11,591
You only need to assemble this money

929
00:50:11,591 --> 00:50:14,591
once per important election cycle,

930
00:50:14,591 --> 00:50:18,591
so maybe once every two, four, six years.

931
00:50:18,591 --> 00:50:19,591
You just need to have enough

932
00:50:19,591 --> 00:50:20,591
to be persuasive to most voters,

933
00:50:20,591 --> 00:50:23,591
and most, I mean, I think average household wealth

934
00:50:23,591 --> 00:50:26,591
is, like, I think it's 44K.

935
00:50:26,591 --> 00:50:28,591
I'd say around 50K here.

936
00:50:28,591 --> 00:50:30,591
So if you have a lot of wealth,

937
00:50:30,591 --> 00:50:34,591
you could at least get the attention of many people.

938
00:50:34,591 --> 00:50:35,591
I think you might need

939
00:50:35,591 --> 00:50:37,591
as little as $5 million per four years,

940
00:50:37,591 --> 00:50:40,591
which in the grand scheme of all this,

941
00:50:40,591 --> 00:50:42,591
I think is sort of achievable.

942
00:50:42,591 --> 00:50:44,591
It's also easier to,

943
00:50:44,591 --> 00:50:46,591
this is an easier sell in a couple ways.

944
00:50:46,591 --> 00:50:47,591
I'll skip to number four,

945
00:50:47,591 --> 00:50:48,591
and then go back to three.

946
00:50:48,591 --> 00:50:50,591
But one cool thing is that this is,

947
00:50:50,591 --> 00:50:53,591
you're giving money, and it's 100% efficient.

948
00:50:53,591 --> 00:50:54,591
So normally if you give money

949
00:50:54,591 --> 00:50:56,591
to the Bill and Melinda Gates Foundation,

950
00:50:56,591 --> 00:50:58,591
some of it goes to administrators,

951
00:50:58,591 --> 00:50:59,591
where it's just gone.

952
00:50:59,591 --> 00:51:01,591
You have to pay the secretary or something.

953
00:51:01,591 --> 00:51:05,591
And then you don't know how they spend it.

954
00:51:05,591 --> 00:51:06,591
They say they spend it a certain way,

955
00:51:06,591 --> 00:51:07,591
but you don't really know.

956
00:51:07,591 --> 00:51:09,591
But with this, it would all happen on the blockchain,

957
00:51:09,591 --> 00:51:11,591
not to be cliche about it.

958
00:51:11,591 --> 00:51:13,591
And so all the donated funds contribute directly

959
00:51:13,591 --> 00:51:17,591
to the election reform cause.

960
00:51:17,591 --> 00:51:18,591
There's no overhead.

961
00:51:18,591 --> 00:51:20,591
None of the money goes to me, for example, at all.

962
00:51:20,591 --> 00:51:22,591
And none of it can possibly be wasted.

963
00:51:22,591 --> 00:51:25,591
It goes directly, you have a direct impact.

964
00:51:25,591 --> 00:51:28,591
Another thing is that it's private, uncensorable.

965
00:51:28,591 --> 00:51:30,591
No one can stop you or someone like Roger Ver

966
00:51:30,591 --> 00:51:32,591
or something from donating,

967
00:51:32,591 --> 00:51:34,591
just because they don't like him.

968
00:51:34,591 --> 00:51:37,591
You can add a little message to your donation.

969
00:51:37,591 --> 00:51:38,591
If you want to be unanonymous,

970
00:51:38,591 --> 00:51:41,591
you could say this donation in memory of whatever

971
00:51:41,591 --> 00:51:42,591
and something like that.

972
00:51:42,591 --> 00:51:44,591
So you can do stuff like that.

973
00:51:44,591 --> 00:51:45,591
But another point is this third point,

974
00:51:45,591 --> 00:51:48,591
is that a lot of people are unsatisfied,

975
00:51:48,591 --> 00:51:49,591
but they don't know what to do,

976
00:51:49,591 --> 00:51:51,591
what specifically to do.

977
00:51:51,591 --> 00:51:53,591
And the people who do come up with things to do

978
00:51:53,591 --> 00:51:57,591
often end up, they sort of split the vote in a sense,

979
00:51:57,591 --> 00:51:59,591
which is that you have people who are like,

980
00:51:59,591 --> 00:52:01,591
both parties suck, so I'm voting Libertarian.

981
00:52:01,591 --> 00:52:02,591
But you also have people who are like,

982
00:52:02,591 --> 00:52:05,591
both parties suck, so I'm going to vote Green Party,

983
00:52:05,591 --> 00:52:06,591
because what difference does it make?

984
00:52:06,591 --> 00:52:08,591
Or I'm going to vote for,

985
00:52:08,591 --> 00:52:10,591
I don't remember who Jill Stein is.

986
00:52:10,591 --> 00:52:11,591
Is she the Green Party?

987
00:52:11,591 --> 00:52:12,591
I don't even remember.

988
00:52:12,591 --> 00:52:15,591
But there's another one.

989
00:52:15,591 --> 00:52:18,591
We have a small, at least in Connecticut,

990
00:52:18,591 --> 00:52:19,591
there's a small labor party.

991
00:52:19,591 --> 00:52:22,591
And I think there's a reform party

992
00:52:22,591 --> 00:52:23,591
that's a real party.

993
00:52:23,591 --> 00:52:24,591
Yeah, there's extreme.

994
00:52:24,591 --> 00:52:25,591
So that's the other thing,

995
00:52:25,591 --> 00:52:26,591
is that if you're Libertarian,

996
00:52:26,591 --> 00:52:28,591
there's extreme factions of Libertarianism as well.

997
00:52:28,591 --> 00:52:30,591
There's anarcho-capitalist,

998
00:52:30,591 --> 00:52:33,591
and then there's Ron Paul sort of people.

999
00:52:34,591 --> 00:52:36,591
And then there's many different groups,

1000
00:52:36,591 --> 00:52:37,591
and they all disagree.

1001
00:52:37,591 --> 00:52:39,591
But with this, it's kind of easy.

1002
00:52:39,591 --> 00:52:42,591
You're all agreeing not to agree.

1003
00:52:42,591 --> 00:52:43,591
You're just saying,

1004
00:52:43,591 --> 00:52:45,591
this money is going to go in the center,

1005
00:52:45,591 --> 00:52:46,591
and we don't know which candidate

1006
00:52:46,591 --> 00:52:48,591
it will end up helping,

1007
00:52:48,591 --> 00:52:50,591
because the process hasn't even started yet.

1008
00:52:50,591 --> 00:52:52,591
So you don't have to think about it too much.

1009
00:52:52,591 --> 00:52:54,591
You can just think about how angry you are

1010
00:52:54,591 --> 00:52:56,591
at the existing options.

1011
00:52:56,591 --> 00:52:58,591
And you don't need a third-party candidate to win.

1012
00:52:58,591 --> 00:53:01,591
You can just induce the two major candidates

1013
00:53:01,591 --> 00:53:04,591
to compete on those metrics.

1014
00:53:04,591 --> 00:53:06,591
And you can add as many metrics as you want

1015
00:53:06,591 --> 00:53:07,591
because of this dish thing.

1016
00:53:07,591 --> 00:53:09,591
You can make millions of rows

1017
00:53:09,591 --> 00:53:11,591
and have tons of states,

1018
00:53:11,591 --> 00:53:14,591
and it will only be diluting the liquidity log and size.

1019
00:53:14,591 --> 00:53:16,591
So it will dilute it somewhat,

1020
00:53:16,591 --> 00:53:18,591
but not that much.

1021
00:53:18,591 --> 00:53:21,591
And so, yeah, that is the talk.

1022
00:53:21,591 --> 00:53:22,591
Yeah, that was a lot of stuff,

1023
00:53:22,591 --> 00:53:24,591
but thank you for listening to it.

1024
00:53:24,591 --> 00:53:29,591
Thank you.

1025
00:53:29,591 --> 00:53:30,591
Yes.

1026
00:53:30,591 --> 00:53:32,591
I'd be happy to take any questions.