So, it mostly got a copy over from Windows to Mac, okay, but some things are a little weird, but I looked at all the slides and they're mostly fine.

So, this talk is about my project, which is Bitcoin Hivemind. It was originally called Truthcoin. I was working on it before I was working on Drivechain, and I put it on hold.

But it's a very different thing than what a lot of other people have worked on, and I worked on it very early.

So, this presentation is going to be about the problem that Hivemind solves, because almost all of the blockchain projects out there today don't actually solve any problem at all.

So, it's a complete waste of time. So, I'm going to try to talk about that. I'm going to talk about why Hivemind works is too complicated.

Or at least I'm not very good at explaining it, even though I don't think it's that complicated in reality.

So, governance. This project is about governance, and that's defined as group decision making.

So, we have some people here. They have some will or some preferences, and then groups.

They come to some agreement, and then there's a policy that's enforced on the entire group.

Governance has a lot of problems, which include rational ignorance and preference aggregation.

The goal is to solve these problems with conditional prediction markets.

So, let's just check. See, this is what I didn't want to happen.

It will blind it on both ends, which is not what I want to happen, but that's okay.

So, here's what the talk is going to be about. I'm going to talk about...

I'm really curious about if you may even have to do this first part, because I would like to know...

So, could people raise their hands, please, if they consider themselves to be a libertarian?

If you're a libertarian, could you please raise your hand?

Raise your hand if you really just don't care at all about politics, and you just try to avoid talking about it as much as possible.

That's great. The project is really dedicated to those people.

So, is anyone here one of these fringe anarchists or anarcho-capitalists or something like that?

There are many in the Bitcoin. Please don't be shy. I'm just curious how many, to what extent, there are in New York.

You can just do a weird noncommittal hand gesture.

So, maybe I won't need to go into this a lot, because the first part of the talk is really about that.

And, unfortunately, what I plan to do is deliver it kind of professor-style and just give a talk,

and then I was just going to read this with it blinded out, but when I press the blind thing, it blinds it out on mine, too,

so I'd have to do it from memory, which I could probably do, but it wouldn't be great.

So, maybe I won't emphasize that part.

But then I'm just going to talk a little bit about how society reacts to problems in general, very quickly.

Then I'm going to talk about the governance problem in particular,

and then I'm going to talk about prediction markets, which I think is where we'll really get going,

and then I'm going to talk about, in particular, these conditional prediction markets that are on the blockchain

as the solution to this problem, and then just like two or three slides about, in practice,

how to actually get any of this done in the real world, which is the goal.

The goal is to use this project to basically fix the U.S. Congress, so it's a very big project.

But before that, you do often run into people who say that there's a sort of total moral objection to governance existing at all,

and they say, I don't want to have any decision forced on me, and I didn't sign any social contract or whatever,

and these people believe that every individual should have a pure veto on everything,

or rather that consent can never be estimated.

But I think since there's not a lot of people, and this is like a room for more practical people,

I might be able to skip all this, which is great, because it's a lot of text.

I think what I'll do is I'll come back to it at the end, if anyone cares.

So I do talk a little bit about – I will say one thing.

We do have one example of where governance is very clearly useful,

which is we had the ozone layer that we tore a hole into in the 1980s,

and then everyone met in Montreal and agreed to replace the CFC gases in refrigerators with something else,

and that reversed the destruction.

If I'm remembering correctly, there were already animals dying and people getting skin cancer in Cuba, Chile, and other places.

As a result of the ozone layer, it was a very rapid problem, and the deal is you only have one Earth.

It's not like all the Earths compete on their carbon tax policy and their climate policy,

and you can just teleport from one Earth to another.

We're all trapped in one.

So as much as I hate saying that as someone who has a strong background in economics,

sometimes we are all in it together, and that is – so in those cases, you absolutely have no choice.

You have to use governance. You have no alternative.

There's this other thing like a giant nuclear explosion that obliterates the planet or something.

You can come up with this grey goo, self-replicating nanotechnology.

You can come up with these weird cases where – but I think basically I'll just skip a lot of this

because this is a cool part about Karl Popper.

Everyone should read Open Society and Its Enemies. It's really short.

It's described by all the isms.

Every ism is a waste of time, including anarchism and libertarianism and everything.

So this is kind of like dedicated to all the people who don't care about isms because they're all false.

So that's good. So I can just skip all that because normally you wouldn't believe,

if you're in the Bitcoin world and you give a talk about something,

people will just – they won't be undecided from the beginning

and just think governance is totally a waste of time, problem to solve

because we just need to go on vacation to Anarchapulco

and that will make all the bad policies in the world just go away somehow.

So that's a little bit about the second part, which is just about problems in general.

So I have an example about this where there's no rain and a bad harvest.

So what I'm saying is there are different ways of looking at a problem.

The best way is to just solve the problem where you have more knowledge and technology

and then the problem is just solved.

But at first, you really may not understand your problem at all,

and you may waste a lot of effort,

and you may misunderstand it to such a great degree that your misunderstanding of the problem

becomes almost part of the culture or is used as a kind of pretext.

So that is when – in this example that I'm about to show you,

it's sort of like the idea of praying for rain.

Culture may eventually rely on these false solutions

because that's just what people have always done,

and anyone who does something different sort of looks strange.

But the point is you really may not know what's going on in the uppercase here, which is red,

and then you may reach a zone where you know that there's a problem,

but you don't know what to do about it, so you just sort of deal with it.

But then finally you do know what to do about it,

and then you feel like an idiot for all those other things that you were doing before.

So if there's bad rain, you can either pray where you're not doing anything to get more water to the plants.

You think the problem is not water.

You think it's just the problem of you not behaving the right way or not praying enough or something.

And people use the false solution as an opportunity for socialization.

So I think that that summarizes most of politics, really, that no one is trying to get anything done.

If you are a Democrat, you just want to show people how much you care about the poor and minorities,

and if you are a Republican, you just want to show people how much you care about kind of like grit or duty or something like that.

And if you're a libertarian, you want to show off how much of a wacky free thinker you are,

and it's not really about doing anything, and so that's where I think this is.

Yeah, it's very much of a signaling type thing.

And then the other thing is if you're not getting enough rain reliably, you can just say that you're just going to settle.

You're going to give up, basically, and you're going to say rain is just not reliable,

and I need to do something else like ration the food more or have fewer children or livestock, food-eating things,

and maybe I can go hunting instead or whatever.

I can plant more seeds to overcompensate for the eventual loss, which is like you could just work harder.

But in contrast to that, you will eventually feel like an idiot

because one day you will discover that you could have done something else that would have just solved your problem.

So this is the idea here that eventually we figure out how to make pipes and water and other things like that.

So that's kind of like where this is going where, I mean, I love Ron Paul a lot,

but it's not practical to vote for someone who can't win in a first-past-the-post democracy.

So the question is, why do we do it? Just to express outrage or other things?

With respect to the problem of governance, which is what this talk is about,

you have these three kind of modes here, and I see just kind of vague complaining as the Frerer case up at the top,

and I see the sort of cypherpunks and encrypted email and Bitcoin as this middle case where you say,

well, governance doesn't really work, so I'm just going to shield myself from all the craziness that's going on.

But then I think that you can try to solve the problem with this technology, which is the traditional prediction market,

and I'm not going to go into a lot of detail about what it is.

That's not to say that this is like a better, more likely to succeed project than Bitcoin or better.

Bitcoin is obviously a really awesome project, but I'm just trying to say that the style of approaching the problem

is sort of defensive in Bitcoin. It just says that you want to ignore or be immune to all the crazy stuff that is happening in Congress,

whereas you would want to maybe take a more active role in the lower part to just make sure that only good things happen.

So okay, so now that ends part two. So now why is governance such a hard problem to solve?

Well, if you ask me and some other people, we say that it's something called multi-factor competition, which I'm now going to explain.

But first I'm going to talk about single-factor competition.

So let's say you've got $20 and you want to buy some dinner.

Life is going to be good for you because you have three restaurants and you're choosing and dining alone,

and you just have the one thing, which is what can you buy with $20 and how much will you enjoy it?

So this is your expected satisfaction vertically here by spending $20 or less at whatever restaurant,

and those are your three choices, and you have one choice that is the best choice.

And so you always get the highest satisfaction possible.

You may not get infinite satisfaction, but you have the highest satisfaction possible.

And the restaurants are induced to compete on this metric of satisfaction per dollar.

So everything works pretty well during this world.

And even if it doesn't work well, it improves over time.

So that's pretty awesome.

The problem is when you have multi-factor.

So this is fine.

This thing glitched over when he copied it from this map.

So in a multi-factor world, your decision depends on lots of different things at once.

So imagine a slightly different situation where many people are choosing to eat somewhere, at some restaurant.

And in addition to having preferences about the food, they strongly prefer to all meet at the same place.

So it's like you're going on a date or something, and you don't want to end up at a different restaurant.

That would not really be helping you achieve your goal.

It depends on how much you like the food at one certain place.

But that's my point, is that sometimes you can't get everything.

So this question is much harder.

The decision that you ultimately make is going to depend on what you prefer, which is what I had before.

That's the first factor.

But it's also going to depend on where other people might go.

And now you have a giant infinite recursion problem.

But basically, where other people go, that is going to be a function of what they prefer.

And maybe they prefer the same thing as you, but that's not going to get you out of this mess,

because where other people might go is not just a function of what they might prefer,

but where they think other people are going.

Because they also think that they want to be near where other people are,

and so maybe they want to sacrifice where they are eating in order for the sake of having better company or something.

So where they think other people might go, technically it goes on forever.

But in general, it's a function of everyone's collective best guess on where most people currently plan on going,

which I'm going to call status quo.

So they have some guess that is just their default guess.

And it doesn't literally need to be the status quo that happened in the past,

but the point is just whatever their state of mind is right now, that is what it is.

And then their state of mind might be changed, so it's a function of the status quo,

and since it's the case that time, attention, and communication are not free,

in some cases they're very costly.

So because of that, it's not only the status quo, but it's also how open to communication or negotiation is.

So we have these preferences thing, and then we have this vague measure of whether or not people are willing to talk about this

for hours and hours, discuss the whole time.

It's important to keep in mind that the negotiation doesn't really improve the set of options.

So although it might bring you to a better option, every minute you spend negotiating is wasted,

because the best thing is to get the best option first,

but if you're not going to be able to ultimately change the option,

then you're just digging yourself further and further into a hole and wasting more time.

Now the weird thing is you have four or something like two or like one plus f of x,

you have more than one criterion, but you can't broadcast how you feel about each of them.

At the end of the day, you just have to pick one place about where you're going to go,

and so you must aggregate these four different things.

And in this little example, these preferences are the same.

This is the same little figure that I put on the previous slide.

So it's the same shape. You see that the little middle one is the tallest.

And so even though everyone believes the same thing,

I also have assumed in this example that everyone thinks that they're going to the one that no one likes,

and so they just assume that they're all going there even though no one likes it there.

So there's a little bit of pluralistic ignorance going on,

and if all these three are the case, then if finally it's also the case that people aren't open to communication or negotiation,

then they will not be able to talk about the fact that none of them like this place.

They'll all just assume.

It'd be kind of like a weird, awkward, extended family gathering

where you've always met at the same place for Thanksgiving

and no one is afraid to say that they don't really like it there anymore,

and so awkward just kind of keeps going because people are afraid to be open about that or whatever it is.

We have a big problem with this self-fulfilling prophecy with respect to this last one

where if everyone believes that negotiating to pick a better restaurant is a lost cause,

if they think that the negotiation is a waste of time, then they won't want to be the first to open the negotiation.

So it's a circular logic, and either everyone will negotiate and then they will make it as best as possible,

or really no one will, and it will always stay at the status quo.

Negotiation is especially hard when there are lots of people and lots of alternatives, right?

Because that just geometrically explodes the number of things that people can talk about

and who you have to talk about them with.

It goes on and on and on forever.

And so when there's a lot of people, just like in the United States there's 250 million adults

and there are infinite number of policies, the prophecy is likely to self-fulfill in the lost cause direction.

So that is too bad.

So, oh yeah, this is too bad. This glitched a little bit, but it's okay.

That weird thing that I brought up in the last slide is not like some weird fringe thing that I just kind of invented.

It's a very common desire to want to stay in sync with other people,

because that reduces ambiguity, it reduces the need to negotiate for things, and it reduces conflict.

And it also gives you network effects and economies of scale.

So I was going to drive on the left in Australia.

It doesn't really matter whether you prefer driving on the left or driving on the right.

It doesn't matter that much.

The point is just that you really want to be doing the same thing as everyone else.

It's the dominant thing that you would care about in that scenario.

And then I had a cool thing here, but the formatting is messed up.

You've got to compare the idea of competing, starting a new competitor to Facebook or Craigslist,

and you compare that with competing, you start up a new barbershop or something like that.

It's a totally different mode of competition.

I thought this was so funny I had to put it in.

It says, why you should stop asking, is Google Plus dead?

And I just think that's kind of a funny joke, because if you have to ask, right, then it is dead, right?

So let's see. Yes.

So again, you get moral arguments sometimes, so I have to talk about them.

But basically, we know that people will put up with Facebook.

You know, Facebook changes the format, and especially if they were doing this like five years ago,

they would change the format all the time, and everyone would be like, I hate this format.

But everyone puts up with it because the alternative is no Facebook,

or number two, an endless and ultimately futile negotiation with unmotivated friends and family

to switch to one particular alternative among many, right?

So if you're going to leave Facebook, where are you going to go?

There's too many potential options.

Then the people that you're talking to, they need to then go and convince all of their own friends.

Who would need to convince their own friends? I don't know.

It's literally impossible.

In the same way we put up with governments and the question of governance,

even though they are incompetent, because the alternative is no property rights,

which is like the naive anarchism death spiral.

But then the other alternative is some really weird, potentially endless negotiation

with a potentially violent, maybe not, but possibly violent transition period.

And who knows whether or not what you end up with is even better or not.

Animal Farm by George Orwell is probably my favorite book.

And for them, they did not end up any better.

They just did a lot of effort, and then just to suffer more at the end.

Obviously there's a big similarity between this scenario of just sadness and unalterability and voting.

So a big problem with voting is that it costs too much to figure out who to vote for.

You need to know the existing option and the challenger and both plans.

So the policies that they plan to enact, that's what I mean by that.

And the likelihood of follow through.

So sure, I remember very clearly that Barack Obama said that he would close Guantanamo Bay.

But it's still open.

So maybe Barack Obama has a plan to close Guantanamo Bay, but he never got around to following through on it.

And then you need to know the effect of these plans on you.

So if someone has something weird like a new tax plan or like a health care bill or something like that,

how are you supposed to know?

Some of these policies are super complicated, and there's no way you can ever know really for sure.

Definitely not as much as some specialist would know what effect the policy will have on you.

So most people don't even care about any of this at all.

So 71% of Americans can't even name their congressional representative.

I can't name my own congressional representative, and I will randomly quiz people out of sort of curiosity.

I've been surprised. My estimation is that more than 29% can.

So I don't know. I have some smart friends or something, I guess.

Because the point I'm trying to make is it's totally useless to know this because it can't improve your life at all.

So I don't know why people would know, and I don't know myself.

But the point is that we're very far away.

I mean you want to know your name, the name of the person, and you want to know their challenger,

and you want to know all the proposed policies and their voting records,

and the likelihood of something new happening, and you need to know this not just for one U.S. Congress,

but what about the state senators, let alone the governor or the mayor or something.

I have a funny story about this, which I think I have a little bit of time to tell, which is that

I was talking to someone who was literally herself, she was a U.S. Congress person.

And I was like, I've got to tell them about this funny thing that most people can't name their Congress person.

And she told me a really great story.

So she's from State A, let's say. I didn't really clear this with her, so I don't want to say anything.

But she's from State A, and she was flying from State B to the capital in Washington, D.C.

And she happened to be sitting next to a bunch of lobbyists on the plane.

So she's like, oh, how funny is this? I'm a Congress person. I'm sitting next to lobbyists on the plane.

And so obviously they were talking, and the lobbyists, they all live in State B,

but they were going to the capital. They were flying from State B.

And so the lobbyists, they obviously had these targets for these people that they were going to hit

to try to persuade them to pass various laws and other things.

And they knew those guys. I think in one case they knew them literally down to their shoe size

because they were literally buying them shoes or something absurd like that.

So they knew all this stuff about the Congress people that they were trying to persuade,

that they had been paid to persuade.

But then she asked them about their own Congress people, the Congress people in State B,

and they had no idea who they were.

So even lobbyists who are paid to know things about representatives and senators,

even they don't know their own.

So this idea of the civic duty is kind of a joke on my part.

And so the reason is this multi-factorness.

There's a lot of things, but in particular it's electability.

So I don't know if anyone here or how many people here are interested in this super cool thing

called Arrow's Impossibility Result.

He won the Nobel Prize in Economics for this.

And it demonstrates that you have these things that are four assumptions that are very, very reasonable.

They're like more than one voter or something.

And if you don't have more than one voter, you're not really voting.

And the deterministic – these first two are technicalities.

You can't even bring them up. They're so simple.

But what he says, of these four things, you can never have all four of them be true at once.

He demonstrated this using some math, which is pretty neat.

But the first two are so important that you can't dismiss them at all.

It's only the second two where you have to choose one to sacrifice.

And it's shocking that in no normal voting scheme where you pick your favorite one,

and other people pick their favorite one, and then you try to choose one winner.

No voting scheme can satisfy all four, so you have to sacrifice one of these two.

The first one is you can't hurt an option when everyone ranks it higher.

So it's like, well, it seems like we might need that one.

But the second one is even more ridiculous, which is the irrelevant alternatives really are irrelevant,

which is that you can't hurt an option by re-ranking the options below or above it.

So if you're trying to vote on Jeb Bush versus Bernie Sanders,

and then people rank – they decide they like Hitler more than Stalin or Stalin more than Hitler,

that cannot hurt either Sanders or Jeb Bush.

And you think like, oh, my God, both of these two seem pretty reasonable.

But unfortunately, you can't have them at all, and the point is this phenomenon of strategic voting.

Most practically, it is the idea of splitting the vote.

So if Jeb Bush had run, he would probably have split the Republican vote.

And so even though he may have dragged people's preferences towards the political right,

the outcome would have been worse for the right.

And so hence why we have all these things like political parties and primaries and superdelegates

and all these weird techniques to try to stop this from happening.

So when a vote is split, all the votes that were cast with a lost cause don't contribute at all

to the one battle that really matters.

So it all leads to this circular concept of electability,

which is kind of like the status quo of the restaurant before,

which is that some people believe that a choice is a lost cause,

and so you can't throw your vote away for that.

It ends up being a lost cause, and even just random people like CNN

end up having a lot of influence just because they can flag people as lost causes.

So in order to solve this problem, we're going to need a reliable source of information on who to vote for,

and we're going to need a way of crunching the multifactoriness back down,

and we'll also need a way of preventing people from capturing this process.

That is the blockchain, obviously.

So first we're going to talk about this prediction market thing,

and hopefully it won't take too much time.

A prediction market is a market for a special kind of derivative.

So this is an example from Intrade, which was my favorite website on the Internet

before it closed in 2012.

But this is a screenshot. I don't remember this.

I guess this is from January 2013.

This thing is some asset that is worth $100

if the year 2012 is the warmest year on record

as measured by some NASA satellite that calculates surface temperature abnormalities.

So you have some exact source, and it says,

if 2012 is the warmest year on record, this thing will be worth $100.

Otherwise it's worth $0.

So as you can see, although 2014 I think was the warmest year on record at this time,

2012 was not.

And this runs from January 2011 to the end of 2012, which is right there.

And you can see that the price is going down.

As it's going down, it becomes more and more obvious that it's not going to work for 2012.

As the likelihood of this event happening goes up, the price goes up.

And as the likelihood goes down, the price goes down.

And so that's just a random example.

And let's see, this glitched a little bit too, but it's okay.

So these are just normal derivatives.

This is like a binary call option that says I owe $20 to someone who has this

only if stock price of some corporation is above $20 a share.

The idea of an event derivative or a prediction market, they're the same thing.

That's saying I owe $20 to whoever owns this derivative on some date

only if Hillary Clinton is elected president.

So I owe $20 if she is, and otherwise I owe nothing.

And the idea is that – I think I'm going to skip this.

Actually, I'm going to explain this part.

So the price was $40 out of $100 at the beginning of January 2011.

So since the price is $40 and the maximum price is worth $100 if it actually happens,

that implies that the objective likelihood of the event is 40%.

And it just conjectures that. It doesn't prove that or anything.

But it says that it's open to refutation.

So if someone doesn't agree that it's 40%, they can make a trade in this market

and pick up expected value.

And since anyone can do that, it's just assumed that if you're not doing it,

it's because you actually agree.

And so it's a way of getting everyone to agree.

And let's see how bad this glitched out.

Okay, it's not that bad.

This looked a lot better on Microsoft.

So what happens is markets aggregate all of society's information

because anyone who disagrees with the current market price can make money

by trading against it.

A lot of people will say that they disagree, but they won't trade.

The real reason is because they don't actually disagree.

They're phonies, which is great because we get to just ignore them,

which is exactly what you should do.

But when members of the public observe this price for free,

which is free, just like checking the stock price of Apple or something,

you get reliable information, which is to say that it's right

or it's at least as little wrong as possible because anyone can refute it

at any time while making money for themselves in expectation.

But not only is it reliable, but it's also common.

So it's broadcast to everyone, and everyone knows that everyone got it.

And that's going to make a really big deal in a couple slides.

But basically it does all the research for us on any given issue,

which in this case is the likelihood that 2012 would be the warmest year on record.

It does all the research for us, and it also does all the persuading.

Everyone knows.

So this is like all these people, and you try to aggregate.

One expert tells you that global warming is fake, and one tells you that it's not,

and one tells you that, well, it's real, but it's a good thing,

and other people say, well, it's real, but it's not caused by humans.

And you're just confused, and everyone's confused separately,

but all the information sources, some of them are very bad,

but listen to them, some of them are very good.

They go into the prediction market, and everyone is happy,

and they all have reliability.

I'll probably skip this part.

But I will say that prediction market supports a clear definition.

So people don't just talk about nonsense all day, like global warming is very abstract.

But when it comes time to make the market, you have to define exactly what you mean.

You have to pick like a real satellite or like a NASA log or something.

So that's nice.

That already helps people a lot.

Now hopefully that was, I don't know, that may have been confusing,

but it's about to get a lot more complicated because you can do very easily markets

that have more than one dimension.

So here's one where Hillary Clinton is elected in 2016.

She either is or she is not.

This is just like the global warming example where either it happens or it does not happen.

But you can also do two things at once.

So if some law or something is passed, you can sort of buy and sell based on that question

or that exposure.

And you can separately do that for this other question of whether or not

unemployment will be low, whether or not we'll have a good economy.

And you can do those separately as there'd be an example of this,

but just stamped out twice.

But if you do them together, you get all the benefits of what you had before

plus some other cool stuff.

In particular, you get the relationship between the two.

So while you have one question over here on this dimension, what have you,

when you add these probabilities up, these are called joint probabilities,

and you add them up, you get exactly what you had before,

which would indicate that in this case would indicate that the outcome of yes

is 60% likely here because you add up the price of these two assets and you get 60,

and you add up the price of these two no assets and you get 40.

So you get everything you got before.

And this question, will 2016 be the warmest year on record?

This is a 50-50 thing.

So you get everything you got before,

but you also get the probability of both happening at once.

And when you do that, you also get what's called the conditional probability,

which says if you do something, would it influence something else?

So the probability is that not only will X happen, but also would Y influence X?

So positive relationship, negative relationship, no relationship.

And that is where it really gets going,

where you do these markets that say which CEO, or if we fired the CEO,

would most increase the stock price, which president would most decrease unemployment,

which Fed policy would most decrease GDP, if any,

or which law would most decrease violent crime.

That's where we could make the talk.

So we have the cheap, reliable source of information to vote for.

We have a way up.

We're going to capture it as a blockchain.

Now the last part is this crunching the multifactorness.

So here's an example where you have this multidimensional market

where someone is going to win the election in 2020,

and as I said, you add these up to get the likelihood.

So just guessing here, this is all invented by me,

but the Democrat would have a 61% chance of being elected in 2020 as president,

and the Republican candidate might have a 38% chance,

and then Elon Musk might have a 0.9% chance of being elected,

making him the lost cause that we mentioned before,

and then someone else might win.

But then this is the likelihood of a good economy in 2021 defined by some specific thing.

This is no, and this is yes.

So then you add this up, and you see we've got a 99.05% chance of having a bad economy

and a 0.95% chance of having a good economy.

But the crucial thing is that of those, 0, 0, 9, 5, almost all of them belong to.

So this is the map behind the conditional likelihood of the good economy.

So you go line by line, and you say, if someone else wins, then all this didn't happen.

So it's equally split here.

You have a 50% likelihood along this dimension of a good economy.

If the Democrat wins, of course they'll screw it up.

So it's certain that they'll have a bad economy with 0%.

And the same thing for the Republican candidate.

They will also start to screw it up with certainty.

But with Elon Musk, it's certain that it will go the other way.

Obviously, this is an exaggeration and just made up by me.

But the point is that we can fix the multi-factor by doing this.

And I'm going to demonstrate why.

It's because the election hasn't happened yet.

So even though there is a likelihood of winning that may be very small for Elon Musk,

these numbers might all validly describe the situation at time equals 1 or time equals whatever.

So you have here a case where someone is likely to be good for the economy but unlikely to win.

So the election hasn't happened yet. We have these numbers.

Everyone knows the election hasn't happened yet, and everyone knows these numbers

because they're the same for everyone, just like the Apple stock price.

And so what you have here is the voter who may decide, you know,

these numbers here are decided by me, and you can renegotiate them at any time,

especially last minute.

It's like if you're in the voting box and you just do some last-minute research on your cell phone

before you walk in to go voting, then you can do like an immediate, cheap, tacit,

renegotiate tacit, which means without speaking.

So without doing any negotiating at all.

You can do a renegotiation to elect this guy.

And it's better for unformed or angry voters.

And the less that people actually know, the better because they just say,

well, I don't know about any of this.

I've invested nothing in this process, so I'm just willing to just kind of go with this on a bark.

And the less that people interact with manipulative media or campaign ads,

the better because they're not invested emotionally in any candidate.

They just show up and they just pick this thing,

and we have returned actually to the single factor competition from before.

So people just pick whichever one they think is the best on this thing.

And now finally, just two slides on being practical.

How do we really get this going in practice?

Well, the idea I think is to ramp it up over time by creating the platform

and then using it on popular things like sports, like the Super Bowl or the Oscars or something.

And just kind of keep it up over time and just show people how accurate the results are,

which they should be maximally accurate.

People should be interested in them or maybe get more interested over time.

Even better though, the election process is so broken and people already hate it so much

that I think people will actually come around.

They have a high chance of coming around eventually or pretty quickly.

And I think especially we have these congressional elections where it makes a big impact who controls Congress

because Congress is in charge of everything.

There are some problems that you can only solve, I think, really in that kind of process,

as I tried to explain before.

And the voters are really uninformed.

The turnout is super low, like no one cares.

So I think more people don't vote than do for these elections.

So even if you've just got all those apathetic people who are just like,

oh, I'm not going to vote because this process doesn't work,

if they could be induced to do something that is really, really cheap,

and it just takes five seconds of their time,

I think that is a good avenue for maybe getting that to actually work.

And then how do we measure those things, like the likelihood of a good economy?

That, unfortunately, is talked about all the time, and that is the end of the talk.

So I don't know.

I started a little late, so I don't know if we have time for questions.

But that is the talk, so I hope that you enjoyed it.

Yes, questions?

Well, I have one observation.

If people are interested in net neutrality,

there's a website called battleforthenet.com,

and you can immediately see your representative.

With two clicks, you can send them a Twitter tweet,

put in your zip code, and you can immediately send them an e-mail,

and you can actually get involved very easily.

Well, that stuff is good, but the problem is when you vote,

it doesn't help you replace a leader who is bad.

If you go into the bad restaurant, you're just stuck in there

because you can't get enough people with you to replace someone that you don't like.

So that's better than nothing, but it doesn't really help, I think.

So the problem with governance.

Yes, question?

So I'm sorry, but I'm going to continue to break into the marketing thing.

Okay, great.

So the question I have for you is I hear what you're saying

about having two dynamics and trying to predict out of those two dynamics.

The thing is I follow you as you state the election

and the yes or no with bad economy.

Do you, I mean, is there something that you as an individual do?

Like, for instance, the climate and the bonus on your credit?

Because I'm probably going to find two types of data.

I'm just going to give them to you.

Yeah, that's a really good question.

So these are decided after the fact.

So before the election, there's no election on here,

but before the election you don't know who's going to win.

But you can place these conditional, I guess you could call them wagers almost, or bets.

You place them in advance, and then they don't settle until afterwards.

Now after the election is over, it would be very easy to observe who the winner was.

So you'll know whether or not Hillary Clinton won.

Everyone will know.

But you don't know before.

No one knows before, but afterwards everyone knows.

So there's a delay.

And what I don't think I explained very well is that there's four states here,

and when you buy this thing, this is the joint.

There's four things here instead of before.

So this thing, there's only one thing.

There's only one thing here, and there's no reason to plot the second thing

because in the case of here, if there's only one thing,

like if you only plot that was the yes outcome for the climate thing,

there's no reason to plot no because it would just be a mirror image of it,

so it's pointless to plot.

But when there's four, then there is a reason to plot them

because they'll all be different.

So if you buy this thing, you only get paid the $100 if the Climate Act is not passed

and if 2016 is not the warmest year on record.

So these are all joints.

So there's no combining until after the fact when you just throw a little switch

that says did it actually happen, yes or no.

So these things are all market assets that have their own market price,

and they'll be trading whatever they want.

So if you want to buy this thing, it will cost you whatever the market price is.

It might be $0.15, and then you'll get $1,

or it might cost you $15, and you'll get $100.

But this thing will only be worth any money to you if this outcome is no

and this outcome is no.

This outcome will only be worth any money to you if this outcome is no

and this outcome is yes.

If anything else happens, you don't get anything for what you own here,

which is why you would buy them in sections if you wanted to redo this thing.

If you wanted to recreate this two-state world, all you would do is you'd say,

instead of buying just one, where you would buy one over here,

instead of buying one, you would buy one and two

and the sum of their prices would be totally equivalent to the one in the previous case.

Yes, okay, good.

You said I have six minutes left?

Okay, so that's cool.

If there are more questions, that's great.

Yes?

I still don't quite understand something.

I'm repeating the same question, but I was wondering,

you have two independent things.

How can you come up with a joint probability?

These things, when they're created, they may not be connected at all.

In this case, they're not.

So they may not actually be connected at all.

That doesn't prevent you from creating a market that says something like,

I'm going to flip a coin and I'm going to roll a dice,

and if it's less than three, then it goes this way,

and if it's less than four, or three, or one, two, or three, it's over here,

and if it's four, five, six, it's over here, and if it's tails, it's over here,

and if it's heads, it's over there.

You could still have a market with that.

You'd have four assets or four tokens or something.

This one would be worth $1, let's say,

only if the dice roll is one, two, or three,

and the coin flip is heads.

If that happens, then this is worth $1, and all these are worth zero.

But if the dice roll ends up at five, and the coin flip is heads,

then this one will be worth $1, and the rest will be worth zero.

So it's not really until the end that they are entangled.

They're entangled by the structure that you impose here.

But there doesn't have to be anything in the real world that actually connects them,

other than, of course, the fact that we're all living in the same universe.

Just informed by people's belief, that's what you're saying.

Absolutely, right.

But see, the point is, someone might actually know.

Very few people would.

Very few people would, but some people might actually know

whether or not this act has any effect on 2016 being the warmest year.

Maybe it only has an effect on 2017.

Maybe it won't actually have an effect.

So someone might know, and that person will trade and try to make some money,

and other people will not.

They will be like, well, that doesn't look right to me,

but I don't want to trade because I don't know anything about it.

And then all of us get to ignore those people, which is exactly what we want.

Does that make sense?

Does that make more sense?

I think so.

I've got to think about it a little bit more.

Okay.

Each of these are what is – this thing right here with the 15,

that is now this thing.

So this thing is going around to 15, and it can go anywhere from 100 to 0,

and it's at 15 right now in this example.

And this thing is trading at 15.

This thing is trading at 5 cents.

So here's the thing is that almost no one thinks that if the act is passed –

no one thinks that both of these things are going to happen at once.

You can get those for pennies on the dollar.

So since you can get those for pennies on the dollar,

but this one is really expensive.

Imagine if this one cost almost $1.

So no, that would mean almost everyone thinks the act is not going to be passed,

and almost everyone thinks that 2016 is going to be a one-time thing.

Yes?

Is this what Gnosis is trying to do?

Yeah, so I know the guys behind Augur and Gnosis,

and I don't have a lot of – I don't think – yeah, it is what they are trying to do.

But I actually – they actually met me in April 2014,

and I know a lot about them and their projects,

and I've been waiting to be impressed for a long time.

And it's actually kind of shocking because we – I finished this –

a lot of the code for this was another person around 2015,

and I just can't believe that some of these other people haven't launched already

because what they did was kind of a fork of our thing.

I think if they just rebased off of ours, they could launch.

But part of the problem is that Ethereum has lots and lots of other problems that interact with this.

So this is why I really wanted this to be a Bitcoin sidechain.

It's much better at home.

Ethereum has all these problems with the gas costs

and with other smart contracts attacking each other,

and just with generally being more unstable and kind of ridiculous, you ask.

But yeah, they are – I had slides about that.

Yes?

For most of the privation markets I've seen, they rely on NASA, let's say, to have the outcome.

Is that something that this project you have sort of trusted?

Yes, there is a peer-to-peer Oracle system that I don't know.

I have a bunch of slides about it, but it's a little complicated to explain.

But that doesn't get around the fact that you need –

what the peer-to-peer Oracle system does is it maps information that you could easily find into the blockchain.

And so that's already a huge amount of work.

So the Oracle that I described, the peer-to-peer Oracle that I described,

it only works for things that are very easy to find.

So you need it to be as easy as who won the election, Donald Trump or Hillary Clinton.

It needs to be that easy because the human attention is very scarce and very unreliable.

So even those things that are very easy take some human people to map that into the blockchain

in a way that does not require trust and holds up strongly to attack

or people's computers catching on fire and stuff.

So that is what the white paper is really about.

It's not about any of this at all.

It's about the peer-to-peer Oracle.

And you can go to bitcoinhivemind.com and you can read about it.

And the white paper is still called Truthcoin, and Truthcoin is my Twitter handle

because no one can spell my last name.

It's impossible, Polish last name.

I think we're out of time then, right?

Yes?

Okay, great.

Thank you.

Thank you.