Proof-of-Take (#008): a dose of perspective and context in the world of Bitcoin
|Nov 12||Public post|
Welcome to Proof-of-Take. The separation of Money and State, enabled by Bitcoin, will happen in our lifetime. It will be one of the most important developments in the history of civilization. This is on-par with inventions like the printing press, antibiotics, and the internet. By the end of it, we may even be able to explain what a blockchain is.
As always, nothing below is investment, legal, or relationship advice.
Dale Carnegie famously wrote How to Win Friends and Influence People
Dale Carnegie famously said:
“Be more concerned with your character than with your reputation, for your character is what you are, while your reputation is merely what others think you are.”
And now, Dale Carnegie is famously, utterly wrong.
Character is important. But reputation is everything.
This may have been good advice before the information age. But the game has changed. There are three ingredients rendering this advice is wrong, each uniquely enabled by the internet.
The Black Mirror Effect
The internet has uniquely enabled us to measure, track, and permanently record reputation. This manifests in everything from a Yelp review, to your Uber score, to China’s new dystopian “social credit scoring.”
I name this “The Black Mirror Effect” due to an episode of the series taking place in a world where reputation literally is everything. Everyone has their own personal Uber rating — for every single interaction. People walk around constantly rating each other. From your best friend, to the ticketing agent at the airport.
In the show, a world of “highly rated” and “lowly rated” people emerges, with the high status people prohibited from accessing things like public places and airplanes. We’re not so far off from this world.
Today, your reputation permanently follows you, like a shadow. And governments, companies, and other people stand ready to weaponize it against you if it suits their needs.
The New Prestige Economy
A good reporters say follow the money. A good social psychologist says follow the prestige. People everywhere, particularly young adults, chase prestige like nothing else. Prestige can be a competition of who has the most beauty, athleticism, intellect or money.
According to Jon Haidt, as examined in his new book The Coddling of the American Mind, a “New Prestige Economy” driven by “callout culture” has emerged in certain pockets of society — namely college campuses.
In his words: “It emerged in ~2013. In the New Prestige Economy you gain prestige by calling out others. Accusing them of racism, sexism, homophobia, islamophobia, or some other form of bigtory… If we have an economy of prestige where I gain prestige by these callouts, there’s an cost imposed on the people I accuse, which doesn’t effect me.”
Nassim Taleb would call this problem: no skin in the game. In economics it’s called an externality. So we have a new economy with negative externalities. Just like companies who pollute rivers — they don’t directly bear the cost, so they increase their activity too much — past the optimal point for society as a whole.
Note that this economy too is uniquely enabled by the internet. Information is now ubiquitous and everyone has access to instant, mass communication. Sending a tweet, forwarding an email, or leaving a review on ratemyprofessor.com is trivial.
*I will of course make the MASSIVE caveat here that heinous actors who perpetrate crimes against people should be called out. Whistles should be blown. However, I think Haidt has hit on something more nuanced.*
(Here’s a good podcast with Haidt and Sam Harris further discussing this topic)
The Court of Public Opinion always gets its pound of flesh
The hallmark of the US justice system is built on the principle of “innocent until proven guilty.” We have this so that everyone enjoys “due process” under the law. It’s in the Constitution.
The hallmark of the Court of Public Opinion, is the opposite. You’re guilty until proven innocent. And the Court of Public Opinion plays judge, jury, and executioner.
Declaring someone guilty (aka destroying their reputation) without due process is bad enough. However, the court of public opinion routinely demands punishment for the crime. And they have a thirst for blood.
Typically, demanding that someone be immediately fired from their job is a good start for a crime committed in the court of public opinion. In some cases, only full exile from society would satisfy the bloodlust.
Again, this is uniquely enabled by the internet. Via social media, the court of public opinion is able to publicly twist corporation’s arms to take swift action.
My caveat above applies here. However, I’m not convinced that process (trial by social media) or outcome is fair crime. Regardless, this is our new reality. You’ve been warned.
There are many examples of this of the years, but here’s an interesting book on the topic.
Dale Carnegie’s advice, that character is more important than reputation, now sounds quaint. And entirely wrong.
How would Dale survive in China’s social credit system? Or on a modern college campus? Or on trial in the court of public opinion?
Thanks for reading! If you loved (or hated) this post, please forward it and share on social media 🙏. I’d also like to hear what you think about it. Hit me up on twitter @canthardywait. This post was inspired by a twitter conversation with my friend Sar