Kaal claims by topic: institutional-design, page 3

879 atomic, individually citable claims from the published work of Wulf A. Kaal tagged institutional-design.

If any single person could own the copyright to software that a decentralized organization uses, that person would hold de facto power over the organization, re establishing hierarchies of power inside it. 2021
Peer to peer networks scale more favorably than client server architectures because client server costs increase linearly per unit while peer to peer network costs can decrease with each added node, depending on topology. 2021
Decentralization is most valuable in chaotic times because the most talented members for a task are not blocked by a rigid hierarchy, unlike bureaucracies that respond to new problems with an outdated structure. 2021
The Tragedy of the Commons is a natural consequence of allowing anonymous participation, which is why the unfiltered layers of platforms such as Twitter, YouTube comments, and Reddit display toxic results. 2021
The r/place experiment showed that anonymous groups can self correct: each time a hate symbol such as a swastika appeared on the shared canvas, it was replaced with something more positive. 2021
Without the ability to rely on proven custody providers, mainstream and legacy institutional investors are restrained from making digital asset investments for legal or business reasons. 2021
A private key differs from a password in that it is immutable and cannot be reset, so if the key is lost or stolen access to the digital asset may be permanently lost. 2021
The unprecedented growth rate of decentralized exchanges may be an early indicator of increasing reliance on decentralized self-custody by retail users, but mainstream institutional adoption of digital assets is unlikely to materialize through self-custody and DEXs. 2021
Cold storage trades security for accessibility: retrieving digital assets from cold storage can take many hours or even days, which makes cold storage especially ill suited to dynamic trading strategies. 2021
Institutional investors are less likely to engage in digital asset investments where custody solutions for digital assets are underdeveloped, and they find it difficult to commit fully until a reliable and respected custody solution exists. 2021
Self management of private keys or passphrases for individual digital assets is too cumbersome for institutional investors, so institutional custody solutions must be as robust as those provided for traditional assets. 2021
The six types of decentralization are not independent: each is subject to its own iterative process and affects the others through feedback effects, so proliferation in one type progressively changes the others. 2021
Peer review exacerbates publication bias and can produce a cartelization of knowledge, because non-conforming innovative ideas may not receive full recognition and new findings that threaten existing hierarchies are delayed or denied recognition. 2021
Network effects proliferate in peer-to-peer networks because, unlike client-server architecture with linearly increasing per-unit costs, peer-to-peer network costs decrease with each added node. 2021
Societal path dependencies toward hierarchy and top-down command and control impose significant obstacles on organizational decentralization, hindering the transition of power from governments and large hierarchical organizations to the edges. 2021
Organizational decentralization can raise economic performance without new technology: Jack Welch's separation of GE business units, each with its own profit-and-loss statement and full accountability, allowed efficient and profitable operation and GE's market value skyrocketed as a result. 2021
Hybrid organizations combining centralized structure and profit optimization with bottom-up decentralization in the form of customer reviews generate significant success but also create tensions, because users who trust each other through ratings still demand consumer safeguards that require command-and-control structures. 2021
Decentralized autonomous organizations epitomize organizational decentralization because the first DAO, built purely on code and smart contracts with no incorporation, physical address, or headquarters, entirely removed all traditional control mechanisms employed by principals in agency relationships. 2021
Governmental decentralization is the transference of responsibility and authority for public functions from centralized governmental agencies to centrally subordinated but quasi-independent public or private entities, and it is incommensurable because of its different kinds, degrees, and dimensions. 2021
Government decentralization at the local level can favor local elites and may overcomplicate the coordination of national policies. 2021
As each form of decentralization empowers heightened proliferation of the other forms, individuals perceive more opportunities for changes in consumer behavior, silent withdrawal, disengagement, and defiance of the established centralized order. 2021
The crypto movement illustrates the feedback effects between types of decentralization: its political philosophy could not be instantiated without technological decentralization in the form of cryptocurrencies, the combination created new markets, and the movement then created new organizational forms in DAOs. 2021
The libertarian and reformist orientation of the crypto community itself neutralizes decentralization, because the strong idea of reforming society with decentralized technology makes cooperation with existing centralized structures often suboptimal. 2021
Decentralized issuers treated central bank issued digital currencies as a threat rather than as a pathway to mainstream acceptance of more decentralized cryptocurrencies, and that misreading forfeited a route to broader adoption. 2021
The profit driven influx into the digital asset space brought rampant fraud that created a chasm between the decentralized asset space and mainstream investors, and lacking regulatory certainty and recognition of cryptocurrencies exacerbated that divide. 2021
Decentralized technology systems require interoperability for survivability, yet most platforms attempt to go it alone in an effort to become the next Bitcoin, so decentralized community silos proliferate and the required infrastructure, which no single protocol can build, does not get built. 2021
Decentralized system design is itself path dependent on the centralized past: designers' prior experience in centralized structures infiltrates and undermines attempts to create more decentralized systems, through subconscious processes the designer cannot change or influence. 2021
The availability of big data and algorithmic analytics increasingly limits individual choice, free will and the diversity of human experiences and actions, because the more analytics are available the less people make decisions that contradict them. 2021
Because centralized algorithmically automated systems can know individuals' political preferences better than the individuals themselves, exercising political will through human voting becomes redundant and democratic elections may not be needed, though existing constitutional arrangements may delay that outcome. 2021
Technological transformation stalls until its supporting infrastructure exists: the digital transformation was inhibited until infrastructure was built, laws were updated, and new institutions were created, just as the steam and combustion engines required new streets, wiring, laws, and institutions. 2021
Social media transfers knowledge from the edges of society into the mainstream by letting holders of marginalized views find kindred spirits, form groups, and incrementally grow influence until their perspective becomes mainstream, shifting the balance of power from a few to the masses. 2021
The social media coordination function is still largely flawed because the incentive design underlying social proof is suboptimal; decentralized technology solutions can take over that coordination function and improve it. 2021
Peer-to-peer architecture inverts the role of the audience: higher demand for a file produces more seeding nodes, which lowers the per-file delivery cost, whereas in client-server architecture demand consumes bandwidth proportionally. 2021
A peer-to-peer computing architecture is more efficient than client-server because client-server carries linearly increasing per-unit costs while peer-to-peer costs fall with each added node, which also leaves the traditional architecture more exposed to competition. 2021
Distributed routing makes a peer-to-peer network resistant to shutdown: BitTorrent could not be taken down even when authorities shut down specific servers, because nodes could update their own routing tables indefinitely. 2021
Platform businesses compound their advantage in technology infrastructure: platform data improves the platform's own technology, improved technology improves services, and better services generate still more data, creating a permanent learning and optimization environment. 2021
Expanded patentability chills open source contribution because developers fear inadvertent infringement yet typically lack the knowledge and skills to determine whether their contribution infringes an existing software patent. 2021
The degree of decentralization of an open source project is determined by the degree of hierarchy in its governance: a flat structure with consensus decision-making and no power disparities between developers is the most decentralized form. 2021
Cloud computing increased connectivity but simultaneously produced monolithic, siloed applications built for a single business, department, or role, and that fragmentation of data and content now impairs collaboration as well as the search, organization, and discovery of content. 2021
The decentralized economy cannot fully proliferate until it acquires the institutions ordinary commerce depends on, above all a secure and meaningful reputation system for anonymous supranational partners and an effective, dynamic governance system. 2021
Because the decentralized economy currently lacks many of the civil institutions available in the larger economy, the average person should not invest anything in the crypto economy. 2021
Greater transparency is in tension with more open membership, because larger networks are only achieved when privacy is ensured. 2021
Banning is the only control a centralized nation has over a decentralized network within its borders, and such bans pose no threat to the network's existence. 2021
The decentralized economy still lacks trustworthy open source decentralized institutions for recording and parsing history, reporting news and guiding attention, without which the average person cannot judge which networks to join or what to invest in. 2021
Corruption has arisen in every organizational circumstance in recorded history, including the least extreme case of identified members of a single culture interacting face to face with deep community ties, so governance design cannot assume corruption can be eliminated. 2021
Groups with decentralized, diverse values require protocol centralization in the form of explicit enforceable rules, because stability depends on the impartial application of law to display fairness, and explicit rules can unite a larger and more diverse membership. 2021
A radically decentralized economy cannot be achieved incrementally: eight institutional problems that centralized business solved centuries ago must all be solved simultaneously, and their solutions must be integrated with one another. 2021
A DAO will not be a genuinely profitable addition to the economy until decentralized versions of the legal system, the political system, the media, banking, and other services exist to support it. 2021
Decentralizing the power structures of core institutions improves them in both effectiveness and efficiency, because decentralization supplies transparency and liquidity. 2021
The eight institutions are necessary conditions for business, which grinds to a halt without them, yet when they run well they consume only a tiny fraction of the economy's resources. 2021
Core institutions are perceived as leaching from the economy only because of corruption, and well designed systems eliminate those economic frictions. 2021
The governance architecture designed for one decentralized institution can be ported to many other DAOs with only superficial changes, so institutional design effort is reusable across the ecosystem. 2021
Historically, whenever a healthy decentralized organization began to earn money it quickly devolved into a centralized institution, because its uniting ideals shifted from transcendental value to a desire for money. 2021
Once the equalizing ideal that moderates a decentralized organization is lost, competition generated by the profit motive leads inevitably to centralization with rigid rules about who holds power and wealth. 2021
No profit-seeking decentralized organization can succeed against centralized competitors in the contemporary marketplace until all eight institutional problems are solved at once. 2021
Bitcoin proved that a decentralized digital representation of value is possible, but it is not efficient enough for wide use because the rest of a decentralized economic environment does not yet exist around it. 2021
The stablecoin cannot be efficient until a robust decentralized economy already exists, producing a chicken and egg problem in which the required institutions presuppose one another. 2021
The democracy and transparency achieved by the founders of current institutions has been subverted by the natural concentration of power that evolves under competition, leaving hierarchies ossified and likely too brittle to adopt processes derived from radically different information technologies. 2021
The fallacy of uniformitarianism is the belief that the social harmony we enjoy today, especially in economically advanced nations, is natural and automatic rather than the product of cultural and public institutions. 2021
Middlemen such as police, lawyers, and insurance salesmen are the catalysts that exist to overcome the friction of economic corruption, and engineers who eliminate them mistake the catalyst for the friction. 2021
Human middlemen have an incentive not to entirely eliminate the corruption they are paid to overcome, which is one reason they become falsely identified with the friction itself. 2021
Path dependencies are a major obstacle to decentralizing institutions and businesses, because humans have psychological inertia and cling to familiar systems, especially those that have given them comfort in the past. 2021
Centralized company formation is supported by an enormous infrastructure amounting to all of civilization, so the entire environment of the decentralized economy must be built before it can support its first truly successful DAO. 2021
Instead of building compatible technologies in the service of interoperability, most crypto projects compete with each other, contradicting the open source culture the space needs if it has any hope of thriving. 2021
Unless the Web3 vision builds at least the features and social advantages of the current political and legal systems into its economy, the decentralized economy will merely be a parasite on the dying host of the traditional mainstream economy, and once the host dies today's social advantages will be lost. 2021
Middlemen persist rather than being automated away because there are certain junctures in business where novel problems regularly arise whenever circumstances change, requiring creative solutions that people step in to supply, and these persistent junctures become business institutions. 2021
Without decentralized versions of the services that overhead institutions provide, including justice, media, banking, underwriting, and insurance, DAOs will not be able to compete with centralized companies. 2021
Because we are reared in a centralized world we reflexively turn to centralized solutions, but a decentralized approach is more effective for global problems, since decentralized networks encourage interoperability through bureaucratic transparency and thereby integrate data better than a single dictating source. 2021
Because more powerful members of a hierarchy are better positioned to capture whatever power becomes available, power distribution in an entrenched hierarchy becomes exponential, leaving the majority with minimal power and wealth. That discontent of the majority is the first destabilizing force acting on a centralized organization. 2021
Rigid hierarchies are unstable and inevitably fall, eroded either by internal corruption or by novel external challenges that the hierarchy is not flexible enough to adapt to. These are the second and third destabilizing factors, alongside majority discontent. 2021
In a rigid competitive hierarchy governed by secular laws, internal corruption arises because each member's optimal strategy is to push the written rules to their limit, while externally any change in the problems the group faces can find the hierarchy unready. 2021
Imperial China invented the printing press and applied it to centralize power through uniform edicts and the first printed money; the resulting bureaucratic rigidity left the hierarchy unable to respond to internal corruption and to external invaders. 2021
Sacralized law generates more stable and successful institutions than secular belief systems, as shown by evidence that religious communes outlast secular communes at every stage of their life course. 2021
Centralized hierarchies have at best always failed after a few centuries and usually much sooner, and the resulting chaos leaves fertile ground for reorganizing the old order, which is what the cyclical word revolution names. 2021
Centralization is a powerful mechanism for rapidly building an efficient organization aimed at solving one specific problem, such as war in pre-unified China. 2021
The more effective a centralized architecture becomes at solving its target problem, the more rigid and unforgiving it becomes; rigid architectures are unstable and fail when met with novel challenges, so more decentralized organizations are more stable. 2021
The centralized hierarchy built by the Chinese Communist Revolution was extremely successful at the military goal it was designed for, but once the military threat was gone it failed completely at solving other important problems, producing catastrophic reforms such as the Cultural Revolution and the Great Leap Forward. 2021
Without a transcendental spiritual or philosophical principle to unify a society, its rules erode as exceptions to the routine are discovered that improve function temporarily yet violate the founding principles of the culture, and such violations split the population. 2021
The Articles of Confederation were consciously written to limit the authority of a weak central government with no chief executive, and this made the American war effort difficult because the organization was very inefficient at marshalling resources. 2021
Code review effectiveness is undermined by heavier review loads, because reviewers with longer review queues become overwhelmed and are more likely to submit poor quality code evaluations. 2021
Code confusion produces blind approval, where a reviewer hopes a co-worker knows what they are doing and approves a change without understanding it, which can result in further bugs and delayed production. 2021
Feedback in modern code review is deficient in both timeliness and substance: receiving feedback in a timely manner is developers' number one reported challenge, and the feedback that arrives is often not insightful because reviewers focus on insignificant details rather than larger issues. 2021
Organizational metrics, such as the number of developers working on a component, organizational distance between developers, and organizational code ownership, are better predictors of defect proneness than traditional metrics like churn, complexity, coverage, dependencies, and pre release bug measures. 2021
Organizational identity and structure affect the time and effectiveness of the code review process, as shown by a statistically significant difference in how quickly Apple accepts its own patches versus Google patches. 2021
The more hierarchical the code review process and the more barriers to entry it imposes, the lower the quality of the resulting code. 2021
In hierarchical legacy review processes the first reviewer's output gets the highest priority and follow on reviewers add only minor upgrades, so the collective of reviewers is not incentivized to find flaws and optimize the code as a collective work product. 2021
Increasing the number of reviewers who ask clarifying questions makes code simpler and clearer and thereby typically increases code quality, but hierarchical review processes make this impossible. 2021
The hierarchical approach to code reviews undermines long term participation and opinion from the edges of the reviewer spectrum, because those reviewers either have no access or are in no position to help review the code. 2021
Cartel power undermines attempts by other industry players to create internal or external controls on the quality of code reviews, leaving the public with no or very weak control over the quality of the code review services it receives. 2021
Forum comments let existing voting associates identify the most competent commenters and invite them to apply for membership by providing work for a grant, creating constant onboarding feedback effects that cannot exist in traditional centralized charitable organizations. 2021
The CHARITYxDAO's long term success depends on maintaining dynamic decentralized fluidity and order; without it the values that initially united the voting associates are at risk of morphing into ever tighter, more complex, and hierarchical structures. 2021
The loss of opportunity from slashing a voting associate's reputation grows as the size of the network increases, because a larger network intensifies competition among associates for the reputation tokens that determine fungible salary payouts. 2021
Commonly used identifiers such as social media profiles and credit scores play less of a role in the DAO voting design, and the resulting more equal distribution of power allows the inclusion of constituents who otherwise have no agency in centralized systems. 2021
Community audits enable enhanced efficiency of coordination because voting associates, with their highly specialized philanthropic skillsets, are ideally positioned to identify other experts in philanthropy. 2021
Appeals to individual sacrifice for a common good constitute ethical collectivism, which corrupts society and undermines the reason and rational thought of individuals. 2021
Decentralism generates efficiency through higher levels of connectivity rather than through the linear cost reduction mechanisms that capitalism and socialism debate. 2021
Because decentralism pursues growth through connectivity and network effects rather than through per unit cost reduction and economies of scale, negative externalities are minimized without any centralized planning. 2021
Decentralism holds that trust in a system should not be controlled by corruptible human constructs and institutions run by a limited number of fallible humans; instead trust rests on technology enhanced individualism and technology facilitated collective human action. 2021
Ex ante remedies for the downsides of representative democracy were not technologically possible when democratic representation was designed, so its downsides such as corruption, bribery, and bias had to be tolerated as inevitable tradeoffs. 2021
Microdemocratic systems must solve the tragedy of the commons, because without controls self interested voters acting independently of the totality of voters may deplete or spoil shared resources such as the environment and public goods. 2021
Regulating centralized technology conglomerates addresses only part of the problem, because even fully regulated conglomerates retain the power to set standards and norms for emerging technologies that government cannot effectively trace; microdemocratic decision making can set such standards outside their control metrics. 2021
Those few entities and individuals who control the data flow and the associated algorithms can use centralized algorithmic human predictors to build autocratic algorithmic systems and structures, and the implied loss of democratic principles in society is perhaps an inevitable side effect. 2021
Decentralized payment systems hold a comparative advantage over centralized legacy fiat systems because holding and storing cryptocurrencies requires no banking relationship, whereas centralized fiat payment platforms typically require an existing banking relationship. 2021
The initial Casper testnet group was hampered by communication shortcomings, with only around 680 validators present in the telegram group that served as the main channel for news and updates. 2021
Human group coordination progresses through three stages: chaos, then decentralized organization, then centralized hierarchy. Decentralized organization is not a deviation but the natural intermediate stage between no organization and a completed hierarchy. 2021
Centralization is not the optimal organizational structure under highly dynamic conditions; the very features that make centralized hierarchies efficient become their greatest weaknesses when conditions change. 2021
If a hierarchy becomes too rigid the organization inevitably fails and the result is a return to chaos, which is why revolutions recur as a cyclic pattern in governmental structures throughout history. 2021
Friction is the inefficient allocation of power, meaning that a different distribution of power would let the organization reach its goals more easily, and it is an ever present feature of any hierarchy. 2021
The most common source of friction is the natural tendency of hierarchies to concentrate power at the top through a rich get richer mechanism: a more powerful member can use their greater power to gain still more power than a weaker member can. 2021
Unchecked concentration of power drives the distribution toward one member holding nearly all resources, which is clearly inefficient for the goals of the group, and the resulting discontent is the main historical reason for revolt. 2021
The more rigid an organization's structure, the more susceptible it is to corruption; at the chaos stage there is no protocol rigidity and therefore no opportunity for corruption, because with no group goal there is nothing to subvert. 2021
Corruption is technically inevitable in any hierarchy, because it is impossible to create a perfectly efficient organization in practice and there is friction in every real system. 2021
As members constantly probe the edge of acceptable behavior, policing the rules becomes more expensive, the rules become divorced from the shared goals, and relationships become brittle and formal instead of warm and loose. 2021
Even where corruption is avoided, rigidity still leads centralized organizations to catastrophic ends, because failures push members to cling more faithfully to the rules that saved them in the past, making the system still more rigid and brittle. 2021
Nothing external can destroy a decentralized organization: such organizations are invincible unless every single member loses adherence to the values that organized it in the first place. 2021
Advances in information technology explain each historical leap in organizational efficiency and reach, from kinship tribes through nation states to the emerging global society. 2021
Ancient Egypt and China remained remarkably stable for thousands of years because of the protocol decentralization fostered by their Rule of Virtue legal systems. 2021
Western democracies still run on structures developed decades or centuries ago and have no formal interaction with the new data stream produced by modern information technology. 2021
Large decentralized networks such as national democracies do not make fundamental changes easily, because stability is their primary quality. 2021
Decentralized money and decentralized contracts have been built, but decentralized business will not work until roughly eight further decentralized institutions that people actually use in business are built. 2021
Money and contracts are worthless in business with counterparties who cannot be trusted to keep a bargain, so decentralized commerce requires a system in which reputation means something. 2021
Centralized organization achieves efficiency through hierarchy: hierarchical structures let centrally organized entities allocate resources with minimal energy loss and identify and remove waste in the system. 2021
Centralized organization of society has reached its limitations, evidenced by weakening public sector legitimacy, economic decline, disillusionment with existing institutions, inadequate response to geopolitical problems, and pressure on overly centralized systems. 2021
A traditional firm is logically centralized because dividing it would break it apart into parts that could not operate independently, a property traceable to the hierarchical order that creates the firm's efficiencies and structure. 2021
Distributed self-organizing systems are nimbler than centralized ones and can efficiently self-repair at points of local failure through coordination without control. 2021
Because information in decentralized systems is continuously outdated by a changing environment, decentralized governance must be autonomous and automated, able to evolve, mutate, and create new information precedent, in the way mitosis replaces worn out cells. 2021
Natural selection operates as a decentralized selection mechanism: no centralized authority determines which organisms survive, and the population with the most adaptable and heritable traits gains a natural comparative advantage without any centralized mechanism. 2021
Technology-driven decentralized systems depend on existing infrastructure and follow existing natural network patterns, just as predator populations could not evolve without prey. 2021
Decentralized systems depend on network effects, which occur when increasing numbers of participants in a network improve the value of network access for the entirety of users; however, a network's infrastructure can compromise its network effects and the associated user benefits. 2021
Information in decentralized systems originates at the edges and is optimized through feedback: peers who receive information transmit its changed relevance back to the original generator, who evaluates and amends it, constantly updating and optimizing information quality. 2021
Centralized coordination enables attack coordination because the hierarchical structure allows attackers to identify a single point of failure, whereas the constantly morphing information flow of decentralized systems increases their attack resistance. 2021
Centralization and decentralization are foundationally different approaches: where centralization creates order, efficiency, and hierarchy out of presumptive chaos, decentralization thrives in perceived chaos, treats inefficiencies as opportunities, and frees the creative process. 2021
Hierarchical centralization is optimally efficient for making big decisions affecting an entire organization, which is why it has historically outcompeted every other organizational structure, whether corporation, army, or government. 2021
Centralization has two major flaws that inevitably lead to its downfall; the first is that every centralized organization has a single point of failure, binding the organization to a leader's poor decisions when that leader lacks information, skill, wisdom, or charisma. 2021
The second flaw of centralization is that a hierarchy's own success and efficiency makes members dependent on it until the structure ossifies and becomes too inflexible to reorganize and respond effectively to a novel crisis. 2021
Decentralized organizations outperform centralized ones precisely in the two circumstances where centralization fails: when choices multiply without bound and when novel crises arise. 2021
There is no clear-cut discrete difference between centralized and decentralized; organizations fall along a spectrum whose essential differentiator is the freedom of each member in the network. 2021
The most successful organizations choose a hybrid of centralization and decentralization that maximizes the strengths of each rather than occupying either extreme. 2021
At least some level of protocol centralization is generally required for group harmony and efficiency, and although power decentralization is conceptually independent of protocol decentralization, power determines how protocol is amended and enforced. 2021
A hierarchy obstructs solving novel problems because it prevents the identification of talented people at the lower rungs and resists the changes needed to construct a new hierarchy for organizing the effort. 2021
The delayed voting outcomes and feedback effects created by the transition from loosely coupled to tightly coupled voting let DAOIC members triangulate their own internal liquidity position against deal feasibility. 2021
Without standards for digital assets it will be very difficult to increase regulatory certainty or coordinate market activity, and without regulatory certainty the digital asset market is less likely to evolve. 2021
The DAOIC pools no assets: the smart contract releases each member's deposit directly to the project after validation pool approval, and returns on purchases are likewise not pooled but paid pro rata to members in proportion to their reputation token holdings. 2021
Because time spent raising capital from limited partners is time taken away from portfolio company due diligence, the current VC model tends to reflect the networking and public relations ability of the general partner instead of their capital allocation ability. 2021
Alternative early round funding mechanisms are not necessarily more successful than VCs in early round technology investing, because they tend to act out of intuition and personal experience whereas VCs use a primarily data driven approach to investment decisions and portfolio company evaluation. 2021
Because of significant path dependencies in the capital formation and capital allocation processes of existing venture capital models, the ideal typical reputation based capital allocation model is less likely to be created in the short term. 2021
Removing capital as a necessity for deal participation creates a very high level of flexibility for DAO investment club members, allowing them to invest without ever being forced to invest, and making capital calls entirely unnecessary. 2021
Centralized civic institutions always become corrupt over time, and that corruption becomes obvious only once a new technology disrupts their operation and reveals their weaknesses. 2021
Truth discovery in the marketplace of ideas is more effective and efficient when news aggregators are more decentralized: ten newspapers reporting on a story produce a more accurate historical picture than one newspaper reporting on the story ten times. 2021
The most obvious harm from news consolidation is that national and international centralized corporations do not devote the same degree of focus to the interests of the local communities they serve, because love does not scale. 2021
A culture of respect for history is unnatural and must be consciously policed, which makes it another of the essential catalyst institutions that has to be deliberately built into the decentralized economy. 2021
Reputation must be staked and risked on votes over work evidence, because otherwise the system suffers the Tragedy of the Commons nothing-at-stake problem; staking ensures every expert is motivated to police every reputation-staked action in order to protect the value of their own investment. 2021
DAOs are free to organize as they choose, and those that fail to find the right incentives for productive behavior will certainly go extinct, because the feedback loop that includes customers outside the DAO punishes unproductive DAOs by loss of fees. 2021
Because eternally perfect protocols are impossible, as illustrated by Arrow's Impossibility Theorem and the Folk Theorems of Game Theory, the remedy is not a better static ruleset but a system that continually improves its protocols and smart contracts in reaction to market change. 2021
In hierarchical structures where members are siloed and have few formal connections across tiers, letting service providers create the regulations produces moral hazard, because the provider has an incentive to weaken standards and regulations. 2021
Reputation has lost much of its meaning during the current institutional disruption: people in dying fields cash in on reputations built over previous generations in a fire sale mentality, and reputation itself is becoming a suspect concept. 2021
Strong unifying values are the institution most essential to the long-term stability of a decentralized organization, and they demand continual reevaluation rather than one-time specification. 2021
Building secure walls with well-designed doors is the proper way to embody conservative and liberal values together in an economic system: walls protect the group from the Tragedy of the Commons and malicious threats, while doors admit fresh input from anyone willing and able to help. 2021
The intuition that strengthening one pole of a value pair necessarily diminishes its opposite is plainly false in any complex situation. 2021
Where a person draws the line between necessities and nonessentials is itself a declaration of values: treating nothing as essential strongly favors meritocracy and treating everything as essential strongly favors equity. 2021
Automating insurance away with smart contracts risks a race to the bottom, because foregoing insurance is more efficient in the short term for an individual, yet the resulting rare unprotected tragedies can chill the entire system. 2021
Overhead institutions such as insurance and policing act as catalysts supplying the activation energy that guarantees liquidity in both government and private business. 2021
Overhead institutions that protect or promote essentials should be governed and borne by the group, while those protecting nonessentials should be governed and borne privately, with each DAO deciding for itself what is essential to its function. 2021
Failing to maintain a healthy balance among the polar value pairs, one that faithfully reflects the people's own values, is what topples empires and leads to social catastrophe. 2021
Beyond any Folk Theorem justification for stability, the ultimate reason not to impose a clear distinction between the individual and the social is that no such clear distinction exists in nature, and a network's values must reflect that vagueness. 2021
Individual autonomy and group cohesion reinforce rather than substitute for each other: the network effect is achieved only when individuals subsume their freedom to act in concert with the group, and diminishing one quality diminishes the other. 2021
A long-term successful network requires a dynamic and responsive governance system that keeps the organization in the decentralized democratic realm and prevents it from moving to the next natural stage of centralized governance with a static hierarchy. 2021
The drift into static power relationships is a universal temptation because centralization is efficient, yet centralized governance is provably flawed. 2021
A centralized hierarchy becomes too rigid when those policing the rules gain more power than the members who honor the transcendental value that originally founded the organization, and the spirit of the law should always reign above the letter of the law. 2021
As an organization loses touch with its transcendental values, members use the rules to jockey for position in the hierarchy and corruption erodes the organization's effectiveness. 2021
The same ability to learn from others' behavior that unleashes the efficiency of cooperation also gives people untold power to trick others, imagining how to manipulate them and corrupt the organization for individual benefit at the group's expense. 2021
Scientists do not deserve and can never earn the authority to rule on whether we should ask what meaning or values lie behind the rules guiding the universe; on that subject they have less authority than those who study spirituality, theology, morality, or poetry. 2021
Unlike scientific laws, transcendental values cannot be stated formally and explicitly, so they must be authored by people in touch with transcendental beauty, true poets, who are nevertheless grounded in concrete understanding of the universe and its laws. 2021
The strength of a decentralized organization is measured by summing the power of each member in their individual autonomy, modified by the group's ability to organize and effect its goals in the larger society. 2021
Anonymous decentralized networks can encourage troll behavior because participants feel safe attacking others without retribution, and in a DAO that trolling destabilizes the organization and creates friction between members and the DAO. 2022
Anonymity lets information flow from the edges of the system, from individuals who would have no agency in centralized structures, and such inputs are much less likely to materialize if DAO participants know each other. 2022
In a DAO, a member's influence and outcomes are determined by the value that member's contributions add to the shared work product, rather than by position in a hierarchy. 2022
High value contribution is self-amplifying in a DAO: when a member adds substantial value, other token holders want to add their skills to the same work product through a policing engagement, which focuses all members' joint efforts on the highest possible value proposition. 2022
Work-to-earn DAOs must leave it entirely to each member how much time they contribute; DAOs that impose quotas and participation requirements may not be sustainable long-term in a value-to-efforts workflow environment. 2022
DCF currency translation breaks down for digital assets: no set discount rate or currency exchange forward curve exists for them, because they are not traded in exchange markets where closing prices are readily available and representative of fair value. 2022
Principal to principal markets are generally not considered observable because little information about their transactions is publicly available, which pushes assets priced there out of the observable input levels. 2022
The Longstaff model's assumptions are inconsistent with reality on two fronts: investors do not have perfect timing, and its assumed volatility of ten to thirty percent is far below the volatility exceeding fifty percent typical of small stocks. 2022
Uniform digital asset valuation standards can only evolve over time as the market evolves, because standard setting requires common core practices, and those practices are only slowly emerging. 2022
Because the main mandate of a fair launch is equitable treatment of the public, fair launches typically involve a mandate to distribute any and all revenue and profits of the project to community investors. 2022
Binance implemented a subscription mechanism that gives everyone an equal opportunity to purchase newly released NFTs, responding to drops that sell out in seconds and leave interested users waiting for initial owners to flip. 2022
Organizational communication across the studied DAOs averages 4.29 out of 10. 2023
Information technology has facilitated and arguably necessitated the DAO in the same way that the printing press, navigational instruments, and reliable maritime shipping necessitated and facilitated the joint stock corporation. 2023
There is no consistent standard for DAO governance, which pushes each DAO to invent its own structure, and because decentralized governance is complex many of those structures fail to become truly decentralized, autonomous, or organized. 2023
True decentralization requires the absence of a primary decision-maker, which is very difficult for a decentralized insurance organization to achieve while it is still in its infancy. 2023
Decentralized governance structures impose their own costs: with no central authority to coordinate diverse stakeholders, consensus is difficult to reach, negotiations are prolonged, and enforcement of agreements is weak because no single entity is responsible for compliance. 2024
Using human judgment to uncover unconscious bias in AI can perpetuate the very biases it is meant to remove, because human reviewers carry their own implicit biases and may lack the expertise to identify bias in complex AI systems. 2024
The gap between regulators' technical understanding and the state of the art in AI drives rules to one of two failure states: too vague to be enforceable, or so prescriptive that they suppress creative and beneficial uses of AI. 2024
When decision making power is distributed across multiple entities in a federated model, consensus and cooperation become harder to reach, which makes cohesive AI governance mechanisms difficult to establish. 2024
Micro tasks are stipulatively defined as small tasks that require human judgment, can be completed by humans independently over the internet, and form part of a larger unified project. 2024
Micro task work is valuable precisely because the human judgment it supplies cannot currently be replaced by machines, which lets organizations build products and outcomes that machines alone cannot synthesize. 2024
Human shortcomings in micro task work such as limited attention span, irrationality, and inaccuracy create verification requirements, but manual verification is performed by humans subject to the same limitations, so verification does not resolve the quality problem it is meant to solve. 2024
The more hierarchical the code review process, the lower the quality of the reviewed code, and the same holds for barriers to entry: hierarchy and entry barriers together degrade code quality. 2024
More reviewers asking clarifying questions makes code simpler and clearer, which typically increases code quality, but hierarchical review processes foreclose this mechanism and also exclude opinions from the edges of the reviewer spectrum. 2024
Bug bounty programs are structurally compromised by their reliance on a trusted intermediary that extracts high commission fees and may hold interests that conflict with the software vendor. 2024
The more hierarchical the code review process, the lower the quality of the reviewed code; hierarchy in review is inversely related to output quality. 2024