Decentralizing the search for truth using idea markets

The search for truth is deeply vulnerable to government, corporate, and other centralized interests, which influence our opinions using tactics like these:

  • Limiting the scope of discussion (“Democrat vs. Republican”)
  • Astroturfing (paying people to imitate a grassroots movement)
  • Distributing airtime ($4B of free airtime to Donald Trump in 2016)
  • Sponsoring entertainment and media (CIA involvement in media)
  • Great firewalls (China)
  • Banning media outlets (Facebook and Twitter)
  • Interrupting members of US Congress to cover Justin Bieber (Video)
  • Scripting local news on a national scale (Video)
  • many more

In the same way that Bitcoin allows people to transact without needing to trust banks and governments, a decentralized market that measures the perceived value of ideas allows people to define reality without needing to trust centralized media and other “reality-defining” institutions.

Ideological risk management

Pascal’s Wager is one of the most famous examples of beliefs being regarded as bets.

Pascal argues in favor of a belief in God due to its high reward and low risk, and to the high risk and low reward of its alternative.

In one way or another, all beliefs work this way — when we “bet on” a belief, we expect to be rewarded more for holding that belief than we would for betting on an alternative.

Typically, the risks involved in betting on a belief are primarily personal and social:

  • “Will my community still accept me if I contradict their beliefs?”
  • “I’ve been saying x on social media, how embarrassing would it be if I started saying y?”
  • “If I believed something else, who would I even be?”

Research on numeracy, cult behavior, science denial, and scientific suppression shows people tend to be far more concerned with issues like the above than with whether they are actually right or wrong.

This is normal and natural, but it’s no secret that humans are lousy belief-investors. We do not manage “ideological risk” well at all.

“Rationality is risk management; nothing more.” — Nassim Nicholas Taleb

To achieve collective “rationality,” therefore, we need a mechanism for collective ideological risk management — an idea market that uses financial structures to assign value to ideas, propositions, and narratives about how the world works.

Introducing financial risks and rewards to “belief betting” alters the risk management landscape for decision-making about beliefs. Not only do financial markets codify what deciding what to believe means in the first place (i.e., making a bet), they provide a common incentive structure that rewards better thinking and punishes worse thinking.

What is an idea market?

Think “Reddit meets NASDAQ.” An idea market is:

  1. An intellectual gold mine

Idea markets allow investors to profit by identifying and popularizing under-appreciated ideas. (I call this venture philosophy.)

Since anyone can participate, an “intellectual gold rush” will occur, as millions of people comb the internet to find obscure geniuses and usher them into the spotlight.

2. A scientific and cultural revolution engine

Kuhn’s Structure of Scientific Revolutions argues that scientific progress is incremental most of the time — only occasionally do we participate in revolutionary science, in which discoveries are made that change our fundamental assumptions about the world.

Idea markets crowdsource a continuous renewal of our fundamental assumptions about the world, enabling an environment of perpetual scientific and cultural revolution.

William Gibson wrote, “The future is here; it just isn’t evenly distributed yet.” Idea markets are future-distributors.

3. An ideological immune system

By making it profitable to identify under-appreciated ideas, idea markets in turn make it expensive to promote ideas that can’t stand on their own merits — propaganda and false narratives.

Corporate and governmental interests will need to continually spend money to artificially inflate the value of a false narrative, and with each passing day the reward to venture philosophers who convincingly replace or refute it will increase. Thus, weak narratives are doomed to crumble and propaganda is doomed to fail.

Fundamentally, idea markets use price discovery to accelerate discovery.

Their ultimate goal is to enable people who “bet on” stronger narratives to take money from people who bet on weaker ones. (We’ll get to the problem of what “stronger” and “weaker” mean later.) Think Reddit meets NASDAQ.

Key qualities

It seems explanation markets ought to have a few key qualities:

  1. They reliably value high-quality content (“stronger narratives”)
  2. They resist manipulation and censorship by moneyed interests
  3. They reward foresight and punish shortsightedness

Token value as perceived-truth-value

Buying a token on Binance means “betting on its future adoption and value within an ecosystem.” The perceived value comes from investment fundamentals — value proposition, team, progress, etc.

With an abstract idea, such as a belief, a narrative, or an explanation, there are no such fundamentals — so a game has to be devised to create some. An idea market needs to have a mechanism such that buying a token means “betting on its future perceived truth value” (or something similar).

What an explanation market could look like

Measuring perceived truth

What gets measured gets managed. — Peter F. Drucker

Measuring perceived truths allows us to collectively manage the zeitgeist, rather than have it managed for us by centralized entities.

The purpose of idea markets is not to eradicate falsehoods or make sure they never become prominent. It’s to create a game that, over time, favors truth and people who value it.

Benefits of an idea market

Accelerates rate of discovery and social progress

  1. Quickens the collective, iterative thinking process whereby over time, narratives with integrity remain standing while others crumble
  2. Captures the value of “obscure genius,” as the least popular narratives offer the greatest potential profit
  3. Reframes beliefs publicly as investments/bets — which they are — rather than identities, social groups, etc.
  4. Incentivizes people to change their minds quickly in order to profit from a future trend or abandon an outdated one
  5. Incentivizes people to discover and popularize underappreciated truths (“Venture Philosophy,” anyone?)
  6. Popularizes useful explanations — since profit is only realized when others are convinced of your idea, it doesn’t help to be a fancy-talking academic. There are no points for being right; you have to sell it.
  7. Explanation markets are antifragile journalistic and scientific authorities that crowdsource the hunt for black swans based on users having skin in the game. They’re basically @nntaleb’s dream (not to mention open season to hunt IYIs and take their money).

Resists propaganda

  1. By tying financial manipulation explicitly to information manipulation, explanation markets weaponize greed to undermine propaganda.
  2. Levels the battleground of truth — The advantage an institutional interest once had in maintaining a widespread belief is now matched by the interest a Venture Philosopher has in toppling it.
  3. Exponentially increases the cost of deceiving the public (big tobacco, oil companies)
  4. Establishes strong narratives not by force, but by flight from worse ideas when they inevitably fail (like Bitcoin pumping when central banks fail — see Cyprus in 2013)

Conclusion

While hopefully idea markets make intuitive sense, it’s a complex idea and one illustration may resonate more than another. So here are a bunch to choose from:

  • Idea markets use price discovery to accelerate discovery.
  • Idea markets do for common knowledge what bitcoin does for money transfer.
  • In the same way that Bitcoin allows people to transact without reliance upon banks and governments, an idea market allows people to define reality without reliance upon centralized media.
  • In the same way that Bitcoin removes reliance on centralized entities like banks for transferring value, idea markets remove reliance on centralized entities like media conglomerates for defining reality.
  • An idea market is not an arbiter of truth, but a prevailing-worldview-improvement engine. Profit means finding something better than what’s at the top, before others do. If people decide something new will be part of the conversation, then it will be.
  • Idea markets create a truly global conversation about what deserves our attention without trusted third parties or intermediaries of any kind.
The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing.” ― Milton Friedman

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