IMO, economics is an area that will continually be hampered by models that don't fit, and increasing complexity.
Any model that predicts things simply and well, will be gamed; thus requiring a more complex model.
Or as Goodhart's Law[1] has it: "When a measure becomes a target, it ceases to be a good measure."
That's presuming we never reach some economic state so perfect, that even with an accurate model, no one can find an extra advantage, nor can it be disrupted by natural events.
Economics like psychology aren't true sciences yet because they don't have a repeatable theoretical model. They're like Alchemy before it evolved in to Chemistry or Astrology before it evolved in to Astronomy. How can you get a repeatable theoretical model? imo you would need to model a world simulation near or at the level of atoms. The more abstraction and the more assumptions the simulation has, the less useful for the social "sciences". imo this is what Hari Seldon's "equation" is in the Foundation series; a simulation
Note that even with Seldon's predictions, a requirement for their fulfilment was that the predictions not be made public so that they would not be altered. The difference in economics and psychology, unlike in chemistry or astronomy, is that these fields are self-reflective. They have an "awareness" of themselves as disciplines and can change and act on information of themselves to in turn gain new "awareness" and behaviour.
Economics is even worse, as it does hold to some fundamental aspects of finite resource allocation and supply/demand in addition to the self-reflectance. This means its model is probably some hybrid of physics-like fundamentals and the weird self-awareness of the "soft science" disciplines.
'Repeatable theoretical model' is not an episemological criterion of a science, usually for empirical sciences what is needed are fasifiable predictions.
Falsifiable predictions are generated by theories. You don’t just throw out predictions haphazardly and test them, they always originate from a theory.
The relationship is circular. Asimov's story was of course based on emerging notions of economics, which had become increasingly mathamaticised and grounded in statistics. His writing also affected and influenced economists, and at least one, Paul Krugman, has stated this specifically:
There are certain novels that can shape a teenage boy's life. For some, it's Ayn Rand's Atlas Shrugged; for others it's Tolkien's The Lord of the Rings. As a widely quoted internet meme says, the unrealistic fantasy world portrayed in one of those books can warp a young man's character forever; the other book is about orcs. But for me, of course, it was neither. My Book – the one that has stayed with me for four-and-a-half decades – is Isaac Asimov's Foundation Trilogy, written when Asimov was barely out of his teens himself. I didn't grow up wanting to be a square-jawed individualist or join a heroic quest; I grew up wanting to be Hari Seldon, using my understanding of the mathematics of human behaviour to save civilisation.
I studied Physics because of reading Asimov as a child, and discovered it was way more difficult and boring in real life. Re-read Foundation when I heard the TV show was coming out, and discovered that it was a terrible book. Asimov, you old deceiver
What made you think it was terrible? I recently reread it too, and while the writing isn’t earth-shatteringly good, I definitely appreciated it for being the novel idea it was at the time.
It's not really a story at all, just an exploration of an idea. The plot is very predictable, and the characters are just the thinnest of veils for whatever point the author is trying to make.
First time I've ever heard of this (always preferred Heinlein to Asimov) and I'm glad I'm not the only one who immediately drew connections to Historical Materialism and Marx.
I have thought this for years. It’s like they don’t realize they are studying a living system, and even worse one that is actively trying to invalidate their models.
I think most economists understand the adversarial nature of an economy, which is why a lot of their models are built on game theory.
I think the bigger issue is that people are not as rational, nor as consistent, as the models treat them. The fundamental premise of a lot of economic theory is that people have consistent, ranked, preferences, and that people work to maximize their preferences. Most people don’t fit that.
My sister is a political science professor, and she says this is an open secret in political science. The assumption is that people have consistent preferences (e.g. someone who is pro gun control is always pro gun control), but research has shown people are fickle, and will give different answers at different times.
Living organisms also adapt to their environments and models which understand them.
If you want to get to base levels, look at metabolism, energy inputs, conversion efficiencies, productive activity, and immunity / defence / risk dynamics.
Economic analysis arose out of cost accounting in which those inputs were specifically discounted, under-priced, and/or externalised.
Deploying via IPFS might also work? Though it'd require having a trustworthy backend storing state ... or I suppose auditing to ensure backend can't inject anything malicious into client layer.
From what I understand, some cryptocurrency DApps like Uniswap[0] are using this route.
Deploying via IPFS might work indeed, but you're then either reliant on a gateway or have to run IPFS yourself locally. I know that Brave now supports IPFS, but for most people a more lightweight solution would be to install the Signed Pages extension for Chrome or Firefox.[0]
I'm not sure if you actually need a trustworthy backend, or rather, if the frontend is encrypting its state before sending it to the backend, then the worst a malicious backend can do is delete or replay your data. By including timestamps and replicating your state to multiple independent backends, that risk can be largely mitigated.
> But it looks like GPS addressing schemes like w3w need a MUCH larger list by an order of magnitude.
If you're trying to get down to 3 words yes, but if you're happy with 4 words (and I am), then the long list would be more than enough. One problem I found was that I think people don't want strongly negative phrases being used to describe where they live (rural poverty assault, evil disease island). The BIP39 wordlist can create word groups that are very offensive, or that would feel rascist if applied to particular parts of the world. It also has words that are easily confused for other words like era/error, son/sun, alter/altar, aisle/I'll, floor/flaw, .
I did use words from BIP39, but had to remove quite a few in the end for my wordlist (e.g. blast, load, black, finger, female etc.) because of the unfortunate clusters it could create.
Ultimately, I think coming up with a good wordlist is still a bit of an unsolved problem. The ideal wordlist for something like this
1. can't form obviously rascist or overtly sexual word clusters
2. can be easily distinguished in spoken communication
3. can be easily distinguished in written communication
4. doesn't have words that sound similar to other words in any of the most common accents
5. doesn't have geographic words (it'd be confusing)
6. is mainly positive or neutral words
7. consists of words that are common and easy to spell, avoiding words that are commonly misspelled and where there are different standard ways of spelling the words depending on region
8. has words that are not too long, a small number of syllables
9. doesn't contain words that are concatenations of other words in the wordlist
Obviously not easy if you need a significant number of them.
I did the same thing as you and had the exact same experience. S2 made the mapping trivial, and I spent nearly all time on the word list.
I was really surprised to find there's not much out there in the way of cross language most commonly used word lists. I assume such lists are out there somewhere in the computational linguistics community but I couldn't find them. I ended up using a list of the most common english words, filtered via pairwise levenstien distance, and then I did a manual scan to drop any words that seemed problematic.
It really would be nice if someone would solve this, but I'm not being flippant about just how much effort would be involved.
Sorry no. I never got around to putting the code up on github and that laptop died. My list wasn't great either anyhow. This is an annoyingly tough problem.
Except under mining, increased investment opens up access to better equipment like ASICs, access to cheaper energy agreements, etc. But no amount of $ unlocks the ability to validate faster (per unit staked).
To clarify: I don't think proof of stake is perfect.
I think the original pie in the sky dream, as hinted at in the Bitcoin white paper, was for decentralization through anyone (all the way to students in their dorms) being able to participate in consensus.
I don't think proof of stake gets things all the way there, but I think it does get closer to a linear ROI curve, compared to how proof of work is right now.
Thank you! That's... well, beautiful isn't the right word, given nature of example... But I was hoping to find a simple non-ergodic example.
The situation the article explores was interesting, but made the jump to something mathematically complex before I sunk my teeth into the fundamental bit.
As I understand it, the difference is basically whether it is possible to end up in a situation where you are out of the game going forward. E.g. with repeated bets, you eventually hit zero money, and then you are stuck at zero forever.
There could also be attractor states that reduce the risk. For example in this case (if the numbers are taken to be such that the EV is positive) then you can also end up with a lucky player getting rich. The chance of that player going bust goes down much lower than the chance for a new player starting with $1. So while individual players may tend to go bust reliably, the total pool of wealth can still grow beyond any set upper boundary. Over time each player tends to get fabulously rich or go bust, so the game is mostly one of whether an initial run of luck gets you out of the danger zone before running into zero.
If you added some effects on what kind of gambles are available to players at different levels, you can create several different attractor states.
Ergodicity is a nice property of models like molecules of gas bouncing around a room, which means that statistical mechanics is practical. If one percent of the molecules tended to end up with all the kinetic energy, while the other molecules gradually one by one reached a complete standstill, then statistical mechanics wouldn't work.
Since the very simple process shown in the article doesn't have this property, it means some familiar statistical tools can't be used naively with these models, or to extrapolate a little bit, to any model of any human activity that tends to these kinds of capturing, fixed-point, attractor outcomes.
Update: the first paragraph above was not quite right for the system described here. It's more about the EV calculation involving ever growing outcomes multiplied by ever shrinking probabilites, with the mean still growing without bound, while in any cohort of practical size you'll never see any of these outcomes. So it's not necessary for any player to go to zero to see the behavior. Of course there are also martingale systems that work the other way and they are also non-ergodic.
So in fact regardless of the initial run of luck, every player still goes to zero with probability one. The youtube video that another commenter linked to actually explains the 40% and 50% example much better.
Ethereum is working to address a lot of those points. When it switches to Proof of Stake (beacon chain is already live), energy costs will drop significantly (talking < 100 watts / node)... Just doing minimum to process blocks, no wasteful mining.
That means network has to pay less in block reward under PoS, so inflation drops to 1% or less.
Eip-1559 upgrade this summer will also start "burning" a portion of fees. Estimates have this around 0.5% - 1.5% deflation.
Combine those features together, and Ethereum should have long term issuance at around 0% indefinitely, while still paying for validators to secure it.
It's a feedback mechanism too... If usage goes down, burn drops, supply inflates slightly, stimulating use, increasing burn again.
The idea is to make an elastic self-securing system.
I don't understand where the pyramid scheme is in that... The money being paid out to validators will by nature barely cover costs (otherwise more people will validate, reducing margins to match). Since anyone can join, and the network punishes correlated misbehavior, that incentivizes decentralization and wide disbursement of block rewards.
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In the case of topic here, spare CPU cycles will no longer be valuable to exploit under PoS. The valuble qualities will be availability and uptime... Which won't be had by exploring in-broswer mining scripts, or CI exploits.
Not to find a solution, it was already found. The roadmap plan was always to switch to PoS, the miners and PoW were always temporary until it was developed / ready. Now the beacon chain (core of PoS) is live, with around $6 billion staked. Some of the miners (not all of them by far) are complaining they're no longer going to be needed, going so far as to make a show of "force". Others (like f2pool) have calmly been preparing with rest of Ethereum community, and are transitioning to staking themselves.
I've had the Droid48 app on my android phone for years. It's a little unstable, hope author updates it. But it's so awesome to have a 48GX available whenever, while my real one sits safely on the shelf at home.
When I first got that thing as kid, nearly returned it, RPN seemed so bizarre. So glad I didn't... Really love that language, would never have understood stack based VMs as deeply if it weren't for the things I coded on that calculator.
My understanding was that malicious validator has to publish votes for two different blocks in one round; which then can be used to slash them. Unlike PoW they can't "sit" on their second vote, because voters are known ahead of time, and once vote is done, opportunity is gone.
They also can't choose transactions to go into block unless they're the proposer, so that's only time they can control whether attack will even benefit them.
So they'll have to wait to get randomly assigned as proposer, in a committee where they control enough of the other randomly selected validators, and have pending txns at the ready to double spend (while receiving party has been sitting waiting for funds).
And even then, won't that just create a fork where the minority of the validators recognize the double vote, and slash them anyways? And what users / services will stay w original fork given that proof?
Any model that predicts things simply and well, will be gamed; thus requiring a more complex model.
Or as Goodhart's Law[1] has it: "When a measure becomes a target, it ceases to be a good measure."
That's presuming we never reach some economic state so perfect, that even with an accurate model, no one can find an extra advantage, nor can it be disrupted by natural events.
[1] https://en.m.wikipedia.org/wiki/Goodhart%27s_law