The Warfare of Crowds

I think that most of us have heard about the "wisdom of crowds" theory, where the opinions of a large group of diverse people are able to come to an equal or better answer than any single individual in the group. However, there are a lot of caveats in this, because the theory assumes that each individual in the group is independent and uninfluenced, as well as someone looking to give an accurate answer.

And this is where the theory falls down in today's world, because the "crowd" that makes up the loud voices of social media are homogenous in thought and have very little skin in the game, so they needn't worry about the accuracy, because they will not be the ones paying the price. They can scream and shout and bully based on their chosen movement of the moment, and then in the next instant, move off to another competing idea with just as much voice and just as little skin.

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Hive actually has a wisdom of crowd mechanism built into it through the Proof of Brain function using stake-based voting. This makes the assumption that the people with stake will be more willing to support content that strengthens the platform and disincentive that which does not, because those with stake have something to lose. This is not very well implemented and the code is far from perfect, which means that people being people will look to maximize themselves over others, to the point where the cost to the platform is greater than the gain they get.

But, the outcome is likely still better than the alternative, which is what is used by the mainstream economy. Because, the mainstream uses the wisdom of the few to make the decisions for the masses, and they are people too, so they are going to push to maximize themselves over those masses with cataclysmic effect. The reason is that while a lot of relatively even decision makers competing against each other will result in a lot of small positives and negatives, when the few force their will on the masses, they will also extract and crush that mass at scale. This means the small harms are amplified millions of time.

For example, if I make a decision that costs you 100 dollars, you will lose the 100 dollars and be upset at me, but the damage is minor and limited. If the government makes a decision that costs 10 million people 100 dollars, the damage is a billion dollars worth. While the 100 dollars you lost might not be usable for much, the billion dollars is the difference of a couple of public hospitals.

To illustrate, the Finnish government like many others, has taken on a lot of debt recently and with rising interest rates, the repayments have quadrupled per capita since last year. This means that the debt servicing fee is now a little over 600 dollars per person, which is 3.3 billion dollars paid in interest alone. The argument is that the decisions they make are for the betterment of Finnish citizens, but there is a lot of evidence to the contrary, and even more in some countries.

And, this is just the interest on some of the national debt, which sits around 220 billion dollars, or 59% of the GDP. This means that this money has been taken and spent on something that hasn't generated additional value. And, this is on top of all of the taxes the government gets through the many tax conduits they employ. The government is making a lot of decisions for a lot of people, but aren't able to return value to those people, making it a growing net loss.

The stupidity of the crowd is that we keep supporting this business model as if one day by way of a miracle, they will suddenly be able to improve their decision making and make some value for citizens. It is unlikely to happen, unless Finland strikes oil and uses it well, like Norway has.

But, it is much easier for us as citizens to proxy our decisions out to people who say they can do a better job than us, so we needn't worry our pretty little heads about it and just go along with whatever they say is the right thing to do.

However, what I think would be a better system to try at the very least is to employ the wisdom of the crowd in the decision making process of governments. This is not done through voting for a better person to make the decisions, but rather through putting the responsibility of decisions on each individual and using their skin in the game directly.

For now, assuming that "tax" is a necessary evil, the evil of it is more in how that money is used by a handful of individuals, as many would agree that it isn't used efficiently or effectively and where it is spent often doesn't bring benefits to the citizens. However, if for instance half of our taxes were placed into a personally controlled wallet where we were given a range of options as to where and how much we would spend in a given area, each year, half or quarter we could then designate to what kinds of projects we want our tax to support. While the other half could be spent on foundational subjects, like schools and infrastructure.

What this would mean is that instead of voting in a government that we hope will be the tiny group of people who will finally benefit us, we will be constantly adding our value directly to projects that we think will benefit us. This completely changes the campaigning, because rather than campaigning as parties, individual people and personalities, it will be the merit of the ideas and plans that will get the support.

Would the wisdom of the crowd reign supreme?

What would be interesting to note is that it is very unlikely that a country using this system would ever be able to generate enough support to go to war with another country, because most individuals would be using their money in their best interest and war only benefits a sliver of a minority.

At least on Hive, while I think that most people would agree the mechanisms are far from perfect, most would also agree that the current economic practices and the actions of governments with the tax money they collect, are worse. Just because they are commonly accepted practices, it doesn't make them right and, because they are flawed, it is human process to look to improve them.

There are better ways.

And blockchain and digital tokenization are exploring some of those ways and building solutions that will evolve into widespread adoption, someday. The rules of a handful of humans will be replaced by transparent code that will give insight and will go through iteration after iteration of continual improvement. And, because the incentive for decision makers will be to increase their own wellbeing and that of the people they care for, it will slowly shift actions to be wellbeing-based, rather than profit based.

"Profit" for the sake of profit is useless. Money is useless. There is no point to it other than how it can be used as a marker to trade goods and services. However, because of the system we have set up that enables power to collect around wealth without adequate and timely mechanisms to shift that wealth and power, the capitalist market ends up monopolizing until it eats itself. While most people would want more money, if one person had all the money, money would be useless, right? It would be like having all the mobile phones in the world - and no one to call.

The current economy isn't using the wisdom of crowds, it is leveraging the stupidity of the masses. It is a system where decisions are made through influencing people to give up their power at best, and force and duress at the worst. Because people are trading their ownership and responsibility for convenience, they end up having no skin in the game and as such, their individual wisdom is no longer adding value to the crowd, because it doesn't matter whether the crowd wins or loses, because the individual has nothing to lose.

The war between centralization and decentralization affects us all, whether we take part in the conversation or not. For those who choose not to be part of the conversation, they will be forced into supporting the centralized forces, because that is the default option. Those who become part of the movement toward decentralization, will start to shift their defaults and that will be continually taking on more responsibility, more ownership, and putting more skin in the game.

Taraz [ Gen1: Hive ]