Ethereal Dreamer - The Core Ideas of Ethereum

Translator's Preface

What is Ethereum? Aside from the technical aspects, Ethereum is a group of thinkers and philosophers who, with freedom, openness and a yearning for a decentralized world, are conducting experiments to transform the economy and society. Perhaps this is just a "dream", but as the article says, it is precisely because no one has tried that we have to go deep into the unknown, so I think this is more like a thought experiment and cultural movement. I remember seeing a sentence on Kernel's website, but I can't find the specific source. The general meaning is that we don't talk about technology because technology is constantly changing, and only ideas can be eternal. Let's appreciate these eternal ideas in this week's translation article!

Overview of this article

This article is Ethereal Dreamers, author: Kernel community. The full text is about 4,800 words long and it is expected to take 35 minutes to read.

Main content

Ethereal Dreamers

We are the makers of music,
We are the dreamers of dreams,
We are those who sleep in the river of time,
The history buried in the earth's past,
We built Nineveh with sighs,
We built Babel with laughter;
And we destroyed them with prophecy,
To declare the values ​​of the new to the old;
For every age is a dream that is dying,
Or a dream that is about to be born.

——"Hymn" by Arthur O'Shaughnessy[1]

How does this fit with Kernel?

The format of this brief is different from anything else you’ll find in your syllabus. That’s because it’s impossible to talk about the shape of a shared dream without consulting many different people, listening to multiple voices, perspectives, and lived experiences. So we invited Mihai Alisie, Karl Floersch, Rhea Myers, Virgil Griffith, Simon de la Rouviere, Kei Kreutler, Toby Shorin, Laura Lotti, and Sam Hart to join us on stage and, beyond the constraints of time, attempt to peel back the veil on our shared, invisible hope, so as to better understand its shape.

This post is intended to touch upon and foreshadow many of the things we’ll be discussing this week and in the weeks ahead. In particular, we hope it helps you better understand:

1. Creating meaningful money.
2. Shared values ​​and diverse values.
3. Code, law, and how to live in all the layers in between[2]. ? We are learning to dream with an open mind… everyone is welcome to co-create.

Fiery Passion

Before Ethereum even launched, this dream was defined as a combination of reflection, introspection, meaning, and shared values. Mihai wrote[3]:

"In the process, it made us reflect on our own values ​​and look within ourselves to ask ourselves what this project meant to each of us individually and collectively. During these long soul-searching sessions, we realized that most binary oppositions ultimately came down to one question: for profit, or not for profit?"

It can be said that the result of all these early deliberations was that we decided that creating money was more fun and interesting than making a profit. What we meant was: Ethereum means that you can create your own money, rather than be suspicious of someone else's imaginary money. Mihai went on to point out that we are not motivated by money, but by a burning passion for this crazy idea of ​​a free, open, decentralized world. That is what makes us happy in the end, and what got us out of bed and working on this project, proud to say that today we are building tomorrow. As we said in our Play of Patterns[4] last week, since nothing like this has ever been done before, there are no right or wrong answers, and no concrete experience to draw on. We are diving deep into the unknown. Learning the Language One way to start our random journey through this unknown territory is to jump into the early work of Karl Floersch, who suggested[5] that Ethereum is the government of the internet, and smart contracts are its law.

However, "law" implies substance, not just form, which means that we care more about what we can actually do than what we might do. Anyone can create laws on Ethereum, and if you learn the language, you are effectively a member of the legislature. Moreover, the executive is merely a network of computers that process meaningful speech for an agreed fee.

Making a law does not mean that everyone will obey it. All Ethereum laws are optional. In order for your law to be adopted, you need to convince your fellow citizens that it is in their interest to obey your law. Good laws will provide unique advantages to those who obey them. They allow for cooperative action and greater trust within the group.

A good example of the difference between formal, prescriptive laws and optional, substantive laws is freedom of movement. Most modern democracies enshrine this freedom in a formal way: anyone can traverse any public land as they please. However, you still have to pay for your own travel and lodging. Therefore, in practice, only a relatively small portion of the population can realize this freedom. Earlier communities framed the problem very differently: they had no formal freedom of movement, but instead actively fostered a culture of hospitality toward strangers[6], because this ensured that anyone could truly travel freely if they wished. In this simplified example, one can begin to see how mutual aid is fundamental to individual autonomy in a “friendly society[7],” an idea we will return to in Module 4[8] and when we turn to a broader perspective on reciprocity[9]. The word “good” here no longer implies some moral stance: it has to do with the computable effects of any executable statement. This shift in how we understand the word “law” is most directly reflected in the fact that it is impossible to “break” the law on Ethereum—because the law is written in an enforceable and unambiguous language, and the Ethereum Virtual Machine (EVM) is deterministic by nature—but it is possible not to obey the law. This is the core of the whole “code is law” debate. As Rhea Myers [10] puts it, taken literally, this is either a “libertarian attempt to reduce the costs and uncertainty of interpreting ambiguous human language” or a “dystopian alternative that replaces rights and safeguards with binary logic”. Karl, however, points to something different. We can reduce coordination costs by limiting the ambiguity of transactional language, but global coordination requires a broader view that all transactions are voluntary: you do not need to sign up to interact with contracts that you do not wish to bind yourself to. Understanding that this is neither a matter of libertarianism nor pure logic requires learning [11] a new language, and the most effective way to do this is with the kind of fiery passion that Karl and Mihai embody. “Speak a new language and the world will be a new world” — Rumi Wittgenstein claims[12] “There are no purely philosophical problems, only misunderstandings of language.” A global computational architecture could reduce such misunderstandings in economic interactions, though it would still be up to those of us who sign on to it to decide what laws make sense of our shared state. As Rhea puts it elsewhere: “Ethereum allows anyone to define what art is[13].” This is a point we will revisit in Module 4[14]. Karl’s post discusses the legislative and executive branches of government, arguing that “for the first time, with low-cost, selective, and inviolable laws, we can easily apply the scientific method, trial and error, to governance[15].” However, this seems to ignore the judicial branch. The function of the judiciary is to interpret the law, resolve disputes, and evaluate case outcomes. However, in this new medium, interpretation and evaluation are no longer ideological questions, but engineering challenges[16]. Disputes also operate differently because laws are optional, meaning they are subject to scrutiny by every citizen. Laws are unbreakable, allowing us to accurately measure their effectiveness. Laws are made available to everyone, meaning that new laws can quickly replace old ineffective laws. And then we repeat. We will be able to turn governance into a science and discover laws that are effective and fair to everyone. It is worth noting that this line of thinking is subject to much criticism, especially when it is simplified for marketing purposes. In particular, we must ask whether ignoring the judiciary is part of a broader social movement toward efficiency at the expense of justice[17]. While the negative skepticism and inevitable pessimistic responses to this article contradict Kernel’s argument, critics such as Evgeny and Katrin remind us of two key points:

While practices may change, it is incumbent on each of us to continually question what constitutes “law” in the true sense of the word, namely social justice, solidarity, and human dignity.

Standards of justice should never be deprived of the pursuit of greater efficiency.

Infinite Game Library

This idea of ​​discovering laws that work and are fair to everyone takes us back in time to the work of Virgil Griffith, who writes:[18]

Ethereum is an unprecedented arena for collaborative gaming.

His paper lays the foundation for understanding how such environments can be used to subvert traditional game theory conditions, and further shows that when we turn non-cooperative games into cooperative ones, rational choices become cooperative [19].

Ethereum constitutes an incorruptible, ubiquitous external monitor that can always enforce the agreements between players, regardless of the game. This means that Ethereum can theoretically turn any non-cooperative game into a cooperative one.

Of course, this situation has both advantages and disadvantages, as games can be easily distorted towards prosocial outcomes. As we will suggest later in the course [20], the best way to deal with this insight is simply to open up knowledge, sharing, work, and communication radically.

Another way to look at the power unleashed by increasingly effective tools is through a historical perspective, looking at the concept of the joint-stock company and limited liability: it is really just another way we see how certain incentives can be distorted. Simon de la Rouviere notes that,[21]

the invention of the limited liability stock corporation created a whole new system of organization. Blockchain technology and the possibility of creating new types of cryptoeconomic coordination systems will offer marginal gains in efficiency over stock corporations, but may also allow us to witness the emergence of unprecedented coordination systems.

Such coordination systems have the potential to bypass state enforcement and its violent premise. As Simon writes elsewhere,[22]

this raises the question of how to design coordination schemes that can accommodate an unlimited number of participants without relying on the state. As thought turns toward more denationalized ideas, we may find a middle ground: some mix of these things may indeed prove beneficial to our society.

Such a system could be used to change the incentives that underlie global coordination failures in mission-critical games like climate change:

Rather than trying to force players to curb the inevitable abuse of common resources, it would be profitable to protect those resources[23]… In fact, as the abuse of common resources increases, the profits from protecting them increase.

This economic feedback loop incentivizes self-regulating ecosystems and creates the time needed for common resources to recover[24]. Understanding how technology can create more time[25], so that people can simply breathe together, will be at the heart of Module 3[26].

Coordinated galaxies

In his article on Joint stock pepe, Simon goes on to note:

The key feature of transformative organizations is that they reduce the transaction costs of coordination. This is captured in Coase’s Theory of the Firm. You can make marginal improvements, such as applying decision support systems within an organization, but occasionally a big systemic change occurs that initially appears to be a marginal benefit but essentially enables entirely new organizational forms to exist.

Lowering barriers to entry (and incentivizing small contributions from the weakly connected periphery) eventually leads to the emergence of large, consensus initiatives. We saw this in the shift from large-scale general partnerships in the early industrial revolution to the subsequent explosion of joint-stock companies.

In Simon’s words, Ethereum is the “dark matter” of organizations, capable of coordinating galaxies of people[27] and with the power to create new Schelling points, rooted in shared, tokenized stories.

Throughout his work[28], Simon suggests that blockchains can be used to create coordination systems that are comparable to (or even more powerful than) joint-stock companies, without relying on physical coercion.

This coordination stems from a shared story within an incentive structure that makes it nearly impossible for those in power to change the narrative. He writes:

“This enables even weak ties to collaborate, and they can collaborate at the speed of information. It’s the force of law, but at the speed of process.”

The term “dark matter” is particularly apt, because the exact consequences of this game-bending and galactic-scale coordination are hard to predict and understand. On a different level, the same is true of joint-stock companies. Simon uses the example of this, complaining:

“Limited liability allows a person to take advantage of actions that benefit him, but not be held accountable if those actions have adverse consequences; he can speculate for profit without being held liable for losses.”

This brings us to a more serious topic, asking…

Could the mass tokenization of all network effects ultimately have a net negative impact on society? If we allow memes to have value, are we making a Faustian bargain with Pepe the giant corporation? A Free Public Space Simon’s question is profound, and it brings us to a concept we will explore in Module 6: the system Mihai describes—one that aims to enable a free, open, and decentralized world—also requires eternal vigilance.[29] A key part of this vigilance concerns our moral imagination and the basis of our ability to create technology (whether internal or external) that is premised on the interests of others.

In an excellent article on “Positive Sum Worlds”[30], Toby, Laura, and Sam list privacy, freely shared work, libertarianism, accountability, and democratic participation as values ​​that go beyond the simplified notion of “good” in economics. If we can not only understand the deep game theory Virgil mentions above, but also start to think together in conversation[31] about the language of the games we play, then it will be possible to reframe economic “problems” like “free riders” and transform them into the broader, more human publics we should serve.

Economists may be puzzled by this shift in meaning, but it is this reordering of language that is at the heart of the new language Karl mentions above. Simon has also written that Ethereum implements money as a language[32], an idea shared by a few geeks who have fallen deep into this particular rabbit hole[33].

These profound changes to our language of communication point to another key part of the otherinter.net article, which is that “a public space always exceeds one’s known protocols.” In Module 7, we will understand that protocols themselves do not encourage giving, protocols themselves are the gift. When viewed from this perspective, we can also see how:

These profound changes to our language of communication point to another key part of the anotherinter.net article, which is that “a public space always exceeds one’s known protocols.” In Module 7, we will understand that protocols themselves do not encourage giving, protocols themselves are the gift[34]. When viewed from this perspective, we can also see how -

Public goods are realized by social institutions through the reproduction of behavioral patterns in the public interest[35]… The social institution required is not a chain company, but a container for different capitals and coordination ideas.

There are some ideas about the uses of coordination capital that have been proposed, but the more important point is that it is up to you to define your role in this shared network[36] and to realize that this personally meaningful work is best done in relationship[37]. As Toby, Laura, and Sam write:

One ​​way to embody positive externalities is to see the success of others as your own. Indeed, this quality is consistent with the principle of credible neutrality[38].

More timeless

One ​​of the core ideas in Positive Sum World thinking has to do with what we call time horizons. Carl Sagan once reminded us that “books are proof of human magic” because they allow us to literally “travel through time.” When you read words written hundreds of years ago, whose voice is that that echoes in your head? Is it the author’s? Your own? Or a mixture of both?

Every new medium we invent allows us to extend our consciousness far into the unknown “future.” This idea aligns with the philosophy of many indigenous peoples[39]: think not of yourself, but of seven generations from now, live with those who have yet to come, remember the “faces that lie beneath the earth.” Blockchain allows us to realistically ask: “What about seventy generations from now? Or seven hundred generations from now?”

The Great Call! We call upon the future comers,

from those dazzling unknown shores;

to bring your sunshine and your summers,

to restore our world to its former glory;

you who will teach us new melodies to your songs,

and things we have never dreamed of.

Toby, Laura, and Sam ask:

How can we use the immutability provided by cryptographic protocols to create something that can outlive us and become the foundation for the long-term continuation of civilization?

Each medium asks us the same question at a deeper level: who do you remember being, and how do you want to be remembered in the future? Blockchain technology makes the idea once proposed by Jose Saramago[40] more clear, adding more precision, clarity, and urgency to this question.

(Translator's note: "The idea once proposed by Jose Saramago" refers to what Jose Saramago said in his book "Blindness": "The good and evil generated by our words and deeds will continue to spread in the days to come.")

We will end where we started as always:

Even if we don't fully understand its application and impact, the large number of ideas and actions triggered by the core concept alone is inspiring and gives us a glimpse of the unlimited potential of our thoughts - we are jointly building and creating our future "reality".