Monthly Archives: December 2022

AI Assistants and Smart Contracts

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Smart contract blockchains are clearly a powerful technology. Digital signatures, ledger databases, and public markets are all significant on their own, in combination they form a whole much greater than the parts. This whole has clear advantages in several areas: micropayments, loyalty points, virtual goods and other applications all benefit from the transparency and trust of blockchains. In other cases sober decisions have to be made about whether the whole is needed or if just one of the components provides the real value. Private ledgers or centralized markets can solve many problems.

A similar evaluation has to be made about business models. For example a social network built on a blockchain smart contract platform (let’s call that Web3 for short) gives users and developers more control and allows new models of sharing the value created. However, the dominant business model for centralized social networks is advertising and in a Web3 social network users often pay for the services they are using. For heavy users those penny transaction costs will add up and they are faced with a choice of whether to pay and deliberately choose the benefits of the Web3 app or continue on the path they are used to.

Everyone likes things that seem free so at first glance Web3 apps appear that they would stay a niche for those users who really care about portability of their data or other benefits or who contribute enough to the system to offset the value they receive.

AI assistants will change this calculus. In the next year you will start using an AI assistant to do more and more tasks for you. That work will get done through programatic interfaces rather than user interfaces. Even more impactful; AI assistants don’t watch ads; at least not in the same way we care about now.

Ok, there will be a transitional period where your assistant watches ads, an arms race between content providers and users, and a switch to a new paradigm. In this new paradigm the tradeoffs will be much clearer and Web3 more competitive. In fact the aspects that remain advertising oriented are likely to be tracked on a blockchain: prove you have engaged with this ad in order to earn.

Big changes are coming to how we interact with the digital world. It’s important to still be clear eyed about what will work and won’t but we should expect major shifts in some large economic systems.

Frontier of Knowledge

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With one of the first optical telescopes on earth, Galileo could observe novel phenomena everywhere he looked. A few hundred years later and new astronomical discoveries require instruments like the $10 billion James Webb. The more we as a species know, the harder it becomes to discover new information. Each new discovery requires more previous knowledge to build upon and often requires more advanced instruments to plumb unknown depths. That at least is the productivity problem also known as the “burden of knowledge“.

The idea that “there is nothing new under the sun” traces at least as far back as ancient Hebrew. In modern times anyone starting a company will quickly find that the same idea has been tried a few times before. Though learning from those failures is one of the best places to start it can be a depressing way to start one’s day.

Fortunately there are a few countervailing forces. Much knowledge acquisition is what in computer science would be called NP-hard. It takes a lot of work to discover – running years long experiments, trying many avenues of research – but once discovered is easy to verify or put into practice. Learning to use CRISPR to edit genes is much faster than discovering it as a mechanism

Next, old ideas are supplanted with new and our working model of what is important to know is constantly refined and updated. We spend a lot of time on this. Is somebody wrong on the internet? I better help them update their model. This process of compaction and encoding allows us to carry around and more quickly find efficient representations of how the universe works.

Ideally those improved representations then make it into school curricula where we can apply improvements in pedagogy. The better we can teach both raw knowledge and the general skills of how to learn and how to reason, the more tractable endless facts become.

We can’t ever read all the books and that of which we are ignorant will always be expanding, however we still have good tools to get us to that frontier and on to exploring. We should expect to discover great and wondrous new things.