Across human history, everyone has the same correct insight, but many draw the wrong conclusions, often in the wildest possible ways. The correct insight is the following. Everything in life is a power struggle. That statement is about energy, and energy can only be conserved. Throughout its conservation, energy does always materialize in some way or another. The very state transitions of energy as it is being conserved, describe the very power struggles that we are referring to here. That is th

Across human history, everyone has the same correct insight, but many draw the wrong conclusions, often in the wildest possible ways. The correct insight is the following. Everything in life is a power struggle. That statement is about energy, and energy can only be conserved. Throughout its conservation, energy does always materialize in some way or another. The very state transitions of energy as it is being conserved, describe the very power struggles that we are referring to here. That is th

The rollup centric roadmap as implemented by the Ethereum ecosystem entails a promise. That promise goes as follows. Every L2 rollup will try out different business models and varying technology stacks, so that we are collectively experimenting with different approaches across the entire Ethereum ecosystem. The promise is then that some of those successful experiments originated on L2 rollups, may find their way back one day to benefit Ethereum mainnet. Someone said recently that all of the L2 e

The rollup centric roadmap as implemented by the Ethereum ecosystem entails a promise. That promise goes as follows. Every L2 rollup will try out different business models and varying technology stacks, so that we are collectively experimenting with different approaches across the entire Ethereum ecosystem. The promise is then that some of those successful experiments originated on L2 rollups, may find their way back one day to benefit Ethereum mainnet. Someone said recently that all of the L2 e

"Dictum meum pactum" is the latin form of "my word is my bond". And with that promise comes an invisible social contract that must be honoured. Humans are inherently social creatures, which means that several trust assumptions are built right into every one of us. Social contracts work because of their implied reputational value. The word of a drunkard may be quickly dismissed in the face of a magistrate, because the reputation of either proceeds them. The proverbial skin in the game here does t

"Dictum meum pactum" is the latin form of "my word is my bond". And with that promise comes an invisible social contract that must be honoured. Humans are inherently social creatures, which means that several trust assumptions are built right into every one of us. Social contracts work because of their implied reputational value. The word of a drunkard may be quickly dismissed in the face of a magistrate, because the reputation of either proceeds them. The proverbial skin in the game here does t

The Powerlaw memo is all about mental models, in particular about how to think. And one of my favourite takeaways this year is the difference between inputs and outputs of complex systems. W38 described how easy it is to mistake inputs for outputs, and in the process get the understanding of any system completely backwards. I find this notion of inputs and outputs so compelling because we can describe literally any complex system as a black box that consumes inputs on one end, and produces outpu

The Powerlaw memo is all about mental models, in particular about how to think. And one of my favourite takeaways this year is the difference between inputs and outputs of complex systems. W38 described how easy it is to mistake inputs for outputs, and in the process get the understanding of any system completely backwards. I find this notion of inputs and outputs so compelling because we can describe literally any complex system as a black box that consumes inputs on one end, and produces outpu

Overfishing regulations and game engines have some things in common. Those things are fundamental principles in mechanism design. And with that we have once again pretty universal patterns in our toolbox in order to understand any complex system. In one form or another, the source of truth should never be provided by the players of the game. And why is that? Because players are incentivized to win the game, not to report the truth. Collusion of players on reported data may lead to the entire gam

Overfishing regulations and game engines have some things in common. Those things are fundamental principles in mechanism design. And with that we have once again pretty universal patterns in our toolbox in order to understand any complex system. In one form or another, the source of truth should never be provided by the players of the game. And why is that? Because players are incentivized to win the game, not to report the truth. Collusion of players on reported data may lead to the entire gam

Markets are full of asymmetries in perception and reality. You hear about memecoin millionaires every day, but you never hear about all the people who lost everything gambling the pension away. This is called survivorship bias. Our perception is bombarded with success, until we are made to believe that success is all there is in this world. And nothing could be further from the truth. And why is that? Because everything that does not survive simply dies and vanishes. So you won't hear about all

Markets are full of asymmetries in perception and reality. You hear about memecoin millionaires every day, but you never hear about all the people who lost everything gambling the pension away. This is called survivorship bias. Our perception is bombarded with success, until we are made to believe that success is all there is in this world. And nothing could be further from the truth. And why is that? Because everything that does not survive simply dies and vanishes. So you won't hear about all

Social systems require free markets for fair equilibria to emerge. But free markets are competitive by nature, and therefore less fair to begin with. So you want your system to be designed in a way where the most critical activity becomes the easiest thing to do for practically anyone to participate in that very value capturing process. The question might be, where to draw the line for accessibility in a world of tradeoffs? Some things can only be made so easy, until the laws of physics may get

Social systems require free markets for fair equilibria to emerge. But free markets are competitive by nature, and therefore less fair to begin with. So you want your system to be designed in a way where the most critical activity becomes the easiest thing to do for practically anyone to participate in that very value capturing process. The question might be, where to draw the line for accessibility in a world of tradeoffs? Some things can only be made so easy, until the laws of physics may get

Humans have to agree on a lot of different things in life, every single day. Consensus describes what a group agrees on. The way in which we come to consensus is defined by a protocol, a set of rules that allow for complex behaviour to emerge. Nation states in the western world thrive for a protocol called democracy, which exists in many different flavours. Blockchain networks mostly utilize the two most prominent consensus mechanisms called Proof of Work and Proof of Stake. Both of those protoc

Humans have to agree on a lot of different things in life, every single day. Consensus describes what a group agrees on. The way in which we come to consensus is defined by a protocol, a set of rules that allow for complex behaviour to emerge. Nation states in the western world thrive for a protocol called democracy, which exists in many different flavours. Blockchain networks mostly utilize the two most prominent consensus mechanisms called Proof of Work and Proof of Stake. Both of those protoc

Property rights rule everything around me. And the only thing that truly matters in this world, is what you can or cannot do. We grow up today in the comfort of our homes, far away from kinetic war or any form of military conflict. People grow up in western societies today, thinking that life is meant to be orderly and happy. I think we are meant to reach for the stars in life and grow beyond our own horizons. But none of that process is orderly nor happy all the time. The only reason why people

Property rights rule everything around me. And the only thing that truly matters in this world, is what you can or cannot do. We grow up today in the comfort of our homes, far away from kinetic war or any form of military conflict. People grow up in western societies today, thinking that life is meant to be orderly and happy. I think we are meant to reach for the stars in life and grow beyond our own horizons. But none of that process is orderly nor happy all the time. The only reason why people

Repeating the same characteristics across different scales is a very common phenomenon that can be observed everywhere in nature. When you are not taking good care of your own body, then you are probably not taking good care of your home either. If you have a dirty kitchen counter all the time, then you will probably have quite a messy life in one way or another too. A very distinct property, and be it yet so small, may cause ripple effects from the micro into the macro structures of our lives,

Repeating the same characteristics across different scales is a very common phenomenon that can be observed everywhere in nature. When you are not taking good care of your own body, then you are probably not taking good care of your home either. If you have a dirty kitchen counter all the time, then you will probably have quite a messy life in one way or another too. A very distinct property, and be it yet so small, may cause ripple effects from the micro into the macro structures of our lives,