“Post-Venture” Capital and the Crypto Nobel Prize

From economic historian Gregory Clark’s ‘A Farewell to Alms’.)

How do we reward innovation today?

Or: the problem with “planting crops is worth nothing; only harvesting matters”

The economics of Moore’s Law, from Bloom et al. 2018’s “Are Ideas Getting Harder to Find?” The authors are economists at major innovation hubs (MIT and Stanford.)

Why Post-Venture Funding Matters

It’s usually hard to tell who will benefit from a great innovation. For instance, Albert Einstein’s equations are essential for GPS devices, but at the time there were no GPS companies. Who should have funded him?

Note that David King has skin in the game for this thesis. I think he could be absolutely right (and there’s certainly no logical reason he should be wrong since execution != innovation)
Citation proportion by industry segment. The 99% for Akerlof is from Google Scholar only (there were some positive results without his name but I checked the first ten and all actually did cite him). I also checked this with Goldin’s TCR and Weyl’s QV ideas, with strikingly similar ratios to the above.

How Blockchain Helps

Fortunately, blockchain is an exceptional technology for rewarding innovators and early adopters. And what we call “post-venture” funding — rewarding people for what they’ve already done or created — has recently exploded on platforms like Twitch. For instance, Streamlabs estimates that donations to Twitch streamers totaled over $100 million in 2017.

Credit: Roman Mager on Unsplash

Genius Grant Futures for Money and Attribution

We explain technical details of how our prizes and our Non-Fungible Tokens (called Glyphs) work in our whitepaper, but here’s a brief sketch:

  1. Historically, great knowledge is valued like great art. Bill Gates paid $40 million for Leonardo Da Vinci’s Codex Leicester. Einstein’s manuscripts sell for millions. And a single page of Darwin’s writing fetches hundreds of thousands of dollars. While you may think there’s some aesthetic beauty tied into that valuation, the ideas can even be typed — James Naismith’s original typewritten Rules of Basketball recently fetched $4 million in an auction. People buy Darwin’s original pages because they are connected to his idea — the fact that information from The Origin of Species is freely available is not a bug for its high value; it’s a feature. Today’s Darwin would type The Origin of the Species in a Google Doc or a versioned LaTeX file or a post on Medium. But now with Planck, and the digital scarcity blockchain enables, she would create a unique Glyph that serves as that first manuscript copy.
  2. Glyphs also entitle the bearer to upstream rewards from the creation of new Glyphs (in the same chain). This is a little complex for an intro article, but intuition for this structure can be found in Chris Dixon’s excellent “Why Decentralization Matters” as well as Steemit and Simon de la Rouviere’s thoughtful work on Bonding Curves (Bruce Kogut was my formal introduction.) Innovations like Harberger taxes are also very relevant here.⁴ At any rate, feel free to skip this little semi-technical preview into the structure we’re encouraging:

Conclusion: The Blockchain Science Stack

As we discussed, science is a protocol for structuring and rewarding new knowledge. If you’ve read this article picturing some sweaty philosopher in a basement hoping to make 2 bucks you’re not thinking big enough. Science is the decentralized structure. Scaling it, well… innovation is valued annually in the trillions, remember. If you’re business-innovation-minded, here are a few “shower thoughts” that might pique your interest further:

  • Are there incredibly innovative people who are too busy to work on all their ideas? Are there great innovators who might be overextended as executors? If so, maybe we wish that we could get them to share more ideas openly. Incentives matter.
  • Would companies like to have a global suggestion box? If they publicly commit to refunding most glyphs created for them, they can get lots of suggestions (while still avoiding spam because of the Glyphs’ cost.). And if the company commits to handsomely rewarding the Glyphs that they actually use, they might get a flood of useful ideas.
  • Are there people who could establish a reputation for innovation, and then exchange their new, encrypted, ideas for money? These people who could provide encrypted seed ideas that others pay them to reveal, but they could also provide creative solutions as businesses are built and developed.
  • Could a large network monopoly be convinced to reward smaller experiments? If enough people had Glyphs staked in new tech experiments, perhaps a large network monopoly that “adopts” that technology would be compelled to make many of them whole. This is likely much more efficient from the perspective of the economy, and it’d be a worthwhile (by definition) marketing cost for the monopoly.

Endnotes

[1] More precisely “ideas are worth nothing” is a Koan, like “What is the sound of one hand clapping?” To see this, just consider that ideas are worth nothing” is itself an idea.

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Impressive-looking signals: Columbia PhD/Fulbright/Cancer Survivor. Less impressive: sold Bitcoin @ $30. @stephensonhmatt on Twitter.

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Matt Stephenson

Matt Stephenson

Impressive-looking signals: Columbia PhD/Fulbright/Cancer Survivor. Less impressive: sold Bitcoin @ $30. @stephensonhmatt on Twitter.