Vitalik Buterin: Money is ‘Fair Type of Game’
Vitalik Buterin: Money is ‘Fair Type of Game’

By | | 22 Mar 2020 - One of the founders of Ethereum, Vitalik Buterin, found money as a type of game. But outside of the game, there may be a solution for people to act for the common good.

In the latest episode of Artificial Intelligence Podcast with Lex Fridman, podcast host and research scientist at MIT. Vitalik Buterin was asked the question "what is money ?," then Buterin answered "This is a game". You get points reduced by numbers, and other people's points increase by the same numbers. This is one type of fair game, which has served useful functions for thousands of years, so it can last. Then buterin continues:

"I think the economist's utopia will be a place where. incentives are consistent in the sense that there is no conflict between what satisfies your goals and what is good for everyone in the world as a whole."

However, he found that the economic philosophy which in many respects deviated from utopia. Public goods, which are often discussed by Buterin, are very important on the Internet, he said. And the idea of ​​money as a game is reflected in trading - one loses money, another huge amount of profit.

"This model works very well when the thing we use is money to incentivize personal items like this. The things you give to one person where the benefits come for one person - but on the internet in particular, "and many contexts beyond that.

"There are actions that can be taken by individuals or groups in which, instead of benefits given to one person. The benefits are only given to many people at the same time. And you cannot control where the benefits are, "said Buterin. Individual actions, he continued, focus costs and distribute benefits, and money as a point system does not do a good job of encouraging such actions.

Buterin is working on quadratic funding

Something "even directly related to crypto, but theoretically outside," which Buterin is working on is a mechanism called quadratic funding. With this system, he explained, if someone gives a coin to someone else, it functions as money.

But if many people give coins to one person - and anonymously. That's "not under consideration for special services for the person himself. And then the number of coins received by that person is greater than just the number of coins that have been given by different people. "

If N each person gives one dollar, each person's contribution will be multiplied by N. And that N person gets N coin boxes. He found, the formula for quadratic funding, "optimally compensates" for the tragedy of shared property.

People who behave contrary to public goods by depleting / damaging shared resources for personal gain. Or as Buterin explained, they do not want to pay the full costs for the benefit of the group if they only receive a small portion in return.

Quadratic funding is useful for public goods in general, he said. This mechanism has been tried in the Ethereum ecosystem, and the top use cases supported by users open the user interface. To make it easier for them to interact with Ethereum. Documentation, podcasts, Ethereum protocol software implementation, etc. "Many things will be useful for many people" that contribute to certain entities.

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