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Climate Change and Changing Value of Knowledge

Knowledge has value. Cryptocurrency (System of Trust) is a transactional equity in knowledge. As we continue to evolve into this new system the evidence is more clear every day, take for example with this evolving concept of "fake news." It is an inevitable construct of an increasingly interconnected global society where every single individual's opinion is available to everyone else instantaneously. Consider the Flat Earth idea. There is a probability it is true. The probability is very low. It therefore has very low value. This is an extreme, but it frames Fake News well: knowledge is not an absolute. It's a probability function. We learned this about electrons and protons in the Modern Physics era, and for scientists then it was most disturbing, but the truth was an election location is not a tiny little orbiting object, like a teeny version of the moon to the earth, it's instead a probability function (this is intensely fascinating for those who didn't take physics in college, I encourage you to at least check it out). 

Climate change has become a political conversation. Every new article that inserts new scientific data into the conversation is immediately parsed by two different camps immediately and exactly to opposite effect. In political conversations all knowledge is exactly worthless. No disrespect to politicians, but economically speaking only politicians have incentive (to win). Their incentive is to get votes, at least half the group +1, and therefore they divide individuals into what they think will give them at least this composition. Individuals carry their water because it determines how we are governed, which is important to the individual.

Carbon dioxide has no value once it's emitted so it cannot be traded like a commodity because it has no underlying value, such as corn or oil. It is therefore a political construct to create carbon credits and force a market of buyers and sellers. In another construct, voluntary carbon credits can be created (government free constructs). The economic force that ultimately determines their use and value comes from customers of companies that want to see their products and services be relatively less carbon output intensive. These have worked to a small, varying degree. Ultimately they have been failures, the former because governments do not allocate scarce resources efficiently and the second because it doesn't properly value the "commodity."

Carbon dioxide emissions have been shown to be problematic in their cumulative emission but the breadth and scale of the problem is both massive and highly diffuse. We don't know the extent of the actual problem but most importantly the cost of the problem. It is impossible for a group of super scientists to get together and pump a bunch of data into a supercomputer and spit out an All-Knowing Answer. This presents an interesting problem dynamic: CO2 has no value and the information gives us no clear answer.

We are in what can be described as version 3.0 of the internet, which is the "mobile phase." First you had static web pages and google search (v1.0). Then facebook de-anonymized the internet a decade later (starting in 2004). By 2014 the mobile phone had taken over and added a geolocation to facebook's "real person." This simple innovation has remarkable consequences. For example, look at Uber. They single handedly shattered every taxi-medallion government/mafioso relationship that people had worked generations to build, in every single city, in every country around the world, all at the same time. I mean, we're talking a nuclear blast here. They just obliterated it. Uber's reward for this is a $50B+ valuation in 5 years. In fact, the only reason why Uber has centralization at all is because no decentralized construct existed that could've seeded the organization at the time. Uber is essentially a software protocol that matches customers to drivers. The drivers and customers are both social equity owners in the construct of the organization; the customer gets from A to B and pays money which the driver earns. The entire organization is more valuable because as a social organization it's transactional value infinitesimally increased due the single transaction. A "traditional" centralized organization removing 10% of every transaction is no longer necessary, as long as the organization has a decentralized currency (System of Trust) internal to its operations.

Web 4.0 provides for such transactional decentralization. IMO this will transform social media of course, replacing it's centralized advertising business model with decentralized knowledge ownership but also the next stage of Uber/AirBnB will become (or be replaced by) decentralized protocols because they are more efficient at the margin (a driver wants the extra 10%, to be sure!). While intellectually interesting to consider these specific cases, it's actually limiting to do so, kind of like a solution looking for a problem: Uber and facebook already exist after all. But there are areas where the combination of these two concepts (decentralization and knowledge) are nothing short of fascinating, and two really really big places to look is Climate Change and Healthcare.

Healthcare we will need to save for another day, but we have discussed a great deal about Climate Change and it's something I've spent several years thinking a lot about, and will become (in my mind and, apparently, ONLY my opinion) one of the first and most powerful effects of the early transition to the Knowledge Economy. Knowledge has value, and mitigating climate change most certainly has value but in the current economic system that value is impossible to effectively capture. Because of this, instead climate Change has devolved into a massless, valueless, zero-sum political discussion. The decentralized System of Trust has the ability to categorically shift the carbon paradigm from a political one to an economic one. It does so by providing for an equity and transactional currency based on the knowledge itself, and not some underlying commodity. 

The theoretical construct of a "carbon credit" ceases to exist entirely. This is the big point one needs to wrap their mind around that I think a lot of people miss. The value is in the knowledge. Because the knowledge is cumulative in nature, and no one individual has all, or none, of the knowledge, the actions of the entire group determine the self-valuation of knowledge itself. This is the system we need to create, which up until now we did not have the ability to do. I think it'll have the same effect on the climate change discussion and landscape that Uber had on taxi cab medallions. In my next post, I will describe the system I think we could create in great detail. 

Onward and upward!

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