Truth, from The Square or The Tower

@midjourneybot: /imagine: cybercriminals phishing for all our money

When you receive a Spam email offering you free money from a Nigerian Prince, how long does it take you to delete it? Or what about Headline Traps? Those are the articles in your newsfeeds that sound like amazing stories, until you tap on them and realize you’ve been tricked.

The humans who designed these deceptions intentionally stole seconds of Human Attention from us. Here are a few more forms of digital deception that already plague our Internet:

  • Deepfakes - manipulated videos or images that deceive viewers into believing false information

  • Phishing scams - emails to obtain sensitive information, such as passwords or credit card numbers, by disguising oneself as a trustworthy entity

  • Tech support scams - fraudulent phone calls from tech support that obtains access to the victim's computer

  • Romance scams - tricks victims into falling in love with a fake persona to get money or confidential information

  • Ransomware - encrypts a victim's files to make them inaccessible, then demands payment for the decryption key

  • Fake news - misleading news that is deliberately spread to manipulate public opinion

  • Auction fraud - fake transactions in online auctions where the seller does not deliver or the buyer does not pay

  • Malware - software designed to steal confidential data.

  • Investment scams - fraudulent schemes that promise high returns on investment, but do not deliver

  • Social engineering - psychological manipulation of individuals to perform actions that are not in their best interest

  • Click farms - groups of people hired to artificially boost traffic on a website, social media platform, or mobile app.

The Internet is a scary place. In 2023, Cybersecurity Ventures estimated the total cost of these cybercrimes at EIGHT TRILLION DOLLARS. That was 9% of the total global economy. Remember all those stories of bandits in the Wild, Wild West? Well, the Internet has no persistent identities, no law makers, and no sheriffs.

The Internet is basically the Wild, Wild West 2.0.


Weapons of Mass Deception

The Internet is already teeming with deceptive behavior, but it’s about to get much, much worse. The proliferation of Generative Artificial Intelligence will soon make it practically impossible to know what is real and what is fake online because many of the generative-ai frameworks are open source for anyone to try. When these cybercriminals incorporate generative-ai into these existing scams, we will be playing “4-D chess” against supercomputers whose only goal is to steal all our time and money. These superhuman “attack-ai” will be Weapons of Mass Deception.

In the future, Deep Fakes will become standard, even for legitimate companies.

By the year 2035, the Disney Plus App will likely stream individualized Disney movies just for you. The app’s artificial intelligence will still stream “Tangled”, my personal favorite, but it will also provide each user with a prompt. You will be able to ask the Disney-AI to, “make a new Avengers movie where they fight any of the original Jack Kirby villains. Have a 30-year-old Arnold Schwarzenegger play Thor, but write his lines as a sassy black woman.” 🤣

We can watch our own trailer, give the Disney-AI more notes, and then watch a new Disney movie every day. We might have to pay $50 to license Arnold Schwarzenegger’s digital likeness, but if we GENERATE a movie good enough to get 100k views online, Disney might actually pay us. 🤔

We might even make enough money to license Brad Pitt’s digital likeness. Brad Pitt is so good looking that he will probably be in new movies for the next three thousand years. Carrie Fisher has already starred as Princess Leia in a Star Wars movie that was written after she was dead. 💀

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Whatever Generative Artificial Intelligence does for Disney, it will also do for Porn. If you think Disney is big, Porn is 30% of all internet traffic. Porn is bigger than Disney, Netflix, HBO Max, and Warner Brothers Discovery combined.

In 2018, Pornhub users spent FIVE BILLION hours watching porn—5,824,699,200 hours to be exact. That’s 665 centuries of time from just one of the three major porn streaming services. Pornhub users watched 109,012,068,000 videos, which is 14 videos per person for everyone on Earth. According to web traffic monitoring, those 100 billion porn videos were consumed in sessions that lasted an average of 18 minutes.

Here are a few more surprising Porn stats:

The line between fantasy and reality is going to blur even more. In the future, Big Porn won’t even need the human performers. The “fantasy economy” will have practically unlimited generative-ai streaming Individualized Porn into virtual reality goggles that can instantly react to changes in heart rate and brainwave activity. Pornhub already has all the training data it needs. Their search bars know what keywords their users want, which videos they watch, where they pause, and exactly when they finish. Gross pun intended.

Everything on the internet that isn’t already fakeable, will be fakeable.


It’s not just the internet. Everything in real life that isn’t already fakeable, will be fakeable too. For example, De Beers and other natural diamond miners campaigned against “cultured diamonds” for decades. Then De Beers reversed course, investing $100M to launch Lightbox, their own cultured diamond brand. That’s because natural diamonds are following the exact same economic path as natural pearls. The battle between cultured pearls and natural pearls started much earlier in history and today 100% of pearls used in jewelry are cultured. Cultured pearls are cheaper, rounder, and have a lower environmental impact.

In the future, even filet mignon steaks will be “cultured” in bioreactors because why buy the cow when you can get the tenderloin for free? 🥩

Nothing in the future will be real for the same reason the world chose cultured pearls—they’re cheaper, better, and have a lower environmental impact. By the year 2050, I wouldn’t be surprised if children can “print gold bars” from an atomic 3D printer their parents get from Walmart. Are gold bars from an atomic 3D printer any different from gold bars dynamited out of the Earth? Yes, they’re cheaper, better, and have a lower environmental impact.

Finding The Truths

It’s easy to see that finding the Truth in the “exponentially multiplying” noise of generative-ai will become ever more difficult over time. ChatGPT is already adding 4 billion words per day to the Internet, and growing. When the cyber criminals get all their “attack-ai” online, how many words per day do you think they will be adding?

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So how do we find information online that we can rely upon? Since we spent the entire first chapter of this book demonstrating all the reasons why Truth can’t exist in this universe, how do we find information that gets as close as possible to the Truth? How do we find information that has the lowest amount of Uncertainty?

There are usually two questions I consider when determining the veracity of any information:

  1. How improbable is this information compared to Chance?

  2. How difficult would it be to replicate this information?

There’s no perfect way to answer these questions, but there are two types of “truths” that are very difficult to replicate: Centralized and Decentralized.

Centralized Truth is information that comes from only one expert provider. Einstein gave us centralized truth. Sources of centralized truth know something that no one else knows. For example, what everyone searches for on the Internet is known only by Google. That “single source” data is so valuable, it generated $282 billion dollars of advertising revenue in 2022. Knowing something that no one else knows creates huge economic opportunities. Wall Street hedge funds have satellites in space monitoring the traffic patterns in Walmart parking lots just so their trading algorithms can make better predictions about the next quarter. Those satellites produce centralized truth.

Decentralized Truth is information from many disparate sources that all independently agree on the same story. Sources of decentralized truth know something that everyone knows. I think of this as “Bayesian Truth”. This kind of truth relies on sampling the same data points repeatedly. While any one sample could be inauthentic, the higher the frequency of the samples, the more true it is.

Yelp reviews are a good example. Yelp is an app that allows restaurant patrons to leave reviews about their dining experience on a scale of 0-5 stars. When our family travels to new cities, we don’t ask any one person for restaurant recommendations—we read what everyone is saying. If a restaurant has 5000 reviews that average 4.7 stars, then we will probably like it too. Yelp is also useful as a menu. Whenever I’m in a restaurant, I scroll down through the photos of the food instead of reading the menu. If 20% of the photos are Shanghai Soup Dumplings, I get the dumplings. That's also a decentralized truth. 

I also use Yelp data to rent houses on the road. Knowing where to rent a house within a city will have a tremendous effect on your experience. When I search for houses on Airbnb, I keep a Yelp window open that shows the best restaurants, sorted by rating, as little dots on the map of that city. This is the cluster where I wanna be. Those neighborhoods will be a little nicer, which means those areas will be a little safer. It’s extremely difficult to fake expensive real estate which is why rich people love it so much. Expensive real estate is decentralized truth. Once I pick the neighborhood, I then pick the bakery or coffee shop that I want to walk to every day to see how that city feels in the morning. I am so curious that I have tried most of the best bakeries and coffee shops in 45 United States and 25 European countries. That’s not hyperbole.

@frenchpeople: merci pour votre obsession du beurre. 🥐

Like I mentioned in the chapter on Philosophy, my goal for this book is to teach you how to find the truth. That’s why most of the information I rely upon in this book comes from either ChatGPT or the smartest research scientists in their respective fields. Those two sources have the lowest amount of uncertainty. ChatGPT is trained on Wikipedia, social media, and all our books. ChatGPT is the best source of Decentralized Truth because ChatGPT knows what everybody knows. The smartest research scientists are the best sources of Centralized Truth because their expensive science experiments enable them to know what nobody knows.

The information in this book has some of the lowest uncertainty on the Internet.


The Medium Is The Message

Hopefully it's much easier for you to recognize centralized and decentralized truths when the information is static, like in a database or a book. Static just means the information is not moving. But information isn’t always static:

  • information travels from friend to friend as texts, emails, and videos

  • information travels from computer to computer as FTP, EDI, and JSON

  • information travels from computers to humans as push notifications, HTML, and apps on our phones

  • information travels from humans to computers as keystrokes, taps, and voice commands

Whenever people or computers share information with each other it creates an Information Network. Each of the actors on the network uses the information to make decisions. Who transmits the information affects the decisions made by other actors on the network. How they send the information affects the decisions made by other actors too. Most surprisingly, where and why the information is transmitted may even be more important than the information itself. 😳

My favorite book that explores Information Networks over time is called “The Square and the Tower” by Niall Ferguson.

Here’s a quote from the publisher,

From the cults of ancient Rome to the dynasties of the Renaissance, from the founding fathers to Facebook, The Square and the Tower tells the story of the rise, fall and rise of networks, and shows how network theory—concepts such as clustering, degrees of separation, weak ties, contagions and phase transitions--can transform our understanding of both the past and the present.

The book is so much easier to understand than that humungous sentence.

@bookworms: “The Square and the Tower” demonstrates how network theory affects virtually everything in our world, everywhere, all the time. This book is kind of like the book, “Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life, in Organisms, Cities, Economies, and Companies” by Geoffrey West. You can’t unread “Scale”—once you know the principles in this book, you see them everywhere.

I also put the book, “Guns, Germs, and Steel: The Fates of Human Societies”, in this category too. Whenever I learn anything new about our world, it usually fits neatly into the frameworks of these 3 books.

The Square and the Tower are Niall Ferguson’s terms for decentralized and centralized information networks, respectively.

The square is a Horizontal Network of people who make decisions together, like voting in an election or reviewing the best restaurants. Everyone is a peer in the square.

The tower is a Vertical Network of people that make decisions according to their rank, often starting with a single source. The President of the United States heads a vertical network of information. A President decides the truth.

Advances in our technology change the way digital truth is consumed over time because “The medium is the message”. This phrase was coined by Canadian philosopher Marshall McLuhan, who also coined the term “Global Village”. In 1962 McLuhan wrote,

The next medium, whatever it is—it may be the extension of consciousness—will include television as its content, not as its environment, and will transform television into an art form. A computer as a research and communication instrument could enhance retrieval, obsolesce mass library organization, retrieve the individual's encyclopedic function and flip into a private line to speedily tailored data of a saleable kind.

That’s a 1960’s way of saying the Internet will lead to Total Entertainment Forever.

“The medium is the message” means the medium through which a message is communicated is just as important as the message itself because it affects the way the audience responds to the message. Let’s use television as an example. Back in the 1950’s and 1960’s, Americans could only watch three television channels. This centralized the truth for an entire nation. The cost to create a TV station was prohibitively expensive, so the medium concentrated most of the available capital. Every American, receiving the same news, from the same source, at the same time, had a huge influence on our culture and politics. Americans during this time wore the same clothes and listened to the same music. People could get labeled “a communist” just for having the wrong haircut. Walter Cronkite signed off his news broadcast each night by saying “That’s the way it is”.


Here’s a short video of Walter Cronkite discussing the risks of his famous sign off. (1 min)

Walter Cronkite delivered centralized truth. The price of the medium forced television and newspaper editors to be objective because both sides of the political aisle read the same information at the same time. Our politicians still fought, but at least they agreed on the facts of the case. When the truth is centralized, even what’s wrong is right. Unfortunately, the converse is also true. When the truth is decentralized, even what’s right is wrong. When the cost of content distribution is low, the quality of the content goes down. Information shifts from facts to opinion, which is exactly what we see in our entertainment news and social media today. Information is currently cheap and getting cheaper.

The journey of our television media from centralization to decentralization took about 50 years. Most American homes only had 3 television channels until around 1980, when UHF antennas doubled that number. By 1990, 60% of American households received 30 channels through cable television. By 2000, digital cable increase that number to hundreds of channels. Today, there are 32 million channels on YouTube that generate commercial revenue.

YouTube has a “preacher” for every truth and they compete against each other to deliver it. Compared to the 1950’s, our hairstyles have diversified. Our clothes have diversified. Our politics have diversified.

That’s a good thing. Why else would dictators like Vladimir Putin and Kim Jong Un centralize control over their country’s news media? Fortunately for America, decentralized democracies are so inefficient that they are incredibly difficult to commandeer. President T***p tried to commandeer our entire country with Coordinated Deception, but his lies never got more than 50% Reach.

Decentralization is why America is so antifragile.

@cybernerds: Hacking a democracy of 350M people is just as difficult as hacking a blockchain with 350M nodes. That’s a very expensive 51% attack.

Also, the world laughed when Kevin Kelly predicted there would be 100,000 channels on TV one day. Today, there’s 32 million. If you haven’t read him, start with his book, “The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future”.

@colbertlateshow: Robbing President T***p of his digital mentions each day is funny every time I see it. T***p and isPotato are pound-for-pound the most efficient jokes ever told.

Two jokes in just 13 letters is absolutely amazing. “Absolutely amazing” needs more letters than that. 😁

Digital Trust

Centralization and decentralization are also important strategies in computer science that ebb and flow with our technological capabilities. For example, in the 1950’s computing was so expensive that it was centralized on a Mainframe, which required users to login from remote terminals. As the cost of microprocessors came down, computing decentralized into Personal Computers (PC) in our homes.

As the costs of creating computers went down, the price of searching them all went up. So Google centralized computing power again and users went back to remote logins—this time called a web browser. Eventually, our battery technology improved and wireless networks became ubiquitous, so iPhones and Androids decentralized computing power again. Not only is there a computer in each person’s house, now there’s a computer in each person’s pocket while they walk around.

The next big centralization is not the metaverse, it’s ChatGPT. Users are already flocking to the new remote login—this time called a chatbot prompt. The prohibitive costs to make ChatGPT or Google’s Gemini is similar to the prohibitive costs of building a television station in 1930. Only three companies can afford to do it. This means ChatGPT is like Walter Cronkite 2.0. There are 100M people asking ChatGPT questions about the universe and it’s answering every one of them the exact same way. Whatever ChatGPT says:

That’s the way it is.

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@historynerds: My favorite window into the history of computers and the Internet is a book by Jon Gertner called, “The Idea Factory: Bell Labs and the Great Age of American Innovation”.

Bell Labs invented the transistor, automated switching, photovoltaic cells, fiber optic cable, Information Theory, and Game Theory. Shockley, Shannon, and von Neumann all worked there together. I will always be a customer of American Telephone and Telegraph because of the incredible impact they had on our world. AT&T was the Internet for almost a century.

Centralization and decentralization have been fundamental forces in the world’s economy too. The reason this matters is because money is literally information.

When you hand $1,000 cash to the teller at your bank, what you receive in exchange is an increase to your digital account balance. Most of the money in the world is completely electronic. It’s held in bank account databases and corporate capitalization tables, which (sad to say) are usually just spreadsheets.

Today, the most cutting-edge finance is called Decentralized Finance (DeFi), but finance has been decentralizing for centuries.

A thousand years ago, almost all commercial finance was under the centralized control of empires. A government’s power to tax, aka the local monopoly on violence without repercussion, was the only credit strong enough to build bridges and fund wars. Government is generally the centralizing force in an economy, while private enterprises try to constantly decentralize that power.

Sovereign control over money and credit first started to crack in 1300 when a Florentino merchant, named Amatino Manucci, invented Double Entry Accounting. Today, that’s known as the receipt. Receipts increased trust between merchant banks allowing them to transfer funds without actually transferring the physical gold. A burgeoning merchant bank network formed that spread credit and liquidity all around Europe. Double entry accounting led Florence to become the global center of finance for centuries. Banks in Florence even managed the revenues for the Pope, the largest revenue stream in the world. Whenever I walk around Florence and admire all the Michaelango and Donatello statues that decorate their city I think, “Wow, receipts were such a big deal”. 🧾

Admiring the “Gates of Paradise” by Ghiberti

The center of world finance migrated from Florence to London around 1600 with the formation of the East India Company. The “decentralizing invention” this time was called the Joint Stock Company. This invention allowed non-sovereign people to pool their capital to fund projects and expeditions that were previously only affordable by kings. For example, back in 1492 when Christopher Columbus went looking for financing, the King of Spain was the only guy on Earth rich enough to sail 3 fully loaded warships off the end of the world just to see what happened. That’s back when Venture Capital financed expeditions with high body counts and “the carry”, or how much money they keep, was still measured in tonnage. ⛵️

The Joint Stock Company allowed the British elite to invest heavily in global trade networks, which transformed the entire world politically, culturally, and economically. Colonies sprouted up all over the Earth paving the way for the globalization we see today. Britain had so much venture capital at work extracting jewels, oil, tea, and antiquities that they were forced into passing the Bubble Act of 1720 to slow down the speculation. Those British colonies produced economic returns for CENTURIES. The British didn’t liberate their weakest colonies until 1960, which is why 18 different countries on Earth share that year of independence. That's almost 10% of all countries.

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Global finance decentralized even further with the Limited Liabilities Act of 1855. In a joint stock company, the shareholders are also liable for any debts accrued by the company. So only the wealthiest individuals could afford to carry the pro rata liability of a joint stock company. The Limited Liability Corporation formally limits shareholder liability to just the assets held by or pledged to the company. The “capitated risk” enables a much wider range of individuals to participate in venture capital and private equity, which creates more liquidity in the economy. Fortunately, the LLC was invented just in time to fund the Second Industrial Revolution.

Today, financial technologies are looking to disintermediate the central banking system altogether. In a central banking system, trust is provided by the state. People trust whatever denomination they can pay their taxes in, that’s as liquid as money gets. But with Bitcoin and other DeFi currencies, there’s no central bank to trust because their blockchain technologies distribute trust across the entire network:

  • An account balance at a bank is a centralized truth.

  • An account balance on a blockchain is a decentralized truth.

Blockchains are not a panacea solution for global finance because the decentralization is extremely expensive to operate. Each transaction on the Bitcoin Network currently consumes over $100 of electricity from around the world. The Bitcoin Network consumes more power every year than all the people of Sweden, including all their saunas. Also, the time required to do all the cryptography is so slow that the transactional throughput of the Bitcoin Network isn’t suitable to replace cash. For now, we’ll just have to settle with the US Dollar, which unfortunately is anonymous to transact, is fungible, and has no history of who possessed each one.

@americans: Just imagine if we could pay our taxes in Bitcoin. We could figure out which of our tax dollars paid for the bombs that destroyed some poor foreign neighborhood, and which of our tax dollars bought a new heart for some old person 1000 miles away who ate cheeseburgers and milkshakes their entire life. 🫀

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