Episode 38 — February 10th, 2022 — Available at read.fluxcollective.org/p/38

Contributors to this issue: Ade Oshineye, Dimitri Glazkov, Erika Rice Scherpelz, Stefano Mazzocchi, Justin Quimby, Alex Komoroske, Boris Smus, Neel Mehta,  Robinson Eaton

Additional insights from: Gordon Brander, a.r. Routh, Ben Mathes, Spencer Pitman

We’re a ragtag band of systems thinkers who have been dedicating our early mornings to finding new lenses to help you make sense of the complex world we live in. This newsletter is a collection of patterns we’ve noticed in recent weeks.

“To be soft is to be powerful”

― Rupi Kaur

🔬🔭 From problems to problem spaces

We humans love to measure our usefulness by our problem-solving ability. Yet, in this complex world, the process of problem-solving alone rarely leads to closure. More often than not, an attempt to solve a given problem just produces another set of problems… some larger than the original. At first, these new problems might not register as actual problems. Over time they fester and grow, first just a nuisance, then nipping at our heels, and then, with a sudden phase transition, looming in front of us like the iceberg that sank the Titanic.

An organization that celebrates itself as a problem-solving machine is likely at an earlier stage of its cultural evolution. Progress here is defined by solving more problems more quickly, without pausing to think whether today’s problem was caused by yesterday’s speedy solution. Words such as “impact” and “launch” are at the center of its vernacular.

Organizations lucky enough to age eventually start to recognize that it is impossible to outrun the compounding loops they create. Terms like “landings” and “long-term efforts” appear, indicating a shift in how problem-solving is understood. Past experience with self-inflicted problems begets risk aversion: if we only have one shot at the problem, we’d better get it right the first time. Stakes mount, decision-making stalls, and everything slows down to a hopeless crawl.

At this stage, it might be useful to pause and examine the norms and incentive structures still in place from those exuberant days of heedless problem-solving. These structures now lock the organization in place with paralyzing might. Solving problems is still the currency of the organization, but that currency dries up when there’s an implicit “without creating new ones” requirement added.

We need a shift in perspective. What if, instead of looking at individual problems, we visualize the set of related problems, both solved and created, as a problem space? This problem space shrinks and grows depending on the actions of those who work within it. If the problem space shrinks, the team is doing good work. If the problem space grows, the team is struggling. 

Through this lens, the impact of a specific problem-solving exercise is no longer important. The overall, long-term health of the problem space becomes the focal point. If an organization can adapt to the norms and incentives that grow from this perspective, it just might be able to overcome its paralysis of indecision. It’s okay to make mistakes when you know you’ll be able to clean them up later.

Shifting into this perspective can also change how an organization views problem solving. Instead of aspiring to find the “one solution to rule them all,” an organization will prefer taking steps that are humble, understanding that they could be missteps. This frees collective creative energy from the angst of getting it right the first time. In time, an organization may find that it has made more progress by compounding small changes than it would have by waiting for the one “perfect” solution. 

🛣️🚩 Signposts 

Clues that point to where our changing world might lead us.

🚏💵 The US Federal Reserve has successfully tested a “digital dollar” prototype

The Fed has partnered with MIT to design an open-source transaction processor for a central bank digital currency (CBDC), which researchers say could enable secure and verifiable digital transactions of US dollars. In one test, the technology was capable of supporting 1.7 million transactions per second (compared to Bitcoin’s seven and Visa’s several thousand), with most transactions getting settled in under two seconds.

🚏🚘 Nissan is halting development of most internal combustion engines

In response to Europe's stringent new emissions-reduction rule for carmakers, Nissan has decided to stop designing internal combustion engines for the European and East Asian markets, focusing instead on electric-car technologies. However, Nissan will keep designing gas-powered engines for the US market, where EV regulations are looser and demand for internal combustion engines (especially in pickup trucks) remains high.

🚏🔋 Scientists found a way to make recycled batteries that do better than the originals

Demand for lithium-ion batteries has skyrocketed in recent years, but lithium is hard to come by and mining for the metal is environmentally destructive. While lithium-ion batteries can be recycled, manufacturers have long feared that this would yield low-quality batteries. But one piece of new research has found a recycling method that “refurbishes” the crystal cathode at the heart of the battery, and it turns out that batteries with an already-used cathode can last longer and charge faster than freshly-made batteries due to the former’s greater “porosity.”

🚏🖌️ TikTok teens are reselling gig work for profit in a trend called “drop servicing”

Some young TikTokers are promoting new “Side hustles that will make you RICH (Minimal Work Involved).” The strategy: find a client who needs some small creative work done, like designing a logo or preparing a marketing campaign. Then, outsource the work to a cheap freelancer on a gig site like Fiverr. Finally, present their work to the client, tacking on a markup of 100% to 400%. This arbitrage-like business model is often called “drop servicing,” a play on the analogous strategy of “dropshipping” physical goods for a hefty profit.

🚏👛 Feds seized $3.6 billion in stolen crypto by finding a suspect’s private keys

The US Department of Justice recently identified two people who had allegedly helped launder some of the billions of dollars of Bitcoin that’d been stolen from a crypto exchange in 2016. Then, with a search warrant, the feds “obtained access to files within an online account” owned by one of the alleged perpetrators. These files contained the private key to a Bitcoin wallet that held 94,000 bitcoins — worth over $3.6 billion at the time — which the DOJ promptly seized.

🚏🎙️ AI can now automatically dub films into other languages

New startups have found creative ways to use AI to automatically dub films into new languages, potentially saving months of labor and much expense. One company feeds in a five-minute clip of the original actor speaking in their native language, then applies that vocal data to a digital translation of the script, then outputs realistic-sounding audio in the new language. Another company can digitally edit the actors’ lips so it looks like they’re actually speaking the new language.

🚏🏡 A Florida house is being sold as an NFT

One home near Tampa Bay is being auctioned off as a non-fungible token, supposedly the first house in the US to be sold in such a way. The house’s deed is owned by an LLC, and the NFT represents ownership of the LLC, so whoever buys the NFT should (in theory) control the house’s deed.

📖⏳ Worth your time

Some especially insightful pieces we’ve read, watched, and listened to recently.

• Solving Wordle Using Information Theory (3Blue1Brown) — A mathematician introduces concepts from information theory, such as entropy and the definition of a Shannon bit, to build up intuition about how you could develop the optimal algorithm to solve the popular word game. He also reveals the algorithm’s pick for the best first word to guess.

• How Long Can Humans Survive? (UnHerd) — A review of Vaclav Smil’s latest book, How the World Really Works. Smil compares our reliance on fossil fuels to the ecosystem around a whale fall (where a dead whale drives a huge but temporary population boom on the seafloor) because of humanity’s profound dependence on nonrenewable energy for surprisingly many aspects of modern life.

• What Does a Healthy Rainforest Look Like? (NPR) — An “eco-acoustics” researcher who installed audio recording devices throughout a tropical rainforest explains how machine learning models trained on an ecosystem’s sounds could be used to predict the ecosystem’s health and biodiversity.

• Japanese Zoning (Urban Kchoze) — Compares US zoning laws (which impose one or two exclusive uses for every zone) to Japanese zoning laws, which look instead at the maximum “nuisance level” to tolerate in each zone and allow everything that is considered less of a nuisance than this threshold. Low-nuisance uses like schools and homes are allowed essentially everywhere, enabling more mixed development. The author then asks how US zoning came to be so prescriptive and over-regulated.

• How Can We Develop Transformative Tools for Thought? (Numinous Productions) — Two researchers dive deep into how we can build memory systems: new digital media for storing and developing ideas, which could ultimately “make memory a choice.” They emphasize the importance of working memory for all cognitive tasks, explore limitations of existing spaced-repetition techniques, and present intriguing directions for future research.

• Neural Noise Shows the Uncertainty of Our Memories (Quanta Magazine) — Examines the strange fuzziness of our working memories and shares research that suggests that this happens because our brains interpret these electrical signals probabilistically. Our brains are effectively working as Bayesian machines, using the mathematical uncertainty to encode how confident we are in the accuracy of our memories.

• The Internet Is Just Investment Banking Now (The Atlantic) — Argues that Web3 is “the most honest turn of the internet epoch”: many things in our everyday life have become financialized, and while Web2 entrepreneurs have tried to hide that behind a facade of idealism, the new world of crypto at last makes the financialization explicit.

📚🌲 Book for your shelf

An evergreen book that will help you dip your toes into systems thinking.

This week, we recommend Wanting: The Power of Mimetic Desire in Everyday Life by Luke Burgis (2021, 282 pages).

They say imitation is the sincerest form of flattery. It is also the source of one of our species’ greatest strengths — how children bootstrap off the cumulative progress made before them — and our species’ greatest weaknesses: our imitation of others’ desires. In Wanting, Luke Burgis explores this phenomenon of desire imitation, known more formally as mimetic desire, and suggests how to address it in our daily lives.

The mimetic theory of desire is an explanation of human behavior and culture that originated from the French polymath René Girard. According to Girard, humans don’t desire anything independently. Human desire is mimetic: we imitate what we see other people wanting. This affects the way we choose partners, friends, careers, clothes, vacation destinations, etc. 

But we don’t just blindly imitate desires. Instead, our desires are governed by two models: external and internal mediators of desire. External mediators of desire are what Burgis refers to as models in “celebristan.” That is, they are models that cannot be directly challenged by those we imitate because they seem to occupy a different plane of existence (as is the case with celebrities, billionaires, or people born of another time). 

Internal mediators of desire are what Burgis refers to as models in “freshmenistan” — friends, fellow students, co-workers — and it is these models that drive a significant portion of our desires, and ultimately, our identities. With internal mediators of desire, there is no major barrier separating one person from another. Competition over anything and everything is possible, and succeeding relative to the people we’re imitating is paramount to our own sense of success. 

This dynamic has been especially felt over the last 20 years, as the normal rhythms of internal mediators of desire have been short-circuited by the Internet,  where internal models of desire are with us — whether through Facebook, Instagram, or LinkedIn — for the rest of our lives. It is also this dynamic that makes Wanting an especially timely read. Girard’s theories describe why we see ourselves in competition with internal mediators of desire, and in Wanting, Burgis suggests what we can do about it.

🕵️‍♀️📆 Lens of the week

This week’s lens: Dowsing rods.

Dowsing rods do work! Well, kind of. Dowsing rods supposedly amplify slight movements of the hand, which can move in response to a person’s subconscious knowledge or perception, among other things. A dowsing rod does nothing on its own other than bringing focus to where a person’s attention is. Without it, perhaps the bearer wouldn’t notice that their attention briefly shifted over there or toward that thing. In the hands of someone who has developed a tacit knowledge around something like how to find ground water, a dowsing rod magnifies their knowhow and pre-verbal intuition.

But this isn’t a call for throwing out reason in favor of intuition. Rather, it’s an acknowledgment that our intuition often flits by unnoticed. Depending on how well the current situation matches the pattern that generated the intuition, unquestioningly following this intuition can lead to quick, efficient reasoning — or, alternately, unconscious bias. Still, tools that magnify our intuition are useful because they can reveal opportunities to investigate more deeply.

What does it mean to use your dowsing rod when you’re not literally looking for something underground? Think about ways that you can harness your intuition in balance with your more analytical side. This can mean paying attention to physical, emotional and intellectual cues. It can mean watching others in your domain and noticing what you predict they’ll do next. You can also harness your intuition with tools. FLUX’s own Gordon Brander built on this idea when he looked at how cards, from the mundane to the mystic, can be used as tools to structure idea generation.

So next time you’re stuck in a situation where the answer is hard to discern, see if you have a calibrated intuition on the subject. If you do, find a dowsing rod and put it to use.

🔮📬 Postcard from the future

A ‘what if’ piece of speculative fiction about a possible future that could result from the systemic forces changing our world.

// Contracts are only as good as the means to enforce them. What happens when contracts are built with the intention of not giving power to nation-states?

// 2030. An issue of Business Insider – Hollywood Edition.

The hit music group [redacted] was sued today in federal court by the owners of the cryptocurrency tokens the band had offered to crowdfund their careers almost 8 years ago. The lawsuit alleges that the band colluded with their manager to “live an overly extravagant and expensive lifestyle” as a way to defraud the token owners of their portion of the 50% of the band’s profits that the tokens represent. The band’s spokesperson denied all claims, suggesting that such expenses are expected as part of the cost of doing business as celebrated artists.

Originally hailed as a democratizing innovation in the economic model around music production, thus giving artists more ownership and control over their careers, the issue of cryptocurrency around future profits was virtually unknown before [redacted] started filling stadiums with concertgoers, causing their tokens to skyrocket in value and making several early fans instant millionaires when they dumped their tokens to other members of the DAO.

And that’s when the problems started. “Hollywood Accounting” is as old as Hollywood — using creative accounting to reduce the amount that must be paid out in taxes and royalties or other profit-sharing agreements, since these are based on the net profit, not raw revenue. So despite [redacted] raking in millions, the band’s profits showed up as zero, and token holders were supposedly left with nothing.

This lawsuit brings to bear a key question: to what extent is the US legal and financial system able to extend into cryptocurrency smart contracts? What case law and jurisdiction apply to contracts contained on blockchain entries? Twitter, Telegraph, and TikTok all blew up in the past week with the filing of the lawsuit weighing in on legal, ethical, and moral opinions. Tune in next week for another episode of “as the crypto turns.”