Inspired by the idea that Eutopia is supposed to be scary. Well, some of the things I like, moreover, I figure things a lot of other people either consciously or subconsciously like are scary indeed.

In Maletopia, violence is not seen as something abhorrent. It is well understood, that the biological wiring of men (largely on the hormonal level) sees fighting and combat as something exciting and winning it is rewarded with a T boost, and on the gut level masculine men do not see fighting as something abhorrent. Videogames are a proof of this. Instead of trying to suppress these instincts and trying to engineer violence-abhorring pacifist men who would probably end up with low testosterone, lower sex appeal to many a straight women, maybe bullied, and depressed, in Maletopia the goal is to provide safe and exciting outlets for these instincts.

EDIT: The ideas being tested

Traditional masculine instincts evolved for an ancestral environment got out of synch with the modern world, became misleading, harmful, and downright dangerous. Having realized this, there were also movements to suppress them. Which is a less than ideal solution. Generally speaking the ancestral environment is fairly simple and not hard to simulate. Why not do it then?

The instincts in question are:

1) Warmongering, finding violence cool, hawkery, militarism

It is a scope insensitivity issue. War was not so costly in human lives and suffering when it was about a tribe raiding another with arrows and bows.  Having the same hawkish, yee-haw, let's kick some butt instincts in an age of world wars and nukes is incredibly dangerous.

Having realized the issue, many intellectuals promoted pacifist humanism, an abhorrence of violence, in German speaking countries there is a clearly visible line from Stefan Zweig type WWI-opposers to the hippies in the 1960's. However these people generally ended up suppressing all aspects of masculinity. They would not let their children learn boxing, they would say it teaches them to solve problems with violence. German hippies tried to be as unmasculine in everything, hair, clothes, as they could. It is fighting against your own testosterone producing glands. Not a very good idea.

2) Tribalism, us vs. them

Obvious enoguh. Camaraderie, an esprit the corps is very important in a war. It is also very harmful when it comes to arguments between political parties. Or about preventing a war.

3) Setting up gendered standards, "a real man should so-and-so", often combined with sexism and homophobia largely in order to set up a contrast ("You hit like a girl! That is totally gay!")

Here the issue is largely that gender as understood today, a binary thing, is a too large scope. It is okay to say "A real marine should be strong and tough!", that is a small and relevant enough scope. Saying "A real man should be strong and tough!", well on one hand I do sympatize with the sentiment, but on the other hand such an expectation should not be cast over literally 50% of humankind. Why cannot we have 4-5 smaller genders, and express such expectations only inside them? And it is also wrong to contrast it to women and gay men, men of whom are strong and tough, this is simply not a properly calibrated contrast. We need to keep the general idea of gendered masculinity, but no longer think in these really broad categories like men, women or gay men. Traditional masculinity should be understood as a subculture, and on one hand it is generally correct to expect those men who want to be parts of it to try to live up to its values, but on the other this simply does not need to have anything to do with women, gay men or men outside this subculture.

4) Sexism and homophobia getting detached from serving as a contrast and becoming a problem on its own

Obvious enough. The core problem is a miscalibrated scope like expecting all men to be tough instead of a subset only, this is e.g. contrasted to the weakness of women and then becomes a stereotype of all women. Everybody loses.

5) A dislike of softness and coddling leading to the opposing of compassionate social policies, being a proud self made hard worker, not wanting to pay taxes to pay welfare lazy people

This is counter-productive in age where more and more work will be automated and sooner or later basically it is either a Basic Income or a violent revolution. A tribe fighting to survive cannot accomodate softness, but a rich modern society can, and it is especially wrong calibration when the lack of jobs is seen as soft laziness.

These instincts are out of synch and problematic. But the goal is not to suppress them, the goal is to simulate that ancestral environment where they can find an outlet.

Some boring background

Maletopia has a highly advanced social market economy where most work is done by robots, most people live on Basic Income and people have a lot of free time. The government does not provide much services directly, letting people buy education or healthcare on a competitive market, but there are also regulations wherever customers cannot really be expected to make informed decisions. They are not dogmatic libertarians, they don't see much wrong in making the generally accepted procedures and rules of e.g. medicine mandatory and not expecting every patient to be able to choose doctors on the competitive marketplace efficiently. However, since it is a robot economy, the people are no longer assets for the state, it means having an educated or healthy population is not necessarily a competitive advantage for the state. This enables governments to be a bit relaxed about this. Some education is mandatory until puberty, but if you think at 12 you never want to see a math textbook anymore, it is no longer the government's job to force you to, just collect your BI and live as you wish. Since politics is largely about who gets to spend whose money, and there is not much spending besides BI, most services are provided by a regulated market, politics as such is largely ignored by the populace and much simpler than today. People can directly elect a Minister of Health, Minister of Agriculture etc., this was implemented in order to push people to look more at their qualifications and not their party affilation or ideology. Besides, there is a Parliament, which is filled by a lot, not election, as here qualifications matter less than being truly representative. Governments  are over smaller areas than today, modeled after Swiss Cantons. Politics is largely considered boring, people are more excited about whether it is the Aalborg Vikings or the Detroit Thug Life who wins the next World Top Raid. DTL's top fighter Jamal has promised to put his diamond-decorated gold chain on the loot pile, can you imagine that? Word is, AV is having a golden wolf's head made in order to be able to match the bet honorably. Why would anyone care about endless debates about car safety regulations when cool things like this happen?

EDIT: To avoid some misunderstandings

People who read the pre-edited version of this article have misunderstood some of my intentions. The basic idea is a standard post-scarcity sci-fi where there is nothing important to do and people live for their hobbies a'la Culture, with the only difference being that I don't think people like being that isolated and generally I think people like to form fairly closely-knit like-minded groups. But what I have in mind is obviously an incredibly diverse world with a million hobby groups for every kind of people possible. The whole thing you might call Utopia, and then it has subsets, the hobby groups of gay artists may be called Gayartopia, the hobby groups of woman gamers Femgamertopia, and the hobby groups of traditionally masculine guys would be called Maletopia.

I will focus on the last subset, because it is the most controversial, interesting, unusual, and scary. But it does not mean that the rest of humankind (about maybe 90%) does not have a wonderful life pursuing their very different kinds of interests. It is just not the purpose of this article to flesh it out.

One reader assumed something like a  generic mainstream pop culture exists in Utopia and it is filled with shows from its Maletopia subset. I would like to leave the question open. To me the idea of a mainstream is already outdated, let alone in the future. It will be YouTube, not CNN.  But sure, Maletopia can generate some spectacular TV shows. Not sure how much it matters.

I also think social oppression is largely the factor of competing for resources or economic exploitation, and if you think some aspects of this sound oppressive, you need to explain how would that make any sort of sense in a post-scarcity world where everybody who does not like the sub-reality generated by any group has access to resources for generating their own.

A fighter's world

The basic ideas were there at least since the early 20th century. Orwell called the spirit of sports as "war minus the shooting", which he understood as a bad thing, Maletopia agrees but sees it as a good thing: it is precisely the shooting what is wrong with war, otherwise, war would be an exciting manly adventure. Or maybe it wouldn't, but clearly the millions of 20th-21th century men who watched war movies and played wargames on their computer thought otherwise. They liked war, or at any rate liked the ideas they had about war, even if those ideas were completely wrong. So Maletopia is really into sports. Into sports of the kind the look a lot like war minus the shooting.

A sport like tennis is obviously a poor simulation of war. It lacks both of its major aspects: the excitement of conflict, violence and danger, and the strong us vs. them tribal spirit of camaraderie.

We have already seen simulations of both aspects in the 20th century. The tribal, us vs. them spirit of camaraderie was simulated in Europe and indeed in most of the world outside America by association football or soccer, both national teams ("Wave your flag!") and clubs.

The fighting aspect is a bit harder to simulate. Clearly, you can simulate a shooting war with paintball or airsoft, you can fence with longswords and look rather awesome at it, but you know it is not serious, your opponent cannot hurt you seriously with those weapons. You could experiment with semi-hard half-nerf swords that kinda hurt but not so much, but there is one traditional and well-respected way to fight while causing real damage, yet keep it reasonably safe: the empty-handed martial arts or combat sports.

Again, the basics were there already at the end of the 20th century. MMA eclipsed the popularity of boxing, largely through looking more vicious, gladiatorial and flashy, yet (this is being debated) being less dangerous, and when in the first days of Maletopia an entrepreneur came up with flashier looking versions of the head protection used in amateur boxing, which were then made mandatory, the problem of concussions and brain damage largely being solved, the safety concerns were largely alleviated. It was understood that it cannot be perfectly safe and yet provide a believable simulation of real combat, there must be a trade-off, and Maletopia has good enough healthcare that lacerations or even broken bones in the ring are not a major issue.

In the first years of Maletopia, Dana Jr. figured there is still one problem left. It is an individual sport, not a team sport, it does not have the tribal, camaraderie aspects of, say, soccer fandom. To keep a long story short, a team version of MMA was made, which required a certain modification of the rules, but I don't want to bore you with the details. Sufficient to say, it was possible to fight team against team now, to fight a simulated, yet believable enough empty-handed tribal war in the MMA ring, with real enough broken noses.

Soon, teams were called tribes and matches were called raids.

The whole thing was made even better when simulated looting was incorporated into the rules. Before a raid, the tribes are supposed to make a bet, and put the money or other valuables they bet visibly on a table. Bystanders, spectators are welcome to put more money or valuables on the pile. After the raid, the winning tribe takes it and parades it around, showing off their loot. After that they distribute it between each other.

Money does not play any other role in the sport in order to be prevent it becoming too profit-oriented. Ticket prices and advertising is only used to pay for costs like renting the venue, which is not much, and only advertisements appropriate to the mood (i.e. MMA gear)  are allowed. Fighters don't receive any other payment than their share of the loot. There is a strong rule against rich people or really anyone sponsoring teams or paying fighters salaries (they collect BI anyway), although offering them gear, a gym to train for free etc. is allowed. But generally speaking the only way a rich sponsor or a fan can get money to the tribe he supports is putting it into the loot pile: and if they lose, the opponent will get it. There is a strong social taboo against paying money to figthers or tribes any other way, there is an oft-quoted saying taking money not fought for is a cowards' wage.

No armchair fans

There is another strong social taboo against armchair fandom. The idea of a fat slob drinking beer and eating wings in front of the TV and rooting for his tribe is considered ridiculous by all. You show respect to the fighters of your tribe by imitating them to a certain extent, by being fit, learning basic self-defense moves, doing a bit of grappling sparring and heavy bag work, so basically do the same thing that the non-competitive people who train at todays MMA, boxing or BJJ gyms do. Fandom and getting your own training is merged into one at your local tribal HQ which also doubles as a training gym. There is no clear separation between fighters and fans, it is simply that only the elite fighters participate in raids. But the idea of a fan who could not do at least some light sparring himself or would run out of breath is considered ridiculous, unless he has a physical disability.

Tribes - by that I mean both the elite fighters who raid, and the amateur fighters who are the fans -  have a strong spirit of camaraderie. This is represented by flags, coats of arms, uniforms, greetings, hand signals, or anything else really, depending on what the tribe and its identity is. They are basically brotherhoods, they take solidarity and honor very importantly. Your tribal HQ is practically your second home. If you have nothing better to do, and some time to kill, you go down to the local tribal HQ to practice a bit or maybe lift some weights, watch the serious elite spar, watch recorded raids, or maybe just have a beer and chat. You can count on each other. If you move houses, your brothers will carry your furniture. There are other organized activities, usually manly fun like shooting clay pigeons.

While it is not mandatory to be a member of a tribe, many men are. Obviously there are pacifist, intellectual, low-testosterone or gay men who dislike the idea. It used to generate a lot of grief, fighters saying a real man must fight and not be a sissy, non-fighters told them their view of masculinity is toxic, sexist, patriarchical, barbarous and completely outdated, since the only place they can practice it in the modern world is a simulation, a sport - the raids are not like _actual_ raids where people die and village get burned down. This resulted in a lot of mud-flinging until a clever solution was found.

Solving the gender conundrum

The clever solution was to define more than two genders. Specifically, two different male genders were defined. Unfortunately our records are lost with regard how exactly they were called. One dubious and unverified source is saying that there were multiple terms, at and least a subset of English-speaking people preferred Mentsh vs. Mannfolk. The first is borrowed from Yiddish, where it roughly means "a good person" and it is used as a gender self-identification of those males who generally abhor the idea of fighting, focus on productive or altruistic pursuits, and if they are straight, their sexual relations with women are based on egalitarian friendships. The Mannfolk is from Old Norse, as white-skinned fighters tend to like a certain (not historically accurate) Viking ethic, they are the fighters in tribes, they have a high-testosterone ethic, and have a certain tendency to sexually objectify women. However, violence against women is strictly forbidden in the Code of Honor of most tribes, this was based on an agreement with the Fempire. As for the sneakier forms of rape, most tribes have a culture that having sex with a woman is not a masculine achievement as such: doing her so good that she comes back asking for more tomorrow is one, and it is the only proper basis of sexual bragging. It is not just ethics, but also a pride in their own manly attractiveness that makes the idea of roofing a drink unthinkably low for the vast majority of tribe members.

It is also helpful that when a member of a tribe behaves unethically outside, the whole tribe is shamed in the media and they will sort out their own punishment internally. Usually it means having to fight the elite fighters, and they will not hold back.

At any rate, inventing two male genders, Mentsh and Mannfolk, sorted out the problem nicely. From that on, sentences like "a real man should fight" or "your sense of masculinity is wrong or outdated" would be almost unintelligible, because would sound like "a real human should fight" or "your sense of what is to be human is wrong and outdated". Instead it is widely accepted truism that real Mannfolk fight and real Mentsh usually don't, that real Mannfolk need to be strong and tough and real Mentsh need to be empathic and sensitive. It also makes it easier for straight women to tell what they are attracted to. Instead of complicated descriptions and instead of men having endless debates like whether women like "bad boys" or not, most women openly state whether they like Mentsh or Mannfolk. This makes things quite easy. It is understood that women who like Mannfolk will be turned off by cowardice, will put up with some sexism, and expect the man to play a leader role in the relationship, while women who like Mentsh will expect equality, sensitivity, respect, and in return their men can allow themselves to show weakness.

Thus nobody talks about "real men" vs. "toxic masculinity" anymore. They see the whole human history through these glasses, nobody was simply a man, or a manly man, or unmanly man, but for example Holger Danske or Arnold or Musashi or Patton were Mannfolk and Einstein and MLK and Freddie Mercury was Mentsh. Some people who are interested in history argue about which gender did e.g. Winston Churchill belong to, but not many are interested in this.

Mentsh usually focus on intellectual, artistic etc. pursuits.

The rise of the knightly orders

There is a new trend in Maletopia that some tribes call themselves chivalrous orders. The idea is that they try to combine the ideals of Mannfolk and Mentsh. The knights, as they call themselves, think that physical fitness, courage, knowing self-defense, and having some exciting fun at a sparring is not a bad idea at all, but the higher morals and higher intellectualism of Mentsh is also something valuable. Knights generally agree that a valuable way to live is to work on the Four Virtuous Activities, namely:

1) physical fitness, fighting and physical challenges,

2) scholarship, intellectualism, learning and rationality,

3) altruism, charity and good works,

4) and protecting the Earth, animals, plants, the natural environment, or indigenous people.

Knights of the Fox are supposed to be versatile, work on all four.

Other chivalrous orders focus on one, also do other two, and are allowed to go easy on the fourth. Knights of the Sword are the closest to the tribes of Mannfolk, they focus on fighting and physical challenges, learning and knowledge matters for them too, but they will usually go easy on either altruism or environmentalism. Knights of the Scroll focus on learning and rationality, find altruism and environmentalism important, and go easy on fighting and physicality. Knights of the Heart and Knights of Earth are easy enough to figure out.

So far I have only talked about men, and mostly about the Mannfolk gender. And I named it Maletopia. Where are women and LGBT people, or the disabled who cannot fight, in all this? Are they an oppressed minority? No.

Women and everybody else in Maletopia

EDIT: as indicated above, Maletopia, i.e. the fighting tribes of the Mannfolk are only a small subset of hobby groups in Utopia. Many, many other kinds of subsets exist to cater to other people. However, we simply focus on the Mannfolk now and their interaction with everybody else.

One of the most important elements of the Grand Compromise with the Fempire was that discrimination and inequality is not allowed in general society as such, but is allowed in private organizations such as these tribes. The reason it was allowed was partially because some MRAs were adamant to be let allowed to organize tribes where only men and only masculine men - the later Mannfolk - are allowed, and be allowed to play these violent games with each other even if others find it revolting. For this reason, they wanted to prevent "entryism", the practice where people who disagree with the values of a movement or group enter it, and then vote and exert pressure to change them.

But the main reason was that now there was hardly any important work to do, as work was done by robots, and people lived on BI, discrimination in these organizations had little affect on how succesful individuals could become. Since basically everything was a hobby now and nothing really mattered, success lost its former meaning, and if some fools wanted to form a hobby group that consisted entirely of tall ginger demisexual males, there was no good reason to not let them to.

As a result, many fighting tribes of Mannfolk consist of straight cissexual men with significantly sexist views and are often recruited from a particular culture, ethnicity or race. Such things tend to strengthen their tribal identity, their solidarity, camaraderie and this is seen as super important in Maletopia. Inclusiveness is not emphasized, since these organizations are essentially about hobbies and thus it is very easy to found many competing ones for every possible identity or need, hence they tend to be exclusive, and use the exclusiveness to form tightly knit  communities with a strong esprit de corps. This also means often disturbing views, like sexism or racism are openly professed by certain tribes of Mannfolk.  However it does not affect anyone outside their tribe, except others tribes they fight with, and women outside their tribe they date, but there are solutions for the worst aspects of it (see above, violence, rape), and since those women who want to be treated as equals usually completely refuse to date Mannfolk and choose to date only Mentsh, basically this sexism does not make anyone miserable.

It is not a surprise that tribes often challenge each other to raids precisely based on their conflicting identities, prejudices and discriminations, and this is seen as a feature, not a bug, a little hatred just makes the raid more real and more warlike. Thus, Steela from Bay Area Amazons likes to say that she will bathe in male tears after their upcoming raid with Italian Cowboys, and Eli from the Lions of Judah is looking forward to break some Nazi bones during their upcoming raid against the Aryan Brotherhood. As a commenter has put it, letting evil tribes exist makes better villains for the raids, and if you complain that evil people are being racist or sexist, that is obviouly stupid. Just put a tenner on the loot pile and hope the bad guys will get their noses bloodied.

The parallels between the ethnic gangs of the 20th century are obvious and intentional.

Besides the straight Mannfolk tribes, there are male fighting tribes who are not straight but androphile (masculine-gay, see Jack Donovan), there are butch amazon fighting tribes, and of course a million similar hobby organizations for people who are not fighters, for the Mentsh, for women who dislike fighting, for LGBT people, for the disabled, for all.

Of course, those groups can and should be fleshed out. All in all, the only reason I called it Maletopia is because I wanted to focus on how the fighting tribes of Mannfolk serve the emotional needs of masculine men. Really, Maletopia is simply a subset of Utopia where everybody else, too, finds groups where they can be themselves.

Actually, the title is a sensationalist lie designed to attract attention. I have no proof. Obviously. I'm not a mathematician. But if I did, it would go something like the following. 

Step 1: Assume that there are ultimate laws of physics governing everything in the world. Say, the wave function of the Universe, whose knowledge allows one to know the Multiverse, as it was, is or will be. Or some other set of laws. 

Step 2: Write these laws as a mathematically consistent formal system representing something akin to the Tegmark Level IV Ultimate ensemble.

Step 3: By Godel's incompleteness, there are some theorems in this formal system that cannot be proven.

Step 4: By construction, these theorems correspond to physical laws whose origins must forever remain a mystery to those inside the Multiverse, because they are a part of it.

Step 5: The consistency of our Multiverse can be proven in a formal system which describes physical laws of a larger world, in which our Multiverse is a small part of, essentially a simulation.

Step 6: Since we cannot determine the origins of our own physics, we cannot figure out a way to break out of our simulation. 

On the bright side, there is a Corollary:  Every level above us is also a simulation, so we are not alone!

This post was originally a link post to

http://arstechnica.com/business/2015/01/fcc-chairman-mocks-industry-claims-that-customers-dont-need-faster-internet/

together with an instruction to read the article before proceeding, and then the following text rot13'd:

I believe this article is a nice rationality test. Did you notice that you were reading a debate over a definition and try to figure out what the purpose of the classification was? Or did you get carried away in the condemnation of the hated telecoms? If you noticed, how long did it take you?

 

I'm open to feedback on whether this test was worthwhile and also on whether I could have presented it better. There's a tradeoff here where explaining the post's value to Less Wrong undermines that value. Had I put "Rationality Test" in the title, I could have avoided the appearance of posting an inappropriate article but made the test weaker.

As you can see from the comments here, it didn't work very well.

I'm mostly editing this now because the apparent outrage-bait link in the discussion section was a bit of a nuisance, but I'll take the chance to list what I've learned:

• Not many LWers are susceptible to this genre of outrage-bait. That is, they don't have the intended gut reaction in the first place, so this didn't test whether they overcame it.
• The only commenter who admits having had said reaction immediately and effortlessly accounted for the fact that the debate was over a definition. This suggests the test was on the easy side, even for those eligible. (Unless a bunch of people failed and didn't comment, but I doubt that)
• Most commenters did not indicate finding it obvious that this was a test. The sort of misdirection I employed is quite viable.
• Feedback on the idea of the test is mixed. People don't seem to mind the concept of being misdirected, but (if I read the top comment correctly) being put through the experience of an outrage-bait link was annoying and the test didn't offer enough value to justify that.

New chapter, and the end is now in sight!

We're 4 days from the end of our matching fundraiser, and still only about 1/3rd of the way to our target (and to the point where pledged funds would cease being matched).

If you'd like to support the growth of rationality in the world, do please consider donating, or asking me about any questions/etc. you may have.  I'd love to talk.  I suspect funds donated to CFAR between now and Jan 31 are quite high-impact.

As a random bonus, I promise that if we meet the $120k matching challenge, I'll post at least two posts with some never-before-shared (on here) rationality techniques that we've been playing with around CFAR.

In the Game of Thrones series, there is an ongoing side plot in which a character is trained by a secretive organization to become an assassin. As part of her training, one of the senior assassins demands that she report to him three new things she has learnt every day. by making a natural inference from the title of the article, you might infer or assume that I am going to suggest that you do the same. I am, but with a crucial difference.

You see, my standards are higher than the Faceless Men. Instead of filling up your list of learnt things with only marginally useful things like gossip or other insignificant things, I am going to take it up a notch and demand that you learn three USEFUL things a day. This is, of course, an entirely self-enforced challenge, and I'll let you decide on the definition of useful. Personally, I use the condition of [>50% probability that X will enrich my life in a significant way], but if you want, you can make up your own criteria for "useful".

This may seem trite or useless, or even obvious(if you're an eager and fast learner, like most LWers). Now stop and think hard. For the entire of the past 30 days, have you ever had a day or two where you just slacked off and didn't learn much? Maybe it was New Year's Day, or your birthday, and instead of learning you decided to spend the whole day partying. Perhaps it was just a lazy Sunday and you couldn't be bothered to learn something and instead just spent the day playing video games or mountain skiing(although there are useful things to be learnt from those, too) or whatever you like to do in your spare time.

I haven't taken an official survey, but my belief(and do correct me if I am very wrong about this) is that on average there's at least one day in thirty in which you did not learn thirty new, useful things. I would consider that day as pretty much wasted from a truth-seeker's point of view. You did not move forward in your quest for knowledge, you did not sharpen your rationality skills(and they always need sharpening, no matter how good you are) and you did not become stronger mentally. That's 12 days in a year, which is more than enough for the average LWer to pick up at least one new skill: say, learning about game theory, to pick a random example. In that year, you have had a chance to gain the knowledge of game theory, and you threw it away.

The point of this exercise is not to make you sweat and do a "mental workout" every day. The point is to prevent days that are wasted. There is a nearly infinite amount of knowledge to collect, and we do not have nearly infinite time. Maybe it's just my Asian mentality speaking here, but every second counts and you are in effect racing against time to gain as much knowledge as possible and put it to good use before you die.

When doing this, you are not allowed to merely work on your projects, unless they also teach you something. If you are a non-programmer, and you begin learning Python, that's a new thing. If you're already fluent in Python, and you program in Python, that's not counted. With one exception: if you learn something through programming(maybe you thought up a nifty new way to sanitize user inputs while working on a database) then that counts. If you're a writer, and you write, that doesn't count. Unless, of course, by writing you learn things about worldbuilding, or plot development, or character development, that you didn't know before. Yes, this counts, even though it's not directly rationality-related, because it enriches your life: it helps you achieve your writing goals(that's also a good condition for usefulness, and is a good example of instrumental rationality).

Today, I've learn about the concept of centered worlds, I have learnt about the policy of indifference in similar worlds and I have learnt the technique of "super-rationality" as a means to predict the behavior of other agents in acausal trade. What have you learnt today?

Do it now. Don't wait, or you will waste this day, which is 86400 countable seconds in which to learn things. In fact, I've given you a head start today, because you can count this article in your list of learnt things.

Good luck to you. Let's learn together.

[This is my first post on LW and I hope that I taught you something interesting and useful. Again, I'm new to posting, so if I violated some unspoken rule of etiquette, or if you think this post is obvious and shitty, feel free to vote me down. But do leave a comment explaining why you did, so I can add it to my list of learnt things.]

LessWrong is where I learned about Bitcoin, several years ago, and my greatest regret is that I did not investigate it more as soon as possible, that people here did not yell at me louder that it was important, and to go take a look at it.  In that spirit, I will do so now.

First of all, several caveats:

* You should not go blindly buying anything that you do not understand.  If you don't know about Bitcoin, you should start by reading about its history, read Satoshi's whitepaper, etc.  I will assume that hte rest of the readers who continue reading this have a decent idea of what Bitcoin is.

* Under absolutely no circumstances should you invest money into Bitcoin that you cannot afford to lose.  "Risk money" only!  That means that if you were to lose 100% of you money, it would not particularly damage your life.  Do not spend money that you will need within the next several years, or ever.  You might in fact want to mentally write off the entire thing as a 100% loss from the start, if that helps.

* Even more strongly, under absolutely no circumstances whatsoever will you borrow money in order to buy Bitcoins, such as using margin, credit card loans, using your student loan, etc.  This is very much similar to taking out a loan, going to a casino and betting it all on black on the roulette wheel.  You would either get very lucky or potentially ruin your life.  Its not worth it, this is reality, and there are no laws of the universe preventing you from losing.

* This post is not "investment advice".

* I own Bitcoins, which makes me biased.  You should update to reflect that I am going to present a pro-Bitcoin case.

So why is this potentially a time to buy Bitcoins?  One could think of markets like a pendulum, where price swings from one extreme to another over time, with a very high price corresponding to over-enthusiasm, and a very low price corresponding to despair.  As Warren Buffett said, Mr. Market is like a manic depressive.  One day he walks into your office and is exuberant, and offers to buy your stocks at a high price.  Another day he is depressed and will sell them for a fraction of that. 

The root cause of this phenomenon is confirmation bias.  When things are going well, and the fundamentals of a stock or commodity are strong, the price is driven up, and this results in a positive feedback loop.  Investors receive confirmation of their belief that things are going good from the price increase, confirming their bias.  The process repeats and builds upon itself during a bull market, until it reaches a point of euphoria, in which bad news is completely ignored or disbelieved in.

The same process happens in reverse during a price decline, or bear market.  Investors receive the feedback that the price is going down => things are bad, and good news is ignored and disbelieved.  Both of these processes run away for a while until they reach enough of an extreme that the "smart money" (most well informed and intelligent agents in the system) realizes that the process has gone too far and switches sides. 

Bitcoin at this point is certainly somewhere in the despair side of the pendulum.  I don't want to imply in any way that it is not possible for it to go lower.  Picking a bottom is probably the most difficult thing to do in markets, especially before it happens, and everyone who has claimed that Bitcoin was at a bottom for the past year has been repeatedly proven wrong.  (In fact, I feel a tremendous amount of fear in sticking my neck out to create this post, well aware that I could look like a complete idiot weeks or months or years from now and utterly destroy my reputation, yet I will continue anyway).

First of all, lets look at the fundamentals of Bitcoin.  On one hand, things are going well. 

Use of Bitcoin (network effect):

One measurement of Bitcoin's value is the strenght of its network effect.  By Metcalfe's law, the value of a network is proporitonal to the square of the number of nodes in the network. 

http://en.wikipedia.org/wiki/Metcalfe%27s_law

Over the long term, Bitcoin's price has generally followed this law (though with wild swings to both the upside and downside as the pendulum swings). 

In terms of network effect, Bitcoin is doing well.

Bitcoin transactions are hitting all time highs:  (28 day average of number of transactions).

https://blockchain.info/charts/n-transactions-excluding-popular?timespan=2year&showDataPoints=false&daysAverageString=28&show_header=true&scale=0&address=

Number of Bitcoin addresses are hitting all time highs:

https://blockchain.info/charts/n-unique-addresses?timespan=2year&showDataPoints=false&daysAverageString=28&show_header=true&scale=0&address=

Merchant adoption continues to hit new highs:

BitPay/Coinbase continue to report 10% monthly growth in the number of merchants that accept Bitcoin.

Prominent companies that began accepting Bitcoin in the past year include: Dell, Overstock, Paypal, Microsoft, etc.

On the other hand, due to the sustained price decline, many Btcoin businesses that started up in the past two years with venture capital funding have shut down.  This is more of an effect of the price decline than a cause however.  In the past month especially there has been a number of bearish news stories, such as Bitpay laying off employees, exchanges Vault of Satoshi and CEX.io deciding to shut down, exchange Bitstamp being hacked and shut down for 3 days, but ultimately is back up without losing customer funds, etc.

The cost to mine a Bitcoin is commonly seen as one indicator of price.   Note that the cost to mine a Bitcoin does not directly determine the *value* or usefulness of a Bitcoin.   I do not believe in the labor theory of value: http://en.wikipedia.org/wiki/Labor_theory_of_value

However, there is a stabilizing effect in commodities, in which over time, the price of an item will often converge towards the cost to produce it due to market forces. 

If a Bitcoin is being priced at a value much greater than the cost (in mining equipment and electricity) to create it, people will invest in mining equipment.  This results in increased 'difficulty' of mining and drives down the amount of Bitcoin that you can create with a particular piece of mining equipment.  (The amount of Bitcoins created is a fixed amount per unit of time, and thus the more mining equipment that exists, the less Bitcoin each miner will get).

If Bitcoin is being priced at a value below the cost to create it, people will stop investing in mining equipment.  This may be a signal that the price is getting too low, and could rise.

Historically, the one period of time where Bitcoin was priced significantly below the cost to produce it was in late 2011.  It was noted on LessWrong.  The price has not currently fallen to quite the same extent as it did back then (which may indicate that it has further to fall), however the current price relative to the mining cost indicates we are very much in the bearish side of the pendulum.

It is difficult to calculate an exact cost to mine a Bitcoin, because this depends on the exact hardware used, your cost of electricity, and a prediction of the future difficulty adjustments that will occur.  However, we can make estimates with websites such as http://www.vnbitcoin.org/bitcoincalculator.php

According to this site, every available Bitcoin miner will never give you back as much money as it cost, factoring in the hardware cost and electricity cost.   Upcoming more efficient miners which have not yet released yet are estimated to pay off in about a year, if difficulty grows extremely slowly, and that is for upcoming technology which has not yet even been released. 

There are two important breakpoints when discussing Bitcoin mining profitability.  The first is the point at which your return is enough that it pays for both the electricity and the hardware.  The second is the point at which you make more than your electricity costs, but cannot recover the hardware cost.

For example, lets say Alice pays $1000 on Bitcoin mining equipment.  Every day, this mining equipment can return $10 worth of Bitcoin, but it costs $5 of electricity to run.  Her gain for the day is $5, and it would take 200 days at this rate before the mining equipment paid for itself.  Once she has made the decision to purchase the mining equipment, the money spent on the miner is a sunk cost.  The money spent on electricity is not a sunk cost, she continues to have the decision every day of whether or not to run her mining equipment.  The optimal decision is to continue to run the miner as long as it returns more than the electricity cost. 

Over time, the payout she will receive from this hardware will decline, as the difficulty of mining Bitcoin increases.  Eventually, her payout will decline below the electricity cost, and she should shut the miner down.  At this point, if her total gain from running the equipment was higher than the hardware cost, it was a good investment.  If it did not recoup its cost, then it was worse than simply spending the money buying Bitcoin on an exchange in the first place.

This process creates a feedback into the market price of Bitcoins.  Imagine that Bitcoin investors have two choices, either they can buy Bitcoins (the commodity which has already been produced by others), or they can buy miners, and produce Bitcoins for themself.   If the Bitcoin price falls sufficiently that mining equipment will not recover its costs over time, investment money that would have gone into miners instead goes into Bitcoin, helping to support the price.  As you can see from mining cost calculators, we have passed this point already.  (In fact, we passed it months ago already).

The second breakpoint is when the Bitcoin price falls so low that it falls below the electricity cost of running mining equipment.  We have passed this point for many of the less efficient ways to mine.  For example, Cointerra recently shut down its cloud mining pool because it was losing money.  We have not yet passed this point for more recent and efficient miners, but we are getting fairly close to it. Crossing this point has occurred once in Bitcoin's history, in late 2011 when the price bottomed out near $2, before giving birth to the massive bull run of 2012-2013 in which the price rose by a factor of 500.

Market Sentiment: 

I was not active in Bitcoin back in 2011, so I cannot compare the present time to the sentiment at the November 2011 bottom.  However, sentiment currently is the worst that I have seen by a significant margin. Again, this does not mean that things could not get much, much worse before they get better!  After all, sentiment has been growing worse for months now as the price declines, and everyone who predicted that it was as bad as it could get and the price could not possibly go below $X has been wrong.  We are in a feedback loop which is strongly pumping bearishness into all market participants, and that feedback loop can continue and has continued for quite a while.

A look at market indicators tells us that Bitcoin is very, very oversold, almost historically oversold.  Again, this does not mean that it could not get worse before it gets better. 

As I write this, the price of Bitcoin is $230.  For perspective, this is down over 80% from the all time high of $1163 in November 2013.  It is still higher than the roughly $100 level it spent most of mid 2013 at.

* The average price of a Bitcoin since the last time it moved is $314.

https://www.reddit.com/r/BitcoinMarkets/comments/2ez90b/and_the_average_bitcoin_cost_basis_is/

The current price is a multiple of .73 of this price.  This is very low historically, but not the lowest it has ever ben.  THe lowest was about .39 in late 2011. 

* Short interest (the number of Bitcoins that were borrowed and sold, and must be rebought later) hit all time highs this week, according to data on the exchange Bitfinex, at more than 25000 Bitcoins sold short:

http://www.bfxdata.com/swaphistory/totals.php

* Weekly RSI (relative strength index), an indicator which tells if a stock or commodity is 'overbought' or 'oversold' relative to its history, just hit its lowest value ever.

Many indicators are telling us that Bitcoin is at or near historical levels in terms of the depth of this bear market.  In percentage terms, the price decline is surpassed only by the November 2011 low.  In terms of length, the current decline is more than twice as long as the previous longest bear market.

To summarize: At the present time, the market is pricing in a significant probability that Bitcoin is dying.

But there are some indicators (such as # of transactions) which say it is not dying.  Maybe it continues down into oblivion, and the remaining fundamentals which looked bullish turn downwards and never recover.  Remember that this is reality, and anything can happen, and nothing will save you.

Given all of this, we now have a choice.  People have often compared Bitcoin to making a bet in which you have a 50% chance of losing everything, and a 50% chance of making multiples (far more than 2x) of what you started with. 

There are times when the payout on that bet is much lower, when everyone is euphoric and has been convinced by the positive feedback loop that they will win.  And there are times when the payout on that bet is much higher, when everyone else is extremely fearful and is convinced it will not pay off. 

This is a time to be good rationalists, and investigate a possible opportunity, comparing the present situation to historical examples, and making an informed decision.   Either Bitcoin has begun the process of dying, and this decline will continue in stages until it hits zero (or some incredibly low value that is essentially the same for our purposes), or it will live.  Based on the new all time high being hit in number of transactions, and ways to spend Bitcoin, I think there is at least a reasonable chance it will live.  Enough of a chance that it is worth taking some money that you can 100% afford to lose, and making a bet.  A rational gamble that there is a decent probability that it will survive, at a time when a large number of others are betting that it will fail.

And then once you do that, try your hardest to mentally write it off as a complete loss, like you had blown the money on a vacation or a consumer good, and now it is gone, and then wait a long time.

Viliam Bur made the announcement in Main, but not everyone checks main, so I'm repeating it here.

During the following months my time and attention will be heavily occupied by some personal stuff, so I will be unable to function as a LW moderator. The new LW moderator is... NancyLebovitz!

From today, please direct all your complaints and investigation requests to Nancy. Please not everyone during the first week. That can be a bit frightening for a new moderator.

There are a few old requests I haven't completed yet. I will try to close everything during the following days, but if I don't do it till the end of January, then I will forward the unfinished cases to Nancy, too.

Long live the new moderator!

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