Dry goods | Nick Szabo: The origin of money (Part-2): evolution, cooperation and collectibles

The origin of money, Part-1: currency and collectibles

Evolution, cooperation and collectibles

Evolutionary psychology is derived from a key mathematical finding by John Maynard Smith [D98] . Smith borrows a population model of co-evolving genes (the model comes from the well-developed field of Population Genetics), pointing out that genes can correspond to behavioral strategies, ie, in simple strategy issues (ie, game theory) A good or bad strategy in the "game".

Smith proved that the competitive environment can be expressed as a strategic problem, and that these genes must compete in the competition to inherit into subsequent generations, so the genes will evolve Nash equilibrium for related strategic problems. These competing games include the prisoner's dilemma (typical of cooperative game problems) and the eagle/pigeon strategy problem (typical of offensive strategy issues).

The key to Smith's theory is that these strategy games, although seemingly unfolding in size, are essentially inter-genetic–the competition for gene propagation. It is the gene (not necessarily the individual) that affects the behavior and appears to have bounded rationality (in the range in which the body shape can be expressed, the best possible strategy is coded, of course, the biological form is also subject to biological raw materials and previous evolutionary history. The impact) and the appearance of "selfishness" (using the metaphor of Richard Dawkins). The effect of genes on behavior is an adaptation, adaptation to the competition of genes through body shape. Smith refers to these evolving Nash equilibriums as "evolutionary stability strategies."

The "classical theories" established in the early theory of individual choice, such as sexual selection and pro-selection theory, are dissolved in this more general model, which subversively places genes rather than individuals at the center of evolutionary theory. So Dawkins used a frequently misunderstood analogy—the “selfish gene”—to describe Smith's theory.

Few other species are more collaborative than the Paleolithic humans . In some cases, such as the hatching and colonization of species such as ants, termites, and bees, animals can cooperate among relatives—because it helps replicate the “selfish genes” that they and their relatives have. In some very extreme situations, non-relatives can also cooperate, and evolutionary psychologists call it "mutual reciprocity." As Dawkins described [D98] , unless the transaction is paid by both parties , one of the parties can cheat (sometimes even real-time transactions are difficult to avoid fraud) . And they usually do this if they can scam. This is what usually happens in games called “Prisoner's Dilemma” by game theory experts – if all parties work together, then each party can get better results, but if one chooses fraud, he can sell it. The fool is making a profit. In a population of deceivers and fools, the deceiver always wins (and therefore is difficult to cooperate). However, some animals will cooperate through repeated games and a strategy called “tooth and teeth”: in the first round of the game, choose cooperation, and then choose to cooperate until the opponent chooses fraud and then choose fraud to protect themselves. This threat from retaliation will allow the parties to continue to cooperate.

But in general, in the animal world, the situation in which individuals actually cooperate is very limited. A major limitation of this cooperation lies in the relationship between the two partners: at least one of them is more or less forced to approach other participants. The most common situation is when parasites and hosts evolve into symbionts . If the interests of the parasite and the host are the same, then the symbiosis will be more appropriate than the individual (that is, the parasite will also provide some benefits to the host); then, if they successfully enter a game of dying, they will evolve into a symbiosis, In this state, their interests, especially the gene withdrawal mechanism from one generation to the next, are consistent. They will become like a single organism. However, in fact, there is not only cooperation, but also exploitation, and it also occurs at the same time. This situation is very much like another system developed by mankind – tribute – we will analyze later.

There are also very specific examples that do not involve parasites and hosts, but also share the same body and become symbiotic . Instead, these examples involve unrelated animals and very limited territorial space. A beautiful example of Dawkins is the cleaner fish, which swim in the host mouth, swallow the bacteria and maintain the health of the host fish. The host fish can deceive these small fish – you can swallow them after they have finished their work. But the host fish did not do this. Because both sides are constantly moving, either party is free to leave this relationship. However, the cleaners have evolved a very strong sense of territory, as well as stripes and dances that are difficult to imitate – much like trademarks that are difficult to forge. Therefore, the host fish knows where to go to find cleaning services – and they know that if they deceive the fish, they have to find a new group of small fish. The entry cost of this symbiotic relationship is very high (and therefore the exit cost is also high), so the two parties can cooperate happily without fraud. In addition, the cleaners are also very small, so the benefits of eating them are not as good as the cleaning of a small group of fish.

Another highly relevant example is the vampire bat. In fact, this bat will suck the blood of mammals. What's interesting is that it's very difficult to predict whether you can get blood. Sometimes you can eat too much, sometimes you don't have to eat. Therefore, the lucky (or older) bat will share the prey with those less hobby (smart) bats: the applicator will spit out the blood and the recipient will gratefully eat it.

In most cases, both the donor and the recipient are related. Of the 110 such examples observed by the endurance biologist GS Wilkinson, 77 were mothers feeding children, and most other examples involved genetic kinship. However, there are still a few examples that cannot be explained by kinship altruism. To explain this part of reciprocity, Wilkinson mixes bats from two groups to form a single population. He then observed that, with very few exceptions, bats generally only care for their old friends in the old group [D89] .

This kind of cooperation requires a long-term relationship, that is, partners need to interact frequently, understand each other, and track each other's behavior. Caves help to limit bats to long-term relationships, and such cooperation is possible.

We will also learn that some humans, like vampire bats, choose high-risk and unstable forms of harvest, and they share the remainder of production activities for unrelated people . In fact, their achievements in this area far exceed the vampire bats, and how these achievements are the subject of our article. Dawkins said, "Currency is a deferred official symbol of reciprocal altruism," but then he no longer promotes this fascinating concept. This is the task of our article.

In a small human population, open reputation can replace retaliation from a single individual, driving people to collaborate with lagging exchanges. However, the reputation system may encounter two types of larger problems—hard to identify who did what, and difficult to assess the value or damage caused by the action.

The need to remember faces and favors is a small cognitive disorder, but it is also a barrier that most humans find relatively easy to overcome. It's easier to identify faces, but it may be harder to recall that a help has occurred when needed. It is even harder to remember the details of a favor that gives the recipient a certain value. Avoiding arguments and misunderstandings is impossible, or it can be difficult to make such help impossible.

Evaluating problems, or value measurement issues, is very broad . For humans, this problem exists in any trading system – whether it is human relationships, bartering, currency, credit, employment, or market transactions. This issue is also important in extortion, taxation, tribute and even judicial punishment. Even in the reciprocal altruism of animals, this issue is particularly important. Imagine the mutual help between monkeys—for example, using a piece of fruit in exchange for scratching the back. Mutual care can drive away the scorpions and fleas that you can't see or catch. However, how many times does the number of pieces of fruit correspond to the feeling that both sides will feel "fair" rather than rip-off? Is the 20-minute hair care service worth two pieces of fruit? How big is it?

Even the simplest “blood-for-blood” deal is more complicated than it seems . How does the bat estimate the value of the blood it receives? According to weight, volume, taste and satiety? Still other factors? This kind of measurement complexity is exactly the same in the monkey's "You scratch my back, I help you scratch" transaction.

Although there are many potential trading opportunities, it is difficult for animals to solve the problem of value measurement. Even the simplest model of remembering faces and matching them with the history of grace, how to make the parties have a sufficiently accurate consensus on the value of grace at the outset is also an important part of the development of reciprocity for animals. obstacle.

However, the stone toolbox left by the Paleolithic humans seems to be a bit too complicated for our brains . (Translator's Note: That is to say, if it is so complicated for the modern human brain, what kind of cooperation form does the Paleolithic mankind use to create these things, and what is it for?)

To trace the blessings associated with these stones—who, who, who knows what quality tools, who owes them, and so on—can become very complicated if they cross the boundaries of the tribe. In addition, there may be a large amount of organic matter and temporary services (such as beauty), etc., which have not survived. Even if only a small part of these traded items and services are kept in mind, as the number increases, the correspondence between people and things becomes more and more difficult until impossible. If the cooperation takes place between the tribes, as the archaeological record implies, then the problem becomes even more difficult, because the hunting-collecting tribes are usually highly hostile and distrustful.

If the shell can be currency, the fur can be money, gold can be money, etc. – if the currency is more than just a coin and a government issued under the legal currency law, but can be a lot of different things – then the currency What is the essence?

Moreover, why do humans, who are often on the verge of starvation, spend so much time creating and appreciating those necklaces that they could have used to hunt and collect?

Carl Menger [M1892], an economist in the 19th century, first described how money naturally evolved and would appear unstoppable from a large number of exchange transactions. The story of modern economics is similar to the version of Menger.

The exchange of things requires the coincidence of the interests of both parties. Alice planted some walnuts and needed some apples; Bob just planted apples and wanted to eat walnuts. And they just lived close, and Alice also trusted Bob, willing to wait quietly between the walnut harvest and the Apple harvest. Assuming all of these conditions are met, there is nothing wrong with changing things. But if Alice is planting oranges, even if Bob wants oranges, that's no good— oranges and apples can't grow in the same climate. If Alice and Bob don't trust each other and can't find a third party to act as an intermediary [L94] or enforce the contract, then their wishes will be lost.

There may also be more complicated situations. Alice and Bob can't fully honor the promise of selling walnuts or apples in the future, because there are other possibilities, Alice can leave the best walnuts to herself and sell the defectives to each other (Bob can do the same). Comparing quality and comparing the quality of two different things is even more difficult than the above problems, especially one of them has become a memory. Also, neither of them can predict an event such as a poor harvest. These complexities greatly increase the difficulty of the problems Alice and Bob deal with, making it harder for them to confirm whether lagging reciprocal transactions can really achieve reciprocal effects. The longer the time interval between the initial transaction and the return transaction, the greater the uncertainty, the greater the complexity .

There is also a related problem (engineers may realize) that the barter "doesn't scale". When the amount of merchandise is small, bartering can be done, but its cost will gradually increase as the volume rises until it is expensive to be worthwhile to do such an exchange. Assuming there are N goods and services, there must be N^2 prices in a barter market. There are 25 relative prices for 5 commodities, but there are 250,000 prices for 500 commodities, far exceeding the actual ability of one to track prices. But with money, you only need N prices – 500 items are 500 prices. When used in this scenario, money acts both as a medium of exchange and as a standard of value—as long as the price of the currency itself is not large enough to be remembered or changed too frequently. (The latter question, coupled with the implicit insurance “contract”, coupled with the lack of a competitive market, may explain why prices are usually evolving over time, not by recent negotiations.)

In other words, the exchange of things requires the supply (or skill), preference, time, and low transaction costs . The transaction cost of this model will grow much faster than the growth of commodity types. Barter exchange is of course better than no trade at all, and it has been widely seen. But compared with the trade in currency, it is a younger brother and it is limited by authority.

Before the emergence of a large-scale trade network, the original currency existed for a long time. Currency has had an even more important use before. By greatly reducing the need for credit, the currency has greatly improved the efficiency of small barter networks . The complete coincidence of preferences is much less than the inter-temporal preference coincidence. With the currency, Alice can collect Bob for the blueberry when it matures this month, and Bob can hunt for Alice when the big animal migrates after 6 months, without having to remember who owes much, and does not need to trust each other. Memory and integrity. A major investment made by a mother for childcare can be protected by the gift of unforgeable items of value. Moreover, the currency also transforms the division of labor from the prisoner's dilemma to a simple exchange.

The original currency used by the hunting-collection tribe is different in appearance from the modern currency, and the role played by modern currency in modern culture is different; the original currency may have some functions limited to being exercised in small trading networks and local institutions (we will be Discussed later). Therefore, I think it would be more appropriate to call them “collections” rather than “currency”. In the anthropological literature, the term for such items is also “currency”; this definition is broader than the banknotes issued by the government and the metal currency, but more than the “collections” or the more ambiguous “we have used in this article. The object of price is to be more narrow (the things of value will be used to refer to things that are not collectibles in the sense of this article).

The reasons for choosing “collectibles” rather than other terms to refer to the original currency will gradually emerge below. Collectibles have very specific attributes, not just decorations. Although the specific items and valuable attributes of the collection differ in different cultures, they are by no means arbitrarily selected. The primary function of the collection is its ultimate function in evolution, as a medium for storing and transferring wealth . Some types of collectibles, such as necklaces, are well-suited for use as currency, even for us (people living in a modern society where economic and social conditions encourage trade). I also occasionally use "primitive currency" instead of "collections" to discuss the transfer of wealth before the metal currency era.


Original link: https://nakamotoinstitute.org/shelling-out/

Author: Nick Szabo

Translation: Ajian

(This article is from the EthFans of Ethereum fans, and it is strictly forbidden to reprint without the permission of the author.