The Infohazard Economy, Part 1

A few funny ways to upset cryptocurrency enthusiasts

Have you ever wondered how the rich get rich and stay rich? Usually, the answer is quite simple: they prioritize their own interests over society’s well-being, looting and pillaging all they can, while privatizing profits and socializing costs. Then they go on TV and pretend that they actually became successful by working hard and providing value to society. “I’m just happy I could make a difference,” they say. “In fact, I want to give back to the community so much, that I instructed all of my employees to go vegan in order to reduce my company’s carbon footprint.” After the interview, they immediately hop on a private jet and dump two tons of carbon while on their way to their private estate.

It may seem hard for the average middle-class American to aspire to such depths of hypocritical self-delusion that you can advocate for environmental protection while simultaneously raining carbon from the skies on your private jet. In order to reach that kind of success track, it’s not enough to be a massive asshole: you also need a lot of inherent privilege. In order to avoid revolution, our wealthy elites spread the lie that we live in a meritocracy, but unlike them, I will never lie to you. The sad fact is that no matter how clever and mean we are, most of us simply don’t have the network or connections to ever attain that level of success under the current oligarchy. However, you can still use your intelligence and meanness to make a reasonable amount of money while giving our oligarch overlords a Really Bad Day, and that’s what I’d like to talk about in this month’s post. Today, I would like to introduce you to the concept of the infohazard.

What is an infohazard and how can you deploy it? The simplest way to describe it is that it is a massive vulnerability in society that is currently unseen - a single loose thread in the fabric of society. By pulling on this thread, you can partially unravel society itself. This causes massive damage to our existing elites, who rely on social stability to maintain power. Since many of our elites are ignorant fools who don’t deserve any of the success that they have, spreading infohazards forces them to either share a portion of their success with you (if they want your help mitigating the damage from the infohazard) or collapses their power base altogether, because it’s very difficult for them to maintain control over a society that has fallen into chaos and civil disorder. An alternative way to frame this is that spreading infohazards is good for people near the bottom of society but bad for those near the top, since higher societal instability is like heating up a bubbling cauldron of soup - the increased volatility makes it more likely that ingredients at the bottom will bubble up to the top. However, if you are already at the top, then unless you are exceptionally smart there is seldom any benefit to the increased volatility since you can’t get much higher than you already are - the increased chaos makes it somewhat more likely that you will lose your position of privilege. Some sophisticated social engineers might argue that just as one needs to steadily apply heat to a soup in order to cook it well, applying a slow but steady rate of volatility to a society produces a better end result because wealthy but incompetent people who don’t deserve their privilege are supplanted by smarter people beneath them, thus ensuring a constant flow of good ideas to the top. But I’m no philosopher: I’m just a humble rando on the internet trying to teach you how to make a few bucks in the stock market.

Additionally, since the specific type of chaos and disorder created is very predictable based on the type of infohazard you chose to spread, you can use infohazards to game the stock market, creating a lot of volatility and uncertainty in the stocks that you want to buy up so that you can purchase them on the cheap at a fraction of their value.

The frustrating thing about educating people on infohazards is that they’re very hard to explain, since giving an example of an infohazard usually triggers the hazard itself. An infohazard is spread simply by sharing hazardous information. Once the information is shared, it tends to go viral, and causes a lot of problems. So in order to explain how an infohazard works to an audience, you either need to talk about it in very abstract ways that don’t really convey much meaning, or you need to give your audience an easy-to-understand example by actively using an infohazard to destroy something right in front of them. I believe in the latter approach, so let’s crash Bitcoin.

To begin composing an infohazard, you need to have a good understanding of the system that you want to destroy. You’re looking for systemic weaknesses: a single loose thread that you can pull on to make the whole system unravel. Let’s do a deep dive into Bitcoin. We’ll need to answer several fundamental “infohazard questions” in order to be able to discover and exploit a vulnerability in the system.

What is Bitcoin?

There’s a simple answer and a complex answer to that. Since the complex answer would probably be the length of an MIT symposium, let’s stick to the simple answer for now. A while back, a bunch of nerds got together on the internet and decided that they wanted to basically print money for themselves instead of just accepting the government monopoly on money-printing. These visionaries decided that since the value of crisp paper bills was not backed by anything other than the government’s say-so (a historical event that William Jennings Bryan got very excitable about), they could also declare their own arbitrary form of money and LARP with each other that it had value, until the LARP caught on with the rest of society and the value of their fake currency became socially-accepted and real, much like fiat currency. Why let the government monopolize all of this sweet money-printing action?

“But wait,” one of the nerds pointed out. “If we can easily create money-equivalent objects, then what stops somebody else from creating more of those things just like we did? Since it doesn’t have any inherent value, this only thing that gives value to this fake “token” money is the scarcity.”

The nerds thought for a while, until one of them came up with an idea. “Instead of making it easy to create these money-equivalent tokens, why don’t we make it hard to create tokens? But it’ll be a method that is much easier for us, because we want to make sure that we become the ones who get rich off it, not anybody else.”

The nerds all agreed that this was a good idea. “But how will we do that? We need some sort of resource that we have a lot of, and other people don’t have much of. That way we have an insurmountable advantage over them.”

“Look in front of you at your damn keyboard, brainiac,” one of the nerds presumably growled. “We nerds have all the computers and technical skill. So let’s create a currency that takes a lot of computers and technical skill to print.”

“Hey, can we use some sort of algorithm to make it harder and harder for each successive token to be created?” another nerd asked. “That way, by the time the filthy normies figure out our hustle, we’ll already have had a chance to print out a ton of this stuff and they’ll be left with the scraps.”

Once again, the nerds all agreed that this was a fine idea. They implemented a protocol called Distributed Ledger Technology to ensure that the digital tokens which their LARP would use as “money” could not be duplicated or counterfeited by any means, except for a 51% attack.

What is Distributed Ledger Technology?

Distributed Ledger Technology is the system on which Bitcoin and other such LARP money operates. It keeps track of who owns each specific token on each machine by having every machine that participates in the ledger track every transaction and “vote” on whether a transaction was real or not.

The best way to think about this is to visualize a group of old biddies playing bingo at the local church, except that these old biddies are all accountants, and instead of calling out bingo numbers, the person running the event is calling out the details of financial transactions. Instead of tracking a bingo card, the old biddies have accounting ledgers, and they record every transaction as the announcer calls it out. (And to think, some people claim that accountants don’t know how to have fun.)

Occasionally, there will be an argument about a transaction, either because some of the old biddies are hard of hearing and they don’t record the transaction properly, or because some of them are lying troublemakers. Whenever there is a disagreement about a transaction, every single biddy opens up their accounting ledger to find the specific transaction that people are arguing about, and checks what actually went down in their own records. Then all of the old biddies vote on which version of the transaction is accurate. The consensus vote of all the old biddies is determined to be the accurate version of events, and after the vote, all of the old biddies who disagreed will adjust their accounting ledgers appropriately to reflect the majority consensus.

What are the vulnerabilities of Distributed Ledger Technology?

The first and most obvious vulnerability is that the legitimacy of all transactions is based on a vote, because these old biddies are very self-interested. If you can bribe, blackmail, or befriend 51% of these biddies so that they will vote in the way you want, you can make up whatever financial transactions you want and have them be recorded as legitimate. You could even say that everybody in the world voluntarily gave their bitcoin tokens to you, and no matter how ridiculous that sounds, it would be accepted as fact if at least 51% of the biddies agree that this happened. This specific way of compromising Distributed Ledger Technology is aptly named as the “51% attack.”

The second and more subtle vulnerability is that you can work these old biddies into a coma simply by increasing the rate at which the announcer calls out transactions until the old biddies start fainting in the church pews. You see, the interesting thing about Distributed Ledger Technology is that every single transaction is recorded by every old biddy. And much as every computer has a different maximum storage size, every old biddy has a limit to her endurance. That means that you can work some of these old biddies to death simply by creating a whole lot of unnecessary transactions that every single one of them has to record. Once some of the biddies die (or have a “memory overflow” if you want to use a programming analogy) it makes it much easier for somebody to execute a 51% attack, since it’s a lot easier to get 51% of the vote when you can artificially tamper with the number of biddies who are alive. (In this analogy, the “old biddies" are the individual machines that run the Distributed Ledger Technology that powers cryptocurrency.)

Proponents of cryptocurrency acknowledge that the continual growth of the distributed ledger can eventually overtax the system, but they point out that the rate at which computer processing power grows is faster than the rate at which financial transactions naturally accumulate in an economic system based on crypto. In other words, you can speed up the rate of transactions, but the machines recording the transactions get more powerful also, so that they can easily handle the added load.

This is a valid point, but the key word in that sentence is “naturally.” The rate at which computer processing power grows is faster than the rate at which financial transactions naturally accumulate in an economic system based on crypto. But what about unnatural accumulation? Instead of running the crypto mining engines at top speed to accumulate wealth, what if somebody ran the crypto transaction engines at top speed to destroy other people’s accumulated wealth? Well, I think in that scenario, you could very easily exceed the rate at which processing power grows. It would be the equivalent of running a car engine constantly at top speed - eventually it would just give out.

The reason this vulnerability is more subtle and went unseen by most of the nerds originally involved in the creation of cryptocurrency is because they all were thinking about the normal use case parameters of the system - in other words, they assumed that everybody who participated in the system would do so in good faith and would be incentivized to try and keep the system afloat. While they understood that some participants might try to get a dominant position in the system by using a 51% attack, it never crossed their minds that some people would participate in the system simply to sabotage it from within - to destroy a trillion dollars worth of cryptocurrency simply for the pure joy of it. This is why whenever you get involved in system-building (regardless of whether said system is a corporation, a piece of software, an activist movement, or even a constitution) it is critically important to have naturally destructive people on your team to stress-test the system. Creative people are only good at thinking about how creative people will interact with their system, which leaves a lot of vulnerabilities and malicious exploits open. Destructive people are good at thinking about how destructive people will interact with your system, so they will stress-test the heck out of it. It’s sad that in our society having destructive personality traits is so unfairly stigmatized, when this trait is actually extremely useful for robust system design. This is why I believe that diversity of thought is so important in our modern society. Infohazards are all about finding that one loose thread in a system that can make the entire thing unravel, and that’s a trait that the destructive mindset is much better at, because people generally tend to be more skillful at the things which they consider fun.

How could this be applied in a real-world setting to destroy Bitcoin?

Because Bitcoin carries no inherent value (it is quite literally LARP money) its value is purely speculative. The only reason it is believed to have value is that people believe that it has the potential to become a viable monetary system. That means that bitcoin accounts need to be able to process monetary transactions with the same ease and speed as a bank processes credit card transactions. Currently bitcoin is nowhere near this benchmark. At the time of this writing, the fee for each bitcoin transaction is $23, and the wait time to process each transaction is 18 minutes, due to the necessity of validating each transaction with the blockchain. However, it is the hope of bitcoin enthusiasts that hardware technology will grow so powerful that fees can be reduced to less than a cent while wait times can be reduced to just a few seconds.

Since this future is entirely speculative, and the entire value of bitcoin comes from the perception that this speculative future may one day become a reality, you can reduce the value of bitcoin simply by introducing an infohazard that ensures there is zero chance of this ever happening. Once the bitcoin transaction fees sink so low that they are close to the rate of a credit card, you can clutter up the transaction engine simply by setting up a couple of computers with bitcoin accounts and using bots to automatically sell bitcoin back and forth to each other. The purpose of this is not to make money on the bitcoin trades - it is simply to fuck up the distributed ledger. The more processing power you can force all the participants in the distributed ledger to direct towards keeping track of your bullshit, the more difficult you make it for the bitcoin system as a whole to operate. Furthermore, since every bitcoin transaction gets tracked through the general ledger (also known as the blockchain) to ensure that it is accurate, slowing down the system enough that bitcoin transactions take several additional minutes (as the system traces every transaction for a particular block back through the ledger’s history) to process ensures that bitcoin will never see widespread adoption as currency. After all, who would want to use a “bitcoin credit card” when you’d have to wait ten minutes at the checkout line to have your transaction go through?

Additionally, if the computers that you were using to do these trades were supercomputers and were substantially more robust than every other machine that participated in the distributed ledger, you might be able to execute a 51% attack simply by overloading every other machine on the ledger. Nobody has ever done this before so it’s difficult to say what would happen if almost every machine in the distributed ledger were to crash, though it would be very exciting to find out. What could happen in the brief period of time before the crashed machines were brought back online? Could you adjust the ledger so that you controlled all several hundred billion dollars worth of bitcoin and then have the other machines adjust their count to match yours as they were brought online one by one? Or would the machines all have completely different ledgers based on the time period that they crashed? It’s possible that the distributed ledger would default back to the position that 51% of the machines were at before they crashed. Of course, since the machines running the distributed ledger have different hardware specs, they wouldn’t all go down at the same time. This could lead to some really interesting situations. It’s unclear whether your window of opportunity to fuck up the distributed ledger would be enough time for you to execute a 51% attack and seize control of all your targeted cryptocurrency, but it would certainly be enough time for you to cause all sorts of extremely interesting problems. Best of all, fucking up the distributed ledger by processing as many transactions as possible at top speed is completely legal, since you are conducting legitimate transactions exactly as the system was designed for. Your intent may be malicious, but nobody ever went to jail for malicious compliance with the letter of the law.

The last time anything similar to this happened with a cryptocurrency was when hackers stole fifty million dollars worth of Ether (another cryptocurrency that operates using distributed ledger technology). This raised questions about the security of the platform. To enhance trust in the cryptocurrency’s security, the Ethereum community decided unilaterally to reverse the hack by rewriting the ledger. What this would mean in terms of our “old biddy accountants in a church bingo hall” analogy is that the old biddies all decided to agree that the theft of fifty million dollars was worth rewriting their accounting books for, in order to ensure that users had a feeling of security in the platform itself.

Just kidding! The idea that a community of cryptocurrency users would ever agree unilaterally to something is hilarious. No, what actually happened is that some users agreed to rewrite the distributed ledger to undo the theft, and others did not. The users that agreed to rewrite their distributed ledger continued using the ethereum name for their crypto. The users that did not agree to rewrite their distributed ledgers and instead allowed the hack to be recorded called their crypto “Ethereum Classic.” In terms of our old biddy accounting analogy, half of the old biddies decided to storm out of the church and start their own financial bingo game. Since all the money utilized was imaginary, they just duplicated it. Remember, crypto is just LARP money, so you can always break off from the big LARPs such as Bitcoin or Ethereum and start your own cryptocurrency LARP simply by “forking the code,” which is nowhere nearly as dirty as it sounds. The downside is that there is a limited amount of users who want to play with this pretend money, so every time a new cryptocurrency starts, the value of all the existing cryptocurrency goes down since there is less chance that your particular cryptocurrency LARP will be adopted as a global standard.

Like all imaginary financial concepts that operate purely because of people’s irrational belief in their reality, cryptocurrency is complicated. However, the most important takeaway here is that the more people use any given cryptocurrency, the shittier it gets, because every transaction makes the distributed ledger longer and longer, which results in higher fees and longer transaction times. The second most important takeaway is that it is very easy to create new cryptocurrencies to compete with older and more established cryptocurrencies, and in fact people are almost certain to do so once the distributed ledger of an established cryptocurrency gets so bloated that it is no longer a viable currency.

What groups would be most incentivized to bring about the destruction of Bitcoin?

There are several groups that would be incentivized to bring about the destruction of Bitcoin. Since all cryptocurrencies are ultimately in competition with each other due to the fact that these LARPs collectively have a limited base of “players” (ie, people who agree to participate in that economic system), anybody who is heavily invested in a rival cryptocurrency like Ethereum or Dogecoin would benefit from the collapse of Bitcoin, since it would give their own cryptocurrency more legitimacy. Now that cryptocurrency can be traded on the commodities market, it can also be bet against by short-sellers. These people could make a lot of money by short-selling Bitcoin.

Environmentalists would also benefit from the destruction of cryptocurrency since currently cryptocurrency is very environmentally damaging. Generating cryptocurrency requires a lot of powerful computers to be run at full power (known as overclocking) and since most electrical plants still use coal power, especially in the regions of China where Bitcoin mining is most common, the process of creating Bitcoin generates a ton of pollution. Bitcoin enthusiasts claim that this is a problem that will one day be solved (like the transaction fee issue or the transaction speed issue) but they don’t really believe that - it is just self-delusional rationalization so that they can continue printing more money with a clean conscience, without feeling that they are contributing to the climate change apocalypse. As Upton Sinclair said, it is difficult to get a man to understand something when his salary depends upon his not understanding it.

Finally, the U.S. government would benefit substantially from the destruction of Bitcoin, for multiple reasons. First of all, if cryptocurrency were successful to the point that the Bitcoin advocates dream of, it would become a potential competitor to the current global reserve currency, the U.S. dollar. Second, cryptocurrency is primarily used for illegal transactions, such as drug dealing and human trafficking. Finally, one of the currencies with the highest proportion of Bitcoin miners is our geopolitical rival China, and due to the way that 51% attacks work, it’s very unlikely that our intelligence services are ever going to want to see what happens if China gets control of 51% of the world’s Bitcoin, since it would allow the CCP to effectively seize control of Bitcoin altogether - something that doesn’t seem great for our national interests.

How could I spread the information to those groups?

That’s the great thing about the internet. Spreading information is super easy! To get information to environmentalists, short-sellers, or rival cryptocurrency enthusiasts, you can simply make a post on social media. As for the intelligence agencies, you don’t even need to bother getting this information to them - they’re probably watching you already!

Anyway, the point is that once we have taken the time to understand Bitcoin not from a constructive point of view but from a destructive point of view, we now have a better sense of what steps could be taken to render it useless. By spreading that information to people who might be motivated to use it effectively, we can help ensure that Bitcoin’s development path will be a lot more unstable and challenging than it would otherwise be. This process - spotting vulnerabilities, identifying groups of people who stand to gain from said vulnerabilities, and then distributing the information directly to them - is how we create an infohazard.

For those of a certain mindset, creating infohazards can be easy and fun. Now that you know what an infohazard is and how to create one, we’ll discuss how to monetize them effectively in part 2 of this post.