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> Cryptocurrencies, even those that turn out to be highly plutocratic, will not turn any part of the world into anything close to dystopia A This is only true

> Cryptocurrencies, even those that turn out to be highly plutocratic, will not turn any part of the world into anything close to dystopia A This is only true iff the meme that "crypto is eating the world" is false, i.e. if a future where crypto is more and more enmeshed in an individual's economic life doesn't pan out. This is possible and maybe even likely, but it is somewhat ironic to hear such a bearish case on crypto's usfeulness made by vbuterin :) > First, start with some utility function representing the value of having a certain amount of money. `log(x)` is popular, because it captures the intuitively appealing approximation that doubling one's income is about as useful at any level: going from $10,000 to $20,000 adds the same utility as going from $5,000 to $10,000 or from $40,000 to $80,000). This is not intuitive to me. Intuitively, going from 10K to 20K is not the same as going from 1M to 2M. In the former case, you cross the USA poverty line[1], in the latter, you can afford a couple more Lambos. Is there something I'm missing in the use of the word "utility"? [1]: https://en.wikipedia.org/wiki/Poverty_threshold#United_States https://en.wikipedia.org/wiki/Poverty_threshold#United_State...

arianon 5y ago
> Is there something I'm missing in the use of the word "utility"? Vitalik uses the word "utility" the same way (mainstream) economists do: A numeric estimation of the satisfaction, pleasure, benefit, advantage, or happiness given by an increase in wealth. What you're calling out is that the concept itself is problematic: as you pointed out, the assumption of log-utility of wealth is not entirely accurate because, in reality, increments in wealth have diminishing utility. There are other limitations with the idea, for example, is it possible to capture in a utility function the well-accepted notion that losing a given amount of money is more painful than it is pleasurable to gain it? Or that receiving a small amount of money now may have much more utility than receiving a large amount of it in the future? Maybe, maybe not, but this is how economists attempt to capture and quantify human behavior regarding our wants and needs for wealth, inadequate as it is.

arianon 5y ago

> Is there something I'm missing in the use of the word "utility"? Vitalik uses the word "utility" the same way (mainstream) economists do: A numeric estimation of the satisfaction, pleasure, benefit, advantage, or happiness given by an increase in wealth. What you're calling out is that the concept itself is problematic: as you pointed out, the assumption of log-utility of wealth is not entirely accurate because, in reality, increments in wealth have diminishing utility. There are other limitations with the idea, for example, is it possible to capture in a utility function the well-accepted notion that losing a given amount of money is more painful than it is pleasurable to gain it? Or that receiving a small amount of money now may have much more utility than receiving a large amount of it in the future? Maybe, maybe not, but this is how economists attempt to capture and quantify human behavior regarding our wants and needs for wealth, inadequate as it is.