How Bill Gates was attracted to Bitcoin

I have just finished reading Nathaniel Popper‘s book, Digital Gold (2015). The book is an intriguing inside story of the Bitcoin community and discusses key figures who are trying to reinvent money with Bitcoin.

There are many passages in the book that, I think, will forever stick with me. In this post, I would like to share one such passages.

The passage I have in mind is the ending part of the book in which Popper discusses how Bill Gates was attracted to Bitcoin through a conversation he had with Wences Casares, an Argentinian technology entrepreneur who had founded Argentina’s first internet service provider. Through his many connections with high profile people in Silicon Valley, Wences Casares was already able to convince the likes of Max Levchin, Marc Andreessen, David Marcus, Reid Hoffman and many more of the promise of Bitcoin.

According to Popper, Wences Casares’ conversation with Bill Gates went like this:

At the Allen & Co. conference, Wences was given one of the speaking slots before Jeff Bezos and Warren Buffett took the stage. Wences gave what was becoming a standard talk, beginning with the history of money, and going on to discuss the potential for Bitcoin to provide financial services to poor people who had long been shut out. He touched on Xapo [Wences’ latest Bitcoin startup] only briefly, at the end. After Wences came down and took a seat with Belle [Wences’ wife], Bezos said from the stage that it was the kind of talk that kept him coming to these events.
In the hallway walking to lunch, after the Bezos-Buffett conversation, Wences spotted Bill Gates, who had been notably reticent about Bitcoin. Wences knew that Gates’s multibillion-dollar foundation had been making a big push to get people in the developing world connected financially, and Wences approached him to explain why Bitcoin might help his cause. As soon as Wences broached the topic, Gates’s face clouded over, and there was a note of anger in his voice as he told Wences that the foundation would never use an anonymous money to further its cause.
Wences was somewhat taken aback, but this was not the first time he had been challenged by a powerful person. He quickly said that Bitcoin could indeed be used anonymously—but so could cash. And Bitcoin services could easily be set up so that users were not anonymous. He then spoke directly to the work that Gates was doing, and noted that the foundation had been pushing people in poor countries into expensive digital services that came with lots of fees each time they were used. The famous M-Pesa system allowed Kenyans to hold and spend money on their cell phones, but charged a fee each time.
“You are spending billions to make poor people poorer,” Wences said.
Gates didn’t just roll over. He vigorously defended the work his foundation had already done, but Gates was less hostile than he had been a few moments earlier, and seemed to evince a certain respect for Wences’s chutzpah.
Wences saw the crowd that was watching the conversation, and knew he had to be careful about antagonizing Bill Gates, especially in front of others. But Wences had another point he wanted to make. He knew that back in the early days of the Internet, Gates had initially bet against the open Internet and built a closed network for Microsoft that was similar to Compuserve and Prodigy—it linked computers to a central server, with news and other information, but not to the broader Internet, as the TCP/IP protocol allowed.
“To me it feels like you are trying to get the whole world connected with something like Compuserve when everyone already has access to TCP/IP,” he said, and then paused anxiously to see what kind of response he would get. What he heard back from Gates was more than he could have reasonably hoped for.
“You know what? I told the foundation not to touch Bitcoin and that may have been a mistake,” Gates said, amicably. “We are going to call you.”

After Wences got back to California, he received an e-mail from the Gates Foundation, looking to set up a time to talk. Not long after that, Gates made his first public comments praising at least some of the concepts behind Bitcoin, if not the anonymity.
And so Bitcoin and its believers attracted one more person who was willing to give this new technology a look, and remain open to the possibility that the whole thing wasn’t, at least, entirely crazy.

There are not many online videos of Bill Gates discussing Bitcoin. Interestingly, in this video, we can find him comparing Bitcoin to currency and asserting that “Bitcoin is better than currency”:

Nathaniel Popper – Digital Gold: Bitcoin and the inside story of the misfits and millionaires trying to reinvent money (2015)


How and why Asians and Westerners think differently (part 3)

In addition to my two previous posts on Richard Nisbett’s The Geography Of Thought (2003) that you can read here and here, I would like to list more experiments from the book that reflect the differences in thinking between East-Asians and Westerners. These experiments show that in general:

Easterners Westerners
View the world in holistic terms. View the world in analytic, atomistic terms.
View the world through a wide-angle lens – see a great deal of the field, especially background events. View the world through a narrower lens – see objects as discrete and separate from their environments.
Are skilled in observing relationships between events and explaining them in relation to one another. Are more focused and skilled in explaining events in terms of properties of objects.
Regard the world as complex and highly changeable and its components as interrelated. Regard the world as stable and linear.
See events as moving in cycles between extremes. See events as moving in linear fashion when they move at all.
Feel that control over events requires coordination with others. Feel themselves to be personally in control of events even when they are not.
Believe that changes in personal happiness are unpredictable and more likely to undergo reversals. Have a more linear thought while predicting personal happiness – from bad to good or good to bad.
Are more likely to believe that someone’s personality is more subject to change. Are more likely to believe that someone’s personality is something about them that they cannot change very much.
Are considered to have a good ability to think historically when they show empathy with historical figures, including those who were enemies. “How” questions are raised more often. Are considered to have good ability to reason historically when they are capable of adducing evidence to fit their causal model of outcome. “Why” questions are raised more often.

On seeing the world being composed of continuous substances vs being composed of discrete objects or separate atoms
Japanese and Americans of various ages from less than 2 to adulthood are presented objects composed of particular substances that are described to them in ways that were neutral with respect to whether each was an object or a substance. For example, they might show a pyramid made of cork and ask the participants to “look at this ‘dax’. ” Then they showed the participants two trays, one of which had something on it of the same shape as the object presented but which was made of a different substance and one of which had the same substance in a different shape. The investigators then asked their participants to point to the tray that had their “dax” on it. Americans were much more likely to choose the same shape as the “dax” than were the Japanese, indicating that the Americans were coding what they saw as an object. The Japanese were more likely to choose the same material as the “dax,” indicating that they were coding what they saw as a substance.

On the atomistic attitude
Participants were asked about the following definitions of a company, and which of the definitions they agree most with: (a) A company is a system designed to perform functions and tasks in an efficient way. People are hired to fulfill these functions with the help of machines and other equipment. They are paid for the tasks they perform; or (b) A company is a group of people working together. The people have social relations with other people and with the organization. The functioning is dependent on these relations.

About 75% of Americans chose the first definition. More than 50% of Canadians, Australians, British, Dutch, and Swedes chose that definition, and about a third of Japanese and Singaporeans chose it. Germans, French, and Italians were intermediate between the Asians and the people of British and northern European culture.

On personal experiences of the world
American and Chinese children between 4 and 6 years of age were asked to report on their daily events. They found the following three remarkable things:

  1. The proportion of self-references was more than three times higher for American children than for Chinese children;
  2. Chinese children provided many small details about events and described them in a brief, matter-of-fact fashion. American children talked in a more leisurely way about many fewer events that were of personal interest to them;
  3. American children made twice as many references to their own internal states, such as preferences and emotions, as did the Chinese children.

In short, American kids prefer talking about themselves much more than do Chinese kids.

On taking the orientation of other people into perspective
North-American students and Asian students were asked to recall specific instances of ten different situations in which they were the center of attention. North Americans were more likely than Asians to reproduce the scene from their original point of view, looking outward. Asians were more likely to imagine the scene as an observer might, describing it from a third-person perspective.

On viewing the world through a wide-angle lens vs tunnel vision
Students at Kyoto University and at the University of Michigan were shown eight color animated underwater vignettes with scenes that were all characterized by having one or more “focal” fish, which were larger, brighter, and faster-moving than anything else in the picture. Each scene also contained less rapidly moving animals, as well as plants, rocks, bubbles etc. The scenes lasted about twenty seconds and were shown twice. After the second showing, participants were asked to say what they had seen. Their answers were coded as to what they referred to.

Americans and Japanese made about an equal number of references to the focal fish, but Japanese made more than 60% more references to background elements, including the water, rocks, bubbles, and inert plants and animals. In addition, whereas Japanese and American participants made about equal numbers of references to movement involving active animals, the Japanese participants made almost twice as many references to relationships involving inert, background objects. Perhaps most tellingly, the very first sentence from the Japanese participants was likely to be one referring to the environment (“It looked like a pond”), whereas the first sentence from Americans was three times as likely to be one referring to the focal fish (“There was a big fish, maybe a trout, moving off to the left”).

Then 96 objects were shown to the participants, half of which they had seen before and half of which they had not seen before. Some objects were shown in their original environment and some were shown in a novel environment. The ability of the Japanese to recall that an object was seen before in the original environment than when it was shown in a new environment was substantially greater. This however, made no difference at all to Americans.

The speed of Japanese judgements was also impaired when the objects were presented against a novel background, whereas Americans’ judgement speed was not affected.

On controlling vs adjusting to the world
When Japanese and American students were asked to tell about incidents in their lives in which they had adjusted to some situation and incidents in which they had been in control of the situation, the incidents of adjustments were apparently more common for the Japanese. Incidents of control were more common for Americans. The Americans also said that they felt awkward, anxious, and incompetent when they had to adjust to a situation.

On beliefs about change
Students from the University of Michigan and Beijing University were asked how likely they thought it was that some state of affairs would undergo a radical change. Chinese thought change was likely about 50% of the time and Americans thought change was likely about 30% of the time.

In addition, the students were shown graphs with alleged trends like world economy growth rate or world cancer death rate. When asked for their predictions, Americans made more predictions that were consistent with the trends shown to them than did the Chinese. The Chinese are more likely to predict a reversal in direction of change than Americans were.

On predicting the course of their own life happiness
When students were asked to predict their own life happiness, they were shown 18 different trends to choose from. Six trends were linear and twelve were non-linear, either stopping or reversing. Almost half of the Americans chose one of the six as the most probably, whereas fewer than a third of the Chinese choices were linear.

Westerners believe that their own futures will move continuously in a single direction – from bad to good or good to bad. East Asians might expect their lives to undergo reversals of fortune – from good to bad to good, or from bad to good to bad.

On newspapers’ portrayal of criminals
When a physics student at the University of Iowa lost an award competition and failed to obtain an academic job, he shot his adviser, the person who had handled his appeal, several fellow students and bystanders, and himself.

The American campus newspapers focused almost entirely on the student’s presumed qualities – murderer’s psychological foibles, attitudes and psychological problems. Chinese reporters emphasized causes that had to do with the context in which the student operated. Explanations centered on his relationships, pressures from Chinese society and aspects of the American context. Systematic analysis of the New York Times and the Chinese-language newspaper the World Journal reflected that in general, the Chinese newspaper focused more on context and less on personal attitudes and psychological attributes.

On causes of behavior
Korean and American college students were asked about their agreement with the following three statements:

  1. How people behave is mostly determined by their personality;
  2. How people behave is mostly determined by the situation in which they find themselves;
  3. How people behave is always jointly determined by their personality and the situation in which they find themselves.

Koreans and Americans regarded personality (1) as equally important in determining behavior, but Koreans rated situational factors (2) and the interaction between situations and personality (3) as more important than Americans did.

On malleability of personality
When the students were asked whether they thought that someone’s personality is something about them that they cannot change very much, the Koreans thought that personalities are more subject to change than the Americans did.

On “Fundamental Attribution Error”
East-Asian and Western students were asked to read an essay written by another student called the “target”. It was made clear that the target had been required to write the speech or essay upholding a particular side of a particular issue. All students reading the target’s essay were inclined in error to believe that what they were reading reflected the actual beliefs of the target. However, there is a difference between East-Asian and American susceptibility. East-Asians don’t make the error if they have been placed in the target’s shoes first. Americans’ dispositional inferences about others were as strong as if they had not themselves experienced exactly the target person’s situation.

On causal attributions
Japanese history teachers begin with setting the context of a given set of events in some detail. Emphasis is put on the initial event that serves as the impetus to subsequent events. They then proceed through the important events in chronological order, linking each event to its successor. The students are encouraged to imagine the mental and emotional states of historical figures by thinking about the analogy between their situations and situations of the students’ everyday lives. Students are regarded as having good ability to think historically when they show empathy with the historical figures, including those who were Japan’s enemies. “How” questions are asked frequently – about twice as often as in American classrooms.

American teachers spend less time setting the context than Japanese teachers do. They begin with the outcome, rather than with the initial event or catalyst. The chronological order of events is destroyed in presentation. Instead, the presentation is dictated by discussion of the causal factors assumed to be important (“The Ottoman empire collapsed for three major reasons”). Students are considered to have good ability to reason historically when they are capable of adducing evidence to fit their causal model of outcome. “Why” questions are asked twice as frequently in American classrooms as in Japanese classrooms.

On estimation that a past event could have been predicted
Participants were told about a young seminary student who was a very kind and religious person. Heading across campus to deliver a sermon, he encountered a man lying in a doorway asking for help. The participants were told that the seminarian was late to deliver his sermon.

In condition A, participants did not know what the seminary student had done, and were asked to estimate the probability that the target would help and how surprised they would be if they were to find out that he had not helped. Both Koreans and Americans reported about an 80% probability that the target would help and indicated that they would be quite surprised if he did not.

In condition B, participants were told that the seminary student had helped the victim and in condition C, that the target had not helped the victim. Participants in conditions B were asked what they believed would have regarded as the probability that the student would have helped – if in fact they had not been told what he did – and also how surprised they were in his actual behavior. Again, both Koreans and Americans in condition B indicated they would have thought the probability of helping was about 80% and both groups reported no surprise that he did help.

Americans in condition C, in which the student unexpectedly did not help the victim, also reported that they would have thought the probability was about 80% that the student would have helped and they reported a great deal of surprise that he did not do so. Koreans in condition C, however, reported that they would have thought the probability was only 50% that the student would have helped and they reported little surprise that he did not. So Americans experienced surprise where Koreans did not and Koreans showed a pronounced hindsight bias, with many indicating they thought they knew something all along which in fact they did not.

Easterners are almost surely closer to the truth than Westerners in their belief that the world is a highly complicated place and Westerners are undoubtedly often far too simple-minded in their explicit models of the world. Easterners’ failure to be surprised as often as they should may be a small price to pay for their greater attunement to a range of possible causal factors.

How and why Asians and Westerners think differently (part 2)

In my previous post on how Asians and Westerners think differently, I discussed the differences of thought between ancient China and ancient Greece as contended by the social psychologist Richard Nisbett in The Geography Of Thought (2003). In this post, I would like to list a number of experiments in the book that reflect the differences. In general, what these experiments show is that:

Easterners Westerners
Live in an interdependent world in which the self is part of a larger whole. Live in a world in which the self is a unitary free agent.
Value success and achievement in good part because they reflect well on the groups they belong to. Value success and achievement, because they are badges of personal merit.
Value fitting in and engage in self-criticism to make sure that they fit in and improve themselves. Value individuality and strive to make themselves look good.
Are highly attuned to the feelings of others and strive for interpersonal harmony. Are more concerned with knowing themselves and are prepared to sacrifice harmony for fairness.
Are accepting of hierarchy and group control. Are more likely to prefer equality and scope for personal action.
Avoid controversy and debate. Have faith in the rhetoric of argumentation in arenas from the law to politics to science.

I think that most of the findings in the experiments are well in line with many people’s stereotypes of East-Asians: they are modest, self-reflective, care about social harmony, dependent on their parents, indirect and hard to read, less individualistic, and having an inclination to avoid arguments.

On self-reflection of personal traits
When asked, “Tell me about yourself”, North-Americans tell more about their personal traits (“friendly, hardworking”), role categories (“teacher”, “I work for a company that makes microchips”), and activities (“I go camping a lot”). East-Asians describe themselves more often within contexts (“I am serious at work”, “I am fun-loving with my friends”), and make references to social roles (“I am Joan’s friend”).

On measuring own qualities
When Americans and Canadians had to measure their qualities, they all rated themselves above average. Asians rate themselves much lower in most dimensions, endorsing fewer positive statements and insisting on their negative qualities more. Even when self-ratings occur anonymously, Asians show much more modesty about their qualities. This suggests that they do not only appear more modest, but are indeed more modest.

On preference for distinctiveness
North-Americans characteristically overestimate their distinctiveness. They also prefer uniqueness in the environment and in their possessions. In an experiment where Koreans and Americans had to choose which object in a pictured array of objects they preferred, Americans chose the rarest object and Koreans the most common one. Asked to choose a pen as a gift, Americans chose the least common colour, whereas East-Asians chose the most common.

On self-improvement
When experimenters asked Canadian and Japanese students to take a bogus “creativity” test and then gave the students “feedback” indicating that they had done very well or very badly, the experimenters secretly observed how long participants worked on a similar task. Canadians worked longer on the task if they had succeeded; the Japanese worked longer if they failed. The Japanese weren’t being masochistic. They simply saw an opportunity for self-improvement and took it. The study shows intriguing implications for skill development in both the East and West. Whereas Westerners are likely to get very good at a few things they start out doing well to begin with, Easterners seem more likely to become good in all trades.

On dependence on the mother
American, Chinese, and Japanese children aged 7-9 were asked to solve such anagrams as “What word can be made from GREIT?” Some of the children were told to work on a particular category of anagrams, other children were given a choice about which anagrams to solve, and still others were told that the experimenter had spoken to the child’s mom who would like the child to work on a particular category. The American children spent most time working on tasks when they were allowed to choose the category themselves. They showed the least motivation when it was Mom who chose the category. Asian children showed the highest level of motivation when Mom chose the category.

On toddler-mother play
When American mothers play with their toddlers, they tend to ask questions about objects and supply information about them. Japanese mothers, on the other hand, asked questions that are more likely to concern feelings (“The wall says ‘ouch’” or “The toy is crying because you threw it”). This suggests that American parents are preparing their children for a world in which they are expected to act independently, whereas Asian parents are preparing their children to anticipate reactions and coordinate their own behavior.

On awareness of feelings
Asians are more accurately aware of feelings and attitudes of others than Westerners. When Koreans and Americans were shown evaluations that employers had made on their employees on rating scales, the Koreans were better able to infer from the ratings what the employers felt about the employees.

The Asian greater awareness of feelings also extends to non-human beings. When Japanese and American students were shown an underwater video and asked what they saw, Japanese students reporting “seeing” more feelings and motivations on the part of fish than did Americans. The Japanese for example said: “The red fish must be angry, because its scales were hurt”.

Similarly, when Chinese and American students were shown animated pictures of a moving group of fishes that appear to be chasing an individual fish and pictures of a group of moving fishes that are approached by the individual fish, the Americans had great difficulty to comply to the request. The Chinese reported much easier the group emotions of the fishes.

On the use of direct and indirect language
Westerners communicate their ideas clearly so that they are more or less understood independently of the context. Asians communicate ideas more indirectly that can only be understood within proper context. If a child’s loud singing annoys an American parent, the parent would be likely just to tell the kid to pipe down. The Asian parent would be more likely to say, “How well you sing a song.” At first the child might feel pleased, but it would likely dawn onto him that something else might have been meant and the child would try being quieter or not singing at all. The consequence is that Westerners are apt to find Asians hard to read, whereas Asians may find Westerners rude.

On individual distinction vs harmonious relations with the group
Managers were asked which of the following types of job they preferred: (a) jobs in which personal initiatives are encouraged and individual initiatives are achieved; versus (b) jobs in which no one is singled out for personal honor, but in which everyone works together. More than 90% of American, Canadian, Australian, British, Dutch, and Swedish respondents endorsed the first choice. Fewer than 50% of Japanese and Singaporeans preferred the first choice. Germans, Italians, Belgians, and French were intermediate.

On the relationship with corporations where one is employed and the connection with one’s colleagues there
When participants were asked to choose between (a) I will most certainly work for a company for the rest of my life; or (b) I am almost sure the relationship will have a limited duration, more than 90% of Americans, Canadians, Australians, British, and Dutch preferred option 1. This was only true for about 40% of Japanese. The French, Germans, Italians, and Belgians were again intermediate.

On relative value placed on achieved vs ascribed status
Participants were asked whether they shared the following view: becoming successful and respected is a matter of hard work. It is important for a manager to be older than his subordinates. Older people should be more respected than younger people.

More than 60% of Americans, Canadian, Australian, Swedish, and British respondents rejected the idea of status being based on any way of age. About 60% of Japanese, Korean, and Singaporean respondents accepted hierarchy based in part on age. French, Italians, Germans, and Belgians were again intermediate.

On universally applicable rules vs special consideration of cases based on their distinctive aspects
Participants are presented the case of an employee whose work for a company though excellent for fifteen years, has been unsatisfactory for a year. If there is no reason to expect that performance will improve, should the employee be (a) dismissed on the grounds that job performance should remain the grounds for dismissal, regardless of the age of the person and his previous record; or (b) is it wrong to disregard the fifteen years the employee has been working for the company?

More than 75% of Americans and Canadians felt the employee should be let go. About 20% of Koreans and Singaporeans agreed with that view. About 30% of Japanese, French, Italians, and Germans agreed and about 40% of British, Australians, Dutch, and Belgians agreed.

On marketing advertisements that emphasize individual benefits vs collective benefits
American advertisements emphasize more on individual benefits and preferences (“Make your way through the crowd”; “Alive with pleasure”). Korean advertisements are more likely to emphasize collective ones (“We have a way of bringing people closer together”; “Ringing out the news of business friendships that really work”). It was found that individualist advertisements were more effective with Americans and the collectivist ones with Koreans.

On rhetoric of argumentation
The whole of rhetoric of argumentation that is second nature in Westerners is largely absent in Asia. North-Americans begin to express opinions and justify them as early as the show-and-tell sessions of nursery school (“This is my robot; he’s fun to play with because…”). In contrast there is not as much argumentation or trafficking in opinions in Asian life.