Sam Williams: Mechanism Design 101

Sam Williams, founder and CEO of decentralized storage system Arweave, gives an overview of “Mechanism Design,” a field of study that has become newly relevant with the development of Bitcoin and subsequent blockchains that require carefully designed incentives for network participants. Williams uses examples to show that economic incentives, when designed properly, can persuade self-interested people to exhibit useful behaviors at fair market value with minimal central planning. This provides a new tool to bootstrap decentralized networks. He cautions, however, that poorly conceived incentive systems can overpower moral frameworks in ways that can be dangerous. This could be harmful, he says, in decentralized protocols, since self-executing code may not easily be altered to curtail unintended consequences. Williams closes with a case study of his company, Arweave, and the way it created an endowment-style financial incentive system to build a platform where data can be secured forever. This kind of model opens the door to new kinds of community-owned networks that can’t be manipulated by central owners.

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[davemontore]

Not a developer or even technically inclined, but I hung in there almost until the 3/4 mark. Until about 35:10 when he said that content would be moderated by code but then didn't explain how that's even possible. Or maybe he did explain it and it went so far over my head... But if anyone has an idea how to explain it, I'd love to hear it. Fascinating video anyway.

[fiosaoar]

One of the best classes in this course. Thank you so much

[joet]

Bitcoin incentivizes entrepreneurs who produce cheap electricity competition in the minning space then leads to innovation in the energy biz cause there is a decentralised incentive to do it ( BTC) Satoshi still king in incentive designs.

[prasadmahadik]

Wow, genius in using the decreasing cost of storage and creating an inflating asset out of it.

[orjihvy]

Can you provide links to the reading materials cited?

[nandit]

this video fills a deeply missing link

[ramdas]

Moderated questions are lame and antithetical to the spirit of the talk. How do we know the presenter didn't rehearse the QA? Why is there a live audience if all they're allowed to do is sit there like sheep and not say anything?
Blockchains are about verifying instead of trusting. The general public better treat their investments in general the same way. This is what VC firms do internally but obviously their business model is all about you having less information then them so "talks" like these are nothing but sales pitches.

[jdchannelviewer]

Like paying US Govt paying hospitals per covid patient and covid death...

[ddddddddd]

Maybe in Mechanism Design 301 he will get to how all rewards put into crypto markets by capital donors are spread until equilibrium is reached near the marginal cost of shitcoin shilling.

[PopovicBozo]

What a loss! Some guys should just stick with their developer tools.