#18 - Blockchain and Alchemy

Welcome to the new subscribers, and thank you all for the comments and feedback on my last newsletter — please keep them coming!

As I mentioned in my introductory post, my goal for this experiment is to sharpen my writing and thinking, to meet like-minded people, and to promote healthier discourse. If you know anyone who would be interested in the discussion, please forward this along or have them subscribe.

Alchemy Blockchain

Blockchain and Alchemy

Some personal news: This week, I joined Alchemy, a blockchain startup, to help build out its developer community and experience. Alchemy is an incredibly interesting company, and I’m excited to join the family, but what is Alchemy, and why is it their time?

Blockchain hype

One of the recurring themes of this newsletter is that emerging technologies create paradigm shifts in how we experience the world and are one of the primary drivers of growth in societal welfare. In my opinion, blockchain is one of these emerging technologies. When most people hear about blockchain, though, they think of the crypto bubble of 2017, when Bitcoin reached $20k and hundreds of people were attaching a blockchain to every application under the sun, getting rich off “Initial Coin Offerings.” But three years later, we still don’t really see a “killer” application for blockchain. What’s with all the blockchain hype?

The core of blockchain is decentralization. I won’t re-hash in-depth all the great pieces written about blockchain and decentralization — It can all be summed up like this: In a fully decentralized world, whenever I want to make any sort of agreement (e.g., to transfer money, to perform work, to share content, etc.,) with anyone else, I don’t need a centralized institution (e.g., banks, courts, companies, etc.,) sitting in the middle to facilitate the agreement. I can just transact with the other person directly, regardless of whether I actually trust that person. The blockchain will cryptographically ensure that the transaction is fulfilled without fraud or piracy. If I don’t like the rules of a system of transactions, I can re-write the rules, and others can join me in my world of new rules. This is hugely important because centralized institutions write their own rules and inevitably extract value from the transaction, but users have no say in that extraction. For example, Facebook facilitates transactions (i.e., connecting, viewing posts, etc.,) but extracts user data to power its ads machine and utilizes an opaque ranking algorithm to get more eyeballs on its ads.

Moreover, from decentralization flow all the other subsidiary properties and benefits of blockchain. For instance, to verify that transactions were fulfilled without fraud, blockchains fundamentally require a level of transparency and auditability. To ensure that no bad actors can retroactively undo a transaction, blockchains fundamentally require that transactions are immutable. That is, once a transaction has been recorded, it is forever baked into the transaction history. To ensure that I am who I say I am when I participate in a transaction or make an agreement, blockchains fundamentally require robust identity authorization and verification. So, given all these inherent properties of blockchain, you might imagine that one great application (among many!) would be supply chain management, to ensure that a product is documented correctly as it moves from its origin through all its touch points. And indeed, olive oil producers are beginning to use blockchain specifically to track olive oil across the supply chain and assure food safety and quality.

Given all this, blockchain is an emerging technology that presents a fundamental change from how we currently experience the world. And although we haven’t seen an explosion in killer blockchain applications, blockchain is still in its nascent stages and will hit the inflection point in the S-Curve of innovation only in a matter of time.

Alchemy and the power of platforms

So blockchain is a matter of when, not if. That said, one of the limiting factors right now is that, well, blockchain development is intimidating and not so easy to get started. Sure, there are a bunch of tutorials for writing your first dummy blockchain application, but what about actually deploying your applications to a blockchain and running, scaling, and monitoring your apps? Alchemy’s mission is to be the go-to platform for blockchain development, to be the entrypoint for new blockchain developers. In other words, Alchemy is reducing the friction for blockchain development, thereby accelerating blockchain’s inevitable trend.

We’ve actually seen these types of businesses before, but in other contexts. For instance, Amazon AWS provides developers with the building blocks for deploying and growing their web applications. Without AWS, new software companies would need to build their own servers and data centers and worry constantly about maintenance / uptime / speed. Instead, AWS provides these services “on the cloud,” and the complexity of having to do things yourself become “abstracted away.” You just plug in and play, and Amazon takes care of the rest. Thanks to AWS, we’ve seen a massive decrease in start-up costs. Whereas previously, entrepreneurs would come to VCs with an idea and seek funding to purchase their servers, today, entrepreneurs go to VCs with a prototype and seek funding to iterate and scale their app.

Another example is this website right here, Substack. Substack provides writers with a fully-functional, out-of-the-box newsletter / blog. Without it, writers would need to work with a myriad of different software providers. For instance, perhaps they’d need to use Mailchimp to configure a mailing list; Stripe to integrate payments; Wordpress to handle the layout of the blog; etc. Thanks to Substack, though, we’ve seen an explosion in the number of newsletters. People previously didn’t have the time or the knowhow to setup blogs, but now, the activation energy is so low that Substack has turned individuals into writers.

The reason I’m so passionate about these types of businesses is that they’re platforms. Bill Gates once said that “a platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it.” This explains Microsoft's rabid focus on developers, developers, developers. A platform’s entire existence depends on its ability to empower creative people to create new value. Another recurring theme of this newsletter is that entrepreneurialism is good. Innovation is good. And platforms reduce the barrier to innovation.

Of course, even though platforms like Alchemy reduce the barrier to innovation, innovation remains a barrier nonetheless, and developers still need to overcome some activation energy. So, my focus at Alchemy will be to help grow its developer community. Indeed, Alchemy started off as an enterprise-grade blockchain solution, but now we're expanding our scope to serve individual blockchain developers. Specifically, I’ll be focusing on how we can introduce new developers to the blockchain community and create the most seamless blockchain development experience in the world.

The story of innovation throughout the PC, Internet, and mobile eras has been the proverbial “letting a thousand flowers bloom:” Developers have the freedom to tinker with technology, taking risks and building new things. Sure, some of them fail, but others succeed wildly, bringing the rest of society up along with them. Blockchain will follow the same arc, and Alchemy is here to be the enabler underneath it all. 

📚 4 articles

The U.S. Digital Service Academy. Ex-Google CEO Eric Schmidt is leading a federal initiative to launch a university that would train a new generation of tech workers for the government. I’m largely in support of this move for 4 reasons: (1) The government has traditionally played a large and important role in innovation, but over the past couple of decades, we’ve seen a huge brain drain from government to industry. The public sector is uniquely equipped to tackle certain problems. (2) This move recognizes that technologists are just as important to U.S. national security and welfare as the traditional military is. Compare, for instance, this U.S. Digital Service Academy with the U.S. Naval Academy. (3) This may inspire a higher sense of civic duty among technologists, even those who don’t attend the academy.

Microsoft acquiring TikTok? No concrete details yet, but keep your eyes peeled. The TikTok conversation has been heating up, not only in the U.S., but globally. To Western politicians, the danger of TikTok boils down to: TikTok is a Chinese company, and the Chinese Communist Party, at any moment’s notice, can, in the shadows, require that TikTok both fork over troves of user data (i.e., surveillance) and manipulate its algorithms (i.e., brainwashing). To be clear, I don’t think this is happening, but the fear is that it could happen. But then, why not also fear Facebook? After all, Facebook has control over even more user data than TikTok, and Facebook controls the eyeballs of literally billions more people. The reason: A government holds a monopoly over sanctioned violence and inevitably surpasses all other entities in its power to take away our civil liberties. Anyways, I’m not sure if Microsoft will end up acquiring TikTok. Some other things that could happen: The U.S. unwinds the Bytedance <> Musical.ly merger (Musical.ly turned into TikTok post-merger); The U.S. completely bans TikTok altogether.

The House Antitrust hearings. Okay, wait, let’s be clear about the bullet point above: Yes, Western politicians are relatively more afraid of TikTok, but they are nonetheless absolutely afraid of Facebook, Amazon, Google, and Apple. This past Wednesday, the CEOs of these four companies testified to the House Committee on the Judiciary about “antitrust” stuff. Interestingly enough, a non-negligible amount of the conversation wasn’t about market power and competition, but about things like relations with China and content moderation, which are tangential, at best. Anyways, in the past few years, big tech has become a punching bag for the American people, but if we want to have a productive conversation about tech regulation, we should be precise in what exactly we are asking tech companies to do and what exactly we want the outcome to be. I’ve previously written about “breaking up big tech” and a popular but intellectually dishonest position against Facebook.

Some scientists are taking a DIY coronavirus vaccine, and nobody knows if it’s legal or if it works. I love the headline to this article. It’s hilarious. Like, really, is this legal? I don’t know that much about the FDA, but I can come up with plausible arguments for both sides. Famous geneticist George Church is apparently a supporter of the DIY vaccine, saying that it’s “extremely safe” and that the worst possible downside is that it’s ineffective.

#17 - Six takeaways from the Twitter hack

Welcome to the new subscribers, and thank you all for the comments and feedback on my last newsletter — please keep them coming!

As I mentioned in my introductory post, my goal for this experiment is to sharpen my writing and thinking, to meet like-minded people, and to promote healthier discourse. If you know anyone who would be interested in the discussion, please forward this along or have them subscribe.

Six takeaways from the Twitter hack

So, uh, this happened:

The Twitter accounts of major companies and individuals have been compromised in one of the most widespread and confounding hacks the platform has ever seen, all in service of promoting a bitcoin scam that appears to be earning its creator quite a bit of money.

The chaos began when Tesla CEO Elon Musk’s Twitter account was seemingly compromised by a hacker intent on using it to run a bitcoin scam. Microsoft co-founder Bill Gates’ account was also seemingly accessed by the same scammer, who posted a similar message with an identical bitcoin wallet address.

Shortly after the initial wave of tweets from Gates and Musk’s accounts, the accounts of Apple, Uber, former President Barack Obama, Amazon CEO Jeff Bezos, Democratic presidential candidate Joe Biden, hip-hop mogul Kanye West, and former New York City mayor and billionaire Mike Bloomberg, among others, were also compromised and began promoting the scam.

This has got to be the worst social media hack of all time. Although we still don’t have a full picture of exactly what happened, I have six important takeaways (based on what we already know):

First, yes, this was terrible, but it could have been way worse. The hackers compromised prominent accounts to scam individuals into routing bitcoin (approximately $120,000 worth) to the hackers’ accounts. Imagine if the hackers had wanted to take the entire stock market for a ride. They could’ve just hacked into Elon Musk’s account and tweeted something crazy about Tesla (yes, something even crazier than “taking it private. Funding secured!”). Or, if they wanted to stir up geopolitical conflict, they could have hacked into Trump’s account and tweeted something crazy about China and nuclear war.

Second, a recurring theme throughout this newsletter has been that technology leverages creativity in both positive and negative ways, and everyone should have a more balanced perspective on technology. Of course, most people leverage technology for good. That said, to the technology lovers: We can’t rid the world entirely of bad actors, and for every great thing that technology has given us, there’s another side of the coin, where technology is used for evil. And to the technology haters, the opposite: It’s natural to focus on the negative outcomes like this Twitter hack, but we shouldn’t forget about all the great things that have come from innovation.

Third, the private sector heavily rewards entrepreneurs who take creative positive risks, but as far as I know, we don’t have rewards for entrepreneurs who brainstorm negative risks and mitigate them proactively. Sure, the government has people for risk mitigation, but there’s been an ongoing brain drain from the public sector to the private sector. What’s worse: Silicon Valley-ites infamously dump on downers who aren’t all gung-ho optimistic about the technological future. I, however, think we need to have these creative “downers” right inside the Twitters, Facebooks, and other tech companies of the world, to prevent downside risk. They should be integrated into product and infrastructure teams, always asking the question of what can possibly go wrong.

Fourth, this hack isn’t the first time something like this has happened to Twitter. Apparently, the hackers solicited Twitter employees, who have “god mode” admin access to accounts, to help with the hack. In 2019 two former Twitter employees were also charged with accessing the accounts of Saudi Arabian dissidents in 2015, and in 2017 a contractor deactivated the account of President Trump. Listen, it’s one thing for a company to suffer from a novel attack vector, but it’s quite another for a company to suffer from the same attack vector multiple times and flail in its response. This demonstrates not only a lack of creativity but a lack of prudence.

Fifth, Twitter’s band-aid solution was extreme, but it may be something we see more of. In response to the hack, Twitter apparently took the extraordinary step of blocking verified accounts (the ones with blue check marks) from tweeting. In my third point, I suggested that companies need to be proactive rather than reactive in mitigating risk. Twitter’s move here is completely reactionary and essentially admits: We have no idea what’s going on, so we’re just going to turn everything off. To be clear, I’m not exactly condemning this response. After all, if something bad is happening and you really don’t know why or how it’s happening, the tools you have at your disposal are necessarily blunt. A parallel here is Facebook’s recent proposed ban on political advertising in the days leading up to the election. The thinking is that, well, a halt on ads could defend against misleading election-related content spreading as people prepare to vote. If Facebook doesn’t know how misinformation is going to spread, and the damage is disproportionately large in the days before the election, then I guess it makes sense to shut the whole apparatus down? I’m not sure. Maybe more companies will start going down this route, but I’d still rather that companies take the preliminary step of creatively brainstorming what’s going to go wrong.

Sixth, and most controversially, you might actually be able to spin this hack as a good thing. Writer Byrne Hobart kinda’ makes this case. Essentially, assume that there are two types of bad actors going around hacking sites: (1) Those who hack for their own personal gain; (2) Those who want to watch the world burn. If you’re a type (1) hacking into Twitter (which is probably what these hackers were), then conducting a bitcoin scam may be the only payoff you have a reasonable chance to collect. Other ways of making personal profit may result in higher returns but are way too risky to pull off. Therefore, according to Hobart, “Bitcoin creates a sort of global bug bounty. If Bitcoin scammers hadn’t found this vulnerability, maybe North Korean hackers or the PLA would have.” In other words, bitcoin incentivizes hackers to find network vulnerabilities in search for (relatively) modest financial gains. The downside from these type (1) hackers is not nearly as bad as the downside from type (2) hackers, who may have pulled off some of the theatrics I described in my first point. To be honest, I’m not sure how much I buy Hobart’s argument. At the end of the day, hacking is still hacking, you’re still taking from other people, and I’d still rather that networks themselves brainstorm all attack vectors / implement their own bug bounties. Nevertheless, Hobart’s point is an interesting one.

📚 5 articles

Venture capital doesn’t build the things we really need. I’ve previously written that VC’s obsession with software-based businesses may be blinding them to riskier (but more impactful) investments into deep tech. This article dives into that idea a bit more.

Google is building holographic glasses, smart tattoos, and more! Extremely cool. There’s a lot of criticism that the big tech firms aren’t really innovating anymore and that they’re just milking their cash cows and copying / acquiring the innovative start-ups. While I think that’s true to some extent, this article shows that it’s not always the case.

De-escalating social media. An innovative idea to let Twitter users essentially attach “sorry, I was wrong” labels to their posts. The hope is that this would de-escalate conflict and misinformation on the platform while also providing opportunities for forgiveness and healthier discourse. This idea could be generalizable to all social media platforms.

An interview with a VC investing in “technical risk.” Early-stage investing inherently involves different types of risk. There’s execution risk—is this the right team? There’s market risk—will consumers (the market) be receptive to the product, and how will competitors respond? There’s regulatory risk—will the government clamp down on this? There’s technical risk—will this technical solution work? And more. The venture capitalist interviewed in the article (Ashmeet Sidana) is focusing on technical risk. The most interesting quote from the interview: “Silicon Valley is a tech investing ecosystem, but most of its participants aren’t solving hard technical problems. They have market insights or consumer insights. It’s the difference between Google and Facebook. Google figured out how to index better, how to better prioritize a sorting problem. Facebook was started with the consumer insight that people want to be connected with each other. I focus on companies based on technical insights. Most VCs don’t.”

Silicon Valley and the death of serendipity. If Silicon Valley became Silicon Valley thanks to fortuitous encounters between really smart people, will COVID-19 and the shift to remote work signal the end of Silicon Valley? Three comments here: (1) I’m not sure I accept the premise that serendipity forms the backbone of Silicon Valley. Yes, the article cites a couple of examples (Facebook and PayPal), but I don’t think these examples are generalizable for the entire industry. I think connections are way more important than serendipity. (2) Even if serendipity is the backbone, I don’t think remote work is a permanent trend that will affect the number / quality of chance in-person encounters. Most of the smart, young people I talk to hate remote work and are excited to get back to in-person work. Sure, maybe remote work appeals to older folk with more stable lives. But the entrepreneurialism and serendipity of Silicon Valley is mainly about attracting the big risk takers, not the ones looking to settle down. (3) Even if the big risk takers begin working remotely, I’m confident tech will find a solution to manufacture serendipity.

#16 - Amazon acquires Zoox

Welcome to the new subscribers, and thank you all for the comments and feedback on my last newsletter — please keep them coming!

As I mentioned in my introductory post, my goal for this experiment is to sharpen my writing and thinking, to meet like-minded people, and to promote healthier discourse. If you know anyone who would be interested in the discussion, please forward this along or have them subscribe.

Amazon acquires Zoox

Last week, Amazon announced that it will be acquiring the autonomous robotaxi startup Zoox.

Why is Zoox special, and why did Amazon in particular make this acquisition?

Zoox and the iPhone

Zoox is trying to be the iPhone of autonomous vehicles. To illustrate, here’s Steve Jobs in 2007 when he first announced the iPhone:

Every once in a while, a revolutionary product comes along that changes everything . . . Today, today Apple is going to reinvent the phone, and here it is. Before we get into it, let me talk about a category of things. The most advanced phones are called smart phones. So they say. And they typically combine a phone plus some e-mail capability, plus they say it’s the Internet. It’s sort of the baby Internet, into one device, and they all have these plastic little keyboards on them.

And the problem is that they’re not so smart and they’re not so easy to use . . . What we wanna do is make a leapfrog product that is way smarter than any mobile device has ever been, and super-easy to use. This is what iPhone is, okay? So, we’re gonna reinvent the phone.

Steve Jobs is absolutely right: Every now and then, there's a generational infrastructural technology that comes along, changing the way we live our lives and facilitating a Cambrian explosion of new technology. The iPhone is a recent example. Uber, Spotify, and indeed Facebook, likely wouldn't be around if we didn't have a powerful computer in our pockets 24/7. However, as Steve Jobs noted, the way these new generational technologies are built requires a level ingenuity and courage in casting off old paradigms of design. The iPhone wasn't built around the constraints of a PDA or a PC. While “smartphones” prior to the iPhone were basically mish-mashes of various technologies (i.e., keyboards, styluses, etc.,), the iPhone re-imagined the smartphone from the ground up. It reinvented the phone.

Self-driving cars, like the iPhone, will be a generational technology. Once they are deployed, we’re going to re-imagine how we construct our cities and suburbs, how companies develop plans for logistics, how we experience time, and certainly many other things I’m unable to imagine right now. I don’t think, however, that the self-driving car will be built around the existing paradigms and constraints of what a car currently is.

Zoox is similar to the iPhone in this way because it's re-envisioning the car from the ground up as opposed to outfitting existing cars, as many other self-driving companies are trying to do. Granted, the iPhone is a consumer device that people have on them 24/7, and so form factor is especially important in shaping the customer’s everyday experience. Although a self-driving car isn’t necessarily a consumer product in the sense that people aren’t going to own self-driving cars, a revolutionary form factor may still be important in achieving better safety and utility for passenger experience. Indeed, today’s cars are designed around the driver, and almost everything in the car serves the comfort and convenience of the driver. But once you remove the driver, you now have all this room for creativity in developing new designs for passengers.

Here are a some examples of Zoox’s innovative design. First, Zoox is focusing heavily on building front-rear symmetry into its vehicles. In other words, the front of its cars are the exact same as the back of its cars such that there is actually no front or back. This symmetrical design means that Zoox (1) offers redundancy and thus lower failure rates; (2) may have an easier time manufacturing new cars and servicing existing cars; and (3) eliminates the need for cars to turn around. Second, instead of the current sedan or minivan paradigm, Zoox is re-imagining how cars’ interiors are structured. Imagine a "social" car where seats are arranged in a circle with a table in the middle. Or, imagine a "business" car that takes one passenger and is designed for ergonomic comfort and ability to work on a laptop. While these are only a couple of examples, Zoox cars still have other design elements that make them an entirely different species than the cars of today.

I guess time will tell whether Zoox’s design is ultimately the right one, but I do believe that Zoox’s general intuition is correct: Autonomous vehicles will require reinventing the car, just as smartphones required reinventing the phone nearly 15 years ago.

Zoox + Amazon

As innovative as Zoox is, though, I’m not sure it makes sense as an acquisition target for Amazon. The immediate, most obvious possible synergy to point out is that Amazon can integrate Zoox into its shipping business for last-mile delivery. After all, a delivery vehicle actually has benefits from being custom-built, removed from the shackles of the current form-factor for cars. For instance, you can take out the space for the driver and passengers and leave it exclusively for cargo. You don’t need windows since, well, packages don’t need to see their surroundings. You want a variety of sizes, from small to large. That said, I wonder whether using Zoox’s proprietary technology and design to ship packages for last-mile delivery is akin to going in for surgery for a paper cut? A smaller but more ordinary delivery mechanism certainly seems more appropriate for delivering and dropping off packages right at customers’ doorsteps. Indeed, Amazon is building out its own autonomous sidewalk robot delivery vehicle, Scout, and Amazon is also working on drone delivery. As it pertains to last-mile delivery, these solutions make more sense than self-driving vehicles, which inevitably are more difficult to build and are inferior from a customer experience perspective.

Or, perhaps Amazon wants to use Zoox for long-haul trucking to transport packages from warehouse to warehouse? This might make more sense, but Zoox has not attempted to apply its tools to trucking, and I’m not sure how much Zoox would need to adapt its technology to fit this use case. Moreover, Amazon has apparently already partnered with autonomous trucking company Embark to ship some of its packages on Embark’s trucks. Why would Amazon want to bring this capability in-house rather than building out its existing partnerships?

Finally, maybe Amazon is truly committed to pursuing robotaxis, thus launching itself into competition with Alphabet’s Waymo, GM’s Cruise, and others. Indeed, the Amazon press release itself did affirm that under Amazon’s umbrella, Zoox would still “drive towards [its] mission [to bring] . . . the future of ride-hailing by designing autonomous technology from the ground up with passengers front-of-mind.” But this doesn’t seem to fit into Amazon’s core mission, right? The cynical interpretation is that Amazon just wants a piece of this trillion-dollar market, core mission be damned. I think the more charitable (and correct) interpretation is that, well, Amazon has been relentlessly expanding its market far beyond its initial market in books. It now has competitive positions in smart speakers, video streaming, ebook readers, groceries, and other areas. Amazon, perhaps the most customer-centric company in the world, wants to serve every consumer in every transaction they can possibly make. To fulfill this mission, though, Amazon’s ambitions need to continually expand so that it offers anything and everything that can be purchased, and rides are no exception.

📚 5 articles

Congressman Devin Nunes can’t sue Twitter over cow and mom parodies. A really funny piece. More Twitter. More Section 230.

Attorney General William Barr and the Google antitrust probe. I admittedly haven’t been paying much attention to Barr or the Department of Justice, but what this article claims is pretty alarming. Essentially, it’s saying that Barr, motivated by personal and political animus, is wielding the Justice Department’s power to punish Google via antitrust litigation.

Searching for aliens. Reading this made me feel small. It’s also interesting that the article notes that the search for extraterrestrial life has undergone a sort of renaissance recently. A lot of venture capitalists I know are really excited about space and are funding space exploration.

The promise and peril of telemedicine. The perils highlighted in this article are: (1) People with poor Internet connectivity will be left in the dust; (2) Eventually, big tech will take over and put family doctors out of jobs; (3) Telemedicine is only an approximation of in-person care; (4) People don’t trust telemedicine. My responses, in turn: (1) Yes, we need universal Internet for all; (2) We need some sort of policies to reintegrate people into society (3) Telemedicine just as good for some things and even better for cost and convenience (4) People will get over it, just as they got over taking rides in random people’s cars.

Republicans are leaving Twitter and flocking to Parler. I guess Republicans have had enough of Twitter’s “censorship.” Meanwhile, Parler is touting itself as an open town square with no censorship (“If you can say it on the street of New York, you can say it on Parler”). What I find hilarious is that Parler is, well, just a conservative town square right now. Parler is so dominantly conservative, in fact, that its CEO is offering a $20,000 “progressive bounty” for an openly liberal pundit with 50,000 followers on Twitter or Facebook to start a Parler account. But get this: What I find even more hilarious is that Parler began taking down a bunch of accounts that messed with the Republicans!

#15 - Fighting fake news: A tale of two platforms (Facebook, pt. 2)

Welcome to the new subscribers, and thank you all for the comments and feedback on my last newsletter — please keep them coming!

As I mentioned in my introductory post, my goal for this experiment is to sharpen my writing and thinking, to meet like-minded people, and to promote healthier discourse. If you know anyone who would be interested in the discussion, please forward this along or have them subscribe.

A tale of two platforms (Facebook, pt. 2)

Last week, I wrote about Twitter’s decision to fact-check President Trump and how that action is consistent with the marketplace of ideas, so long as Twitter applies its fact-checking labels even-handedly. This week is about Facebook’s decision not to fact-check Trump and Facebook’s approach to fake news more broadly.

Facebook’s fact-checking policies

Although Facebook chose not to fact-check Trump, it actually does have a fact-checking program whereby third-party fact-checking organizations like Snopes and Politico review news articles on Facebook. Facebook simply chooses not to fact-check politicians. Its reasoning is as follows:

Our approach is grounded in Facebook's fundamental belief in free expression, respect for the democratic process, and the belief that, especially in mature democracies with a free press, political speech is the most scrutinized speech there is. Just as critically, by limiting political speech we would leave people less informed about what their elected officials are saying and leave politicians less accountable for their words.

If we couch this in language of the marketplace of ideas, Facebook is essentially saying that the marketplace for political ideas is the most free, well-functioning marketplace there is. Political speech is already covered so heavily by the press and the People that Facebook need not play a role in fact-checking.

I think this is fair. But I disagree that slapping a fact-check label on political figures would “limit political speech,” “leave people less informed,” and “leave politicians less accountable for their words.” At worst, a fact-check label has no negative effects on free speech (after all, people can simply ignore the label), and at best, a fact-check label would leave people more informed and politicians more accountable. From the perspective of the marketplace of ideas, politicians can be one of the major proxies people use to get reliable news. If politicians become sole proxies for truth, those politicians become de facto arbiters of truth, and we need them to be fact-checked.

The problem, though, is that Facebook not only applies a fact-check label to posts that are fact-checked. It also demotes the post in the News Feed. In my opinion, this action is inconsistent with the marketplace of ideas. While a fact-check label shines light on a piece of news by adding contextual information about what fact-checking organizations think about that news, demotion in News Feed ensures that a piece of news does not see the light of day. In other words, a fact-check label allows users to be their own arbiters of truth, but demotion deprives people of that opportunity in the first place. Demotion hampers the ability for news to compete in the marketplace of ideas.

Context everywhere

One of the big products I worked on while I was at Facebook was the Context Button. Essentially, for every news article posted on Facebook, we’d surface a host of contextual information about that article, such as publisher information, where the article was shared, and related articles. We were enabling users to assess this contextual metadata and come to their own conclusions about the credibility and integrity of a piece of news. For instance, was the article only shared in Russia? Might raise some red flags. Or, did the publisher create its Facebook page ten years ago? Probably more credible than if it created its Facebook page ten days ago. The idea behind the Context Button grew, and we began to add contextual information to other things on Facebook, not just news articles. For instance, we began rolling out the Context Button for branded content and political ads. When thinking about what to internally call these inter-related projects, one idea that came to mind was “Context Everywhere.”

Of course, this name is cheesy, and we ended up calling it something else, but the idea still resonates with me. The cost to produce and re-produce content is lower now than ever before. We went from papyrus to printing press to printer to Google Docs, from painting to daguerrotype to digital camera to smartphone. Thanks to technology, we are inundated with content, but as the amount of content has increased, the amount of time we devote to digesting the content also must increase. We need a way to sift the truthful wheat from the informational chaff. The problem is that this sifting takes work. As I wrote in A tale of two platforms (Twitter, pt. 1):

In practice, in order to decide what’s true, we often shift the responsibility of sifting though the informational deluge to external actors. In other words, instead of digesting information to be our own arbiters of truth, we (sometimes blindly) rely on external proxies to evaluate “truth” . . . It’s a mental heuristic to cope with the reality that we’re bombarded with information. Often, it’s impossible for us to perform the intellectual due diligence to verify every piece of information we come across . . . The more proxies we rely on, though, the better and more effective is the competition in the marketplace of ideas.

In my mind, the way to empower people to become arbiters of truth is to add proxies, or “context,” everywhere. Behind each piece of content is its own wealth of contextual information. So, no matter how quickly the amount of content grows, the amount of contextual information only grows faster. We just don’t have this valuable context. Indeed, it doesn’t even seem like Facebook shows the Context Button anymore on news articles [1].

I envision a world where people consume the news with a dose of skepticism. The Internet has massively reduced the friction to produce, re-produce, and consume content from anywhere and everywhere. As a result, we’ll come across fake news pretty often. But perhaps the best way to combat this is to introduce friction into the way we consume news, by making it a habit to understand any contextual information about the news we see. Perhaps friction isn’t always a bad thing.


  1. At least not for me. Although my News Feed is filled with news articles, I see not a single Context Button on any of these articles although I used to see them, even for a while after I left the company. I’m not sure if the feature has been killed or if they’re running a new experiment, maybe my Facebook-employee friends can enlighten me here.

📚 5 articles

The results are in for remote learning: It didn’t work. Many technologists nowadays seem to think that all industries will and must succumb to disruption. Technology has obviously transformed many industries, but some industries have been resistant to change. Must their resistance ultimately crumble and give way to the incredible force of technology? Education is one of those industries that has remained largely intact from technological disruption. Some (including me) had originally thought that COVID-19 would accelerate the adoption of online class. After going through a quarter of online learning, though, I’ve found that it sucks. In-person learning might be coupled with online class and with different cost structures, but I don’t see learning institutions abolishing it entirely.

IBM bars law enforcement from using its facial recognition technology. Other companies (like Microsoft and Amazon) also made similar announcements. I largely agree with this policy, but to play devil’s advocate, here are three reasons against: (1) We’re putting people in jail on the basis of wildly inaccurate eye-witness testimony. Facial recognition technology can provide a helpful supplement in making important sentencing decisions. (2) Police alone are probably more racist than IBM’s algorithm. (3) If we want algorithms to improve, they need to be used in the wild.

To adapt to tech, we’re heading into the shadows. Fascinating and thought-provoking. Essentially, in order to learn, use, and develop new technologies, we need room to experiment. Unfortunately, red tape and surveillance are choking these opportunities for experimentation, so we’re resorting to increasingly inappropriate and difficult-to-observe methods.

Snapchat made quite a few announcements for changes to its app. And I’m impressed. On one hand, Snapchat is becoming a platform for apps. On the other, Snapchat is also increasingly opening up its API for other apps to use.

Studying China’s ‘re-education’ program for Uighurs. Difficult read. The policy recommendations revolve around more stringent sanctions, increased reporting, and bans on surveillance technology.

#14 - Fighting fake news: A tale of two platforms (Twitter, pt. 1)

Welcome to the new subscribers, and thank you all for the comments and feedback on my last newsletter — please keep them coming!

As I mentioned in my introductory post, my goal for this experiment is to sharpen my writing and thinking, to meet like-minded people, and to promote healthier discourse. If you know anyone who would be interested in the discussion, please forward this along or have them subscribe.

A tale of two platforms (Twitter, pt. 1)

Twitter recently fact-checked a couple of President Trump’s tweets regarding mail-in ballots:

Clicking the ‘Get the facts’ link takes you to a Twitter page describing what third-party fact checkers think about Trump’s tweets and what other verified Twitter users have tweeted about mail-in ballots. After Twitter applied its labels, Trump went on a tirade and released an executive order that (1) lambasted Twitter’s actions as being politically biased; (2) claimed that such actions are not protected from legal liability under Section 230; and (3) called for legislation reform to enhance liability.

Mark Zuckerberg also joined the fray, saying that Facebook and other internet platforms shouldn’t be arbiters of truth. I largely agree. The question, though, is where to draw the line for being an “arbiter of truth.” For instance, it’s clearly pretty bad if a few engineers got together, decided that a post is fake, and deleted the post. But it’s not always that clear-cut. What if a few engineers got together, decided that a post is fake, and chose to downrank the post in users’ News Feeds? Or what if Facebook’s algorithms flagged a post as potentially fake and then downranked the post?

You know where I’m going with this: In attaching a fact-checked tag to Trump’s tweet, was Twitter acting as an arbiter of truth?

My answer is probably not.

This post is not about any sort of legal analysis, but about my philosophy on how online platforms can fight fake news while not being an arbiter of truth. This week, I’m writing about how Twitter’s actions fit in with this philosophy. In a couple weeks, I’ll tackle Facebook.

The marketplace of ideas

My philosophy on fake news stems from the marketplace of ideas. From a judicial opinion for the Supreme Court:

“The remedy for speech that is false is speech that is true. This is the ordinary course in a free society. The response to the unreasoned is the rational; to the uninformed, the enlightened; to the straightout lie, the simple truth . . . The theory of our Constitution is ‘that the best test of truth is the power of the thought to get itself accepted in the competition of the market’ . . . Only a weak society needs government protection or intervention before it pursues its resolve to preserve the truth. Truth needs neither handcuffs nor a badge for its vindication.” 

I promise I’ll get back to Twitter in a bit, but let’s first take a step back to think about who decides truth. The government? Twitter? CNN? The marketplace of ideas suggests actually that we ourselves are our own arbiters of truth. We digest the multitude of information coming our way, and we arrive at our own ultimate conclusions about what to believe, based on the merits of what we see. As information competes in a “survival of the truthiest,” the “truth” organically emerges as our clear winner. Or, at least that’s what’s supposed to happen in theory.

In practice, in order to decide what’s true, we often shift the responsibility of sifting though the informational deluge to external actors. In other words, instead of digesting information to be our own arbiters of truth, we (sometimes blindly) rely on external proxies to evaluate “truth.” Some people will place heavy weight on who’s making a statement. “Did CNN just report something? It must be true!” Other people will place more weight on the number of people making the same statement: “All my friends say this is true, so it must be true!” Still others will place the most weight on what their trusted experts say about the statement: “The Federal Reserve Chairman said he agrees, so it must be true!”

Now, let me be clear: Relying on proxies isn’t necessarily a bad thing. It’s a mental heuristic to cope with the reality that we’re bombarded with information. Often, it’s impossible for us to perform the intellectual due diligence to verify every piece of information we come across. For example, most people believe global warming to be true yet have never read a journal paper on global warming. Instead, we justifiably rely on scientific experts to tell us what they know via news articles, podcasts, and TV appearances. Instead of reading the scientific research paper in Nature, we take a quick glance at the scientist’s credentials, who agrees with the scientist, and if we’re really intellectually honest, perhaps even who the scientist’s detractors are and what they are saying. For a given idea in the marketplace of ideas, we necessarily rely on contextual proxies to evaluate its truth.

Okay, so relying on proxies isn’t bad per se, but what I think is bad is blindly relying on one proxy to the exclusion of all others. This distorts the free market of ideas. If we always trust what Fox News says, Fox News becomes a bottleneck for error. Instead of letting ideas compete and survive on their merits, we co-opt this competitive process and place conclusive weight on a proxy, like who makes the statement. By introducing other proxies into our mental heuristics, though, we have more robust protection against the chance that one of our proxies is incorrect for a particular piece of news.

Let’s recap: We should be our own arbiters of truth, digesting and verifying information to trust, but we often outsource this rather difficult job by relying on proxies. When one proxy garners conclusive weight, it becomes the de facto arbiter of truth. The more proxies we rely on, though, the better and more effective is the competition in the marketplace of ideas.


Alright, now back to Twitter. In my opinion, Twitter was not acting as an arbiter of truth but merely enhancing competition in the marketplace of ideas by adding contextual information that certain organizations have deemed Trump’s tweets to be false. Twitter did not delete Trump’s tweets, nor did it hide Trump’s tweets. I’m not even sure Twitter downranked Trump’s tweets. If that were the case, Twitter would be stifling the competition of ideas, and I’d be more amenable to calling Twitter an arbiter of truth. But Twitter’s action, standing alone on its face, is consistent with the marketplace of ideas.

The problem with Twitter, though, is that you can’t view its action in a vacuum. Twitter already functions pretty closely to a free marketplace of ideas. Many people come to Twitter to barter and exchange their version of the truth. For instance, a couple months ago, CNN tweeted that Elon Musk had failed to deliver ventilators to California hospitals. Musk responded, debunking CNN with a string of tweets showing that the hospitals had actually received the ventilators and were being put to use. Another example: Early on in the coronavirus crisis, the U.S. Surgeon General had tweeted that the general public didn’t need to wear masks. Many people on Twitter responded citing the need for universal masks. Now, as many States begin to open up, wearing masks is a general requirement. Twitter never added any ‘fact-check’ tags to either CNN or the Surgeon General. Yet it chose to do so for Trump.

To be clear, I’m not coming to Trump’s defense. If more contextual information is a good thing, then by all means, we should add them. But if Twitter adds them, it shouldn’t do so discriminatorily. That is, it should add more contextual information not just for Trump, but also for CNN and Fox News and everyone else on the platform. As it stands right now, Twitter’s decision to fact-check Trump seems more partisan than neutral. Imagine a hypothetical world where Twitter provides contextual information only for conservative viewpoints and media outlets. This would create more nuance to the competition of conservative ideas and may even create more nuanced views among conservatives. However, liberal media outlets would still enjoy an unquestioned dominance (monopoly?) in shaping the views of liberals. To me, that’s not only unfair, but also inconsistent with the marketplace of ideas. In such a world, Twitter would be one step closer to actually being an arbiter of truth.

📚 4 articles

Inside Twitter’s decisions to fact-check Trump. An interesting view from the inside.

Twitter’s new feature letting you choose who can reply to your tweets raises First Amendment concerns. Essentially, public officials using this feature can stifle free speech, in violation of the Constitution.

Section 230 and Twitter. I explicitly said this post wasn’t going to dive into the legal specifics of Twitter’s actions and Trump’s response, but this article gives a great overview. I’ve also previously written about Section 230.

We should be skeptical about COVID-19 models. “All models are wrong, but some are useful.” There are too many moving parts, and they all interact with each other in complex ways. Often, models can’t capture such complexity, so when something outside the model changes, the model is ruined.

Loading more posts…