Spinning sand into gold
Google's $2 trillion fortune is based on one small change
In the times of knights and dragons, wizards practiced a strange and dark art. Alchemy, the magic of making small changes to turn lead into gold, also turned men secretive and greedy. Shadowy figures working in darkened rooms muttering weird spells into cauldrons. All with the hope of buying their way to heaven with glittering gold.
It was nonsense, of course, as were dragons and kings.
In modern times, we’ve created our own alchemy and turned sand into gold. Silicon, the stuff at the heart of the vast wealth of our computer age, is made from sand cooked at high temperatures. Popular Science even has a helpful feature on how you can turn your backyard sand into silicon.
Along with our own alchemy, we’ve got our own wizards. Shadowy figures working in darkened rooms typing weird spells into boxes.
The difference is that the silicon kind of alchemy has created more wealth than ever before in the history of humankind. All the world’s most valuable trillion-dollar companies - Apple, Microsoft, Google, Amazon and Tesla - are based on the magic that comes from that sand-turned-silicon.
The small changes that underlie our modern riches are amazing. For example, the basis of Google’s $2 trillion fortune is delivering good search results by counting the words in the links to a page instead of counting the words on the page itself.
When people search for stuff on the internet, they want good results. Before Google, there were already a few dozen other search engines. AltaVista was the most popular. To deliver good results, AltaVista counted the number of times a word appeared on a page, and showed results based on that.
By contrast, when someone searched Google for stuff on the internet, Google counted the number of times that word appeared in the links from other sites to the page. They didn’t care so much what a page or a site said about itself, they cared what other people thought and wrote about that page. It was these other people’s opinions that became the basis for the results Google delivered.
It was more effective because it was less biased, more relevant, and was a good way to measure popularity. It was, in effect, an early form of the social proof that is the basis for America’s globally dominant social networks today.
If you’d like, you can read the Google guys’ original 1998 paper on their invention here, to better understand their small change, and their secret spell, that turned into a $2 trillion fortune.
(By the way, when it comes to Google, my dumb claim to fame is I’m the guy who suggested in early 1999 that the ‘o’ change color to show what page you’re on in the search results. If I had a penny for every time…)
Or to take another $2 trillion example: crypto.
The original paper by Satoshi Nakamoto (a fake name, by the way) is brilliant. I was turned on to it by Chris Dixon who has since gone on to be an enormous investor in the space.
Bitcoin’s small change is to make things safe by making them public.
If we try to build a system that stashes actual money secretly on your disk drive, it’s never going to be safe enough. Your ability to defend your disk drive is always going to be outsmarted by organized thieves who want to steal it.
So instead, let’s store money publicly on a global disk drive run by anybody and everybody. Really!! Everybody is allowed to help out and keep this public list of money owners up-to-date.
But that’s what makes it safe, ironically. We’ll stop thieves by leaving your money lying around in public, but we’ll only agree that you’re the rightful owner if the millions of people running the global disk drive also agree.
Hiding in plain sight.
You can’t steal from public opinion.
Those are the small changes behind crypto and blockchain, and in the 13 years since the Nakamoto paper, the global value of crypto has grown to $2 trillion.
You know, after all those centuries of funny hats and boiling cauldrons, it’s brutal that it was something even less valuable than lead that was turned into gold. And that it was this silicon alchemy that led to the trillion dollar futures of our tomorrow…
On the page vs. to the page.
Private money vs. public money.
It’s these small changes that shine white light and want to show how everything has turned to gold.
Let’s grow!
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I couldn't find a way to squeeze this in without making the post overly long, but I found it interesting that in modern times, we've discovered that silicon and lead aren't that far away from each other! Both are in the same periodic group: Carbons.
https://en.wikipedia.org/wiki/Carbon_group
https://ptable.com/?lang=en#Properties
I love the premise of the article! Unfortunately, from and information security standpoint, cryptocurrencies are still vulnerable to the exact same threats you mention when you have "a system that stashes actual money secretly on your disk drive". In fact that is exactly where the private keys associated with those bitcoin transactions are stored (on your phone, hard drive, etc.) The actual blockchain transaction records may be very secure, however the private keys associated with your bitcoin wallet(s) must also be protected. This is the weak link in the chain, and what makes the true security of your bitcoin less than your dollars stored at your bank. With crypto, YOU are now responsible from solely defending your private keys, with no recourse if they are compromised: no FDIC insurance, no zero liability protection. It's definitely a paradigm shift!