The bet on advanced non-human intelligent life in 2021
What would you do if you had information which you knew was likely true, but most of the world didn’t yet believe? If you had inside information on a crypto coin or stock, a rational individual should behave in a way that profits from that information asymmetry. After learning about the history of UFOs during the pandemic, this is the kind of scenario I was faced with in May 2021, when famed rationalist Eliezer Yudkowsky proposed the odds at 100:1 for a bet “against visible intelligent aliens” on Twitter. It started a chain of events which winds through a fascinating world of blockchain, DeFi and ultimately how smart contracts help strangers on the Internet transact with minimal trust assumptions.
So apparently there's some kind of thing right now about supposed aliens. I haven't looked into it at all, but I am happy to blindly bet against anything to do with visible intelligent aliens at 100:1 odds.— Eliezer Yudkowsky (@ESYudkowsky) April 28, 2020
I had been studying the lengthy history of UFOs as a hobby during the pandemic. Anybody following me on Twitter would know this. So when I found Eliezer’s tweet, I found it interesting that someone would bet with those odds. After all the research I had done, including books, films and surveying my close friends and family, they seemed good to me, so I reached out.
Any chance your still taking bets? Have your odds been updated or still 100:1? Willing to escrow $1000 in an ETH smart contract.— michaelnolivos.eth (@micksabox) March 23, 2021
I didn’t receive a response in March of 2021. By that time, there had already been significant developments for anyone following #ufotwitter, which the mainstream media hadn’t picked up on yet. Then on May 16, 2021, everything changed. 60 minutes aired a segment on the sightings off the coast in San Diego in 2004, the “Tic Tac” UFO, as well as events off the East coast near Jacksonville in 2014. It went viral, and suddenly what was the domain of fringe researchers on the Internet became a global conversation. So I tried again, this time with a well-known meme. It worked!
Odds unchanged. The difficulty is setting up the ETH smart contract and picking a judge who doesn't add more than 1% noise risk. Do you have walkthrough on how the contract works and why I should trust it?— Eliezer Yudkowsky (@ESYudkowsky) May 19, 2021
So how do two strangers, who have never met before, interact safely in order to execute a bet such as this? Well, we can use a smart contract system. The Ethereum blockchain is well suited for this, and there already exists an ecosystem of service providers which are needed in order for this to work. Let’s take a look.
- An escrow smart contract to store deposits of the bet safely. A candidate for this could be a 2-of-3 multisig wallet using gnosis-safe. This smart contract wallet can be setup to require 2 out of 3 signatures in order to process transactions. The first two parties can be Eliezer and I. The third party can be an adjudicator smart contract.
- The adjudicator contract resolves disputes in the outcome of the bet. This adjudicator contract should be able to act as a signatory in the escrow contract, or store the state of the outcome which could be queried by the escrow contract. Existing components that we can use are Aragon Court or Kleros. These judication systems rely on standardized interfaces to a network of incentivized jurors who, from a game theoretical perspective, coordinate around what’s known as a schelling point. The schelling point is the truth, as supported by the evidence provided. Since there is no way to coordinate (jurors are selected in a random process), the only way to succeed is by examining the evidence and judging based on what the outcome should fairly, or rationally, be. This article has more details, and you can also read Vitalik Buterin’s analysis of the 2020 election on-chain dispute using prediction markets here.
It’s important to understand the implications of the 2 of 3 multi-sig setup. This means that at any time, for any reason, Eliezer and I could coordinate to take actions on the escrowed funds using the Gnosis Safe interface. There was a concern that the opportunity cost of locking up the funds would forego the opportunity cost of staking or earning interest on that capital, as is possible with various DeFi protocols.
I'm legit interested in learning how to execute this in crypto - this is the year I'm finally learning how to use crypto - but at 100:1 odds, foregone earnings from the lockup are a real issue if the term is longer than a month. Might bet 10 ETH : 0.1 ETH and worry less.— Eliezer Yudkowsky (@ESYudkowsky) May 19, 2021
The answer to this, using the system described above, is that Eliezer and myself could coordinate and stake the deposits into any DeFi protocol. At that point, the opportunity cost is captured by the escrow contract itself. This is indeed how yield aggregation protocols like Yearn work. If we coordinated, we would satisfy the 2 of 3 signature requirements, so we don’t need to rely on the adjudicator smart contract for anything.
The Betting Logic
I took the time to describe the basics of how the third-party components would work, but so far omitted the terms of the bet. The actual bet itself contains terms, like time limits for when disclosure would occur, which would need to be encoded in a custom smart contract. It is possible to create a plugin to the Gnosis Safe contract which allows for this interface. But this introduces the need for the custom contract to be developed, as well as for Eliezer to be able to audit the contract. This introduces additional challenges and risks, including a smart contract bug which could result in loss of funds. Is there another way?
Notice that the construction above is fairly generic, besides the logic of the bet and it’s terms. It would be great if there was a “generic betting system” where we could simply plug in the time limit and the contents of the bet. It turns out, there is already an existing system of blockchain prediction markets which allow you to accomplish most of the requirements above. I’ll use the example of Omen. Omen provides a simple interface for anyone to create a prediction market.
Let’s observe the interface and how it maps to what we’re trying to do:
- The contents of the “bet” is captured as the “Market Question”
- The odds of 100:1 can be captured using the Outcome Probability
- The closing date and category can be specified
- There is an option to select arbitrators. There, we see the Kleros option.
There are a few other to note with this kind of setup.
First, and the most important, is that the prediction market is not private. The first system was designed between a known set of fixed participants, just Eliezer and myself sharing a multi-signature wallet smart contract. Using a prediction market like Omen, anyone can participate by transacting with the market. Skeptics who believe aliens don’t exist and will not be disclosed can buy the “No” outcome. The true believers on #ufotwitter can buy the “Yes” outcome. In this way, while the odds may start out at 100:1, the prediction market will dynamically change the odds, since it uses an automated market maker. You can read the Omen FAQs and the market rules to better understand the prediction market system.
Second, most of the challenges that were previously described are no longer relevant. Omen has been used successfully by many people, participating in many markets, including the highly disputed 2020 election. I encourage you to again read Vitalik Buterin’s analysis of the election market. With this proven system, there’s less risk of smart contract bugs and no need for the effort and delays needed to code a custom contract.
Third, the DeFi option is unclear how it would work in this setup. Maybe the market tokens that you receive when you place a bet on an outcome can be used in DeFi for other things. Given how programmable and open DeFi is, I wouldn’t be surprised if that’s the case. But right now, I’m not sure if this is an option.
I suspect I would not be the only participant who is interested in taking a side on this bet, on either outcome. Eliezer, if you’re reading this, we could be the ones who launch one of the most significant prediction markets of the year. There will be rampant speculation and betting activity on both sides. More importantly to me, people will realize that there is a significant amount of real information to suggest that we are not alone. That signal should surface properly, in a decentralized fashion, as people are self-incentivized to research and act on the information they know and believe to be true.
And for the record, I do believe that an advanced non-human intelligence has visited us and is visiting us, and it will be disclosed by the US intelligence reports slated to be published this year. If you disagree, then let’s make a bet.
Software developer, technology entreprenuer and product builder. Curious UAP researcher and consciousness experimenter. Thoughts on crypto, software and modern UFO disclosure @micksabox.