How does Alexis de Tocqueville’s observation relate to the internet?

Tocqueville noted that in democratic ages, human bonds become larger in scope but weaker in commitment. This applies to the internet, where global connections exist but lack the weight and commitment needed for effective collective action.

Why is the Prisoner's Dilemma a flawed framework for understanding societal problems?

The Prisoner's Dilemma overemphasizes defection and human nature as the root cause of problems. This leads to extremes of either distrust or a desire for centralized control, rather than focusing on building systems for voluntary cooperation.

What is the Stag Hunt game and how is it relevant to crypto?

The Stag Hunt model suggests that individuals, acting in their self-interest, can achieve optimal welfare through coordination and commitment. This framework is relevant to crypto's mission, which according to the speaker, should be to build institutions that enable such voluntary, coordinated actions.

What are 'Coordination Markets' and how do they work?

Coordination markets are a proposed crypto-based system where individuals can make conditional commitments for collective actions, like migrating to a new platform. These markets accumulate intents, and if a threshold is met, the action triggers atomically for all participants.

Why hasn't technology like coordination markets been built before?

Early internet and crypto pioneers, influenced by cypherpunk culture, focused on permissionless and trustless systems, minimizing trust rather than building for community coordination. Their mindset led to artifacts like stateless money and encryption, not tools for collective action.

What is the new direction for crypto infrastructure?

The next layer of the internet and crypto needs to move beyond just trustlessness. Builders must focus on fostering trust, alignment, and shared interests to create systems that facilitate collective action and community building.

Key Moments

Kaspa Founder Yonatan Sompolinsky Address at the Oxford Union

Oxford Union

News & Politics7 min read41 min video

Apr 7, 2026|4,243 views|521|102

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Key Moments

TL;DR

The internet, despite enabling global connection, lacks institutions for binding commitments, leading to weak social bonds. Game theory suggests stag hunt, not prisoner's dilemma, is the key to fostering collective action through 'coordination markets'.

Key Insights

The internet, nearly 43 years old, is treated as a finished product despite lacking institutions for enforcing commitments and fostering shared understanding, akin to a democracy with failing institutions.

Game theory suggests 'stag hunt' is a more fitting framework than the 'prisoner's dilemma' for understanding societal problems, as it allows for mutually beneficial outcomes through cooperation and commitment.

Solving the 'stag hunt' requires 'assurance contracts'—enforceable commitments where individuals agree to act together, either coordinating to pursue a larger opportunity or refraining from acting individually.

Crypto's core mission should be to provide the infrastructure for these 'coordination markets,' enabling large groups of internet users to commit to collective actions, such as migrating to new platforms or forming new organizations.

Coordination markets allow individuals to specify their commitment thresholds (e.g., 'I'll switch social networks only if 10 million others do') and are only triggered when these conditions are met, creating emergent collective action tied to market incentives.

The lack of such coordination markets in crypto's two-decade history is attributed to early builders (cypherpunks) prioritizing trustlessness and individual freedom over community organization, as per Winner's law that artifacts embody their creators' values.

The internet's democratic deficit: emergent chaos and weak bonds

Yonatan Sompolinsky opens by likening the internet to a flawed democracy: it offers near-total free speech and constant participation but suffers from failing institutions and a profound inability to govern itself. Despite its age of 43 years, the internet is treated as a completed project, yet its interactions are ephemeral. Unlike traditional democracies that take centuries to stabilize, the internet's structure is assumed to be fixed. While it facilitates global connections and transactions, these interactions still rely on external institutions for enforcement. This creates a paradox: the greatest egalitarian project requires robust institutions for genuine commitment, yet it lacks them entirely. This decay in user experience, from the elevating feeling of a 'global fraternity' in the late 90s to today's discourse, stems from what Alexis de Tocqueville observed in democracies: human bonds become larger in scope but weaker in commitment, more ephemeral, and carrying less individual weight.

Beyond the prisoner's dilemma: the stag hunt as a model for cooperation

Sompolinsky challenges the prevalent use of the 'prisoner's dilemma' as a model for societal failures, arguing it overemphasizes human nature's inherent selfishness and propensity for defection. This framework, associated with the 'Malik' or demon of betrayal, leads to a pessimistic view that necessitates replacing individual agency with collective virtue or centralized control. Instead, he proposes the 'stag hunt' game as a more accurate and constructive model. In the stag hunt, two hunters can either cooperate to hunt a large stag, providing abundant food, or defect to hunt smaller game individually, securing less. Crucially, if communication and commitment are possible, the stag hunt incentivizes cooperation for mutual self-interest, leading to a stable, beneficial equilibrium. This shift in perspective is vital because it suggests that societal problems often arise not from malice, but from a failure to coordinate and commit, rather than from an insurmountable human flaw. The stag hunt framework offers a path toward achieving better collective outcomes within a system of self-interested agents.

Assurance contracts: enabling commitment in a trustless world

To resolve the stag hunt's coordination problem, Sompolinsky introduces the concept of 'assurance contracts.' These are formal agreements where participants bind themselves to act collectively. The core idea is that individuals will only commit to a large, rewarding undertaking (hunting the stag) if they are assured that enough others will also commit, thus removing the risk of acting alone. This mechanism is essential for bridging the gap between individual desire for greater welfare and the inability to achieve it independently. The challenge lies in implementing these assurance contracts within the internet's current institutional vacuum. Without a mechanism for enforceable commitments, large-scale voluntary collective action remains impossible, even when a significant portion of users desire it. This is where blockchain technology and cryptocurrencies offer a potential solution by providing the rails for such binding agreements.

Crypto's true mission: building coordination markets for collective action

Sompolinsky argues that the fundamental mission of cryptocurrency and blockchain technology is not merely stateless money or decentralized finance, but the creation of 'coordination markets.' These markets leverage assurance contracts on the internet to enable collective action. He illustrates this with an example: if a million users are dissatisfied with a social network like Twitter, they could use a coordination market to commit to migrating to a new platform simultaneously. This commitment would be conditional—users would only pay a subscription fee or make a change if a specified threshold of participants (e.g., 10 million users) also commit. This system, described in three stages—identifying a 'stag' (opportunity), organizing a 'pack' (gathering commitments), and then the collective 'hunt' (executing the action)—allows for emergent, decentralized coordination. Such a mechanism is revolutionary because it enables communities, not just individuals, to move collectively, unlocking potential for financial, political, or social change that is currently impossible on the internet.

The emergence of decentralized coordination: from stealth to action

In a coordination market, a social entrepreneur might post a 'stag'—an idea for a new social network or a cause. Interested users would then 'sign a commitment,' potentially involving a small fee or pledge. Crucially, this commitment is conditional: 'I will join this new network only if at least 10 million people do.' This is the 'pack accumulating in stealth mode' phase. Until the threshold is met, no one bears the risk of moving alone. Once the threshold is achieved, all commitments trigger atomically and simultaneously, leading to a collective migration or action. This contrasts sharply with today's internet, where individuals can switch services, but entire communities cannot coordinate a mass exodus or unified push for change. The power lies in enabling individuals to define their own participation conditions, attracting others based on shared intent without central planning. This emergent property of coordination markets is a significant step beyond current internet capabilities.

Beyond zero-sum games: a middle ground for self-interest

Coordination markets offer an alternative to two extremes prevalent in the crypto space and broader society. Firstly, they are a stark contrast to the 'player versus player' dynamics seen in meme coin casinos, which are characterized by zero-sum games where traders merely try to undercut each other. Secondly, they provide a middle ground to the idea of a 'leviathan' or a central planner—a benevolent dictator or superintelligence that organizes society. Instead, coordination markets embrace the reality of self-interested individuals and provide them with the tools to select better equilibria. By allowing individuals to act on their own behalf, with their own information and incentives, while simultaneously enabling them to coordinate their strategies, these markets foster beneficial collective outcomes without requiring a shift to total altruism or central control. This framework respects individual autonomy while facilitating powerful collective action.

Why now? The builders' mindset and the evolution of internet infrastructure

Sompolinsky addresses why coordination markets, despite their potential, have not been built in crypto's nearly two decades of existence. He invokes Winner's law, postulating that artifacts have politics—they embody the values of their creators. The early pioneers of the cypherpunk movement, driven by a culture of suspicion towards institutions and a desire for trustlessness, built foundational internet and crypto infrastructure focused on permissionless, censorship-resistant, and anonymous systems. While crucial for creating a bare backbone, this mindset was not naturally conducive to building tools for community organization and collective action. Their focus was on minimizing trust, not on building coordination. The current infrastructure, while robust, needs to evolve. As David Goodhart suggests, these 'roads' built on trustlessness need to 'lead somewhere.' This transition requires a 'new generation of builders' —individuals more oriented towards fostering trust, alignment, and shared interests, who can develop the next layer of the internet, a layer capable of supporting true digital democracy through coordinated action.

Mentioned in This Episode

●Products

●Software & Apps

●Companies

●Organizations

●Concepts

●People Referenced

Common Questions

The internet, despite having free speech, lacks the institutions necessary to foster shared understanding and enable collective action, making it a 'digital democracy' with low capacity to govern itself, leading to chaos and a decay in user experience.

Topics

AI & Machine Learning Technology & Innovation Society & Philosophy Game Theory Internet Governance Digital Democracy Collective Action Coordination Markets

Mentioned in this video

People

Yonatan Sompolinsky

Kaspa founder and blockchain researcher, also a research associate at Harvard University.

Alexis de Tocqueville

A French visitor to America whose observations on democracy's broader but weaker human bonds are applied to the internet's social fabric.

Scott Alexander

Mentioned in relation to the prisoner's dilemma and the concept of a 'singleton superintelligence'.

David Goodhart

Author mentioned for his book title, used metaphorically to discuss the need for crypto's infrastructure to lead somewhere beyond trustlessness.

Robert Moses

Urban planner whose design of bridges in Long Island, intentionally or unintentionally, restricted access for public transport users, illustrating how artifacts reflect creators' politics.

Companies

Kaspa

The blockchain protocol founded and researched by Yonatan Sompolinsky.

Twitter

Used as an example of a social network from which users might want to migrate, illustrating the need for collective action coordination.

Netflix

Used as an example of a service users might want to leave if dissatisfied, highlighting the current inability to coordinate such a collective move.

Organizations

Harvard University

University where Yonatan Sompolinsky is a research associate.

Libertarian Party

Mentioned as an example of forming new political parties, illustrating a scenario where collective action is needed.

Concepts

Prisoner's Dilemma

A game theory scenario where two individuals acting in their own self-interest result in a worse outcome for both, used to explain societal problems stemming from defection and greed.

Stag Hunt

A game theory scenario where collaboration leads to a better outcome for all participants, compared to individual self-interest. It requires commitment and coordination to achieve.

Software & Apps

Bitcoin

Mentioned as a cryptocurrency with a shifting narrative, contrasted with the proposed mission of crypto for coordination.

Pledge Bank

An example of a previous attempt at collective action mechanisms, considered uninteresting by the speaker.

Locations

Hong Kong

Referenced for the 2019 protests as an example of collective action and marches.