Incentives

On Charlie Munger Charlie Munger once said: “Show me the incentive, and I’ll show you the outcome.” If he were in his prime today, he’d be the Czar of AI & Crypto. David Sacks, the current Czar of AI & Crypto in 2025, is doing a phenomenal job on the legislative front, but Charlie would have embodied it differently. Incentives run the world. They’re innate to human nature. What I find intriguing is how this core understanding translates to other domains. ...

One of the major selling points of cryptocurrencies is that everything is decentralized and trust no longer lies in single a third party. However, the trust didn’t simply dissipate, it got distributed to participants of the network. In my opinion, the incentive structure built into cryptoeconomics is one of its most overlooked benefits. The fundamental idea can be summarized as follows: no one wants to lose money, and everyone wants to maximize the profit they receive for the work that they do. ...