The power law will eat the world. Even as recently as a couple of decades ago, those of us at the frontier barely had any clue about the power law, or how a handful of investments, companies, or creators would produce nearly all the value in their fields. Today, the power law is well established in startups and content creation.
Soon, it will be well established that anything we attempt will have a power law distribution of outcomes. In a hyperconnected world, a small change in one part of the network can have a powerful rippling effect across the entire system. The best outcomes will become almost unimaginably large, while the median attempt for anything will increasingly be failure.
The future will have more possibility and less predictability. We call this the critical phase.
This isn't just about AI. Broadly, progress itself leads us toward this state. A more connected world with greater freedom of expression, greater leverage to create, better tools and more capital to fuel creation, and more people creating and transacting with each other leads us to the critical phase exponentially fast. AI just happens to be the greatest accelerant toward the critical phase that we have ever witnessed.
As the barriers to creation fall and the rewards for success rise, more people will create, more companies will be formed, and more ideas will be funded. At the same time, outcomes will become increasingly concentrated at the top. These things are not contradictory.
In fact, the increasing concentration of wealth will increasingly be a byproduct of progress rather than injustice, which was certainly the case earlier in a much more zero-sum world. It is easy to miss the nuance required to see the critical phase correctly. Someone might see more firms being created and assume that outcomes are not becoming more concentrated. But we will have more concentrated outcomes alongside more creation because the prize is so much greater, the winners are less stable, and the barriers to creation are falling as our tools become better and cheaper.
We can already observe this. Over the past decade, outcomes for content creation and startups have become more concentrated toward the top despite far more people creating and far more startups getting funded. Concentration of outcomes, more competition, more growth, more churn, and more leverage all go hand in hand. Each amplifies the others.
The signs are already here. We have the most fragile set of winners ever. A couple of decades ago, the winning company looked like it was going to stay on top for decades to come. This is no longer the case.
As we gain greater leverage and abundance, competition will arrive far more quickly and forcefully than ever, and increasingly from places we least expect. The company that overtakes today's frontier AI labs, for example, may start as a biology research company trying to discover a new compute substrate. As we enter the critical phase, such weird competition will become the norm.
Knowledge work will become increasingly K-shaped. The best are rapidly getting ahead of the median. The best will increasingly have unlimited opportunity while the median struggles to get hired. Peak outcomes will grow exponentially. Quadrillion-dollar companies are basically guaranteed by the end of this decade, barring some massive catastrophe.
When the best creators and companies will be worth quadrillions of dollars, the cost to create is coming down, and the advantage that winners hold is becoming more flimsy, why wouldn't the market fund many orders of magnitude more ideas?
We are not prepared for the critical phase. How can student loans make sense when the majority of graduates will not be able to reliably land a job right after graduating? How do mortgages, credit, and debt work when we will not have stable, predictable incomes? How can four-year election cycles work when the world will change more in one day than it did in the previous decade?
Nature can be unintuitive. We all crave stability even though absolutely nothing in nature is stable. Similarly, in nature, there is no such thing as stagnation. There is only accelerating growth or accelerating decay.
The frontier will advance rapidly, but the work required to advance it is going to get really fucking difficult. The most important discoveries may take years, decades, or entire lifetimes of exploration. We will need ways to sustain people through long, uncertain journeys whose value cannot yet be attached to a job, a company, or even a clearly stated idea.
Accelerating growth is truly our only option. If we do not orient ourselves to advance the frontier and accelerate growth, we will rapidly decay. Why can't we just slow things down?
Incentives. None of us can stop AI acceleration. The frontier companies think they can, but even they will increasingly find it difficult to do so. The cat is out of the bag. We are on an exponential curve of AI advancement. There will be temporary hiccups, but over the next couple of decades it would be naive to expect an intentional slowdown.
If AI accelerates and our growth does not, what happens? We get an extreme, unnatural concentration of power, and thereby oppression and stagnation. Positive-sum growth is the greatest check on concentrated power.
Nations that sacrifice their growth will be eaten by the ones that don't. People greatly underestimate the cost of losing. I come from a culture that, after 200 years of being ruled by a radically different one, has been reduced to a meek shell of its former trajectory. Other cultures have literally been wiped off the face of the earth as a consequence of losing. This is how fucking important it is to win in the world. No country will take the risk of falling behind while others continue to grow. Would you take that risk?
And even if you are not eaten, what will your people do? You will not be able to stop them from adopting AI for long because, as they see AI do the majority of the laborious work in other nations, they will find it inhumane to continue living their lives without AI. And if you do adopt AI but lack the sort of ambition, culture, and incentives for growth that it requires, your people will wither away like an unwatered garden.
The happiest people, and cultures, are the ones who dedicate themselves to the service of others, who work together tirelessly to solve shared problems. By doing so, they reverberate with vitality, life, and the creative spark that defines the human spirit. Living a life of unbounded luxury and indulgence without striving to serve others and humanity is a sign of decay. It isn't something to strive for. Friends who only meet during the good times are only friends at the surface.
Human connection is a byproduct of shared struggle. As progress eliminates the lower struggles of poverty and misfortune, we must replace it with higher struggles - with the pursuit of serving others, advancing the frontier, and solving our collective challenges. Without shared struggle and shared goals, we will find ourselves disconnected, lonely and depressed.
Therefore, we must strive harder than ever to advance the frontier and accelerate positive-sum growth, or we will collapse from the weight of our accelerating leverage.
There isn't a choice. The vitamin and the pill are the same. We are in a Red Queen race with nature. We have to grow.
So what is stopping us from growing and advancing the frontier in the way that we need to? Let's look.
To enable growth and advance the frontier, we must enable and support individuals who will create long-term value for the world, proportional to their potential.
When we unlock every individual's potential, we will unlock our collective potential to grow. At present, there are many, many ways in which we are failing at this.
Firstly, even for people who we know are clearly going to create incredible long-term value for the world, we suck at enabling and supporting them. A person can only incentivize support and collaboration after they discover a worthwhile idea to turn into a company. They have no way to incentivize people to help them succeed before they discover that idea.
As a result, so many incredible people are stuck wasting time working jobs that they really shouldn't be working. In order to make ends meet, they cannot get started on the explorations they need to discover the ideas that they are meant to bring into the world. That is detrimental to all of us in the long run.
And as we saw earlier, advancing the frontier will become more difficult than ever, even as AI does more stuff for us. What remains for us will be harder. We need a new sort of instrument that enables an individual to incentivize others to help them succeed at the level of their life, not just for a single idea in the way that a company does today.
This is why the first step, the core primitive of Rootnet, is a legal instrument that I'm calling the personal stock. A personal stock enables an individual to share equity in the wealth they will create across their life. It lets them incentivize people to help them succeed at the level of life, independent of ideas, and raise venture capital independent of ideas, including before they discover anything.
This creates a marketplace for human potential. It will be critically important in the critical phase because it is how we push support and resources to individuals based on their potential, regardless of the circumstances and misfortunes of their birth.
Imagine every single person on the planet with a personal stock. There will be an incredibly strong incentive to back people who are ignored by others because that is where the greatest returns are. Yes, a lot of investments will go toward obvious people, like people graduating from Stanford or whatever. But there will also be an incredible opportunity to back people with potential who do not have the privilege, credentials, or circumstances of these obviously high-potential people.
Democratizing opportunity is critical for us to accelerate growth because the truth is that the majority of people with potential are presently oppressed by poverty.
I spent four years of high school in India. Many of my classmates and friends were much sharper than I am. But as a consequence of the circumstances of their families, they were forced to get a job rather than have the privilege of exploring their ideas and following their curiosity. In a world with personal stocks, I'm sure some of them would be working on ideas far greater than anything I will ever do.
It is an absolute tragedy that we don't enable and support such great minds. This isn't just true around the world. It is true within America and within every geography. Opportunity is concentrated while potential is broadly distributed. If we don't address this gap, we cannot accelerate our growth and advance the frontier in the ways that we have to.
But the personal stock alone is far from enough.
Personal stocks let us back people who will go on to create monetary value in the world. These will be people who earn stakes in valuable companies and other assets across their lives. Future startup founders, builders, scientists, and certain kinds of artists will lend their talents to ideas organized as companies, earn stakes in them, and create wealth that way. Anyone who will create value in this way will have a personal stock that others want to invest in and back. Which is great.
But there are many people who create incredible long-term value for the world, who inspire us and enable us to advance the frontier, who are almost entirely invisible to our current economic system.
Recently, I was captivated by a film created by an incredible filmmaker named Shaurya. In it, he interviewed ambitious Indian founders looking to change the world. He created such a beautiful work of art that it will inspire many people to think bigger, believe in themselves, and have the courage to bring their ideas into the world.
But look at Shaurya's options for creating wealth. They are honestly quite sad.
He can charge money for tickets to watch his work. But that would go against what he wants, which is to inspire as many people as he can. It would also be bad for the world. The people who would have been inspired to start things will either be restricted from watching it or have that inspiration delayed, which is detrimental to all of us.
Or he can tell stories for companies to help them grow and earn stakes in those companies. But rather than inspiring potentially billions of people, he is now forced to tell stories that are far more restricted. They are restricted in the number of people they can reach, and more importantly, in the space of ideas they can explore, because they are restricted to what the company is doing.
Because Shaurya's talent and work fall outside the scope of companies, he either has to narrow his talent to fit into the context of a company or sacrifice creating wealth.
This is a lose-lose situation for every single person in the world. There are so many illegible contributors to our growth who cannot capture any of the value of their impact. They are forced to devolve into far less impactful work to gain the wealth and status that they deserve and need.
All of us know people like this. There are teachers who inspired us when we were young, compassionate grannies who make sure our local parks are vibrant, clean, and safe for kids to play in, and many others whose contribution we may not even be able to clearly define. But we all agree that they are incredibly valuable.
When we are unable to let them capture the value they create, we disincentivize such contributions. We make it impossible for people to dedicate their lives to this sort of illegible impact because we have no way for them to materially benefit from it.
They cannot capture the value they create because we literally do not have instruments that reflect it. If you create value in a direct way, your contribution can show up on the cap table of a company. But when you create value at the level of a collective, a group, or a network, there is no cap table where your impact is recorded.
This is why we need stocks for groups and networks of people.
These network stocks need to be organized in a specific way to enable the kind of growth we need. The network's stock holds equity in each member's personal stock, and each member holds equity in the network's stock.
When any person in the network wins, everyone does. This creates an incredibly powerful incentive to collaborate and support others to realize their potential. And it finally lets us incentivize people who create value directly at the level of the network, even when they don't create value at the level of any specific company or person within it.
Networks will compete for people like Shaurya by offering them equity in the network itself. That competition will allow these illegible yet incredibly powerful contributors at the level of the collective to finally earn what they deserve. We will finally incentivize these long-term value creators.
As we get deeper into the critical phase and as AI accelerates, personal stocks and network stocks will make us increasingly better at enabling and supporting people according to their potential.
We have enough now to describe the system we need to create. We need a network that has its own stock, where each member within that network has their own personal stock.
Let's call this network Rootnet.
At first, I thought personal stocks would be enough to get this off the ground. Once enough people had their own personal stocks and the instrument had been validated, we could work together to build a network, scale personal stocks, and then build network stocks.
But I was wrong.
In my conversations with people about this idea, including people interested in launching their own personal stock, I have realized that this is a very, very big ask. It has extremely high friction. A personal stock requires you to enter an agreement that pertains to your entire life. It isn't something people do willy-nilly. Even if the agreement is sound, people are skeptical about signing up for something like this, with good reason.
A community and a network are also critical to creating the culture that lets us use personal stocks in the way they are meant to be used. We need investors and members who are long-term oriented and ambitious, who want to play positive-sum games with high-integrity people across very long time horizons. Even one person with a scarcity mindset who is looking to milk an individual for money in the short term can pollute the entire system and kill this idea in the bud.
People will only adopt personal stocks when they are presented as part of a network and a community backed by respected people, the right people, and enough capital to protect its members through storms and challenges that we cannot predict.
This is the sort of idea in which the chicken and the egg must come together.
Tangibly, Rootnet starts as an entity with a cap table. When a member joins, they launch their own personal stock and exchange equity with Rootnet. They allocate some of their shares to Rootnet, and in return they receive shares in Rootnet. This binds them to the network. When Rootnet's valuation increases, the wealth in each member's hands increases. When a member wins, Rootnet and everyone who owns it win too.
We will also need investors for Rootnet. Many of these investors may not want or need to launch personal stocks anytime soon, so not every Rootnet shareholder will necessarily be a member.
Let's say we launch Rootnet today. The network has a cap table, and a few of us within it have our own personal stocks. We hold equity in Rootnet, and Rootnet holds equity in us. People apply to join, and it is on us to choose the right people because culture is critical to this entire system.
This is how the network gets started.
Before we design the rest of it, we need to understand what the valuation of these stocks actually represents.
A personal stock's valuation reflects the market's belief in the wealth that a person will create across their entire life above the portion reserved for themselves, which is called a floor.
A person's valuation can be far greater than their present net worth because valuation reflects their potential to create value. It doesn't just reflect the ideas they are currently working on. It reflects the ideas they will discover and the assets they will accumulate across their life, including the ones they don't know about today.
The younger a person is, the healthier they are, the greater the potential they show, and the more time they have ahead of them, the more likely it is that their valuation will be much greater than their present net worth.
Time horizon is critical here. A company's valuation reflects the future of a single company. A personal stock reflects a person's entire life, so it reaches further. A network stock reflects its current members, the members who will join in the future, and everything they may do together, so it reaches further still. A stock that represents the potential of all humanity will reflect the longest time horizon of all.
A network's valuation won't just be the sum of its members' valuations. It will likely be much greater because it will reflect the members who will join in the future and help it create more value. Of course, if the market thinks the members of a network are being stupid, making bad calls, and showing terrible judgment, it will price the network accordingly. The network's valuation may not be much greater than the sum of its members. It may even be less because the market is correcting for overvalued members at the level of the network.
The point is that things can get messy. This isn't some sort of rule. But we have to understand what these valuations represent to make sense of the system.
Now we can design Rootnet to optimize for growth and advance the frontier.
Let's first talk about governance.
If this network must last for centuries, its governance must be sufficiently decentralized. The best form of decentralized government we have in the world today is democracy.
But democracy as it is implemented today will not work for the critical phase. When the amount of change in one day surpasses the amount of change over the previous decade, we cannot have four or five-year leadership terms. Even if we elect the right people to govern, we may decide within a few hours that something in the world has changed so drastically that they are no longer the best people to govern the system.
We need an election process that is far more dynamic and adaptable to change. We need continuous voting, where the moment we change our mind we can allocate our vote to someone else, some other idea, or some other proposal.
Anyone should be able to propose a policy change, not just those who are elected. As we enter deeper into the critical phase, we will become more ignorant about what the world needs. We need ideas to bubble up from the ground.
Critically, we should be able to allocate our voting power to other individuals or entities. As the rate of change accelerates, hundreds of thousands, and eventually millions, of proposals may start flowing in every minute. Even with powerful AI filtering, each individual will not be able to make informed decisions across everything. We should be able to give others our voting power for certain categories of decisions when we trust their judgment, amplifying their judgment rather than trying to reason about everything ourselves.
But even with all of this, there is a fundamental flaw that underpins modern democracy: equally weighted voting.
Every vote is worth the same. This works reasonably well in a non-critical-phase world that does not change rapidly and where the gap between the median and the best is not so vast. But as the power law eats the world and the gap between those at the frontier and the average person sharply increases, equally weighted voting will be catastrophic. It will pull the system toward the average opinion, which will become increasingly deluded about what is true about the world.
We need some notion of weighting. But we can't weight votes by how much equity someone holds in Rootnet because that would lead to wealthy people controlling the system. Wealth reflects the value you created in the past. Increasingly, the people who had good judgment in the past may no longer have good judgment about the future because the world is changing too quickly.
The only viable candidate for weighting votes is valuation. Valuation is precisely our collective belief in an individual's potential to create value in the long run. We want those who we think have the best judgment and ability to navigate the future to steer our ship so that we succeed in the future.
The critical phase will lead to rapid shifts in our collective priorities. We may decide that mining more steel is critical because we need to build more data centers for AI and steel is the bottleneck. Tomorrow, an event or a new scientific study may reveal that global warming is about to fuck us over in the next couple of years. Our priorities will shift instantly.
On Rootnet, the valuations of the people best equipped to tackle the biggest current problem will spike. They will gain the power to make sure that nothing gets in the way of attacking the problem fiercely. Once they make progress, the market will adapt again. The valuations of people tackling the next problem will rise as we collectively realize that it is becoming more important.
Rootnet allows us to adapt as fast as we can to the rapidly changing nature of our collective problems and desires.
One second-order effect is that voting power will shift toward younger people. Assuming the future will be better than the present, their personal stocks will reflect much more of that future. Younger people, rather than old and outdated minds, will increasingly influence our governance.
Rootnet will start small. Most of the world will ignore it because it is such a weird idea. That will play to our advantage. Too much attention on an idea like this in the early days would be counterproductive and detrimental.
Eventually, the shape of this idea will grow to all of humanity. When I say Rootnet, I don't necessarily mean the specific network that we start. Who the fuck knows? But Rootnet as the shape of an idea will win because nothing else will enable us to adapt to the critical phase.
On a long enough time horizon, the world will become a set of fluid networks that people move between, not rigid nations with rigid barriers. Citizenship will be reflected on cap tables.
This is how we solve our collective problems together because we literally are in this together. All of humanity is one species. Global warming doesn't choose specific countries and leave out the rest. It will cook all of us sooner or later. We have no choice but to break down our rigid barriers and work together to solve our collective challenges. Our problems don't discriminate, and therefore we must not either.
It is critical to have more than one network. Only competition between networks will create the forcing function required to optimize for positive-sum growth and advance the frontier. This is why forkability and open source are critical to Rootnet's design. Everything we build should be open. We need to make it as easy as possible for others to start their own networks and compete, and we need to encourage them to compete. That competition will hold us accountable and keep us in line as well.
The idea of Rootnet exists beyond this first network, and beyond any one person's perspective. Own the parts that resonate with you. Fork them. Every person will see this idea in their own way, and that is how it will evolve.
A lot of what I'm describing will only happen long after we are dead. The world has a lot of inertia, and it is essential to remember that. But thinking long-term is crucial because it lets us make the right design decisions today. Forkability and open source become obvious when we think on a long enough time horizon and consider humanity as a whole.
But we are still missing something critical.
No market is efficient because every market reflects our ignorance. As we get deeper into the critical phase, we will become more ignorant about who and what has the greatest potential to create long-term value for the world. The rate of change will accelerate. Many more ideas will be worked on and many more directions will be explored. It will become far more difficult at any moment to make sense of what is valuable.
Even if this market matures, even if we have an abundance of capital to allocate toward more people and ideas, we will increasingly fail to support people and ideas that have the potential to have an incredible impact on the world. If we deny this, we are denying that we are ignorant, which is the deepest ignorance of all.
This is why universal basic equity is critical to enable growth.
At the level of a network that eventually represents humanity, universal basic equity means a constant flow of new shares issued to every person. The rate of issuance can be determined by a function that we collectively vote on. Everyone will hold equity in our collective success, including the people whose potential the market has failed to see.
This isn't only a moral argument. Universal basic equity compensates for our ignorance. It creates a strong and rising baseline for the people we ignore, including the people who may eventually have the greatest impact on our world.
Universal basic equity will not lead to massive inflation because anyone who believes that the future will be better than the present will have an exceptionally strong incentive to hold their equity.
We may still need universal basic income in some shape or form. Once Rootnet is well capitalized, I can imagine us voting for a massive subsidy or free AI tokens allocated to everyone. Things like that will be useful. But universal basic equity will be the primary way we ensure that everyone has a strong baseline and a stake in our future.
There are second-order effects here that may not be obvious, but are quite special.
We can have a much more powerful education system in which teachers invest in students instead of charging them money to teach. This aligns incentives, keeps teachers accountable, and lets students share the risk of their education rather than carry all of it on their backs.
We will be far more united because all of us will share a stake in our collective success. We will be incentivized to be far more ambitious and advance the frontier. Anyone who has done really difficult things knows how important it is to collaborate. You have to. We will be forced to collaborate and support each other to achieve our ambitions, and therefore we will become more united.
We will finally be able to incentivize the things we actually value, including art and other forms of expression that cannot be cleanly labeled but are valuable for society. And not just any art. We will incentivize art that reflects the truth. Optimism happens to be more aligned with the truth than pessimism, so we will have much more optimistic art that helps us realize what we are actually capable of.
There is a lot here that we cannot predict. We don't need to predict it as long as we build this in a way that lets our descendants adapt it according to what they want and accurately reflects what they believe. Things will take care of themselves.
Rootnet will help us optimize for long-term value instead of short-term value.
There is a lot of negative impact from the technologies we use today. It is abundantly clear that many forms of social media and their algorithms are rotting our minds. Prediction markets are incredible tools for incentivizing the truth, but they can also promote and encourage rotting behavior like gambling. We struggle to keep what is positive for the world while reducing what is negative because our economic system is too short-sighted.
When each of us holds a stock that represents our collective potential, behavior that damages our long-term potential will show up in the value of that stock. A company may create an addictive product and increase its own valuation because it makes more revenue. But if the product damages our collective potential, it will cause an even greater drop in Rootnet's valuation. For people who hold stakes in both, the puny gain in the company's value will be overwhelmed by the loss at the collective level.
Today we expect companies to be responsible, but they are not designed for that. They don't have the incentive. When Meta makes more money by getting people addicted, that may be a net negative for the world, but it is not necessarily a net negative for Meta's shareholders. Meta will not curb it to the degree it needs to.
With Rootnet, even the founders of the damn company would create a net loss for themselves by doing this. They would hold a stake in Rootnet, and the fall in its value would make their gains from the company look like nothing compared with the loss they created at the collective level. We would force the company to eliminate the bad parts far more aggressively.
This only makes sense when we remember the time horizons represented by these stocks. A personal stock looks beyond a single company to an entire life. A network stock looks beyond a single life. A stock representing humanity's potential looks further than all of them. The wider the network, the more the stock can price consequences that a company's short time horizon ignores.
Taxes also feel quite detrimental to our collective growth. Do we really need to tax people who create a lot of value in the world when their success can directly increase the wealth in each of our hands through the network stock? Taxes are a zero-sum way for the collective to share in the success of an individual it helped enable. On Rootnet, we can share that success directly, so taxes may no longer be required.
This is also why Rootnet cannot just be a company that charges people fees to launch their personal stocks, like a Coinbase or an AngelList. When Rootnet actually holds equity in its members, it has a direct way to capture the value it helps create. It doesn't need taxes, fees, or weaker and more zero-sum forms of capturing value.
Rootnet spans every dimension. There is a complex technological piece that will eventually be onchain. There is a complex legal piece, a complex story piece, and a complex political piece. Anyone and everyone who has the potential to create value for the world has the potential to create value for Rootnet.
Rootnet will welcome you with open arms.
This is my life's work, and I want to work with people who feel the same way about this exploration. This will be one of the most ambitious ideas the world has ever seen. We may struggle with it for years, if not decades, if not our entire lifetimes. But if you see what I see, then you will see that we have no choice but to try.
In its earliest days, Rootnet will be like a small budding plant. It will require a lot of protection to maintain the culture it needs to grow. But once it grows into a large tree, it will be the one protecting us.