Hi! We had the amazing opportunity of talking to Haseeb Qureshi - venture capitalist, Managing Partner at Dragonfly Capital, Effective Altruist, writer and former poker pro. We talked about effective altruism, why it’s important ot give now, and how Web3 can help make giving more effective.
If it’s your first time reading about the idea of effective altruism, this is some background. Effective altruism is a philosophy and social movement which aims to use evidence and reason to find the most effective ways in which we can improve the world. This includes locating key cause areas: that of global poverty, animal welfare, AI safety or the long term perspective, to name a few. Some of the ideas that effective altruists promote are donating to effective charities,’earning to give’ and creating a habit of donating, or even signing a pledge to give away a certain amount of your income. If you’d like to read more, head over to this post.
You work in the decentralised space and you also describe yourself as an effective altruist. But what came first for you?
Haseeb: Before I ever got into tech or crypto for that matter, I used to be a professional poker player. I did that for five years, from when I was 16 until I turned 21. And after I quit poker, I was very uncertain what I wanted to do with my life. From my time as a poker player, one of the things I learned about myself was that I wasn’t someone who was very motivated by money, even though I thought of myself as somebody who’s pretty good at making it. But I was never good at spending money. And it was in 2013 that I first came across the ideas of effective altruism reading Ben Kuhn’s blog. And funnily enough, the first thing that I read was the hypothetical apostasy for effective altruism. Hypothetical apostasy is this idea proposed by Nick Bostrom that in order to really understand an argument, the best way to prove that you do is to write an argument claiming the opposite, then trying to refute the argument that you have, and having that argument be so strong that people on the other side would agree with it. And so Ben Kuhn wrote a hypothetical apostasy of effective altruists: it’s him trying to pick apart as aggressively as he can the core claims of effective altruism. So I read this and I thought: “This is a terrible argument, it doesn’t make any sense. It took me a while to understand what it was that it was actually somebody who believed the opposite to be true. And I realised: everything this guy’s talking about makes sense.
I studied some philosophy when I was an undergrad. I started reading more and more about effective altruism, going deeper into it, and the notion of ‘earning to give’ kept coming up. Eventually it really clicked for me, that earning to give made total sense to me in terms of who I was and what I valued. I’m somebody who isn’t intrinsically motivated by money or by material goods, but I like to think of myself as someone who would be very effective at competing in the marketplace. At the time I’d quit poker, I was going to med school. I had no skills, no network, no relationships - nothing, but I was confident for some reason that if I were to try to make money - and I wasn’t entirely sure how yet - and then take the capital that I could make and direct it towards other people and causes, towards things that had much higher leverage than what I could do by myself, I could have a much bigger impact than if I were to go out there and work directly. So that was what originally turned me on to the idea of earning to give. That eventually led me to enter the tech industry, then to entrepreneurship, which in turn led me to the world of crypto and then the investing side of that. So one thing led to another and now I’m a venture capitalist.
That’s an amazing story. Talking of money: one of EA’s main cause areas is global poverty. Do you think DeFi has the potential to help fight it?
Haseeb: Of course, although it’s not sufficient in-and-of-itself. Finance is only one of the things which are inaccessible to people who don’t have a lot of wealth. What finance fundamentally does is it allows people to transfer risk and to save. But if you’re very poor, those won’t be your primary goals. When you’re poor your primary problem is not having access to high productivity opportunities. I think DeFi is really valuable for the global poor, but it’s far more valuable for the global middle class. And you have to remember that the middle class in different countries around the world is defined by a much lower standard of living than what we tend to think of as the middle class standard in the US. But something that does excite me which can be done for the global poor are things like direct transfers and other kinds of charitable interventions which can be made much more efficient using the idea of a global and permissionless payment system. Giving Directly is a perfect example of a charity which would really benefit from having crypto rails that could allow you to send money to folks who are living in places which lack robust financial infrastructure or banking. And as more and more of the world eventually finds its way into crypto, the fixed costs to those kinds of interventions will continue to get lower over time.
One of the most well-known EA-inspired projects out there is 80,000 Hours. It is based around the idea that as we spend 80 thousand working hours in our lifetime, we should choose a career which can make a positive impact. Do you think that careers in Web3 have the potential of being high-impact?
Haseeb: I think in the context of earning to give, there are really tremendous economic opportunities in Web3: it’s such a burgeoning field and one which is ripe for disruption. But for those living in developing countries, this path to economic opportunities isn’t that direct. I think that most of the time Web3 is no different than most other forms of economic innovation and it isn’t the poorest who are the first beneficiaries of economic innovation. The majority of those poorest folks are not even on the internet so for them getting onto web three is, almost by definition, a much further step in their development. One thing that people and organisations like 80,000 Hours say quite often now that they didn’t use to say, is that early on in your career, one of the best things to do is just go work on hard problems, develop the competence, relationships, and skills, and only then figure out what is actually the most impactful way to go, one which will allow you to directly get an outcome you care about. And one place where you certainly will develop a lot of competence and the ability to learn how to solve very unstructured problems is getting into entrepreneurship and the Web3 space, which is one of the most white space areas you could possibly be working on today.
That makes perfect sense. You talk about the importance of “giving now”, as opposed to the Bill Gates-style of giving: accumulating as much as possible and signing a pledge to give some away when you die. Why is “giving now” important and how can it be beneficial?
Haseeb: To be clear, I don’t want to impugn what Bill Gates is up to: what he’s doing is amazing. And the same is true for most of the folks who are in their echelon, making a massive impact. It’s actually quite difficult to give the amounts of money that they’re trying to donate. For someone like me, that’s not the case. In the context of global giving, the amount of money that I have to give is just too small, at least for now. I believe there is an inflection point: at my level of giving or lower, some of the considerations that make it prudent for someone like Bill Gates to be very careful and gradual with their giving, don’t make sense. So for people like me, I think the overriding interest is to just give and to make sure that you make it a habit.
Some people say: “I’m saving money now, and I want to compound the investments that I’ve made at the moment, and then give when I’m older, at a later date.” A big part of the reason why push back very strongly against this approach, is connected to a concept we have in behavioural economics: that people can be sophisticates and naifs. You have to ask: how good am I at projecting my future self and understanding what that future self will do? Somebody who is a naif assumes that in their most lucid moments of planning, the self that they imagine is exactly the self that is going to be doing these things in the future, whether it be many years from now, or even just later that day when they’re tired. The sophisticate is somebody who actually understands the difference between their current self and their future self, whether it be their future self later that day, when they’re tired, or many years in the future. Sophisticates understand the divergence: because there’s always evidence between you now and your future self. So the question is, how big is that divergence going to be? The mark of somebody who understands their future self is that they learn how to commit their future self to things that make it so that divergence leads to someone they’re comfortable with being. The number one way to make sure that your future self is the kind of person you want to be, is to be doing things regularly from now until then, which will make you into that very kind of person. In that sense, one of the most obvious things which seem worrying, is that when you look at the people who end up making money and becoming successful, you notice that they’re less and less the kind of people they were when they were young and idealistic. To avoid that, the only way is to commit yourself to a degree of action that is uncommon, robust and rigorous when it comes to your principles. That’s why I recommend to most people who want to be earning to give to do so every single year. That way there’s never a sense of discontinuity in your own commitment to the idea with which you started.
Now, that being said, the best counter argument to this is saying: “How do I know that the best giving opportunities are today?” The answer is, you don’t know that. There are a lot of middle grounds: for example you could donate to a donor-advised fund, and then have that fund donate at some point later in the future. Or you could donate to one of these EA-managed funds like Effective Altruism Funds, which is where I donate a lot of my charitable contributions to.
But at the end of the day, I think the worst argument for donating later, as opposed to donating now, is the compounding argument. It goes like this: “Look, I’m very good at investing or making money because I got into this position because of that. So given that I’m good at making money I should keep reinvesting into making money because I have a higher ROI (return on investment) than the average place where you could deposit your money. So therefore, I should just keep compounding my money the way that Bill Gates did, and then go invest it all at the end.” It’s a matter of the expected value of doing so being higher than the expected value of just donating money. The reason why this argument is bad is because if you were to take it seriously, then first of all, you’re assuming that there’s zero ROI to donating. But of course, that’s not true: the whole point of donating is that you’re going to have a positive impact that will then flow through and amplify itself. So if you are able to lift multiple people out of poverty, then those folks become far more productive and they will go do other things and live robust and happy lives: that is a ROI that produces more and more things over time. And if you actually thought the ROI was close to zero or close to the prevailing interest rate, then you shouldn’t be donating to that cause at all. It’s a bad donation, right? The whole purpose of donating is the presumption that it’s productive. And second, if you take the compounding argument seriously, then it would imply that nobody should almost ever donate, instead everybody should go and try to find the most high-ROI ways to multiply their money, and just keep doing that forever until we run out of ways to multiply money, which of course makes no sense. When you think about ROI, you have to think about it on both sides: in terms of charitable giving and in terms of your ability to multiply capital. It may very well be that very early on in your career, the amount of money you can donate is de minimis, while the amount which you can multiply may be quite large. But at most scales, beyond the very small, that just stops being true. So that’s why I have a very strong bias toward giving now and why every year I give a third of my pretax income to charity. And it’s also why I recommend to other people who are in the path of earning to give to try to do the same.
Sounds like good advice. How do you think decentralised solutions could help facilitate more effective giving? Are there any promising projects in the decentralised space connected to giving which you’ve come across?
Haseeb: When it comes to the act of giving, two projects come to mind. The first is The Giving Block - a startup that allows you to give crypto directly to charitable causes. Most charities have no idea how to handle crypto. And so it’s a very practical kind of brick-and-mortar-type problem and The Giving Block thankfully solves this problem: pretty much any nonprofit can integrate with The Giving Block and start taking donations in crypto. So folks who’ve made a lot of money in crypto can donate directly without selling it and incurring a tax burden, which oftentimes actually is a very problematic issue for those who are living certain tax regimes. The second project is called Give Crypto. What it basically does is GiveDirectly-style experiments, in different countries, using cryptocurrencies. It’s a full on test pilot of trying to do universal basic income (UBI) in different small villages around the world, largely in Latin America.
What about DAOs (Decentralised Autonomous Organisations)?
Haseeb: I think it’s too early to say. DAOs are such a broad concept: one connected to the organisation of people and the organisation of capital. I think it remains to be seen how they will end up impacting the notion of effective giving. But I do tend to agree with the instinct, that probably there will be some intersection there, as DAOs become more developed and used more. It seems likely that new methods of organising people and energy will end up being used to organise something around charity as well.
What are you particularly excited about working in the decentralised space and thinking about the future?
Haseeb: One of the things I’m particularly excited about in crypto is the growth of synthetic assets. I think it’s one of the areas of DeFi that’s taken a while to take off, but it’s pretty clear that synthetic assets are going to become very important as DeFi goes increasingly mainstream. So to go back to financial opportunity and how crypto and DeFi can enable that for a larger swath of humankind, one of the most obvious things is that if you live in a place where you don’t have access to robust financial infrastructure, then it’s very difficult to do a whole lot beyond just very basic things, like saving and maybe a little bit of borrowing. And right now, that’s sort of what crypto makes available to you: you can take some USD in the form of a stablecoin like USD C or USD T and lend it out, borrow some of it and earn some yield on it - it means you can basically save. But one of the most obvious things that people want access to is financial assets - the kind of thing that you and I have access to, because we live in First World countries which have robust financial infrastructure. If you live in very remote parts of the world, it’s very difficult to gain access to things like equity markets, bonds, the kinds of pedestrian capital assets that most people in developed economies have. I think you’ll see a day in the future where everybody in the world who has a mobile phone will be able to invest in the same universe of assets that you and I can buy right now, and those are going to become real through synthetic assets. It’s sort of the “Amazonification” of finance. I think it’s probably going to happen in the next couple of years. So that’s one thing that I’m very excited about: that you’re going to see a world in the not-too-far future where anybody in crypto is going to be able to buy anything that you and I can buy today.