Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Backfeed – The Social Operating System for Decentralized Organizations

Episode Date: January 24, 2016

The idea that in the future tokens will play a crucial role in networks and organizations to incentivize decentralized collaboration and reward contribution is not new. It’s the original decentralized autonomous organization idea that has informed many projects that have been on the podcast (Swarm, Ethereum, Factom, Storj, etc). For Matan, the vision originally led to found decentralized ride-sharing application LaZooz. One year ago, he left LaZooz to found Backfeed, which is building the tools that so far have been missing to make mass collaboration without a central party possible.Topics covered in this episode:How he became interested in blockchains and started the ridesharing application LaZoozBackfeed’s vision for a social operating system for decentralized organizationsThe role of reputation, proof-of-value and tokens in BackfeedThe applications Backfeed is currently buildingThe business of model of BackfeedEpisode links:Backfeed websiteBackfeed: An Introduction for Mere MortalsMatan Field DevCon Talk about BackfeedThis episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/115

This is Epicenter Bitcoin, episode 115 with guest, Matan Field. This episode of Epicenter Bitcoin is brought you by Ledger, now accepting pre-orders for the all-new Ledger Blue developer edition, a Bluetooth and NFC touchscreen touchscreen hardware signing device. Learn more about the LedgerBlue at LedgerWall.com and use the discount code Epicenter to get 10% off your first order. And by Hyde.me. Protect yourself against hackers and safeguard your identity online with a first-class BPA. Go to hide.me slash epicenter and sign up for a free account today. Hi, welcome to Epicenter Bitcoin. The show which talks about the technologies, projects, and people driving decentralization and the global cryptocurrency revolution.

My name is Sebastian Kutu. And my name is Brian Fabian Crane. We're here today with Matan Field. He's the CEO of Backfeed. Now, some of you may have heard of Backfeed. It's an interesting company, sort of exploring their concept of decentralized autonomous organization so we look forward to diving into that it's a topic that we haven't explored for quite a while so thanks so much for coming on matan yeah nice to be here yeah so martin we actually

we all we did sort of meet so when we were in uh with eras we were in teliv in was it october and we had a dinner and and martin came as well so we but we didn't get to talk back then so i'm glad we will have a chance to talk now Can tell us a bit, how did you get involved in cryptocurrency, decentralization, and this whole field? Right. So almost coincidentally, I would say, I was doing completely different things. I was doing my research, my post-doctoral research in theoretical physics at the Tecneon in the northern of Israel. And during that time, I had an idea to build a real-time ride-sharing application. I joined with a couple of my friends, and we've started working on this application

and trying to solve the critical mass problem of how bringing enough early adopters to make real-time ride-sharing work at the first place. and through that process, that thinking process, we realized that we realized the ideas of tokens and decentralized organization. It was before those ideas were called like that. And through that, we basically came into the Bitcoin and the blockchain space.

During that process, eventually we, I mean, eventually real-time blockchain became secondary and decentralization became primary, and that's how I reached all this field and dived in. At some point, I just realized how promising and larger potential there is in it. And at some point, I just quitted my academic research and decided to focus on that. So you started working on right sharing, and that was before you were aware of cryptocurrencies and blockchains. And then you thought like, oh, that's a great fit.

and let me explore that? Right, yeah. So, exactly. So, I mean, as I said, I mean, in the real-time writing field, which hasn't been cracked down yet, there is a serious problem of how to bring the early adopters because if there are not enough early adopters,

the writing doesn't work. But if it doesn't work, how do you bring the early adopters? And our solution to that, we said, well, we just, you know, how many people do we need to recruit? Let's say in Tel Aviv we need 100,000 people. So let's just make a project with 100,000 partners and we just solved the critical mass problem.

And then we asked the question, okay, but how a project with 100,000 people is functioning, how decision are being made, how value is being distributed, and so on and so forth. And then we said, yeah, of course, you need to have some tracking of value, tracking of economy. And then we said probably Bitcoin,

can do some help on that front. And we dived into blockchain, that was exactly the same time where Ethereum, where Vitalik has had an idea, has his idea of Ethereum and the whole revolution of decentralized organization has started. So it was a perfect match, and then we dived deeply into the blockchain scene. And then we became from a ride-sharing application, we became a ride-sharing decentralized application and the more I worked on this I realized that actually the the basic concept of the central organization and the thing that we're still missing at

the time of decentralized value distribution and so on are more basic and more generic and more big than specifically ride sharing and at some point I also decided to quit Lazou's the decentralized write-sharing application and found backfeed early this early 2015 to systematically build the the layers that were still missing in that space to enable the centralized organizations yes so there was some some parts and some components that you felt like we're missing for something like let's use to to really work so we said like okay let's let's try to build those base layer technologies and infrastructure layers so that applications like lezouz and you know a

hundred others that will come that uses similar architecture can thrive in the future. Is that sort of the evolution you took? Yeah, exactly. So, so basically, I mean, you can think of Bitcoin as a prototype for this future. And the idea is that millions of people can collaborate or cooperate in decentralized fashion by distributing value that is being created. So in the Bitcoin case, it is by miners that verify transactions of others. And then for contributing to the network by verifying those transactions,

they receive some of the value of the network in terms of new Bitcoin that are being issued. But then that value distribution is only enabled by algorithmically verifiable actions. In that case, it's mining. Verifying transaction is algorithmically verifiable. But there was no way to make a decentralized cooperation of a generic kind. So, for example, decentralized coding, decentralized startups, decentralized insurance, decentralized publishing, decentralized journalism, decentralized lending, or whatever. But decentralized cooperation that requires actions that need to be valued or evaluated by real people and not by algorithms.

So all this logical layer of decentralized governance, decentralized value distribution, decentralized influence reputation system, it was completely missing. And without which you cannot make a generic decentralized cooperation. So we came up to build exactly the, to build and fill up that layer, and of course to develop the whole roadmap further.

So when you go to the backfeed website, It says it's a social operating system for decentralized organizations. And when you're thinking about an operating system, you think of a, usually a computer or a mobile phone that has the central software that allows for software to be run and for sort of the ability for applications to talk to each other and interact with each other through a file system, etc. So can you give us the sort of broad overview of BatFeed and how it relates to operating systems as software? I mean, what is a social operating system is what I'm getting at. Right, right, right. So, I mean, a computer is basically the skeleton on top of which you can run softwares. Just as the blockchain together with DHD's, distribute hash tables,

are the skeleton to run decentralized applications. But then you still need, you're still missing the human layer, or before the human layer, you still missing the operating system for the human layer in order, just as described before, in order to facilitate the central cooperation between a human being, and this is the social operating system. So in that sense, it's analogous. If you want, it's the partly software, partly human layer that is enabling to run social applications, to run collaborative efforts of people.

And what does that look like exactly? What are the components to this technology and how do people interact with it? So, yeah, so it is not an application. It's really more like an operating system on top of which you can build applications. Also, by the way, I should have also said that it's also the system that allows for different software to be interoperable with each other. So different Central's cooperation will be completely interoperable with each other. And eventually we'll create one big network, one big collaborative network. network, how it looks like. So different applications may look in different ways, but the basic

idea is that the core protocol within is enabling people to feedback each other's activities, to feedback each other's contributions. And then this feedback is kind of tricky, and that's why it's backfeed, because when you feedback someone else, the environment feedbacks you. So the more you are aligned with the network, the more your feedback brings your reputation upward and also counts more. And if you are disaligned in your feedback with the network around you, then your reputation decreases. That's what we call it, backfeed. So basically, it's a protocol that collects, if you want, all of the feedbacks in a network, and by that creates the influence power, the reputation, creates the value distribution, and also creates

alignment, multi-value system alignment. So if you have initially a big network with, let's say, millions people that all think very differently, then via this protocol organically and spontaneously, the network starts to crystallize around different value systems, and all of which are legitimate, just as GitHub basically allows an organic creation of different opinion of how code should be designed and you have multiple branches of code. So in this case, we have multiple branches of value system, of reputation system. I up until now had not even realized the word play with feedback and backfeeds. But you mentioned in a a talk. I was watching one of your talks that you did at DevCon recently and you said that

identity is defined by your actions. You are what you do. And that's an interesting idea because in traditional identity systems, your identity is defined by, you know, a whole lot of other things. And we've had, we've had guests talk about identity on the podcast a bunch of times before. Identity can be defined by, you know, what other people say of you. Identity is also defined by what you say about yourself. Identity can also be defined by a power structure like the state. But it's the first time that I ever hear someone say that identity is defined by actions. Tell us what this looks like and how it applies to your reputation score in Backfeed. Right. So in a decentralized world, you can participate from your node on the network and do

whatever you do. You can contribute code, you can contribute ideas, you can write blog posts, you can make comments or anything else. This will also connect with the Internet of Things and basically our physical world. And for your actions,

your actions have influence, right? They have consequences in the world, and the network around you can feedback or back feed on those activities. So basically, people can appreciate or disappreciate your contribution.

And at the end of the day, I mean, I can also handle several identities. It's completely legitimate, but these several identities will basically have only part, each of them will have part of my history. And at the same time, we, three of us can also handle one identity, which is completely legitimate. This identity will have history of activities, it will have opinions, and according to the activities that it will do, and then the feedbacks that the network will make on them, this identity will have a level of reputation.

Now, it's not one reputation because you'll have many, many different networks, and each network has its own reputation system. Even a part of a network can be another network which has its own reputation system. And then an identity will be the aggregation of all of its actions and the aggregation of all of the feedbacks on these actions and resulting multiplicity of reputations in all networks. So I'd love to go a little bit deeper here and explore how this can work. So you mentioned that you could have a sort of branching off

and you have a different network that coalesce around different value systems. How would that work in reality? Can you give an example of that? So for example, let's discuss Maybe we can Let's discuss several examples But let's start with one and then we can discuss later in more death

Another example that we work on So for example There is a very simple application That we start to build about Curation of Content on the web So You know, you can On any website that you are

You can click if you want to curate that website If you like that website right? Because eventually the problem is that the internet is just vast and huge and we're not even touching the 1% of the internet and Google decides for us what is the right. It's the tragedy of the filter bubble. So Google decides for us what is right to see for us and what is not. And imagine that all of the people around the world can inform each other about good network, good website versus bad website. And then if, you know, if you and I have similar opinions and we curate the kind of the same content similarly,

then gradually we are starting to aggregate a network around us, which is with like-minded people. And this network will start to curate content, you know, according to its opinions. But maybe some other person is, you know, thinking differently and, you know, some other people, people, and they curate content in a different way. and eventually what you'll have, you'll have many networks that curate content differently,

they see the website differently, and with this extension, you'll be able to search the web, it's like a kind of search engine, but it's more than an engine, I would say it's a mind, it's a search mind. You will be able to search the web for stuff according to the value system of other people.

You can ask yourself how, you know, how people in Argentina look at things, than people in China or how left-wing people think in terms of the web with respect to right-wing people and so on. So you'll be able to look at the web from different goggles of different networks with different value systems or different likes and dislikes. Let's take a short break so we can go to Paris.

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If you want to get a secure setup for storing your Bitcoins, go to ledgerwalt.com and use the code Epicenter to get 10% off your order. We'd like to thank Ledger for their support of Epicenter Bitcoin. You know, let's say if you look at an example of a decentralized system, where you have obviously very wide divergence of value, I think Bitcoin would be a great example, right? And it's not really clear to me here how you can have easily a sort of divergence into, you know, multiple Bitcoin's that have, you know, different views and, you know, different interpretations, you know, let's say around what is this thing actually supposed to do. Because you have network effects that are so big that it just, it doesn't really work. So do you think that's going to, you know, network effects would be one thing that prevents. these sort of systems to emerge? So no.

So yeah, I mean, no and yes. I mean, for Bitcoin, it doesn't fit in this, if you want, in this scheme, because it's not designed in that way from the beginning. But with the right design, what I speak about is basically a fractal of network. So it's not just many, many different networks which don't speak it with each other. There is a fractal structure of a network that is in a way divided to many sub-network. that divide the many sub-networks and so on and so forth. And all these networks are not independent of each other.

They do have economical and reputational relationship between them. So that eventually, in a way, this kind of fractal of network is leveraging both competition and cooperation, or if you want agreement and disagreement. So in a way, two networks are using a common component on whatever they agree about and use different components on whatever they disagree about. And in that way, you both explore maximal cooperation and the same times the diversification of opinion and competition on the disagreements.

So these different networks are not independent of each other. They do build one big network of information. They do build one big network of cooperation. So you don't lose the network effect. Okay. So it wouldn't work with something like a cryptocurrency in that case. you think it would work with a publishing system. Can you talk a little bit more, you know,

let's say if you take a general or can you give another example of how that could work and how this sort of exchange of value and competition and collaboration would work? Yeah, sure. So let's explore another, let's explore decentralized journalism or publishing, which is something that we work on today. So, for example, anyone can add, content to that network. Anyone can write a blog post. Anyone can suggest edit of others blog posts. Anyone can suggest

new title or anyone can suggest comments or translations to the network. Now communities who are like-minded or systematically like-minded will appreciate the same content and this kind of content will start to aggregate in that community. Now different community may appreciate different content and this different content will start to aggrate around that community.

But they may very well have, you know, common component or common content that both communities appreciate. Now, it's not that, it's not like binary. So it's basically a continuous evaluation of content, which will vary between the two communities. And the content that both communities will highly appreciate will be visible in both, both communities and content which is only appreciate but one of the communities will be more visible will be visible only in that community or or content that is more highly evaluate in one community than the other will be more visible in one community rather than the other but as a whole those two communities will be part of one big community they will have they will have

access to one big database of information they will just choose to look to view that database in a different differently so eventually the end of the day you have one big decentralized journalism, but with two different goggles to look at it, to read two newspaper, if you want, from the same database of content. So whatever they agree about, they leverage and build up more content with the network power of the whole network. Whatever they disagree about, indeed, that's where they have, if you want, less of the network that is building up that power, but that's just because they disagree about it,

makes sense. So in that way, you leverage, if you want, you build up the optimization between cooperation and diversity. And how do you connect? So in the context of this example, just decentralized journalism, let's hypothesize that you have, like you said, a fractal, some sort of fractal pattern of this network that stems from this initial idea of having, say, a newspaper. It sort of starts to look a bit like evolution, where some branches will become more powerful and others will have less influence.

Can you talk about the dynamics there? What happens when you start having, you know, perhaps thousands of branches on what was initially one newspaper. What impacts does that fragmentation of information have? How do you then know what would be sort of the correct information? Can we assume that the bigger branches are correct? Or is there something else at play here?

Well, firstly, there is no correct or incorrect. There is just the branches that are live, stay alive on the branches that die off. and you gave the perfect analogy to evolution. This is evolution, in fact. It's very, very analogous to evolution. In fact, you have the same two forces. So in evolution, you have a force of alignment.

So the BackFit Protocol works in a way that creates a feedback loop, so that people who are systematically aligned with each other, their reputation is gradually increasing, and then at the next step, they define the axis of alignment in a stronger way, and then it's still keeping increasing. So you have a force that drives towards alignment, homogenization, which is the same force of genes that drives into homogenization of species

in closed environment. Okay. Could you also use something like Backfeed then to create a prediction market? Because it seems like the mechanics would be somewhat similar, only you would have human reputation on the line. Yeah, it's a little bit analogous to prediction market, but non-economic prediction market, It's a reputational prediction market in a way.

And you have also the second force that in evolution, well, mutation basically make the diversification from homogeneity. And here, the fact that you are misaligned with the community around you makes you the incentivization to fork out to a new network. And this will create a dynamics that will balance itself organically and dynamically. So if you have too much of diversity, you'll be able to collect power from cooperating with people and agreeing with them and building the network effect.

If we have too strong a network, too much homogeneous, then people will be able to create value from forking out and exploring new dimensions, new directions. So in a way, organically, just like evolution, society with this essential governance mechanism, will explore the whole spectrum, the whole space if you want, of directions, of actions, of opinions and whatnot,

in a way which will be able to maximize and optimize itself. So, you know, it will have too much homogeneity, you will create diversity. If you have too much diversity, it will create homogeneity. Okay. Now, you also mentioned in one of your talks that reputation is seated by making a valuable contribution perceived by as reputable agents. How if you have, say, one branch of a system where there's enormous reputation,

enormous weight of the community behind it, how would it be possible then in that case for any one other agent to branch off and be successful if network effects are so big there? And I'll also try to get my head around this, but what would a sort of the guess the equivalent of a 51% attack look like in a system such as proof of value. Right, right, right. I guess there's two questions that may not be directly related, but... Right, right, right. So the idea is that, yeah, the more the network, the bigger the network, the more the network

effect exists, then in a way, the harder it is to change the momentum of that network. But the same time, the economical model that lies beneath the... this protocol is analogously to the Bitcoin, is giving more value to early adopters. The earlier you are in a network, the more value, the more financial ownership that you gain from that network. So in a way, if you can fork that network

to a new direction that will in the future drive a lot of attention, then the earlier you are doing that, the more value will gain, so the bigger incentive to do so. And that's exactly what we'll balance. to that. So if the network is too big, if you want, and the homogeneity is not justified, meaning there are enough people who think differently, then there will be incentive for that person, you know, for that entrepreneur to fork out the network and find and found a new

direction for others to follow. And those early adopters that will follow will also gain from the network, and then that builds a snowball effect, right? So the economical incentive for early adoption is basically balancing out the rigidity of the, of the momentum of a network effect that is being generated. That makes sense. And in terms of 51%, then just like there, also here, you have a 51% attack. Like if you can take over 51% of the reputation in the network, then you are definitely controlling the network.

But the whole point is that the, like if you are 51% of the network, you are the network, right? You should do whatever you want. And if you will, if you rule the network, in a way that will not make the other people happy, they will just fork out to get a new network. So in that way, you cannot really, you see, the forking out can always run away from you.

You cannot, like, you cannot control anyone. One big difference in that protocol, this is a bit more technical, but there is an inherent tension between scalability, decentralization, and resilience. So decentralization requires that information and decision is distributed along the whole network and not gathering in one place. And resilience requires that in a way every decision needs to be approved by 51% of the network.

But then that brings an inherent tension with scalability because when the network is very big, it's unacceptable that every decision is being observed by 51%. of the people on the network. And here we're talking about actual people observing an activity. It's not a machine observation, although also in the blockchain, machine observation is also a bottleneck for scalability. But in the human network is much more severe, right?

And so this is built intention. And the solution, the resolution of that paradox is exactly this fractalization. So fractalization, or if you want, compositionality, let you have, let you make decisions with less attention in the network, like the example, well, you can think of the U.S. political architecture. This is the same thing, but just for a simple example, if you have nine people

with equal weight on the network, you need five of them to agree about any decision. But if this nine is separated, is divided into three groups, and each group is divided to three people, again, all of whom are equal-weighted, then you can see that you can get a majority vote by four people, two of each of the two networks. So you can, you see, you can get a vote to pass or a decision to pass with less attention in the network. And you can show that the more you fractalized network, the less the threshold for decision is going down.

So in a way, the 51% is going down, down and down. But you can show that it happens in a way that doesn't disrupt resilience, because although you need less and less people to control, well, to, to, take decision, you need more and more specific configurations of people to do so. And you can show in a simulation that it is done so organically in a way that resilience is kept intact. All right. That's quite a challenge to wrap your head around that, I have to say.

Now, I had a question before that maybe it ties into that. So with something like a prediction market, I mean, I have been thinking about that, especially also in the context of augur, where you know, you have like different people predicting things and, you know, you want to predict like what everybody else is predicting, right? So in proof of value, because, you know, outliers basically get punished and you're deemed to be bad at, you know, predicting things or evaluating things if you diverge too much from the sort of consensus. So you have a similar system. Do you think that leads to, for example, good decisions and good, or does that just lead to sort of, you know, least common denominator? And, you know, you sort of try to, you know, have this homogenization and everybody fitting in with each other? Well, yeah, I think, I think it works good. But let me emphasize two things.

Firstly, you're not being punished. Your reputation is decreasing in a network if you are systematically misaligned with it. But that's completely good. Like, I don't want to have a hyper-reputation in a network that I don't think that I'm not like-minded. Like, I don't want to have my feed,

you know, spammed by a network that thinks differently. Actually, I want to have a lower reputation in a system where I'm disaligned. But then I have the incentive to just open a new network, which is aligned with my opinion. So actually, I want, you have the insubstant you have the incentive to just express, it's not a prediction mark in that sense,

it's analogous, but it's not a prediction market. I don't have an incentive to predict the future. I actually have the incentive to say what I think should happen, and then the network will organize around my opinion, or not organize a model of my opinion, and then I will have the incentive to fork to a new network, or I would just be driven to a network that is more like-minded. That's one thing.

The second thing is that the protocol is not only about alignment, and this alignment is also about in a way innovation. So the earlier I kind of express different opinion from the majority and then some people follow my route, then I will gain more reputation around that because I was early. So in a way I have the incentive, I actually have the incentive to say what I think should happen,

not what I believe will happen by the network, but what I think should happen. And I have the incentive to say that as early as possible. Yes, so that makes sense me, I think that early, early mover rewards, I think that that could have some effect, not necessarily to say what you think, but, you know, if you think you see an opinion that may be unpopular today, but you think will become popular in the future, you know, then sort of, you know, standing up for that might be, might be a good move. I mean, but when you say, you know,

you just start another network, I guess a lot of this depends here on, you know, what are we talking about what are the costs of setting up another network, you know, is that just a sort of automatically it happens or it's really hard, I think, to wrap your head around that because we talk about it so abstractly, right? I, you know, if I try to sort of translate it to Bitcoin, for example, then you have like, yes, you can do that, you know, you can like fork the co-base do a new coin, but the costs are enormous. I mean, maybe the cost of just doing. the copying is not enormous, but the cost of actually trying to create value, they're moving people over is enormous. So I wonder if you'll have similar effects here, or if maybe what

you mean when you talk about networks is something quite different. Well, yeah, in some, in some, it depends on, so firstly, it depends on application. In some application, forking out a new network is just completely automatic, it just happens. So these do different networks are not really separable from each other. They are actually still using the same code base and same everything. Just the reputational system is falking out or also the economical system. But then in some network it might be manually. So just with a click of a button, new reputation system will be created around me. And yes, I mean, maybe thousands of them will be created all the time and will just die out because not enough people are interested in that donation.

I will be alone. But then those who, just like evolution, those who will have resonance around them will start growing and they will have more and more incentive to grow them further and then they will still use the same code base and same information and same everything that are not separable from each other the two network that just forked but they just use different reputation system

and in fact even that it's not like completely distinguishable like it's not that I will only use that system or only use that system I will have reputation of that system and you'll have reputation of that system and again it's just if it's just a machinery to to in a way identify alignment and misalignment and more alignment and so on between people and aggregate that and in a way organically and spontaneously mark where like-minded people are a thing together so you mentioned replication isn't money in this system but there is

something a little bit like money or tokens or a currency or or an app coin or whatever it is called. How does that work? And what's the role of that? Right. So the idea is that whenever people are doing activities in the system and then they are feedbacking each other, then two things happen. So one thing is that there is a reputation distribution or again, maybe the reputation

is a little bit confusing, but the influence power in the system is being distributed and redistributed. But another thing is that the economical power in the system, if you want to economical ownership in the system is being redistributed all the time. So if I'm doing contribution, if I'm contributed to a network, then I get back from the network some of the value in that network. And that that value is taking place in terms of crypto tokens. And each system, each network has its own crypto tokens.

Now, these crypto tokens are completely tangible. You can, you know, you can exchange them, you can trade them or just keep in your wallet and there are indeed decentralized application DAP tokens and they are adaptive to tokens because once a network is becoming powerful enough and it produces something maybe this something is decentralized journalism maybe this something is decentralized right sharing or whatnot then you will need or not you and anyone else will need to have those tokens the same tokens that were being distributed to early adopters and early contributors you will need to

use those tokens in order to facilitate the new service or product or value that was created by that network. So people that will have those tokens will be able to use them in order to facilitate the value and people who won't have those tokens will have to purchase them. And then either the people who don't have a token can purchase the tokens for people who have them or you can also do that via the system, which although decentralized, hold a smart contract that runs in a way like a bank. And then people who don't have token can purchase those tokens from the network.

and people who have tokens can sell their tokens on the network and gain back the funds that are entering from the people who purchase tokens from the network. So in that way, that creates a demand for those tokens that gives them a real tangible value and that basically reward back the early contributors and early adopters. This is basically a generalization, although somewhat differently put,

it's a generalization of the Bitcoin economy. Right. So I mean, we've, this is of course, these are ideas that we have actually talked about many times on this show. So we've had, you know, Joel Dietz on once upon a time, quite a long time ago to talk about swarm, you know, when they were doing their thing, which is very similar, right? We also had gems on, which was a similar idea that you had an app where you would reward early contributors who, you know, made the app popular and then they got some reward for that. we've had storage on at one point, also quite a while ago, which was a similar thing, where, you know, people would sort of contribute to network with their hardware thing. And of course, even Ethereum, you could think is in a way. It's a little bit like that, right? They pre-sell the currency and then it was given to developers as well, right? And then into a foundation.

Yeah, the miners, right. So yeah, I think that that idea of crypto equity is certainly interesting. Although to be honest, I feel like the results have been a little bit underwhelming with a lot of these projects that, you know, there was a lot of sort of promises and a lot of excitement and it didn't sort of quite live up to it. I guess that might have a lot to do with what we're talking about here, right? The sort of lack of tools and lack of technologies to actually enable those. processes. Is that one of the reasons that informs also how you go about it here? Yeah, absolutely. I think those ideas are great, but they were just very premature. I think we were lacking systems. Even the blockchain technology was still premature.

The DHD technology needed for that is too mature. The integration between them was premature. The protocol that I'm talking about, the economical protocol were premature. the governmental protocol completely misexisted. And it was just very early and visionary, but very far from implementation. And then that's exactly what we have decided to do differently this time. We decided to firstly build up the foundation

in a very systematic way and only then start building application with those technology. And that's where we are right now. we are having, I would say, not even the full foundation in place, but we are having a large chunk of the foundation of technology in place, and now we're starting to build proof of concepts, but from A to Z. It will still take a long time before the technology matures,

but we hope to have this year a first example of a completely decentralized cooperation. Maybe it's not, will not be fully scalable, maybe it's not be fully generic, Maybe it's not really, I don't know, fully operational, but it will be working and proving itself. And then I think this technology in the future will gradually build itself in the coming five years or so. Let's take a short break and talk about hide.me. You know, setting up a VPN on multiple devices can be complicated.

Say you want to do like three devices and you have 10 different exit nodes that you want to configure, well, that's 30 different configurations that you have to do manually in each of those devices OS. and that can take a long time. Hyde.me makes this super easy with their apps. So they have apps for Windows, MacOS, Android, iOS, and Windows phone. So you just install the app, log in,

and boom, you're ready to use VPN with Hyde.me. So this is perfect if you're traveling. You just install the app on your devices. And say you're using public Wi-Fi, you turn on the app, you connect, and you're completely protected against hacking, man-in-the-middle attacks, or any type of malicious activity.

And of course, the apps work with their fleet plan. To try out their free plan, head to hide the me slash epicenter. It includes two gigabytes of data, which is more than enough to keep you protected when you go traveling. It also includes three exit notes in Singapore, Amsterdam and Montreal. And if you use all URLs or hide up me slash epicenter, it's going to give you 35% off if you ever decide to sign up for a premium account. And their premium account includes unlimited data. It includes up to five devices connected simultaneously. So you can put your grandmother using a VPN, even your dog's tablet you can put on a VPN.

And you can use any of their exit notes and they've got 30 exit notes all over the world. And of course, you can pay with Bitcoin. So give it a try and we would like to thank HaTotMe for their support of WebCenter Bitcoin. So let's talk a bit more about applications. we've mentioned the idea of decentralized journalism. Tell us what are some other, perhaps far into the future, or maybe not so much far into the future, applications that you're most excited about

and that are, in all fairness, most likely to work with something like this because I think there's certain types of things that definitely would be hard to build on an application like this, but others are perhaps more obvious. What are your thoughts on that? Right. So, yeah, I think we're just starting to scratch the surface of it. So there are those applications are coming from the content, I would say,

like journalism and publishing and book writing. And there are applications who come from the making, like decentralized startups, what it looks like a million people who build a startup together. and there will be applications are more financial in nature like social trading of assets like decentralized insurance like essential lending

there are you know real like real life application more like real time ride sharing and other ride sharing application or transportation application there will be more more like the social like social networks Twitter

etc there will be a lot of applications that use the if you want the curation, the evaluation component in a way like decentralized Yelp or decentralized product hunt or those kind of network that basically help people to reach out to the content, to the information that they are looking after. What else? I'm sure there are many others that I just don't think of right now, but there are basically tens and hundreds of basically every industry that you can think of, I think, will have a decentralized counterpart.

Okay. And specifically with regards to governance, so we sort of brushed on this before the show where we said that this could potentially be useful for something like Bitcoin in the context of the block size debate and figuring out what is the good decision to take. And you mentioned, I think that there's a GitHub plugin. that you're developing. So in terms of governance of, say, things like a software project or governance of just, you know, government, like social government. Of anything.

Of anything. But, you know, like state government also. Tell us about how you think that Backfeed, what role you think Batfee could play there and how those dynamics would play out. Well, I think any Descentrales interaction, cooperation, collaboration, of many will need some level of governance. And that can be from, as you say, the central governance for decentralized application, like just such like Bitcoin,

where today we speak about decentralized application, but the governance, the building of the application is completely centralized or we can talk about decentralized collaboration to build stuff together. And I'm saying that in the future we will just have decentralized organization where the, the building of stuff and the usage of stuff and the adapting of stuff is not separable from each other. It's just one continuous or one continuum.

And so, yeah, so the Senate Governance is starting from, you know, from application to collaborations and eventually to meta-collaborations, you know, between different applications or between different networks. And eventually also, I would say, to real, you know, to real-life networks, to either it's IoT's or actually, you know, municipalities or states. I see no reason why it will not reach there, although, of course, it will take more time. But eventually, I think once I would say we learn how to spontaneously, indirectly manage a society, I think we will find out that this unmanagement, if you want, is an order of magnitude more efficient than centralized coordination.

and in that way we'll find out to be more powerful, more resilient, more participatory, more growing faster, and probably also more fair and desired for everyone. So, yeah, I think eventually it will reach out to real-life governance as well, but of course it will take much more time for that. And one issue that we wanted to touch on as well, and we were supposed to have one of your co-founders on Prima Verde Filippi. She couldn't make it, unfortunately. And we wanted to ask her the question of the legal status of DAOs.

Of course, she's done a lot of work on this because it's part of her research. And the idea of the question of legal status of DAOs has come up quite a bit. And when we're talking about, we've been talking about DAOs, simply like crowd sales, like Ethereum's, crowd sale. it had been questioned whether or not those were legal or not. And with something like the zoos, Brian and I were speaking about it earlier before the show. And it, well, the legality of something like the zoos could be questioned where, you know, you're potentially building a taxi service that is made up of people that don't have taxi licenses. So how does a DAO, where it,

where there is no central authority managing it fall into an existing legal framework. Are the individuals taking part in something as disruptive as building a decentralized ride-sharing system? Are they not becoming, are they not putting themselves at risks individually to be targeted by, you know, lawmakers that would say something like, you know, you can't do this. We're going to find you. We're going to take your driver's license. or perhaps take your car away. So, well, yeah, Lazzo is very particular because of the taxi and driving stuff and insurance,

but actually there, since we're speaking about real-time ride sharing and it's not commercial drive, then I think there is no issue about any insurance or risk. Still, the sensitivity is not actually there. The sensitivity is in the token economy. and the if you want the risk is the exposure of these tokens to definition of securities

or the exposure of the whole monitor system around it to definition of banking and all that these are the serious sensitivities there's a lot of work put forward

to struggle that because in a way those new futuristic technologies and systems are right now bound to all regulations which doesn't fit them anymore and are not serving the purpose anymore and there's a lot of work in a way to legally architecture that framework that will make that

that system legal and legitimate and at the same time there's a lot of effort to change regulation to fit the future. So I would say that, yeah, I would say there are two, if you want two ways, or, yeah, three ways to think about it, two that I just mentioned. One is building the legal architecture to make what exists right now in the new technology

fit the current relation. another effort is to change the current regulation. And the third, if you want ideology, is simply to build a truly decentralized network. And then regulation in a way is just impossible. I mean, even today, the regulator could have woke up and say, well, Bitcoin is illegal. But there is just simply no way to regulate anymore Bitcoin

and say it's not legal. It's just there. It's just impossible to unroot it. So in a way, it's too late for the regulation. the regulation has to face it, the existence of Bitcoin, and to adopt its regulation accordingly. So the same thing happens here. I think there are advances in all three fronts,

and eventually I think it will just meet somewhere in the middle. We are personally trying to, we are planning to, in the coming year, to spend a lot of our resources on building those legal architectures that will make those frameworks completely legal in all jurisdictions. and it will take a long time before the network will be fully decentralized at a technological level so we're not waiting to that time. We're just trying to adapt what we are doing to be legally in the current regulation scheme. Today's magic word is feedback.

F-E-E-D-B-A-C-K. Head over to let's-talk bitcoin.com to sign in, enter the magic word, and claim your part of a list of your list. reward. So is Backfeed sort of a regular startup, you know, that has raised money from investors and is trying to, you know, make money and exit at some point? Do you guys have a, what is the business model here? Right.

So Backfeed, yeah, BackFeed is a company that was one of the lessons I took from Lazos. Laszouz, we said, no, we are building decentralized cooperation. We will be ourselves, decentralized cooperation. but that was a little bit too naive because it was too early. The tools were not mature, the framework, the protocols, and nothing was mature enough.

And this time we said we'll do it, we'll extrapolate. We'll start in the world. We'll found a company. We'll raise money. We'll have a business model. And then gradually, we'll build the new world.

Eventually we'll decentralize ourselves as well. So, yes, BackFit is a company. We've raised so far in two rounds, about half million dollars. We're now raising actually these very days. We're raising a few, a little more fund.

we are also now actually in process of raising larger funds from VCs that we are hoping to close in the near future and we have a business model. So the business model is very simple, it's just the business model of decentralized cooperation is that if you are contributing to the network, you receive tokens. As I said, those tokens become valuable

because they are needed to facilitate the network and us backfeed as if one is a founding agent, we will receive amount of tokens for our contribution to that network. So initially we'll be the founding contribution. We'll have all the tokens, but then as long as the network is growing, we'll just become just one more agent. Back for the company will just become one agent in a network that is contributing and getting tokens

and eventually redeem those tokens into funds. And if you want, my vision or my dream is actually making an IPO, but IPO not in the stock market, but IPO into the decentralized world. So eventually BackFit can dissolve in the decentralized organization. It is it is founded. So it will just disappear into it. Yes, and the idea is to create value for the investors. That's, you know, we need that to engine and fuel our development.

So it serves that future. So we're not trying to, we're trying to build a new future, but we are still relying on the existing one. Yeah, okay. No, that certainly is, it's an interesting. same model, right? I think I remember talking about this with VC actually at ages ago, you know, two years ago or something where we had that sort of conversation. It's like, oh, would you, would you be allowed to, for example, invest in tokens directly or, you know, maybe invest in a company that then does this sort of thing and comes out with tokens?

So you alluded to a little bit that the sort of world you see and I think especially like backfeed dissolving into. into this kind of decentralized organization itself, if we project forward and let's assume that, you know, this is successful and a lot of other projects like that are successful and, you know, this technology gets, you know, adopted on a wide scale, what kind of world, what's the world going to look like? And what are the sort of second order effects of that?

Yeah, that's a good question. So, so first of all, you can be sure that the world will be decentralized. and why that I mean that everything will be decentralized. Human beings and artificial intelligences and well you can also assume that artificial tangents and human beings

will not be that far from each other. They will be all intermixed with each other. You'll have in a way what I call swarm intelligence. So Backfield Protocol is basically it's a machinery for swarm intelligence of people but it's also just as much as machinery for swarming

intelligence of bots, of bots or agitemes or artificial intelligence agents. So eventually you'll have these, I don't know, trillions of artificial agents, artificial intelligence agents, whether it's in Internet of Things or whether it's like in the financial market or anywhere, each of which will operate by its own strategy. And then you'll have millions and billions of people, each of which will be a free agent, you know, to act in any way and be part of anything that he or she wants. And then the idea of the blockchain

and the backfield layer and all that is basically to indirectly synchronize, indirectly coordinate with all of those trillions of agents into a collective coherent state in the collective coherent action. The derivative will be that there will be a large-scale correlations, large-scale corporations that will make much more efficient activity,

much more efficient decision-making, much more freedom. I think this kind of movement will completely release the power from the hands of a few people, from the hands of, if you want, governments, from the hands of people with very, very large stake. and will be distributed in a much more wide scale, I would say, not necessarily evenly, but in a wider scale. It will release content information.

It will release, it will create much more cooperative environment. If you want, it's creating the environment where cooperation is the winning strategy, rather the competition, or better say, cooperation. So there is a lot of cooperation and maybe on things we agree in competition and things we disagree. I think it can create, I think today it's the only thing that actually can can can can can can can can can can can can cure if you want the ecology. So we talked before about decentralized governance. You can also apply all these ideas to decentralized ecological governance. So the decision making of what is good ecologically wise and what is bad ecological wise.

and how to monetize that and in a way incentivize large bodies to be ecologically viable, it will create a much more coherent production chain because today the production chain is completely disrupted and divided into tiny, tiny, tiny bits, that each of which optimizes itself, but the whole chain is completely off optimum. The whole chain is completely disrupting the environment and completely distracting the will and the desire

of the consumers. And when you have a spontaneously indirect coordination over the whole throughout the chain, you can optimize the whole chain to be, you know, ecologically wise and consumer-wise and everything. So I would say that generally we'll have a much more coherent world,

much less disrupted or, you know, corrupted world, I hope. Yeah, no, that's certainly a hope that we share as well. So you mentioned a little bit about the GitHub plugin you're working on and also the publishing site. Is there anything else people should check out or, you know, if they want to collaborate or cooperate with Backfeed, what's the way to do it? Yeah. So firstly, the best way is to just enter our new website that we just launched recently, backfid.cc, b-ac-k, fwedd.c. Inside there, you can also reach the Backfield magazine that we just launched. This will be an open magazine where people will guest authors.

I mean, we will also fuel that, but guest authors will, we already have a list of guest authors to write blog posts and articles. And gradual, we will make that as one of our flagship applications. So the Backfield magazine itself will be a decentralized collaboration. eventually to be fully decentralized for the community and by the community. Of course, people are always welcome to be in touch with us to cooperate. We will gradually build the decentralized collaboration around this. So we call it the DCO for DCOs.

So to found a decentralized collaborative organization that is building the environment for the centralized collaborative organizations. And at some point, we'll also make a crowd sale of tokens to fund initiate that DCO. So we expect the crowds of tokens for that towards the end of this year. Yeah, and I mean, people are contacting all the time, and we hope to create a movement, to create a momentum around that. Eventually, it's not only about us, by the way, the stack that we are envisioning is a much bigger stack than just backfeed.

We are, if you want, making significant layers in the stack, but there are others. There are the blockchain elements. There is the Dhty elements and like visual browser or explorer elements. And we are in touch with all of those groups who are building today components which may serve as part in that stack. And we are trying to build up a much larger cooperation to fuel and bring about the future that we see. So I think, yeah, I think cooperation should be part of that of the design also to make that that happen. Okay, well, Matan, thanks so much for coming on and sharing a bit about what's going on with Backfeed and you vision for that.

And I'm certainly looking forward to seeing what, you know, as you roll those projects out and as those things kind of come into real life, how they turn out. So thanks so much for taking the time. Thank you. It was a pleasure. Yeah, so we're at the end of our episodes. So Epic Center Bitcoin is part of the LTP network. So you can find lots of shows on Let's Sok Bitcoin and they're quite excellent. So please check that out on let's talk Bitcoin.com.

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