Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Vinay Gupta: From Lawyer Capitalism to Programmer Capitalism

Episode Date: January 18, 2016

Vinay Gupta has been a programmer, 1990s cypherpunk, ‘resilience guru’, Ethereum release coordinator and currently collaborates with Consensys to mainstream smart contract technology. He also invented the Hexayurt, a cheap and resilient architectural structure for disaster-stricken communities. Recently, Vinay has become a thought leader in the cryptocurrency space. He is famed for his eloquence and ability to distill the crypto-finance technological paradigm into easy big-picture visualisations. Check out this podcast for some unique insights into technology, politics and history. Topics covered in this episode: His work on resilience. The connection between resilience and cryptocurrencies A history of the cypherpunks – who they were, what they believed in and why they failed. Why smart contracts matter? What is special about them? The impact cryptocurrencies will have on capitalism Why cryptocurrencies could be a great tool to explore basic income Episode links: Vinay Gupta - Dangerous Old Men: cypherpunk's failure, Ethereum's success Vinay Gupta - Resilience Guru | London Real Simple Critical Infrastructure Maps Vinay Gupta | Computers that just work | State of the Net 2015 Vinay's site re.silience.com This episode is hosted by Brian Fabian Crain and Meher Roy. Show notes and listening options: epicenter.tv/114

This is Epicenter Bitcoin, episode 114 with guest Vinay Gupta. This episode of Epicenter Bitcoin is brought you by high.combe. Protect yourself against hackers and safeguard your identity online with a first class VPN. Go to hide.combe slash epicenter and sign up for a free account today. Welcome to Epicenter Bitcoin, the show which talks about the technologies, projects, and people driving decentralization in the global cryptocurrency revolution. My name is Brian Fabian Crane. And I'm Meher Roy. Today we have a special guest with us. He's called Vinay Gupta. Many of you might

already know him. He has previously been a Sifa punk, a global resilience guru, a release coordinator for Ethereum and he's now associated with consensus. We'll be talking about all of these topics, identity, how to fund public infrastructure and other themes. But first, let's have an introduction from the man himself, Vinay Gupta. So, hi, guys. So right now I'm split between the consensus group and the Ethereum Foundation, mostly working with consensus. And I'm really kind of in the middle of doing the 2016 kind of planning an analysis,

just trying to figure out what's going to be important this year and what role I have to play in that. Cool. Can you give us, what are your most important, interesting predictions for this year? Well, so I think that up until now, the entire field has been largely limited by available money. You know, it's been quite hard to raise funds for projects. There's been a lot of curiosity from funders, but not very much action. And I think that R3 has kind of tipped the entire ecosystem into a different gear.

Like it's legitimized this notion that blockchain is a technology that is critically important to banking. And at that point, the money is seriously beginning to flow into the field. So I think that this is the year where we're going to go from it being scarce money and abundant talent to being abundant money and scarce talent. And I don't think any of us really know how to operate in that environment. We're so used to having to bang on the doors that now that the doors I think are largely auto-opening, I think we're going to have a fair amount of chaos. So what I'm trying to do is look at what's happened in the dot-com world over the past 10 or 15 years to try and figure out how our field is going to change and what we have to do to adapt to the new operations. operating environment where we're going for being scrappy outsiders to being the new mainstream. So you're predicting a dot blockchain bubble?

Oh, it's already started. I mean, my estimate is that we're going to see a billion dollars come into the Ethereum ecosystem in 2016 alone. And the general estimates for the amount of money going into the entire blockchain ecosystem, including Bitcoin, is on the order 10 billion. I think a single machine. 10 billion this year is what we're going to see. Yeah, 10 billion this year. So, for example, J.P. Morgan recently released a report suggesting that they were going to put 9 billion. Actually, I think it might be leaked rather than released.

But they were going to put 9 billion into the high-tech ecosystem, including drones and blockchains. Government of Singapore has a $7 billion smart cities program and is seriously interested in blockchain stuff. there's just a really, really, really broad-based push from water entities to get this technology into their systems. No, I totally agree with that, and I'm certainly very optimistic and bullish on the prospects as well, but that is definitely a different level of... Oh, yeah. Yeah, we'll see if that happens. That would certainly be interesting to see what happens then.

Because you're certainly right, right? there's a certain lack of talent and a lot of immaturity too. So if you start having, combining that, like immaturity of the tech and the knowledge, how did you use it and all? So if you combine that with insane inflows of money, I agree. You'd probably end up with all kinds of interesting, weird, and slightly nonsensical projects.

Well, one of the things that really strikes me with us it's very, very hard to pick winners, right? So I saw, you know this investor, Paul Graham, runs an outfit called Y Combinator? So Graham describes what he thought when he was offered the opportunity to invest in Facebook, which was that it was a tool for people who had no money to do something not very important.

And it was, you know, obviously not going to go anywhere. Right? You know, it's a way for college students to waste time on the internet. That's just, why would anybody even invest in that kind of thing? Lots of people looked at Airbnb and said people are not going to rent each other's living rooms to each other. That's crazy. That's ever going to happen.

You know, how do we tell what's going to be important and what isn't ahead of time? Yeah, absolutely. So before we keep going with that, let's take a step back and focus a little bit on your back. So one of these labels that are applied to you, you apply to things you call yourself as a resilience guru. Can you tell people what is resilience? What do you mean with that? Well, so my background is disaster relief. I mean, I have many backgrounds. I've done lots of things over the years. But I spent many years on a disaster relief technology called the Hexia. Which is, do you know Burning Man? Have you been to Burning Man?

I have been to Burning Man. It's actually funny because I have been to Burning Man. and I was listening to your interview with London Real, which was fantastic, by the way. And I heard you say, mentioned that you invented the hexade. And I was a Burning Man in 2012. And I remember like Googling about it in preparation and reading about the hexahirt. So I was like, oh, wow, that was you. So yeah, I know what are you talking about there. but perhaps for those who don't know, what is the hexahe urge?

Well, so I'm going to show you a picture right here if I can get this damn thing to open. I guess that'll work. So let's see. How's that for a high-tech solution, huh? So there you could see on the screen this silver building sitting in the middle of the desert. Apologies for it kind of wobbling a little.

There we go. So the point of that building is that the wall is a whole sheet 4x8 just as it comes off the track. And the roof pieces are triangles, which are half a sheet of 4x8 cut on the diagonal. Zip, boom, there's your triangle. And the reason for doing that is it means that you could take an industrial supply chain which generates plywood or OSB or poly-iso insulation or wherever it happens to be, and you could take the stream of that material, add a table saw and maybe a couple drills

to the end of that process and have an emergency housing solution. So it's a really, really, really simple way of generating enormous quantities of housing. And given that we've got 60 million refugees in an ongoing refugee crisis in Europe, it seems like the kind of situation where being able to generate huge amounts of housing really cheaply might be a good idea. And that's the first part of a much broader system. So the second part, if I can just bring this up. Apologies for the somewhat low-tech AV solution. So the second part is a thing called the dartboard of death.

Can you see this here? The dartboard of death. And it's a planning tool called simple critical infrastructure maps. And it's a way of figuring out if you're going to deploy 60,000 hexhertz in the middle of a desert field, desert plane. What do you need to provide people as well as the basic physical structures so that they can live? You need maybe some solar panels for communications. You need toilets. you need water filters, but most of all what you need is a comprehensive map of human needs

so that you know whether you've covered everything on the required list or not. And it's actually quite hard to come up with a fully objective, fully comprehensive list of human needs that will apply in all places at all times. But that's what the resilience map system does. And I did this stuff. I worked a bit with the Red Cross. I worked a bit with the UN. I worked a bit with the American Department of Defense.

I worked a bit with Diffid in the UK. I worked a lot with the team that went on to do the IKEA shelter, the one that they're deploying in Syria and Jordan, I think, right now. And so that's what I did for a really long time. And they use them in enormous numbers of burning that. They just download the plans from the internet and build them. There's probably a couple million dollars worth of them built every year. So what kind of disaster scenarios are you most concerned about personally? Well, so for me, the big thing is climate change.

expectation is that we're going to see something on the region of 150 million people displaced. And the existing humanitarian systems are completely unable to cope with 150 million people who have no place to go back to. So we've got pretty good solutions for doing temporary shelters, but we don't have good solutions for long-term or permanent displacement. And most of the people that are displaced by climate are going to be permanently displaced because their homes are gone and their farmland is covered in saltwater or the cities are just covered in mold and they're of it will be inhabitable then. So,

so that's a lot of people, like 150 million people displaced is a big, big amount because, I mean, what's, what's that like? That might be like, you know, a few, like one or two percentage of the world's population. So we're talking a very big number. That's right.

That's right. Okay. And you personally see this kind of scenario occurring over the time horizon, like what kind of time horizon? We've already got 60 million refugees as it stands. So that number is only going to go up until we find some better solutions for dealing with them.

Do cryptocurrencies have a role to play in a scenario like that? Like if you have 60 million refugees already and you could go up to 150 million, let's say, with climate change, what role does cryptocurrency tech have there? Well, so cryptocurrency tech itself is a small part of a much wider set of things you can do. So the technologies that give you the assurance that the Bitcoin won't be double spent

can also give you things like passports. They can give you non-reputiatable medical records. They can give you all kinds of tight control of information. And that's really, really important to refugees. So imagine that you are a refugee and you document every step of your journey on a blockchain. You've got an app on your phone, you take some pictures of where you are, the pictures get uploaded into IPFS, the hashes get uploaded into the Bitcoin or the Ethereum

blockchain, and every day you take a couple of pictures to document your conditions and document what's happening to you. If you've got a hundred million people's worth of that stuff as a kind of public log of what's happening, it becomes very hard to deny the scale of the problem, it becomes very hard to offer substandard services. If something goes wrong and these people are, for example, left to freeze the death as happened in the Pakistan earthquakes, it becomes really obvious that you have people recording their damn deaths on camera in a blockchain, and this forces accountability on the international community. In addition, if you've got the ability to show identity credentials, maybe you can get people

across borders, and then finally, you've got the ability to actually give people money using a blockchain. But fundamentally, I think that there's a big question of accountability and I think that this is fundamentally about blockchains as an accountability technology first and as a currency technology second. So is your interest in blockchains, Bitcoin, Ethereum, is that sort of an outgrowth of your interest in resilience and disaster or do you view it as a more of a separate thing that has some areas of intersection? Well I mean the fundamental reason I'm

in this stuff is because I was a cipherbank in the night. 90s. So, you know, in, I don't know, 96 or 97, I helped some people write some software for getting human rights abuse data out of China. I was very heavily involved in sort of magic internet money in 99 in 2000 when the technology choice was a thing called eGold. I wrote a prototype for an append, only general ledger based cryptographic stock market with bearer shares in 2000. So I was quite into this stuff. When I saw Bitcoin come over the horizon, I completely ignored it because I knew it was just a currency. And what I'd seen from the Egold example was that things which were just currencies didn't produce any social change.

It was better money, but it was just better money. If you wanted to produce interesting social change, what was really required was smart contracts. So when Ethereum came over the horizon, it was like, ah, smart contracts are back. Right, that's worth going for a look for out. So, you know, I came over to the Ethereum space and sure enough it was smart contracts. And once you have smart contracts, you could build an entirely new world. The smart contract is a hugely powerful construct. Explain to us, so explain to us why a smart contract is powerful. Okay, so there's a whole bunch of different reasons why smart contracts are powerful.

But what they boil down to is this. Right now, software exists inside of a given organization. or inside of a given individual's property. Even if it's running in the cloud, it's running in a piece of the cloud that you rent and therefore it's your cloud. The result is that the software always has the agency of the person

that is paying for the software to exist. I mean agency in a kind of technical economic sense. It's my software, it's your software, it's their software. And as a result, to a large degree software doesn't change the trust architecture that exists in the world. My software is not that different from my staff, or my book or my industrial machine, wherever it happens to be. Once you get to smart contract, you have software, which isn't yours or mine, it exists in the space between us.

So the software is in some sense relational. It doesn't exist inside of the nodes. It exists inside of the network. And that's interesting because it generates new architectures of trust. And new architectures of trust, you know, the last time somebody invented a really fundamentally new trust architecture, the output was capitalism. You know, the joint stock corporation was a new way of handling trust. Limited liability was a new way of handling trust. And what came out of that was enormous change, really, really enormous change.

So I think that smart contracts probably won't have quite as much impact as the invention of capitalism, but they could very, very easily be the next stage of capitalism's development. Okay, that's interesting. So actually, that's one of the topics I wrote that and I wanted to talk about was the sort of impact of all of this on capitalism. So, which was sort of towards the end, but let's talk about it right now. So do you view smart contracts and blockchains as, as the next stage of capitalism, or is there also the potential to have something that's, you know, truly different

and forms of economic interaction that aren't very well described by the word capitalism? So Buckminster Four describes what we have now and what we call capitalism is law cap, lawyer capitalism. And lawyer capitalism, basically the transactions are contractual, the contracts grow and grow and grow and grow because that's just the nature of reality that things gain complexity over time. And as a result, over time, more and more and more the value in the system becomes owned by lawyers.

One of the critical examples of that is that the US government is almost entirely made of lawyers. There are almost no engineers in Congress or the Senate. It's lawyers, lawyers, lawyers, lawyers, and more lawyers. So, forces that law cap is inherently sort of parasitic, piratical, inefficient, and it has a whole bunch of fundamental problems because the most powerful class of people within lawyer-based capitalism are also the people that have the most to gain from being complex and inefficient.

And this results in ineffective economic choices. the notion that you could go to a kind of tech cap, right, a technical capitalism where the vast majority of the hard decisions are made by software and codify bodies of software take the role that's currently made by law, I think is pretty credible, right? I think that, you know, say 15 years from now, you know, by the time you guys are basically my age, I think it's entirely credible that you could have a situation where you have, you know, hundreds of thousands of lines of software, tens of millions of lines of software, that embodies things like a uniform commercial code, which could be used for taking 70, 80% of disputes and making an automated resolution on

them. So you have a set of trusted third parties or more likely insured and escrowed, bonded third parties that input the information into the systems about what happened, and then the software makes a resolution based on previous case while in the rules that were programmed into it. everybody can see the software therefore everybody knows the outcome of the decision before they actually act and as a result you wind up with this very broad clear lane in which very ordinary transactions never wind up in court because everybody checks a transaction against the legal software before they act and as a result their actions are always legal and I think that that kind of stuff could grow out with the smart contract ecosystem really easily

you know it's kind of like pre-cognitive compliance you check against the compliance suite before you act in the same way that you check against the test suite before you upload a new piece of software to your servers. And if it sounds kind of crazy now, how crazy would it have sounded that we would have something like Amazon Prime now in 1995 when we were just, you know, before we'd invented e-commerce? So I agree. I think that's a very plausible vision there that, but essentially where you're going there is that a whole set of economic interactions, they're maybe manual now and mediated by courts of law and lawyers a lot, right? They essentially become automated, and they also move a little bit at least, or probably varies a lot depending on the situation and the

environment, but they move a bit out of the grip of the sort of existing legal framework, right? Well, I mean, international business is not going to continue to be tied up inside of nation state courts forever. That can't happen. Absolutely, yeah. But if you take a step back and look at this, it's from a little bit more of a macro perspective. What is the end result of that? Does that mean we just have the sort of capitalism today where you have an enormous power, for example, of the wealthy and those? you know, big corporations, is that going even more like that because you have the power of the state is being eroded?

And so you have, let's say, inequality increases even more in a world like that because there's less ability to reinforce, for example, redistribution. Or will you also have, let's say, alternative models where people use things like Ethereum, cryptocurrencies, these DAOs to have completely novel models of interaction and community and economic collaboration. Okay, so this is where we get to a really, really complex problem. So different societies vote for different kinds of wealth distributions inside of democracies. The Scandinavian societies vote for a more equal wealth distribution, and they get it. American society votes for a much less equal distribution

and they get it. You go to South America, they vote for really unequal wealth distributions and they get those. It's my opinion that in almost all societies, the democratic mass of people could vote for more equality if they actually wanted it.

And in most cases, what happens is they actually don't want that much more equality. What they want is more opportunity. And generally speaking, the voters are substantially to the right of the governments. So the political

party system and for your electoral representative electoral democracy and all the rest of that kind of stuff seem to have a stabilising impact on populations that if they were basically left to make their own laws would I think be vastly more libertarian, vastly less caring, vastly

more selfish than they are now. So for example I think that it's pretty clear that after the collapse of the Soviet Union, things like the welfare state as a concept are largely being eaten away, not by capitalism, but because the voters just don't care enough to maintain the damn things. So my feeling is that we're in a position where the world is growing increasingly competitive and increasingly selfish, and I think that the way that we choose to deploy these technologies will mirror those values. You're not going to see a fundamental change in how we

do things in terms of sharing or welfare states or those kind of concerns, we're not going to see a more equal society until people use their democratic power to create one. Because if they're not willing to vote for more equality, they're certainly going to deploy technologies to give it to them. I think the basic truth is that people right now just generally speaking don't care and we still have to build an efficient world and an effective world with people that are really fundamentally kind of uncaring about each other. We have to make it work in spite of human nature, not because of human nature. Yeah, that's an interesting point of view.

I probably disagree with you on some levels here. I mean, I think especially the idea that people have that much ability to, you know, make real choices. I think if you look at, like, for example, the United States, it seems to me that the political system is so corrupt and captured by, you know, large industrial interests and law. groups and stuff, that the ability for, I mean, you would need an enormous amount of consensus among the population and sort of collaboration and movement to really fundamentally change something there. But I agree with you on the longer run. That is democracy, right?

Democracy is that you don't change the rules of society until more than half of the people who vote want that change. So the kind of enormous collaboration that you're talking about to get change to happen, that's what democracy looks like. It requires enormous pressure from maybe 25 or 40% of your population to get change to happen. That's the democratic process. If you've got a situation where smaller numbers of people could cause radical change, you have a very poor representative democracy. Well, I don't know if I have a very poor representative democracy. Well, I don't know if I would agree with that. I mean, I think you can have a system where there's, there's, it's so difficult for to have a,

the opinions from the voters sort of to flow up that in the end, the entities and the parties that sort of control the executive process, you know, they can have just enormous amount of latitude that largely remains unaffected by anything else to have. happens. In the areas where the voters care, they have no trouble at all controlling their political parties. Right? American voters really care about gun control.

They have no problem at all making sure that the parties keep them in, keep gun control where they want it. The pro-gun people have a party that is always going to be pro-gun and it fully represents that view. The anti-gun people have a party that's fully anti-gun and it fully represents that view. Same thing on abortion rights. right in the areas where the voters really care the parties completely comply and will not move for anything but you could also say that the two issues you brought up there gun control and abortion

rights are things that really don't matter that much right if you in terms of the actual power structures today they're like side shows that nobody really cares about well they sure as hell matter to the voters well an enormous powerful, right? And the enormously powerful people. I mean, think of the size of the anti-gun lobby in America or the size of the anti-abortion lobby in America. These are huge organizations.

The National Rifle Association has something like 4 million members. That's roughly 1% of all Americans, maybe 2%. It's an immense organization. I don't know how big the total collective of all the radical anti-abortion activists is, but it's probably a similar size. These are really, really big pressure groups. They're vastly bigger than the pressure groups around things like access to health care.

They're vastly bigger than the pressure groups around things like environment. The bottom line is that what you're dealing with here is enormous public apathy about the issues that are important to us but are completely unimportant to them. Yeah, I wonder if you're right. I think there's some other things going on as well. For example, if you, you know, they've done experiments where they ask people, people, ask for example Americans, you know, what do you estimate is the current wealth distribution, how much of the wealth or income is earned by the top 1%, top 10%, you know.

So they ask that question. And they ask, what would you like it to be? And the thing is that what people estimate is completely wrong. And what they would like it to be, that's like Americans tend to align with like the actual wealth distribution in Scandinavia or something like that. So there is a, yeah. Yeah, I read an article or two about the stuff you're talking about. Yes, it's absolutely true that if you show Americans, you know, wealth distribution graphs,

they're shocked by how much money is concentrated in the top. But if you tell them, we're going to take everybody who is poorer than you and we're going to give them some of your money, they freak out. Right, but then for 99%... And if people you would ask, you wouldn't actually take their money, but you would take the money of those extremely rich, right? So they... Well, okay. So if you're talking about reallocating wealth inside of dominant imperial powers, that's not in any way creating social justice.

Right? If you're stealing from the world at gunpoint, which is basically the business model of empire, you know, a prince is nothing but a stationary bandit. If you're stealing from people at gunpoint as a way of fueling your economy, even if inside of your country the economy is very egalitarian and fair, outside of your economy, you're still basically rape and pillage Vikings. So every time that the Americans start a war to try and bring the price of oil down, every time that the Americans invade a bunch of South American countries so they can facilitate easier access to either cocaine or bananas, right?

All of those kind of processes, if you look at the other end of where America's wealth, created, it's created inside of authoritarian socialism in China, it's created inside of you know vicious feudalism in Africa. So if you're going to have a society which is genuinely fairer, you've got to remember that the global 1% line is 35,000 dollars a year. If you're making 35,000 dollars a year, you are the 1% globally. So if wealth is going to be reallocated in a fair form, it's going to make almost all of the you know, European and American middle classes radically poorer. And they're going to fight that to the death. Let's take a short break to talk about hide.me. Look, when you're choosing a VPN provider,

you want to make sure that your privacy is protected. You know, if a government agency tries to force the VPN provider to hand over some of your traffic or browse information, will they be able to do that? And is your payment information attached to the account? These are all things that you want to consider when choosing a VPN provider. With hide.combe, all that's taken care of. For starters, they're based in Malaysia, and Malaysian laws don't require them to keep any logs. In fact, Hyde.Me has no logs of your traffic or browsing history. So even if a government agency was trying to force them to hand over some information, they would be straight out of luck because Hyde.m.me has nothing to give them.

In addition to that, they use a third-party payment provider, which doesn't give them any of your payment information, so they have no way to link an account to like a credit card or a PayPal account. So even if you're paying with PayPal or credit card, there's no way for Hyde.Me to know which account paid for what. And of course, if you're paying with Bitcoin, then you're completely transparent. And so what we suggest is if you're creating an account with HyD.Me, if you want that extra level of privacy, just make a fake Gmail address and use that to sign in. So that way, you're completely anonymous.

You can give Hitami a try with their free plan. Their free plan includes two gigabytes of data at unthuddled bandwidth. You can use any of their free exit nodes, which are in, Amsterdam, in Singapore, and in Montreal, and you can sign up for that at Haithumme slash epicenter. Now, if you use RURL, and if you decide to go premium down the line, it's going to get you 35% off. And the premium plan gives you a lot. It gives you unlimited data. You can use as much as you want. You can connect up to five devices, so your whole household fits on the plan, and you can use any of their exit nodes all over the world, and they've got like 30 of them.

And of course, you can pay with Bitcoin. So give it a try. We would like to thank Haight. combe for their support of WebSand on Bitcoin. So like universal basic income, do you think blockchain could enable that and how? Ah, so I did a talk about this for state of the net in, oh, where the heck was it, Milan?

state of the net in the land I did a half hour maybe an hour talking universal basic income with blockchains pretty easy to find maybe I'll send you guys URL or something so my basic thinking is that it's very very easy to do universal basic income on blockchains and blockchains are a really good medium for

experimenting with universal basic income because you can record and watch all the spending to know exactly how the universal basic income was spent and as a result it becomes really really a lot easier to justify whether these programs are working or not. So I'm quite in favour of blockchains as a prototyping technology for these kind of radical changes in social policy. You know, whether it's universal basic income,

whether it's some kind of tax credit for people who have three children in countries with a low birth rate, whether it's a change in retirement age, if you're going to have a change in social policy that you could conceivably document on blockchains. I think there are really good reasons for doing it because it allows everybody that's either for or against the change to look at the same non-editable data set to make their arguments about the effectiveness of the policy. So I'm definitely for that. So for instance, like universal basic income might have a shape like you have a small island, let's imagine a small island with 200,000 people. And they essentially done a blocker.

chain and the issuing schedule like Bitcoin has an issue in schedule where new bitcoins are issued to the miners that solve the blocks in this in this imaginary blockchain in order in addition to new coins being issued to the validators or miners you have coins being issued every year to each citizen on the island yes sure sure like is that a good imagination of universal basic income that sounds very much like Aurora coin, which was a project floated for Iceland. Iceland's about 300,000 people in the IDOs who are going to have some kind of system tied to the Icelandic national ID number.

So in Iceland, they have a national ID number called a Kenetala. And everybody's Kenetala is visible in a basically like a phone book context. So they're never used for identifying people in any kind of private situation. But they're used for things like library cards. And it's a really smart system. It's actually quite intelligent. Because they're so public, the assumption is not that your Kedatala identifies you. They're ever used for verifying an identity because anybody can look them up openly,

but they are used for convenience. It's a really smart system. So, yes, if a country like Iceland implemented something like a rotor coin that had broad popular support and it worked, no reason it couldn't be tried, and you could document the success or the failure of the project as it went. Whether it would work in terms of making a better society, I'm not at all sure. Because there are two problems. The first is redistributing wealth has a very bad history. So you start with universal basic income.

The landwards increase the rent by 20% to soak up all the money that comes in. Society continues exactly as it was in all that you've done in subsidised the landfords. We don't know whether that will happen in practice, but it certainly could happen in theory. Another problem is that universal basic income to distribute its wealth but not power. So you're not going to necessarily wind up with a better or failure or a more equitable society because if you redistribute wealth but you don't redistribute power, all that will happen is that people with power will continue to change the rules of the game to benefit themselves. So I think that universal basic income is probably coming.

it seems like an inevitable next step in social policy, but I have a feeling that it's going to create a bunch of new problems and maybe that's just the nature of progress. Fix some problems, create others. So that's an interesting perspective that it doesn't change the nature of power. And I'd actually like to merge that with your earlier point about the system that we are in being lawyer capitalism. So the way I read your comment is that today, due to the fundamental nature of contracting in capitalism,

what ends up happening is there's a lot of administrative cost in order to make these contracts and have them maintain and then, and then have the dispute settled. Now because of this high administrative costs, the class of lawyers becomes very powerful in a society. And because power concentrates in these class of lawyers and they end up having political positions, they tend to make the rules of society even more complex. They tend to make the contracts even more complex because that is how their class makes the living in the first place. So it's kind of a kind of kind of. a circle where you are a lawyer you become a politician you have the power to make laws and

you make ever more complex laws because that's how people in your class are going to benefit and slowly the complexity of our social structure becomes way more than it needs to be yes do you know the the old joke about the indian bureaucrats no i don't so the joke is that if you're a bureaucrat in India, you know, you're the head of a department. When you have a child, you make a new form in your department. And over the next 25 years, the form gradually becomes more complex and it grows some additional forms, and then you get some processing, and then you get some regulation, and then you get, you know, some oversight. And by the time that you're done, the form, over 25 years, grows into a department. And then when your kid graduates from law school,

you install them as the head of the department. And this is the kind of organic biological growth of the complexity of the Indian bureaucracy. Yeah, yeah. And it's kind of a joke, but it's also kind of not. Yeah, no, I, like, for our listeners, like I grew up in India and my father was in the Indian government and this is actually true.

It's like bureaucracy done in families. Yeah, absolutely. You know, my grandfather was in the government. My father was, I turned out to be the black sheep. that's in Bitcoin doing the opposite thing. Yeah, yeah, you say that now, but eventually the government will adopt Bitcoin and then you'll become part of the government.

Okay. Dharma and karma, right? So what you're essentially saying is, like, in smart contracts, we have an alternative to lawyer capitalism where in theory you could have contracts that, while they may be rigid, like the cost of maintaining them, implementing them, maintaining them,

and settling disputes is much lower than the system with lawyers. And this can actually make society more efficient because it kind of gives you an alternative sort of structure to the lawyer capitalism. Yes, exactly. Right. So, you know, the 70, 80, 90% of commercial disputes that could potentially be settled with a pretty simple system where you take the body of law, you write it up as a smart contract, and then you have professionals that input reliable data into those systems. And if they're found out to be lying or they turn out to be wrong, you have an insurance system that basically covers the claims that result from those errors. So you still have some humans in the loop because the humans have to decide what the facts of the case were. But once you decide the facts of the case, the machinery makes the decisions. And I think that we could probably resolve huge percentages of the current system's lawsuits in those kind of conditions.

It's going to take a long time to write the software. But if you think of the complexity of something like a self-driving car, I don't think it's at all unreasonable to think of a self-overseeing car. contract. And this is definitely futurism, but, you know, think of all the airline tickets, all of the package deliveries, all of the purchase orders, all the rest of this kind of stuff. There are huge parts of society, which is just the same handle being turned over and over and over and over and over and over again. You know, venture capital deals, you know, come with a bunch of contracts, which are enormously complicated. But if you had a bunch of smart contracts where you basically just punched

in a bunch of parameters, you know, what's the equity split? Who are the owners? You know, who's meant to be in charge? Then, you know, if there's a later lawsuit, the vast majority of that stuff would just get sorted out by software. And I think that's entirely reasonable. Over time, it could take 10 or 15 years, but over time, I think the repetitive parcel of the law will be automated.

I think it's interesting. I've talked with some people also about smart contrasts exactly in that way. And of course, the effects from an economic perspective is that when we look at what happened with automation, you know, at one point there was all the blue collar jobs got automated. And this is a lot of these sort of not super creative white collar, you know, middle class office shops happening the exact same thing to that. Yes. Class war. I would also like to tie in like two or three more. threads from from your life into into this discussion right so to kind of make

this whole point very very real in front of us like you've been a sipher punk and in the show you said that you were involved with the digital like the digital gold movement in the early 2000s and and you you had the feeling that they created better money but they didn't have the potential for a better society because they didn't have the technology of smart contracts Yes. My basic questions are like, who is the Sifferpunk fundamentally? What did they want and why did they fail?

Ah, well, this is a very interesting question, right? So this goes all the way back to GCHQ in the 1970s. GCHQ is the English equivalent of the NSA, government communication headquarters. They invent public key cryptography at GCHQ, a good few years before it's reinvented inside of the public domain. There's a really good write-up about that kicking around called something like the alternate history of cryptography. So once you've got public key cryptography, you have the ability to generate secure communications

between people that have never met each other and digital signatures and digital signatures give you the potential for very high levels of trust, again, between people that have never met and never will. So in the early 1990s, Phil Zimmerman implements these algorithms inside of PGP, pretty good privacy. And then there's a wave of

sort of, you know, this kind of speculative technological futurism where a bunch of engineers and a bunch of business people and a bunch of science fiction writers and a bunch of journalists sit around and talk about the future relative to some new technology.

So right now that conversation is happening around life extension, it's happening around automation. drones, right? A little bit around Bitcoin. So out of those conversations comes this realization that the natural shape of a society which has

public e-cropography as a fundamental part of it is radically different from the shape of society we have today. It's as different from the society that we have today as capitalism was from feudalism or industrialism was from farming. So the people that embrace that as a perspective, become cypherpunks. They become people who say, look, relative to the modern technology base, a completely different society as possible, and that completely different society would be better

than the one that we have now for the following reasons, and off they go and they make that case. And the result of that kind of whole process, that whole push, is this model that fundamentally, this kind of encryption is a human right, and access to that kind of encryption is fundamental to human freedom, which puts the cypherpunks into direct conflict with the state because the state is basically the American government. It's like, no, no, no, no, no, no. These are munitions and you don't need to own public key cryptography any more than you need to own a personal landmine.

Don't do it. So the process of that struggle realigns the cyberpunks, sorry, the cypherpunks, realigns them into a much more strongly anti-government movement than they had been initially. And that struggle for legitimacy goes on for several years until the entire thing basically washes out after 9-11. So 9-11 happens and the cyphor punk movement really hugely loses momentum

because the national security state basically is going crazy. It's like a bull in a China shop. And nobody really feels that that stuff is kind of relevant anymore at that point. Except Julian Assange. So there's a long kind of dead period where not much happens. then you get Assange and then you get Snowden and Snowden is basically the point where the

Cyphabank movement finally bit the government in a way that mattered because Snowden takes an enormous repository of documents out of the NSA and publishes them and it becomes completely pure to anybody that's paying attention that the American government has slipped into being something along the lines of a police state or a fascism

and we're in the very early process there are very early parts of the process to repair that now that Snowden's made it visible to the political elites in America that they are being spied on eventually they will find a way to stop it and then we'll have a kind of new vision of America emerge so so now now now now let's let's get let's put this conversation in some perspective most of our listeners and including us are people who have not lived the cypherpunk movement and for us public key, public key private cryptography is kind of a granted. We don't really know the history they went through.

Tell us, like, in your answer, there was a statement that, like, public key cryptography is such a fundamental invention that if you take it to its conclusion, that society would be so radically different from the current one, that that difference is the same as the difference between industrial society and an agricultural society. Tell us why this is such a fundamental invention. Okay, so that's a really tricky question. It's really, really subtle.

It's a crack at it. So, throughout human history, the only way to prove to somebody that you knew a secret was to tell them what the secret was. And that's been the status of information as it flowed through human history. societies since the adventure of dirt.

It's an ancient, ancient truth that if I know a secret, the only way from it you communicate that secret to you is to tell you the secret. And once in a while, people have figured out ways around that property that gave them a little bit of an advantage and they've used those.

So a good example of this is that around the time of the early days of the scientific revolution, scientists used to make predictions that they thought were too ridiculous to really publicly claim, but if somebody else thought of the idea and it turned out to be true or they could prove it later on they wanted to establish when they had had the idea. So they used to publish

strings of letters and the strings of letters it would be like A13 B11 C41 D and 11 E 19 and what it would refer to is a sentence and you were counting the number of times the given letter appeared in the sentence

and at a later date you could publish the sentence and the sentence would correspond exactly to the letter count that had been published and this was like a very primitive form of a hash function and scientists were using that stuff as a way of establishing seniority of claim on radical ideas

that they didn't really dare publish until they had strong evidence but it was a way of dating your hunches essentially you know similar kinds of things happen around commercial use of ciphers the Rothschilds of a private communication network which I seem to remember was largely carrier pigeons with I can't remember if they use codes or not various screliaments had codes

so there's always been a use of those technologies inside of the frameworks right the system of the world has always used cryptography where it's been available they've always used things like hash functions primitive forms once you come along and you build systems like that

that are essentially perfect, hugely, hugely powerful things begin to happen. You know, if I could send a completely secret message to anybody in the world and it's impossible for anybody to break up and read the message, things like espionage become trivial. Anybody inside of a government can send a encrypted message to somebody with a bunch of government secrets in it, and the government will have no way of knowing what was inside the message so you can't prove the espionage occurred.

Sounds completely crazy, more or less what happens, every time somebody leaks something from inside of government these days. You also get a whole bunch of abilities to turn things like free speech into what you call a performative speech act. So if I speak, I am spending this Bitcoin and put a digital signature on it, that speech is actually the spending of the Bitcoin. So you wind up in a position where the economy becomes completely unified with the culture because spending is speaking and speaking is transacting.

God only knows what that is. turns into in the long run, but when you take the things like the absolute right to free speech is commonly entrenched in the American model, then what comes out of the fact that spending a speech is this notion of unlimited opportunities to spend in ways that people consider radical because you're so protected by your free speech rights. Everything you look at, if you look at it in the right way, that could conceivably touch cryptography even at a theoretical level, is currently turning itself inside out. The whole thing is in free fall. Okay, very interesting.

Now, the thing that mayor was referring to, right, it's a talk of you, so we'll link to that as well, that you gave a defcon about sort of cyphur punks and why their vision didn't really pan out and wasn't so successful. Now, you gave a few reasons in there, and there's one that I... The public infrastructure problem predominantly. That's one, that's one, and I would like to talk about that, but there was also another way. one that I thought would be very interesting to talk about, which you called metastructures. We can start with either one. So metastructures is a white word for companies, corporations, governments, guilds, and all the rest

of this kind of stuff. And the tools that the cypherpunks generated were point-to-point communication tools. Encrypted messaging, whether it was email or chat, was the core thing that cypherpunks produced. For example, HTTPPS, you know, the secure standard used. for doing things like credit card payments or logins online. HCTPS was a cipher pump technology. So while you're in a position where you're deploying the crypto in a way that is largely about point-to-point communication, you can't have a situation where you've got a 25-person group that votes on something and it's all secure. So you can't have, say, a company board, do a bunch of deliberation on...

self-sett of seriously to say what to make you can't go through and you know have a voting or a democratic process or a jury process and then somehow have that represented to the world in a cryptographically secure way there's just no really good way of doing it

inside of those models once you bring along new technology like smart contracts that allows you to do that kind of thing you get hugely greater expressive power so the same set of algorithms generate a vastly new set of social possibilities So the cipherbank tooling that we had before Ethereum really didn't support group formation very well.

It didn't support running organizations. It didn't support things like jury trials. It was really, really limited to people basically write each other secure letters. And once you open up beyond that, all kinds of other things become possible. How does that relate to what we are seeing today with, for example, the debate about the block size in Bitcoin? Do you think that's really sort of maybe Bitcoin is one of the last technologies that's successful on a sort of huge scale, sort of Cyphoprunk technologies as successful, that hasn't explicitly built in some sort of, you know, formal governance structure that allows decision making on a protocol level to happen? So Bitcoin's problem was that, you know, if people thought that, well, people thought, Satoshi Curly thought,

that Bitcoin was illegal. He seems to function on the assumption that he was going to get nuked by the feds for having written this piece of software so he didn't really want to be in the public eye and therefore he built no governance structure. The sort of notion was that it was essentially leaderless resistance.

And I think that Satoshi would probably have been horrified by the idea that the federal government would embrace Bitcoin to the extent that it has, never mind Wall Street. I don't think Satoshi would be pleased about that at all. But given that these technologies are being rapidly embraced by governments and by companies, there's a pretty good chance that actually, you know, the machinery is not going to try and destroy these technologies.

And that means you could build governed instructors that are really public and open and transparent in the way the charities are and still build cryptographic, I don't know what you'd call them, cryptographic social transformation tools. Because it seems like what's happening is, that the state has simply stopped thinking of this kind of cryptography as a threat, at which point there's no reason to be underground. But couldn't you have

a governance structure where you do have transparency in all of those things, but you also have the participants, you know, you have the anonymity of the participants. So can't you have both? Yeah, oh, there's no doubt that you could

build that, right? No doubt at all. But at this point in history, seems like there's not much of a reason to, right? You know, there hasn't actually been any kind of really, really heavy state level retaliation or retribution against, say, Bitcoin users or even Bitcoin devs. For the most part, you know, the governments are basically looking at these as being a new generation, database technology that they can integrate and assimilate. So the revolutionary claim that this technology was going to hugely impact the function of the state, and it was going to be this, you know, kind of end point tax

starvation, disintermediation, Tim May, Cypher, and Omicon kind of a trip, which was a huge part of the EU claim made in the 1990s. That doesn't seem to view what's happening. The state just seems to be adapting. And maybe we shouldn't be surprised about that. But my point would probably be, well, a few things. So number one is they didn't have to, right?

Because Bitcoin is still like a completely irrelevant. If you look at it from a larger economic perspective, right? So they could enforce a lot of things on the level of exchanges and wallets and they never had to go to the protocol level. But if you did have, let's say Bitcoin became very big and then those developers had that crucial role. And let's say they said, oh, we're going to do zero cash or something like that. It's going to be like impart of Bitcoin. I mean, I cannot imagine that you would not have an enormous amount of pressure on those people. and I think if that was, you know, if the control structure of a project like that was public,

you know, I mean, I think the government, we would see a completely different government response than we have seen so far. Maybe they'd just use the software for running the black budget. You think the US government uses Bitcoin to run black budgets? No, no, but they certainly could, right? I mean, you think that having this kind of, you know, anonymous secret transactional infrastructure would be in some way a threat to the government? government, but if that was the threat to the government, why does the government fund Tor? Remember, Tor is a US government funded project and it has been since before the beginning. So if they were afraid of these kind of technologies, there's no reason to fund Tor.

The official reason that the US government says that it funds Tor is to provide cover traffic for the US Navy's communications at sea. Right? I just don't think the government really is threatened by these technologies. They don't respond like they're being threatened They seem to be quite eager for the stuff to mature So they can use it for stuff Think of how much more convenient The reconstruction of Iraq and Afghanistan

Would have been if they'd had Bitcoin No need to ship enormous Crate of cash, a billion dollars strapped on an enormous wooden plank You know, wrapped in clingfill and dropped off a plane to some local war award You just sent the guy Bitcoin There's almost nothing

That the government cannot find use for at a given time So I think that we're in a position where what's happening is that we're seeing social change because new technology has arrived and the state is adapting to the social change and the same that the state usually adapts to the social change. Yeah, I think again, I view it a little bit differently. I mean, I think there's a variety of ways to use that technology, right? So, I mean, in a way, blockchains are agnostic, right? They don't have inherent value. You can use it for all kinds of things. And there's certainly things where governments can use that technology and do things that are perfectly reasonable and attractive to a government.

And then they will do that. They will use it. But at the same time, if you have something like Bitcoin, for example, or Ethereum as well, right, you can also see a lot of uses that they cannot control. And I would think that those instances of those uses of the technologies are not things that governments will like. to see. Because in the end, it is a loss of power, right? If government doesn't like to see that stuff, why did they fund Tor? Tor is a key technology for this so-called culture of anonymity and all the rest of that stuff, and the government has put millions and millions of dollars into Tor.

How do you explain that? I mean, so number one, I would say it very much seems to be the case, right, that the NSA, or some of government agencies do have the capability to de-anonomized Tor. So if you look at it from that perspective, maybe it's not such a bad tool, right? You have all these people who think they need to hide things from your government, like self-identify themselves by using Tor. And then the only people who can find, you know, track them down is like the US government, right? So that's one thing I would...

So you basically think that Tor is an enormous honeypot run by the US government. Is that what you're saying? I mean, I suspect it has become that at least. I'm not saying it was planned to go that way, but from my superficial impression of the project, it seems to have sort of evolved into that. I mean, that is a very controversial statement. I know a lot of tour developers, you know,

on Twitter seem to be rejecting that position very, very strongly over and over again as loudly as they can. I guess we won't see what happens, right? Maybe some future weeker will reveal what the real status of Torr is. But if the government doesn't find Tor to be fundamentally a threat, I don't see any reason why they would find Bitcoin to be fundamentally a threat. I think that the evidence is that they're fairly neutral towards these technologies. Today's magic word is Hegseyert.

head over at let's talkbidcoin.com to sign in, enter the magic word, and claim your part of the listener award. So, Vin, you are a global resilience guru and one of your big interests is to think about how can things go wrong. So what you're essentially saying is this scenario that the American government, the Chinese government and the Russians will partner together to clamp down on cryptocurrency is not. not an interesting threat to worry about. No, I just, I don't see any real incentive for them to do it. You know? I just don't see any evidence at their head in that direction. I think if anything, what you're going to see is massive use of these currencies

by the intelligence community to hide their operations, use of these currencies to, you know, manage, you know, and our chunks of stuff with the black budget. You know, I just don't perceive this stuff to be a threat to state power in the way that people seem to think that is. And by the way, the reason that I don't think it's a threat to state power is because the state doesn't react to it as if it was remotely worried. There isn't even the slightest trace of anxiety on the behaviour of the US government towards these things. You want to see something the US government has anxiety about look at the way that they basically smashed Occupy with the big hammer.

That's what it looks like when the US government doesn't like you. It's people kicking down your door and pepper spraying your dog. And that's just not happening inside of the Bitcoin community. People aren't being arrested. They're not being investigated. They're not being hassled. The state is completely complacent. And either that's the worst mistaken human history or actually they've looked at it and decided

that it just doesn't matter that much. And what about the other movement? So like you talked about how we had lawyer capitalism and I'm going to term the smart contract bureaucracy that is coming, hopefully, as programmer capital. So what you're saying is we're moving from lawyer capitalism to programmer capitalism, right? Do you think the state would be worried about that? No, I think the state will simply be run by programmers, right? I mean, look, if Steve Jobs had lived, what do you think the odds are that Steve Jobs would have joined the, you know, 2016 presidential race probably running as a Republican?

Right? Zero percent? I'm Steve. No, I really think that Jobs was so. pissed off about the government preventing Apple from offering strong encryption on their phones, I think there's a real chance Jobs would have decided that he was going to run for government. You know, go in there and try and fix the problem from the inside. Just imagine it for a moment, right?

So if Jobs run for president, you know, you're already using my telephone. You're going to get a message from me about my presidential campaign on your iPhone every morning, whether you like or not, you can't get off. I'm going to come up with a bunch of super smart guy Silicon Valley policies for fixing America. They're going to have some elements from the right and some elements from the left. They're going to be smart use of technology to fix real problems you have. We're going to take all of this great thinking we did that produce the devices that are educating your children and facilitating the smooth function of your life.

And we're going to automate the federal government. Okay, so jobs is dead. It's not going to be jobs. What about the guy that used to run Google, Eric Schmidt. Right? 2020 election. What about Elon Musk? Gets the rocket's going pretty well, decides that the weak link in his plan for saving the world is actually the US government, thinks that it might be possible to fix it from the inside. It's only a matter of time until somebody from Silicon Valley with enough power and enough reputation and enough money decides that the right place to steer the world from is not an office, but the White House. It's only a matter of time. That's actually exciting.

Yeah. I mean, personally, I think the U.S. government is such terrible state that can almost only get better. That's right. I mean, your choice at this point is a military coup or a takeover by Silicon Valley. I think you'd rather have a takeover by Silicon Valley. Right. But I think the interesting thing there, if you looked at Obama and, you know, when he came with all these plans he had, and then if you look objectively at what he's done, he's done nothing,

None of the things he said. He's basically been... He's basically been the black Ronald Reagan. Yeah, you can say that, right. So you can ask like, why was that, right? So there's only two explanations, really, right? One, either he was completely dishonest about it. Right?

So he was literally lying and like saying things to get elected, but he didn't actually mean them. Or he came in there. Is he a politician? Is he a politician? were his lips moving? Right, but do you... I mean, lying to an extent

which is almost mind-blowing about everything, or he came in there, he had... Maybe he lied a little bit. He had this... Is he a politician and were his lips moving? Right? Politicians are professional liar. So we know for sure he was lying.

at least about some things, politicians go out and say whatever will get them elected. Well, but there's different extents here. I will of course agree that all politicians lie probably quite a lot, right? But is it just distorting the truth or is it literally saying the exact opposite of what you actually want to do? Okay, so what's the second part? Well, the second explanation, of course, is that he was probably lying like all politicians lie with a lot of things, but that overall, you know, a lot of his intention things he was saying

was also, you know, genuine intentions and a desire to do that. But then he came into office and he literally could not do any of those. Maybe he didn't want to even... In as much as, right, the Republicans wind up controlling both Congress and Senate, which leaves the president with very little ability to make law. And if you can't get them to vote for, your laws, you don't have that much power to steer the country. The American government is meant to be a government of laws, not of men. The president is not meant to have more power than Congress

and the Senate. So if the Congress and the Senate are a Republican and the president is Democrat, it's a bad time to be president because the power is with the lawmakers, not with the executive branch. Right, but the Congress and Senate weren't Republican the whole time he was president. No, they weren't Republican the whole time, but they were Republicans. in the second term, which is where politicians typically do all the radical stuff. Okay, before like, okay, so that's, uh, I think, I think we have reached an impasse. So the last question, um, and by the way, I'm not discounting the power of the black state here, right? Military industrial complex and all the rest of that stuff is absolutely there.

And it's absolutely real and it's enormously powerful. But the US population is largely served pretty well by the military industrial complex. which is why they don't use their power to throw them over. The military industrial complex is a pretty good representation of what average American wants. That's the problem. If they didn't want it, they would be huge mass demonstrations about the injustice of American society all the time. Sanders would have like 90% of the vote and the democratic machinery would just shove these guys right over. The problem is the military industrial complex is giving most Americans, most Americans, most of the democratic industrial complex is giving most of the vote,

of what they want most of the time, which is a chance of opportunity and a ton of national security power. That's why they don't change it. That's something to think about. The military industrial complex is a representation of what the average American wants. Yep. Okay, before we close out, because we have already reached the end of our standard interview. Okay. One question.

give us a vision for programmer capitalism. What does it look like? What's different in programmer capitalism from lawyer capitalism? Okay. So let me frame this. Look at the good side, then look at the bad side. Or maybe look at the bad side and the good side.

So the bad side of programmer capitalism would be the programmer industrial complex, which is basically robotic war machines, robot traffic wardens at a massive surveillance state that gives you a machine that you carry around at all times that constantly spies on you and reports

everything you do to the government. That sounds terrible, doesn't it? Yeah, that sounds terrible. Right? You pay for your own surveillance device and all of the information your phone goes to the government already. Right?

We're already seeing programmer capitalism. It's called the NSC. Right? Yeah. So the bad side of this is that you get increasing power going to the technical branches of the state. So the NSA becomes a larger and larger thing. The US military becomes increasingly robotic. You send the robots out to fight your wars.

You know, third world peasant uprising where they're threatening to cut off the banana supply is met by Ed 209 from Robocop, dropped from the sky in enormous numbers, and they basically just keep shooting until there's no more or. I have signatures, then you send down the robots to go and harvest the bananas. Right? You know the term banana Republic? It actually came from American invasions organized by banana companies. Look it up.

Look up the history of Banana Republic. The history is mind-blowing. So that is the kind of nightmare scenario of this kind of robot-driven, tentocratic imperialism. And it's clear that the American military is pushing for that as hard as they could possibly go. Everybody agrees that putting American soul. into the path of angry brown men with guns is a losing proposition every time they try it they come back with a bunch of dead white boys and no real progress in their foreign policy

objectives right it just doesn't work to have very expensive very precious American soldiers who are very expensive to recruit and very expensive to train fighting peasants who are making you know one dollar fifty an hour and are you know using a 30-year-old AK-47 it just doesn't work And that's the downside. The upside is a society in which everything that the government does is transparent and accountable and systems are provably fair because the software makes the decisions. So the law that's made by Congress or the Senate is encoded as software.

The software then makes the actual decisions the vast majority of the time. So are you eligible for healthcare is decided by a piece of software that takes 15 seconds to give you an answer? And if the answer is no, it tells you exactly why the answer. answer is no and if there's a factual error in that, you take it to a human being that is certified as being able to restate the facts for the computer, they restate the facts in an accurate form and you get your healthcare coverage. So you could build stable, predictable, transparent bureaucracies that manage the shared assets of society in a completely predictable way. The tax code

could become a piece of software with minimal human interpretation. Your tax advisor basically takes the facts, writes the facts down, swears the facts are true. If the facts aren't true, they're going to face an enormous fine, which will be covered by their insurance, and if they're proven to have lied intentionally, they're going to go to jail. So you put all of the emphasis on accurate inputs into software that then makes decisions in a completely transparent way. And I think that you can see something come out of that that is hugely more efficient than the current government is and is provably fair because it operates

on clearly stated truth rather than an ambiguous human judgment. Would a system like that be better for all things that the state does? Definitely not. But I think that there's a 60, 70, 80% middle of the road, just shit-shuffling thing the state does that could potentially go away pretty

comprehensively. And I think that that's really worth doing. Two extremes. Cool. Brian, I think that's a good note to end on. We have some exciting visions about the future. Of course, if you do have this robot banana republic thing and that is driven by the industrial military complex,

it does sort of seem to apply that that's what the American people want, no? Well, look, in 2004, the American people voted for Bush, again. That undoubtedly is... Everybody knew, right? Yeah. They're not that unhappy, right? The American people on average are not that unhappy about the status quo.

There are a small number of very intelligent, very well-educated science fiction reading predominantly white males who are of the opinion that they're being completely screwed by the system. Right? And that demographic ranges from the... the guys that are out there in Oregon occupying some, you know, natural wildlife preserve or whatever it is, the Bundy Ranch guys, right the way across through the kind of new left, right the way out through the back end of, you know, extreme politics, anarchism, the cypherpunks, all the rest of that stuff. Right. But actually, you know, the feeling that something has gone wrong and it's the government's fault is pervasive right across the societal class, which is losing power. And that societal class is losing power to minorities and it's losing power to women and it's losing power to the people on the other end of the supply chain in China.

The core thing which motivates the vast majority of political resistance to the state is basically people that were privileged slowly losing economic advantage to classes that were previously less privileged or dirt poor. Nobody wants a fairer world except for the very, very poorest half of humanity and the poorest half of humanity are largely peasant farmers living on a single acre of agricultural land that they inherited from their great, great, great, great, great grandparents and which their grandchildren will live and die on in all probability.

That's 50% of humanity. Right? People say they want a fairer world, what they generally mean is they want to be richer. The fairer world is a world that starts with improving the lives of the peasants in the very, very poorest areas because they are the people that need the help most and we have to work up from there by layers. The political axis that we're operating on is largely a fantasy.

We've got this kind of colonial world model that we inherited from generation to generation after generation of imperialist wars, largely propagated by Europeans and Americans against the rest of the world. And what's happening is that as the colonial era ends, because the rest of the world now has manufacturing capacity, it now has independent political thought, it's really beginning to catch up,

the bubble of privilege that colonialism created for people is collapsing and the people that are hit hardest are the people that were profiting the most from colonialism. And that's the white males. So the anger that the white males feel towards the government is that the government is no longer making them rich. And different people express that pain in different ways depending on where they come from in the political spectrum.

So once you start separating the loss of privilege from fairness, A fairer world is a world in which the poor do much better and the rich do much worse. And most of the time people aren't campaigning for that because they don't identify themselves as being the rich and they definitely don't want to think about how much poverty there is. And once you get clear about that, you see the real revolutionary possibility of blockchains, which is they could provide statistical evidence of how the world really works and then we could use that statistical evidence to force real change where it really matters. and it's up to us as a society to decide where that really is.

First the facts, then the decisions. That's what I wanted to say. All right. Well, Veney, thanks so much. I think we can wrap up with that. So thanks so much for coming on. I mean, I think you're super elaborate and eloquent in expressing very interesting and unusual and sometimes viewpoints that were in discreet.

But I think that makes for the most interesting discussions. So, of course, we will link to a lot of your resources. So we'll link to your resilience website, some of the work you've done with Hex and Gerts, and also some of your other talks you've done, which are very interesting. So thanks so much, Renee, for coming on. It's fantastic. Really good to talk. And, yeah, really a pleasure.

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