TFTC: A Bitcoin Podcast - Tales from the Crypt #27: Alejandro Machado

Episode Date: May 9, 2018

Join Marty as he sits down with Alejandro Machado to discuss Bitcoin and Venezuela, how Bitcoin may be able to help the struggling country, and how Venezuela got to this point. The two also venture into discussions about UX in crypto, the weird world we're living in, and how it's getting harder and harder to trust the information we receive on a day-to-day basis. Follow Alejandro on Twitter @alegw Follow Marty on Twitter @MartyBent

what is up freaks welcome back to tales from the crypt it's your boy marty bent sipping on a stella on a sweaty thursday night here in new york city the weather has turned fast it went from winter to summer in three days i should not have procrastinated on getting my air conditioner fixed over the winter and because of that i've been having some sweaty sleeps last few days. But enough about my sweaty sleeps. We've got somebody very special in the podcast today, in the booth, as always. Today, the subject is going to be Venezuela. We've got digital nomad and product designer Alejandro Machado with us. Alejandro, welcome. Thanks for having me, Marty. Thanks for coming on. I know you've been traveling. You came straight from

Philadelphia into the studio. I appreciate that. Let's jump right into it. Our time is short tonight we've got beers to catch up with eduardo later yes we do this is tales from the crypt what's your tale how'd you find bitcoin well i actually came to bitcoin kind of late in the game uh it was um only last year that i really appreciated the potential of it i well i studied computer science so let's start there and uh i studied in in venezuela and at venezuelan university it's called universidad simon bolivar it's a public university it's a pretty good one and we had really great professors from almost every area of computation except cryptography and networks and stuff like that.

Those professors were really bad. And while I got into AI, I got into a whole bunch of other things and I kind of didn't see the potential of it because I read about it in Hacker News when it came out. Like, shortly after it came out, maybe 2009, 2010 or something like that. Yeah, Slashdot and Hacker News were writing about it, I believe. Yeah. I'm a big fan of the Twitter account News White Combinator.

It, like, gets all the best bits from Hacker News without you having to go through the whole feed. Yeah. So I was addicted to it back then. I still check it from now on then. But I probably, you know, stumbled upon it a couple times. You know, like, it usually happens. You kind of dismiss it. And then I, I think it was last year, I started seeing something new in it and started getting more interested.

And I actually had, so I have a good friend from exchange year. I did an exchange year in Sweden when I was an undergrad. And his name is Damian, Damian Brenner. He's the CEO of Zeppelin Solutions. and they work with smart country security now so back then when when we met uh we were both you know students and uh crypto wasn't even a thing this was well this 2011 but no there was this was nowhere on anyone's radio radar and i i kept in touch with them we we we talked a lot and uh i think we both switch up mics here real quick all right here's coming in like a little

all right let's see is this better uh yeah a hundred times better this is like this is this is my downfall in this podcast the goddamn audio i can never get it perfect okay i'm sorry we're good now so you met damien yeah in sweden he's working on zeppelin and zeppelin they are auditing smart contracts they are they are auditing and they're building uh infrastructure to make smart contracts safer for everybody okay and um because they've proven to be pretty unsafe up to this point they have they have they're aware of that but you know open zeppelin contracts have never been compromised because they follow best practice they actually created one of the like guides that are referenced for the whole ecosystem the ethereum ecosystem and um they are doing great work there

i mean not to say that they'll never get hacked you know it's always you have to be really careful about the way you code things, but the patterns that they have are really top-notch. Yeah. I remember, I don't know if it was Damien, I forget who it was, somebody from Zeppelin. We had a DM exchange for a little bit over the summer. It was very interesting stuff.

And Santi was telling me to look into them. I mean, that's what the space needs right now is people creating these best practices and stuff like that. We're focused on security because we don't want the DAO hack to happen again. No, the DAO hack, the parity hack. None of those. No.

Yeah, and I think even if you're not that interested in the Ethereum ecosystem, these security practices have applications to Bitcoin and to all of them, really. If you are planning to run any code on a blockchain, be it the Bitcoin blockchain or any of them, if you follow these practices, you'll probably do things a lot better than the average. Yeah, so they're probably waiting with bated breath to see Simplicity and Scriptless Scripts get put into Bitcoin, because that will be a smart contracting language, correct? Right, that's right. And they have worked with Bitcoin before.

Demian and Manuel Arroz, his co-founder, they're big in the blockchain space in general, and they've had a lot of early products in the blockchain ecosystem before that was even a thing. they created proof of existence you might you might know but that was the first non-monetary application of the blockchain i think yeah sort of what santi did with with roma's daughter right when he hashed exactly her birth certificate into the bitcoin blockchain yeah so manu created that yeah and uh they have they've spawned that off into many different ideas and products

and some of them i think were too early for for their time and some of them are giving fruits right now like zeppelin that they open zeppelin smart contracts the whole framework and and the one with the work that they want to do with zeppelin os uh they want to bring security to into a new level to like to be to be able to make smart contracts secure by default which they're not right now yeah so you were born in venezuela i was born and raised i i've lived i've lived there almost all my life um i left when i was 25 so you know i i spent uh some time abroad because i did my exchange year where i met demi i did my master's part here in the u.s and part in portugal was a master's in human computer interaction at cardigan melon so that's

because i so i started out as a developer and i told you i was a hacker news junkie but i so i did i didn't i did an internship at spotify when i was in sweden um i might do my exchange here And I found out that I liked working on products more, you know, like in the intersection between humans and software, not only on coding. So I decided to do my master's. I was on track to do like a research career in AI or something of the like, because that's what my thesis was about. But I realized that I much enjoy the product side of things and the people side of things. Yeah, like the user experience. User experience, yes, for sure.

So, yeah, I picked that master's and I lived in here in Pittsburgh and in Portugal for a while. And then I went back to Venezuela because I really wanted to make a difference there, you know, maybe, you know, do a startup there. I had a bunch of ideas and I've always been very close to my hometown and my homeland in general. I've never had the long-term, you know, ambition to migrate and to be elsewhere. I really want to go back and rebuild things when the time is right. But right now, it's not the time. That's why I'm kind of like skipping around in a digital nomad fashion. Yeah.

What year did you go back? 2015. 2015. Early 2015. So let's lay out the landscape. We had Eduardo on who we're going to meet later. And he laid out the landscape. we actually had the first part of our conversation cut off we weren't recording because i'm an idiot

um but he basically the part that got cut off was the history of venezuela and how it got to where it is today that's a shame yeah i listened to that episode but yeah that part was missing but maybe we could fill some of that in that's filled in yeah so i i grew up in uh in a country that felt very you know it was it had a lot of problems and it still does and but it was on its way to become uh you know it was a liberal democracy back then you know in the 90s venezuela was not in a really terrible place there was a lot of corruption for sure like the the 40 years prior to chavez was a very you know the politicians had a really bad rap like like i think everywhere yeah uh wherever you find a politician corruption is not too far behind

exactly and venezuela i think was um an outlier in that regard because i think we were more maybe more corrupt than the and then the average maybe not you know if you compare it to the rest of latin america because we have a pretty bad history overall but you know the the fact that there's oil and the government pumps it out of the ground and the fact that they have to they kind of keep all of that because it's nationalized and so on that creates strong incentives for the government to to misbehave let's say so the people were fed up with all these and and in 1998 i was only 80 years old they elected chavez because he represented change but i think the the people in my family for example and the people in um you know in general in in the middle class i think the

majority of them they saw that chavez wasn't the answer to the corruption because they were fed up with corruption like that everyone was uh you know losing from from the corrupt system but some a lot of people saw that chavez wasn't the solution because chavez was a military man he had attempted to overthrow the government with a coup in 1992 earlier and uh it was just not the answer but you know some people went along with it he he won uh by by majority because he convinced a majority of population to vote for him and in the beginning he didn't claim to be any any of these like labels that that they have now like he didn't claim to be a socialist he said that cuba was a dictatorship and um he pretended to be you know like a middle ground candidate where he would just fight against

corruption that's that's when when a politician tells you that they want to fight against corruption you know be be very aware and measure his words very well because that's typically the rallying cry for something else they're hiding something like because everyone can line up against corruption like no one likes corruption so that that's like an empty message yeah it's an easy populist uh tribe right there that's right tribe that's right so so growing up you know i i really enjoyed my childhood i had a really nice childhood you know middle class in venezuela we we didn't we didn't have a lot of needs like you know my mom and dad that were both working um and uh you know we we had a happy happy life um things started started to get more complicated

when chavez came to power and then he started dismantling the institutions i think that's that's a good way of like drafting that journey there he didn't care much for for example central bank independence so one of the things that their first world takes for granted and i know you know some of the crypto folks here might uh not fully agree with me on this because you know central banks central bankers are evil and so on and that's yeah i get it but you know having just one separation between the government and the central bank like europe does or like the u.s does you know the fed isn't you know trump can't order stuff to the fed right now and the fed won't will obey that that's not happening but but chavez actually did that he asked for a millardito which is like a little

billion just give me a little billion and and you know you'll see what i can do with it that that's what chavez did or he said and the central bank obliged and they said you know well we'll do it And then Chavez came again for more, and they did it again. So Chavez got used to being able to finance everything that he wanted just by printing money and by just asking the central bank to do his bidding. And, yeah, that's how it all started. And I think, looking back, that's one of the things that went really wrong. Because it set a really bad precedent.

Yeah, you get addicted to that. Yeah. It's like heroin. Exactly. Once you get it. easy money it's not they don't call it easy money for nothing exactly this is money you can print like yes it's simple and so that's why we're here folks is a podcast about bitcoin and this is bitcoin's mission is to create a monetary system where where where that's not possible that's not

possible where there's sound money right that money is it's actually represents something tangible and then cannot be printed at will it's an algorithmically determined system so let's talk about bitcoin in venezuela what's going on i know uh maduro confiscated a lot of mining equipment yeah he launched his own shit coin uh things are not getting any better from a bolivar perspective um what's going on yeah where do we start i mean let's are people actually using it like is bitcoin helping at all it is but the story is more complex than that it's not helping maybe in the way that you think that oh you know the average population is buying it and and using it i think it's more you know very few tech savvy people who have become miners or who have become

early adopters are reaping the benefits of using bitcoin and holding bitcoin in the past and now you know mining bitcoin and other cryptocurrencies now now it's it's really difficult to mine bitcoin in venezuela because the government will know that you're mining yeah how how how will they know because they control the electrical grid and they know when there's an abnormal use of electricity so if you have like you know a small apartment and your electricity bill is like the state building or something they know that you're mining and uh they'll well typically what they did before was they'd send some of their goons to like store you um i think that i've heard that's changed now they want to do it more like by the book because now i think since since last year

very recently you have to uh register and they have this central registry of miners and and if you register in theory they will just leave you alone because you i mean you you're committed to giving them a share of your profits basically like taxing you right i don't know how that works in practice though because i i'm not very no miners don't really talk about that stuff that much because they they're afraid to be targeted and uh i think it's very irregular like if i if i had to guess uh looking by the way looking at the way the government does things usually i think it's very still very regular and i think the profits from those um mining operations and like the the government's cut what they want to take from it is um basically going to the

enforcers you know to the to the circuit police that goes around and and you know raids apartment buildings and stuff like that so i think it's it's still a very you know artisanal operation it's not like a state level thing where maduro knows exactly what where cryptocurrency is being mined i think it's much more you know low level or or pure um system if you will where you know the people who have the guns and who have the authority uh will come and get it and they won't do it on behalf of the government they will do it on behalf of themselves and they'll keep the money for themselves okay they've seized mining equipments they have seized profits you know they just take your your hard drive and they demand your keys so so are these like analogous

to roaming militias that so they're separate of the government it's not like they they are still so i think that the the body that does this kind of thing most often is called sebi it's basically a secret police they they claim to be an intelligent it's like an intelligence service of sorts like kind of like the fbi but much more tropical and and haphazard but um yeah so so they have they have a lot of resources at their disposal for example they have access to the electrical grid and then you know the intel and uh they they tackle civilians there's also the military like counterintelligence unit i i don't think they tackle minors or civilians that often but it could still happen um yeah those would be the the people who would have access to to data

privileged data from the electrical grid and other sources that would try to extort you or actually do it and then maybe they could collaborate with like state police and stuff like that to like actually and and but the thing is it's they have incentives to not collaborate with a lot of people because they want to take the profits for themselves. Yeah. So they try to like

get as close to the source as possible. So if you have, if you're like a captain in the secret police and you have access to this database of the electrical grid

and how much electricity is being used in every apartment building or I don't think they have that much data but maybe like by zones or something and you kind of snoop around

and kind of feel the area. I think, I mean, if you have that position, you'd be making a killing. yeah just by extorting people right now damn that's so fucking crazy what's crazy is like they're not they're not shutting down mining operations because they see bitcoin as like something evil that that'll like take down the boulevard like that's already happened but like

they just want they want the profits they want the bitcoin yeah that's that's very funny because the government changed their narrative uh with the bitcoin and cryptocurrencies in general like almost 180 degrees like the last year it was you know it was evil because you know they they have this perpetual need for having an enemy right and before the enemy was well the enemy has always been the u.s and they use dollar and and so on because you know everything's priced in dollars and the petrodollar and this and that so they have that but uh last year they they've been fighting with this website that gives the price of uh bolivares that gives the price of one dollar in bolivares petra dollar no dollar today dollars today no did you talk with the lord about that i talked

with santi santi was tweeting about i actually wrote about it in my newsletter last week oh yeah and then um santi and i got called out on twitter by a managing editor editor from a reason who actually might be coming on the podcast in a couple months basically saying that he contacted the owner of Dollar Today who said that the prices weren't being manipulated and he said this dude lived in like Alabama or something

oh yeah the Alabama guy so I sometimes write for Caracas Chronicles it's a news site run by Venezuelans it's independent journalism and it's in English it's in English so if anybody any of you listeners any of you freaks that are in America and want to learn more about

venezuela caracas papers.com caracas chronicles caracas chronicles.com yeah it's a good source yeah um we have like journalists on the ground who are venezuelan who write in english so it's it's great and they have complete editorial control they can publish whatever they want and um yeah so there was an article about the alabama guy but i i last i heard these are just rumors right because everything's kind of shady in that world i heard that the guy had sold it and and they had sold it to the government like that the the latest rumor is that dollar today is right now being controlled by the government so last year recapping from my like what i was saying before dollar today was like the nemesis of the government last year because they are against

they they want to hold the price of the dollar as low as they can because they know if if they dollar prices go up they can afford less things because they they can they have to import everything basically and and the more that your currency is the less your currency is worth you know the the worse off you are so they they they try to censor the the price of the dollar and they they think that by doing that they are fighting some sort of an economic war against you know the enemies of the republic that want to you know make the dollar price known as actually it's actually forbidden in venezuela to publish the price of the dollar it's a crime what it is yeah so you know lots of lots of people so dollar today is blocked by you know by by the by the

authority like conatel is the like the regulator for internet and some telecommunications that they're blocked so like if you type in dollar today.com and in venezuela you can't access but of course they have a twitter account and they have you know apps and stuff like that so they they get around that pretty easily because the government's not that tech savvy to block it at the you know at a higher level but um so they they had been fighting with it and i think what i wanted to say about uh dollar today and bitcoin i think in the beginning of this year uh some there was there was a blog there's a blog called aporrea it's a government it's like government supporters blog i don't think it's actually run by the government but it's just like a bunch of people

who are ideologically aligned with the government. And they said they had proof that Dollar Today controls the price of Bitcoin globally. So this tiny website that's supposedly run by this Alabama dude. That's fucking incredible. That mainly just publishes the dollar rate against the Bolivar.

Yeah, the currency pair. Yeah, the currency pair. So they pointed to a couple of, you know, coincidences in the graph. If you look at the dollar today price against the Bolivar and the Bitcoin graph, they had a, like, you know, like similar patterns in some ways. But like, it's just like you're looking at noise, man. And they're interpreting it as, you know, like, oh, yeah, it must be that dollar today because the dollar today changes because I think what they noticed was the price of the dollar optics just before the Bitcoin price is going up. So they say, you know, this is conclusive proof. Come on, Venezuelan government.

This is statistics 101. Correlation is not causation. Come on. This should be well known throughout the world. Yep. Yep. And, you know, they just don't seem to realize that if they had that predictive power, like if Dollar Tree had that predictive power, they'd probably be more valuable than Apple, right? Like, what are they talking about?

They have no idea what they're talking about. Well, they're just trying to confuse everybody, right? Yeah. Well, I think that they genuinely believe that, like the people that published that article, and I think they have degrees in economics or something. I don't know where they got it in the cereal box, probably. but um they were serious about it i don't think they were joking when they published that i'll i'll send it to you later i'll it's it's a fun read jesus christ so where do we go from here like venezuela like it's complete shit show like how how do we

i mean and we're not going to solve venezuela's problems here but as a venezuelan what do you think needs to happen yeah but so i've seen a few initiatives and let's talk specifically about the crypto world because a lot of can happen in politics um i i don't see the government voluntarily yielding power to any other actor because it's just not the way they roll and if they were to do that they'd be tried and the hague and you know that they don't want that they want they're holding on to power i think not only to keep the money that they stole but to keep their freedom to roam around the the country because well right now if they go out they'll probably get um prosecuted or like they they don't want to go out of venezuela that often and

and well sometimes sometimes they do but it's not it's not a common case like the people like the government cronies that are really really deep in the dirt uh they have their lifestyles they said it's a very limited lifestyle because people hate them like they can't go out in public and they can't like speak in public maduro is like supposedly holding a campaign rally and he has to be protected from all sides he can't be seen like in public you know it's not not like the typical candidate yeah um rally that that that he has to do because it it's it's very patent that that people don't don't like to see them around his approval ratings are super low so these guys are not going to give power voluntarily and i think whatever happens with the with the government i

think we should be planning you know the crypto community should be planning other things and and should be independent of that. So what's interesting is that with the whole rollout of the Petro, which we could talk about later if you want, I think what went unnoticed was that Maduro issued decrees legalizing cryptocurrencies, Bitcoin, Litecoin, other, you know, I think he just didn't mention specifically, but he said, you know, cryptocurrencies are now illegal.

And they'd never been illegal because, you know, in law, everything as far as i know i think in in the in the law principles of like the the venezuela is is running by uh if something's not declared illegal it's legal by default right it's not not not not allowed so bitcoin was used in the past but the government could say or or the secret police could come to your place and say hey what you're doing is legal be illegal because you're mining and you know this is and then people would you know be scared and they they had no recourse they can't say no what i'm doing is legal but now maduro is saying okay cryptocurrency mining is legal so you can do it you just need a license or you need you need to because they want to

regulate it right so it's interesting because this whole thing may may just backfire on on maduro uh this whole effort of teaching people about cryptocurrencies we hope that people will be smart enough to gravitate towards the free cryptocurrencies you know like bitcoin i think bitcoin is the main example of that because if they could pay if they skip the petrol altogether if the petrol gets no attention from the people but instead bitcoin does i think there's a there's a pretty real chance that people will start having an economy run by real money by by sound money it'll be a dark market to start you think well it it was kind of a dark dark market to start with uh local bitcoins kind of operated in the in the shadows somehow so like it all it all used to be

much shadier than it is now but i think now with the government announcements that everything's going to be legal now you know for example you could now he maduro ordered the and he just goes ordering bossing around everybody but like so maduro ordered the uh the flight uh companies the airline companies that are operating inside venezuela to accept cryptocurrencies and he didn't say petro he didn't say you have to accept petro only for some industries he's trying to do that so like he's especially in the in the oil industry he he's trying to so like the what you mentioned with india before yeah so free freaks that don't know i think believe is this week or last week maduro offered india a 30 discount on oil if they paid in the petro let's talk about the petro a

little bit what the fuck is it does it exist like who has it who owns it like does anybody outside of like the maduro government own it like so last time i checked there were four or five addresses in the NEM blockchain. That's the one that runs the Petro. And they had all of the issuing. So they haven't issued any, like they haven't, they claim that they had an ICO,

but the investors are not seeing their money. Do people actually invest in it? I've seen some people on Twitter who have screenshots that kind of, to me, sort of prove that they've sent a significant amount of money to the government. So like, I'm talking about like $5,000, $6,000,

Crazy people who are just investing their money because maybe they got lucky and they got early in the game with Bitcoin and stuff. And now they have money that they don't know what to do with and they wanted to keep multiplying it. So I've seen such people. I don't know any personally. I don't know anyone personally who was invested in the Petro. But as far as I know, they haven't received anything back. So like they've, for example, if you pay in, you can pay in Bitcoin so that the government, you log into the Petro website, you get an address where you have to send the Bitcoin and then they promise that they will send you Petros because you have to register your NEM wallet and then the Petros can be transferred using the NEM blockchain. but so far only only the government or only you know four or five addresses who like they all

seem to have connections with the government because of the the behavior of the transactions this is very small transactions that kind of seem like test transactions or you know the whole amount like if if there's 10 million of one kind of pitch because now there's four kinds of pictures what crazy yeah what so the government didn't just a hard fork already no no no it's not even that it's crazier so the government created four different tokens for the petro and no one knows what they're about because the white paper doesn't mention any of it like the white paper only mentions one and they say okay the ticker is ve ptr this is the one but then from that from there we they created not only that but i think ptr pre-sale uh ptr ico and some other i forget

so there's four tokens and actually one of them has mutable supply interestingly enough so if you buy that one it's actually scarce no the mutable supply in the in the nm blockchain means that they can issue oh mutable i thought you said immutable mutable mutable so there there's like a uh parameter when you create a music like so tokens in the nm blockchain are called mosaics yeah what's going on with nm like nm's always like been on like the top 10 in crypto or uh coin market cap I've never understood what they do or when it came to be. I don't know much about them, actually. I think they want to be an Ethereum replacement of sorts.

They say they power smart contracts and they have tokens and stuff, but I don't know of any serious enough crypto projects running on the NEM blockchain like you do. I mean, Ethereum has a lot of crypto projects that are running. Are you saying that Petro isn't serious? No, no, no. i would never say that petro is serious as it gets uh it's funny watching maduro trying to like pull this off without without like everybody knows it's bullshit

like it's like what are you doing like well you know that's what they do all the time they maduro is used to this like you were saying like him legalizing cryptocurrencies might backfire because people will start using bitcoin that's that's right him him doing this on a global scale like the petro like doing it like in front of a global audience of like it's just like drawing more negative attention to him like oh my god if this guy's this stupid like we need to help venezuela out and that's one thing i tried to broach when eduardo is here but i didn't really do a good job of it i don't think is like how do venezuelans like number one do you want help from the outside world number two how would we be able to help if we can right number three like

what are the first steps yeah yeah yeah so i'm i've been working on that for a while you know these questions are really hard because there's no not one single way of doing it and you have to be responsible by the way you do it you want you want to be you want to create the most good and um so for example zuko from zcash has reached out and and he's one of the people who are most vocal about helping venezuela and fighting hyperinflation i think that that's beautiful the the whole you know beyond the crypto beyond bitcoin and and beyond you know the whole ecosystem of blockchains i think that the common the common goal or the the common vision that we all have is to separate money and state you know eric for for he says that very often and and i think uh

that's a vision that we all share that we shouldn't be fighting against each other so much we should be sharing that vision and i think venezuela is one of the the points where where that vision is crystal clear because hyperinflation could be a thing of the past if you separated money in states like the reason why venezuela is going through a hyperinflationary phase is because the government has been really irresponsible so what if you could take that power from the government what if you what if the government would were no longer able to issue currency in in such an irresponsible way so you know how church and state were the same or were very tight together in the 15th century until that asshole martin luther came along

exactly so and and then so the the whole thing changed now now we now we have freedom of religion we have other things uh and uh that has shaped the modern state in a way that has been i think we would all agree that's beneficial states where the where religion or one single religion doesn't play a huge role i think are better off than states where religion is is very tight there well i would agree and it's funny like our favorite book here on this podcast is the sovereign individual oh that's right and they and they talk about like 500 year super cycles and we're at an inflection point like entering another super cycle with the information age but the last 500 years were dominated by nation states which overtook the church before it and it's

interesting to see how these huge monolithic structures whether it be the church from 1000 a.d to 1500 a.d or the nation states from 1500 a.d to today they sort of wind up turning into the same like money-sucking monolith that that they overthrew so like the state or the church back in the day they used to charge alms like it wasn't it wasn't called taxes but you had to pay money to the church to be in good standing with god to get to heaven and it was basically a tax on people where the church gathered a bunch of money it's probably why the church the catholic church in particular is like the one of the richest entities in the world sure and it's probably from that accumulation of of wealth when they were charging people taxes in the form of alms yeah

which were usually precious metals like gold and then nation states martin luther comes in writes a 95 thesis destroys the church shards it up uh we have sort of like a renaissance period nation states take over they've had the last 500 years and they've sort of turned into what the church was towards the end of the 15th century have you noticed it's a common pattern i'm i want to say i'm a big fan of the sovereign individual uh that's one of the books that demi recommended so that's that's when i was kind of like hovering around the crypto space but not really until you know i i read that in 2016 but like that um that was one of like the first approaches that i had and i i also started following balaji srinivasan and on twitter

and he you know he also references uh sovereign individual themes very often i think it's brilliant and um i think that this is a very common pattern that the state or you know some super entity that aggregates humans kind of becomes stagnation becomes a you know becomes too rigid too rigid and then like it becomes too monolithic and too too slow yeah for for the changes in technology that's right and then that's that's when it's up to the individual to stand up for for nimbleness for change for exit for exit exit a system yeah monetary like and you can't exit the system until you have something to exit to and that may be what the internet and bitcoin are providing us that's right an opportunity to exit via technology yeah we hope so yeah um god i fucking love that

book read it if you haven't it's so good so good uh i lent it to a friend and you should never lend books to friends they will never return especially if they're as good as the sovereign i did the same thing i haven't seen it i haven't seen it in a year um i actually just buy it again that's that's actually on my list of things to do i gotta buy another copy um no but it's it's it because we are like at an inflection point right now like we are in the middle of it feels like that way a huge transit like it's undeniable it's undeniable like the free flow of information the fact that you're from venezuela we did a skype call when you were in columbia a couple months ago a few months ago in this office actually like it's the world is changing like yeah

these government is becoming less relevant yes exactly like everything mobile is leading the world and now crypto is in the world and i think the combination of crypto and mobile and you know the ability to work from anywhere and the ability to be earning money from anywhere and without having a state dictate how much the currency is worth because if i earn in dollars i'm subject to the fed right it not doesn't matter if i'm not i mean i'm not i'm not a u.s citizen i i have lived in the u.s but not don't do don't live in the u.s currently but let's say i i receive a paycheck in dollars before before the services that i do i'm being subject to the policies of the united states and why should i be if i don't have you know if i don't have my apartment

my residence here, for example. Why should I be subject to that? Well, in this case, I mean, it's certainly convenient to earn in US dollars or in euros, for example. These are strong currencies that most of the world respects. But what if you are in Venezuela and you have to be subject to earning in bolívares? Because that's a national currency. No one's going to pay you in any other currency because the losses, the national currency is the bolívar. So what do you do when your salary is nominally going up you know by because maduro you know decreed 150 increase in the minimum wage i think like a couple days ago i don't know if it was 150 but you know you get the point it's it's ridiculous you know how much they've raised and raised and raised and

raised the minimum wage and right now it stands at like i think something like three dollars three a half dollars if you take into account the salary plus the food benefits and stuff so that's a month monthly salary of 3.5 where does it reach the point of ridiculousness where people just throw up their hands and say this is this is not gonna fucking work anymore like is it are we close to that point have you thought you were close to that point at some point in the past i have i have i have thought that many times so last year you know we had a lot of protests and uh i really thought we were getting close because you could feel it you know people were fed up you you would see hundreds of hundreds of thousands of people on you know on the streets and you see them they

censor the tv stations they can't show that in venezuela but you see that on instagram because i was seeing something similar to what we saw during the arab spring where the people were kind of rising up but um the government actually managed to squash those protests after a while because the people got tired and they jailed the main opposition leaders. And they're actually very skilled. So if I had to say something good about the Venezuelan government or give them props for something, it would be that they're a ruthless machine of experts at keeping power.

And they have created an environment for themselves where they're safe. They are surrounded by military men and they know how to keep them happy, happy enough to actually keep themselves in power for a while. But that apparatus is actually starting to show some cracks because, you know, I think a couple of days ago, a few pictures of the middle and lower ranking officials came out, like, you know, how they would in the past give them stuff like, you know, cars and apartment buildings, like apartments or, you know, stuff that everyone kind of needs. So if you're in the military and you have no other skill to speak of, then you'd be okay. So they took really good care of that because they spent a lot of their budget in the military. Chavez was a military man and he always took care of his own, right? And then Maduro kind of tried to do the same. But Maduro is not a military man.

That's like the first point, I think, of distrust there. And that might precipitate some change in the future. So far, Maduro has proven to be loyal to the men in olive green. But what's happening right now is that there's just not enough money to go around. There's not enough, and people are starting to get fewer benefits. So, for example, the military, these guys I mentioned, they were happy with just, like, a pack of rice, you know, like a soap bar. This is what they're bribing the officials with. What?

I mean, the middle, the lower and, you know, mid-low ranking officials, they are content with just the basic necessities of life because that's how far we've come. That's luxury in today's Venezuela. Yes, it is. Yes, it is. holy shit but as you say i think you know how how much further can you go because what what happens when you can't even afford that right what happens when you can't afford to keep your infantryman you know with with like a bar of soap and and and some food on the table it's crazy how how it gets to this point that's what blows my mind especially when it comes to food because

arguably venezuela's going through famine right now right yeah well that's a pretty strong word I think there's like international standard recognitions of when a famine occurs. I don't think we're quite there yet. But I would say that people are starving. Some people are starving. And I would say, well, you know, there's statistics. I think the average Venezuelan lost something like 20 pounds, I want to say, last year. It's massive.

I don't have the numbers off the top of my head. But look it up. It's incredible how much the system has been able to make the average Venezuelan worse off in terms of, you know, food security, in terms of income. Maslow's hierarchy of needs. yeah and and uh especially you know food um health health services it's something that it's really it's baffling to see how they're just so incompetent that they can't even you would think that they'd have an incentive to to keep hospitals well stocked because they're they're they're public hospitals and they after all they claim to be you know they're socialists

and we are caring for the people and so on. But, you know, the people who are experiencing the blunt of the crisis right now are, you know, from my friends, they're doctors. My doctor friends are going through such a hard time because they have to look at patients in the face and tell them, I'm sorry, but we can't treat you because we don't have this. We don't have this or that. Or, for example, they have someone who's been shot

because that happens very often in Venezuela. it's a very dangerous country and they just don't have you know the the things that they need to save his life so they they had they have to do of course they try to do whatever they can and sometimes they they work that they're heroes and you know i think in everyone's views um but it's it's very hard for for the people who are facing the crisis and then for you know for doctors and for people who do social work i think it's it's leaving the marks there the crisis is just staggering yeah the mental scars are going to be they're going to be pretty heavy i can i mean i can't imagine i was gonna say i can't i can't imagine like and i bet like

your doctor friends they probably feel like a mission to like stay and help out and like i i know some people who feel that way um i know people who have felt that way but they now you know they're i don't want to say they're giving up because it's that's a very strong statement you know like if like you could you could ask me did i ever give up venezuela because i'm not living there anymore but i haven't i'm trying to fight from from outside and i think my my doctor friends would say the same, but themselves, uh,

I have, for example, a, um, a doctor aunt. It's a, she's my, my mom's cousin.

We're, they're practically like sisters and she runs, uh, one of the children's hospitals in Caracas. And I, I know that I know for a fact she, she feels very responsible about what goes on, goes on there because she's one of the very few qualified people to run that

place. And if she goes away, then she's got to show. Yeah. it's it's incredible how things can deteriorate you know if if you have lack of materials but also lack of personnel yeah it the things things can go bleak very very soon very fast no it's just crazy like when i had eduardo on i had za our buddy za from zimbabwe i listened to that podcast episode was great yeah the way he describes it like the brain drain happens fast

you have like the smartest people leaving first that know that they need to get out and then the strong ones like your aunt and your other friends that are doctors are staying back and it's it's yeah it's a rebuild once you have that brain drain right so i wonder um doctors are obviously something that you need in a country and you need that person on the ground you need that person to be there and and maybe for example a civil engineer if you want to build a building you have to be there and then do the measurings and do that that stuff but what if you know people like myself who are computer scientists and product designers and and people who work with digital tools i think we could do a great deal uh and especially now with cryptocurrency that you

know it's it's a way out of hyperinflation it's a way out of the traditional financial financial system especially you know that there's services that are there have been running in venezuela for a long time like local bitcoins is one of the greatest examples of how you can trade believe it is for for bitcoin and you know so far it's it's it's held up really great so what if we could as software engineers and designers get together or you know or not we could we could do things remotely and work on projects for the benefit of most venezuelans what what would that look like so i got a couple of projects that i wanted to mention here um that i have uh you know my support I can't do, like, I only have 24 hours in a day, and I don't have my full attention to any one of these specific projects at the moment, but I think they're all valuable, and I hope to find, you know, one that is the most bang for the buck, you know?

So there's a few people that are working in Cucuta. It's a border city with Colombia, and they're trying to make that city. Do you know David Hay? he's he's on some YouTube channels I don't think I do that is a Bitcoin enthusiast and he I think his wife is Venezuelan and so he feels very passionately about about Venezuela so he started this project and also my friend Jonathan Kahn I was just in Dallas with him a couple days ago and a great guy in And they are trying to make Cucuta a place where merchants accept Bitcoin and other cryptocurrencies too.

And where they're organizing airdrops to the refugees that are coming from Venezuela there. And they're doing this by expanding because Cucuta is a fairly functional place. It's not a dystopia. You know, Cucuta is in Colombia. And the peso colombiano is a perfectly functional coin. I know you're going to say, it's fiat, it's bullshit. But it's not that bad compared to the Bolivar. Let's be clear.

Fiat currencies are very, they work. I mean, they work right now. They work right now. But they have a lot of utility. Right. So the idea is this. These people who are coming from Venezuela to Cucuta, they don't have fiat because their fiat is broken. So no one has bolívares. If you take bolívares through the border with you, they're practically worthless. And, well, you can exchange some of it to have something to eat the next day, but not very many people have thought or have enough in advance. Nobody's accepting bolívares outside of Venezuela, right?

Well, in Cúcuta, some people are because it's easy to transfer, to go back and forth in the border. But they charge massive rates because they are subject to extortion by the National Guard in Venezuela. So it's not the best setup for an exchange, if you will. But so what if these people who, you know, they have some sort of refugee status, if they were airdropped some Bitcoin and the businesses around them, so maybe pharmacies, grocery stores, things that are first necessity, they start accepting Bitcoin. So what they're doing now, they're doing a pilot program

where they're handing out tablets. They're very, very inexpensive tablets to merchants. And the deal is, okay, you're going to get to keep this tablet. And the catch is we'll teach you how to accept cryptocurrencies. And you will serve the needs of, you know, you can still charge in pesos whenever you want, You can serve the needs of people who are from Venezuela who we're going to airdrop Bitcoin to. And then you could use Bitcoin, for example, to accept payments.

And we'll teach you how to exchange it into pesos if you want to exchange it. But we recommend that you keep the Bitcoin, right? We got that hook there. and um some you know some businesses are taking in the value proposition and saying okay yeah i mean i'm not i'm not there's no loss in this like there's there's no downside so why not let's do it yeah no i've heard about this airdrop actually at uh the bitcoin meetup that i go to into the city in this in new york city in particular i think this guy might be involved with this project in particular jonathan wheeler i think so yeah i'm meeting with them uh i think tomorrow yeah it's

interesting at lunch airdrops is another uh touchy subject in the bitcoin cryptocurrency sphere because in the past like aurora coin like four coins a massive failure huh yeah but i think with bitcoin it could be and especially in venezuela like it's a it's a very unique situation and setup where crisis create creates opportunities exactly so how do the mechanics of this airdrop work do you say we we have not figured out yeah uh i think it's that devil is in the details you know uh and you know jonathan and jonathan uh jonathan khan and david hay are working hard at that and they're working like they're talking to all the venezuelans about it and i'm i'm uh chiming in and putting in some democracy earth is all part of this too right democracy earth is i

know experimenting with some uh lightning channels and they're in talks with some political i think julio coco is one of like the dissidents yeah he's like a twitter yeah he's a twitter personality and uh they i think they're working with him to to maybe start um accepting or yeah trying to experiment with what they could do with the lightning network i'm not very familiar with those efforts but i applaud them i think uh everything that you know touches cryptocurrency that could potentially help the Venezuelan people, I think we should try it all. Because we don't know why it will work.

And maybe we'll find out that airdrops are not such a hot thing. They don't work very well. But maybe we'll find out that they do. There's people that run controlled experiments on giving people cash, direct cash, in societies, like in small villages in Africa, for example. there's um and they've been studied uh for for a long time and uh sometimes this works really well like you could bootstrap an economy and you could increase the livelihoods and and the the capacity

of um of everything from from the people just by giving them giving them directly cash and and this would be the equivalent thing with bitcoin so maybe that's a good strategy i'm not i'm not sure it is but i think it's worth a shot and i think the lightning network setup that they're doing julio coco is also worth a shot i think for example supporting uh journalism in venezuela like for example you could donate to caracas chronicles that that's also worth a shot like if if you're just looking for something to do you know like i just want to help out venezuela uh what why should i do if you care about journalism i think that's that's a good way to start um caracas chronicles is is a great uh great resource i think for example there's well

my university is also collecting funds in bitcoin uh because it's a state-run university and that the state denies them of funds uh and and it has done so for the past five or six years or more and um we are we're trying to set up for example a um kind of like an endowment but it's much riskier than the traditional endowment that you see here in the u.s because you know harvard has the endowment and they they got plenty of money to go around and they they want low risk because Because they don't want to risk the whole endowment in Bitcoin or EOS or the next hot thing, right? But for us, I think it would make a lot of sense to make riskier choices. There's not much more downside.

Exactly. And there's huge upside potential. So I think doing this kind of – I'm not a finance guy. And I'm looking for people who help me out in this task. i have a few people who who are willing to help out and we're ironing out details but i think for example they have setting up this crypto endowment of sorts is something i'm excited about it's it's just it's never been done you know no university has has done this because they they typically are very conservative and they they want their money to be safe and now i think in in countries that

are in crisis i think there's an opportunity to do this yeah and that's like that's what i think like that's how hyper bitcoinization will begin is if countries like venezuela zimbabwe other other areas in certain or similar predicaments it's when the citizens start demanding to get paid in bitcoin right cryptocurrencies i think uh in zimbabwe uh the there was like a de facto dollarization right so they the zimbabwe dollar was worth nothing those people started demanding to be paid in in dollars multiple currencies and i had actually somebody a newsletter subscriber emailed me this week actually monday or tuesday i forget which day exactly but he was just down in zimbabwe and he said the main currency like people are

using bitcoin like people have bitcoin but it's not huge the main currency down there is cattle right now that's like what za said like whenever you want to like pay for your tuition for school you give you give the school cow or something like that wow so like livestock they've i mean they've reverted completely back to a bartering system like store value the coincidence of once it's uh i'll give you a cow for for an education it's crazy it's like wow so i think that's cheap yeah i don't know i don't know how much a cow is worth i don't know how much uh how much the cattle futures are going for these days but um no it's crazy to see like different types of currency like what evolves and maybe bitcoin it's not proven like it's not it's not

a guarantee but it is hope it's like you it is you can you can try this is it's a it's an opportunity to give an honest try at bootstrapping like an economy that's right that's right and i think well i think the essential thing is for the majority of people to have smartphones to have a phone that is capable of running a wallet that is the the core element of any airdrop of any effort that wants to achieve mass adoption in crypto and i think i mean the absolute prerequisite is to have computers in our pockets and in this case it's phones right yeah so this is a good segue into like the ux of crypto right now like yeah so how how are everyday venezuelans struggling like what do you think i don't want to preface the question that way um

so ux and crypto not the best not the best we're working on it you have to be pretty tech savvy yes as as of now as of today yes i think we are trying to develop best practices for for the for the dApps and for applications that interact with blockchains does they don't have to be fully decentralized because it's very hard to get a fully decentralized application. And you only need decentralization in very very specific cases. And it's also not a

binary choice. It's not like, oh, I'm fully decentralized or not decentralized or fully centralized. It's a spectrum. I think we've learned that everything, you can measure you can quantify decentralization and every, you know

you need a minimum degree to be censorship resistant at state level for state level actors. But beyond that, I mean, I know Bitcoin heavily prioritizes censorship resistance, and I think that's great because that works for people, for Venezuelans, for example. But there's a lot to play around in that spectrum between being fully decentralized and being centralized. So, yeah, what people have to figure out first

or what we should tell them or set their expectations to is that blockchains take longer than usual to interact with. So if you're in the Bitcoin blockchain, you have to get used to the fact that every 10 minutes, it's only every 10 minutes that the blocks get cleared. So if you are sending money to someone, that, it takes a while. It just takes a while.

And that's the price you pay for decentralization. that that's fine as a trade-off it is a trade-off yeah so that's one thing i think if people are used to one of the big obstacles in the ux and in crypto is that they are people are very used to instantaneous everything so instagram load it and refresh it and yeah i want more it's 2018 i need it now exactly i can't wait patience doesn't exist anymore we forgot that virtue Yep. And I think we're getting it back with Bitcoin. I think we are.

It's helping people expand their time horizon, lower their time preference. We're getting away from a lifestyle of conspicuous consumption. I hope so. I certainly hope so. I do too. Because, yeah, you make bad decisions when you're forced to think short-term, you know?

Yeah. There's one thing I brought up on Twitter. I think it was, I forget who I tweeted it at, But the fact that we need to adopt, as Native Americans, I believe it was the Iroquois, they had the whole mentality of seven generations. Like, they made decisions thinking about the future. Seven generations into the future? Into the future. Wow.

So they made decisions around their society thinking about seven generations into the future. So their time preference was, like, 210 years. Wow. Like, two centuries. and i think more people around the world needs a number one read up on the seven generations theory and then number two start adopting some some of those tendencies within that theory which is thinking long term yeah yeah and i think uh that also ties into uh the way that you know things are are moving rapidly uh i think you know the past year has been so crazy and i

think every year we we say oh that year go by it's speeds up they warn you everything's speeding i'll never forget i was a senior in high school and we were it's around thanksgiving break and we were playing a football game like in a field like in our high school field where we would go play football like after school it was like a pickup game and uh it was thanksgiving break and a couple of students like a group of students from two years above us in high school who are now in college like came back to like reminisce like at the football field while we were playing and they like literally walked up to us and they're like they did like the billy madison like grab the kid by the face we're like stay here as long as you can it only gets faster like

cherish this like we don't realize until like we don't 10 years later now i'm like holy shit yeah it really flew by yeah time flies cherish life but especially with the emergence of like all these technologies and and our attention spans now like where they're where they're being directed it's it feels like it's getting faster and faster and faster and faster yeah so well in that and we'll tie him back to to bitcoin and to you know ux of cryptocurrencies i think well having a a set block size or a block time of 10 minutes may not be such a bad thing You know, you might get some of that patience back. And so that's one of the things that is challenging to tell people because you're fighting against the current.

The current is taking you to a society that expects everything really, really fast and easy. And just sometimes you just have to wait. So that's one of the things, one of the challenges that we have. i think um also the internet has spoiled us into believing that things are free always so like information is always free and i think with cryptocurrency the cryptocurrencies kind of break that model a little bit and uh well you know there's all there's all this talk about micro payments and now the lightning network is up and uh it's going to enable some sub satoshi payments and i'm really excited about all that um but i wonder you know how how do we because

growing up i i didn't have to pay anything to start reading stuff like hacker news for example like what if every article on hacker news now or you know a few years from now is going to cost like a fraction of a penny and i'm in a country where i don't have access or or you know my my My family's wages are very low, and I can't afford that. I don't know if the microtransaction structure works out in the long run. Because as soon as you have somebody offering better content for free, if people can get better content for free, if people are willing to put content out for free...

Do you think that will work in the long term? why like because of advertising or potential forever so i'm a good example of this like i put this out for free i pay for this i pay for my newsletter um i have had a few ads nothing crazy but again like i would never i i think putting a paywall up for me specifically since i'm so niche and so small like right now like it kind of goes against your ethos right like because you that and then like nobody would fucking pay for what i'm writing you know like that's right um so that's like where i go back and forth so maybe like opt-in subscription like something like patreon for example i think works better yeah no but with micro attractions but then like

i go back and forth like what bat stone with the attention token in the browser like you just pay right to not get served ads i mean because again there is a cost for the internet is not free yeah they're selling your data like there's hidden cost and it's like are people willing to forego that hidden cost and then have a material cost that they can see. It's tangible. They know exactly how much they're spending. Maybe people would rather just not know

how much their data is being sold for. It's debatable. Well, one of the things that tie into UX and the data or the privacy preferences for people, I think most people, if given the choice, they would obviously prefer to keep their data private yeah you know that this whole facebook fiasco was was all about that but i think do you think people care enough about their data to for example quit because i i quit facebook for example i i i'm no longer using it like granted i

if i i use other facebook servers i use whatsapp all the time i know that they're tracking everything whatsapp is mutinying right now so yeah oh yeah i saw that um yeah i haven't deleted my facebook yeah i'm a weak bitch uh i don't know that's like i've gone back and forth i had this conversation and yeah i don't know if people care enough about their privacy to give up these services and i think what we need to do maybe is to build something that's just better yeah have you talked to ryan chair and the people from block stack yeah and uh patrick stanley and uh he was on the podcast two episodes ago okay actually i'm gonna go to block stack for lunch in a couple weeks here that's awesome i've been trying to get ryan and maneeb on they're very busy people

oh they are yeah um big fan of blockstack what me too me too because they have scalable dApps right now that are working yeah and that's i don't think enough people are talking about that like they have a google suite you can do like google docs spreadsheets calendars on blockstack yeah decentralized to an extent that but yeah but that censorship resistant yeah it then then it comes to my point what does that offer to the regular american for example you know because in venezuela you might have you might find a use case for that because you know the government might be censoring you or like a place like china for example because the government is much more technologically uh savvy so in china if you get censored you can have access to these decentralized

applications and right away you don't need to bother with vpn or anything you just like get complete access to this right now but in um you know for the average american what would it take for the average Joe to switch from Google Docs to any of these Google Docs replacements that are on Blockstack. That's what I wonder. Yeah. And for me, it has a lot of value.

Don't get me wrong. I think it's a really exciting project and I fully support it. I just think there's something there that needs to happen. It's going to be like a black swan event, like an Equifax hack or something like that. Somebody's going to hack Google servers

and there's going to be like a fappening, but it's not going to be celebrities. it's gonna be regular joes where some hacker just puts regular people's information on the internet that they hacked like that's it's got to be a catalyst like that yeah yeah so but for example the equifax hack is a good it's a good breaking point there i i was astounded by by the you know the scale of it but you think it had the reaction like because you know people were upset about it but what happened like what was the consequence for equifax after all that went down i think they they're just doing business as you as usual they they basically have yeah they go in front of

congress get a slap on the list that's that's it slap on the wrist um what's what where's their skin exactly exactly so what the point i'm trying to get at is like something like fucking fight club-esque like the last scene of fight club has happened where we're not blowing up buildings per se but like blowing up like everybody's information and being like hey we hack this we're gonna like prove that like like we had these naked photos of you know we're just like put them on the internet it's gonna scare people and be like holy shit we need to like so it takes like a very it takes like a ideological hacker exactly like so that's that's one i've talked about this on the podcast before but one theory i had after the equifax hack is one of the hackers that stole that data did a quasi

ddos on the irs where they have identifying information they have social security numbers they have addresses they have email addresses phone numbers they can technically with all that information file taxes for all those people oh yeah i've ever heard of that maybe in your newsletter yeah they can file taxes for all those people and multiple times and basically confuse the fuck out of the irs the irs doesn't know what's real what's fake like they just know that somebody's yeah somebody's claiming taxes for the same person multiple times so that would create a real need for a cryptograph on chain kyc of source like i i prove my identity when like you know using uport or using block stack or using something yeah and then you know that that's

the way you know the otiris knows that that that's actually him yeah exactly okay it's gonna it's gonna i believe a catalyst like that is needed okay i'm not calling for please no no no not at all but but it might be you got to scare people straight people don't fucking change people change based out of fear yeah people aren't like afraid enough they don't give a shit yeah well and they're comfortable because services like google docs and services like search and all that it's just very comfortable i use google maps to get here that's it yeah that's the thing i'm worrying about though have we been lulled in the comfort intentionally so like we we don't even need like a fight brave new world kind of scenario where yeah i i don't think there's one specific actor that's orchestrating

all this thing i don't i don't really believe in that like that's a very conspiracy theorist occam's razor like yeah i think it's just the i think the environment as a whole has that kind of perverse uh incentive to to lull you into very passive ways of thinking and passive ways of of acting so yeah just obey right a false sense of security if you will right and we have cryptographically proven security people it's here yeah we can really secure our data and prove it with math yeah we can we just need a catalyst like you say exactly to move off to that world it's trying to convince people to care yeah which is not easy yeah so i guess minnesota represents an opportunity there to because you know when society breaks down when institutions break down

completely you have to start kind of starts from scratch and what better way of starting from scratch than just using bitcoin and using the things on top of decentralized applications decentralized infrastructure blockchains uh you can start fresh from like you can like set up a new identity system like for example i could show you my venezuelan id right now you're gonna laugh let me say it the ids in venezuela are so ridiculous they look totally fake i actually had my first venezuelan id when i was 16 like i faked it and i i said i was 18 oh my god you look like such a baby yeah but holy shit but look at the quality of that i made a fake id in my dorm room my freshman year that looks more legit than this like i literally made it it's literally

holy shit piece of paper that you can post this on twitter yeah sure i'm gonna take a picture of it i'll post it on twitter in a little bit but this is insane yeah well it's gonna be expired soon anyway so like i can't even vote with that thing this is worse than like a fake library card yeah i don't think you look like a exactly yeah it looks like a fake fake library so so what happens when your government services uh are in such bad shape that all they can produce is something that you know looks like a like a fake library card like how do you generate something that doesn't even have like a barcode on it like can that not even be no no no it no it can't well this is to be well it's from 2008 so it should it should have a lot more safety

so they're probably worse now um i think they've gotten a little bit better yeah but uh you know to the point is they they are able to like a government can issue a kind of a library card that you know it looks totally fake and like a kid that's 16 i was 16 when i did this and i wasn't like specifically very technically savvy i hadn't studied computer science yet like i i was into computers but you know anyone could do this and and get away with it so i think there's um the the state and an individual have to kind of let's say we have to kind of come together uh at a place where we have ownership and and cryptograph cryptographically proven ownership over our assets and and and we are we have to be look we have to

have to feel protected by by the tools that we use if we we use a tool that for example is a is is an id that looks like a library card you know that that plays against you because anyone can steal your your identity from you like anyone can it could impersonate you yeah uh so that's that's that's a really bad model but if you have a system where if you if you get enough people to think in the mindset of cryptographically secure proofs and you start um having some sort of tokenized ids or some sort of smartly generated uh you know proofs that that You are who you say you are. Yeah.

If we work on that and if we have a system where the user kind of has ownership over the data, then the whole system will be more secure. I think that the state will benefit and the user, the citizen will benefit. Yeah. And if you freaks want to experiment with any of these technologies that are out there right now, download Blockstack, Keybase.io. very good uh pgp like cryptography like fully and then encrypted service yeah um just to learn how to like create a pgpk how to prove with cryptography who you are so like with these

services block stack and keybase in particular you have to like use your social media accounts you cryptographically cryptographically prove your social media accounts or whether it be your github twitter facebook that you make a post that says hey i'm registering this block stack id i'm registering my key base id and i'm cryptographically proven that this is me right my proclamation and you have to do it on multiple sites just that's right i've done it yeah and but there's kind of one missing link there so you can prove all of all of your you know social media accounts and all that where does the state come in like where or like how do you represent yourself to the state how do you prove like maybe is it with biometrics that you do it is it and that gets hairy yeah

because you only have so much of it so it's like if you only have one thumb right so if if your fingerprint gets burned burned or if you if if it gets public can someone impersonate you using your fingerprint yeah those are questions that we have to ask ourselves when when we're designing the system you know like there's people working on this that are you know way way more in the weeds that i than i am this is i'm just like ranting here or just trying to brainstorm here with very little info but you know you port is working on this like blocks tags also working on this how how do you have um an id that really represents you and that no one can take away from you like how do you how do you do that maybe maybe that's so i i saw something interesting

in germany when i was there uh they have this uh system called post ident and uh they actually verify your identity in a sort of federated way uh by by having you go to the post office well it's it's i guess it's it would be similar to what the u.s does with passports and i think it's brilliant and i i had never seen that before i i was really surprised when i found out that the u.s uh u.s citizens get their passports in post offices because in venezuela you have to go to a central central service and go to central office and they like the government issues it and it's like the casa de moneda which is like the the same facility that prints the bills and stuff so you have to like deal with them directly so it feels like a very centralized model whereas here in the

u.s you would do it through a post office and you you would verify your identity for sure but you would do it in a in a more let's say the central way like it's not just one single point of failure so you yeah i i got my last passport at a government building it wasn't i mean the post office is government run too but but there's many of them yeah and uh you could go to any any you like which is which is the advantage so what if we had the equivalent of post offices for identity service on a blockchain what what would that look like maybe maybe it's just one other service that post offices offer and what i'm going to mention about germany is that i had to i wanted to open a bank account uh that was uh digital only so germany has great uh

services for for banking online and they have like bank online only banks that that are free like they don't charge fees and so on so they're great one of them is called number 26 and uh they they just verify that that you are who you say you are and and just the cleric of the post office sees you and sees a passport and he signs a document or you know it's a digital document that says that person has verified that you are who you say you are in person in person yeah so the prerequisite is showing up physically yeah and having yeah but now i mean not i don't think we have to do that exactly the same way i think now now we have cameras now we have phones with great cameras and and capabilities so well that's that's what we're talking about it gets hairy

because you have you have deep deep faking where like people can fake you on video and audio well yeah that's coming that's that's here it's here yeah it's in its nation stages but it's here okay like that's where so that's where i was bringing up earlier like i don't know if this was recorded or not and i forget but what we talked about last podcast like could you cryptographically prove like an audio recording like using a digital identity like a black block stack id like signing a king saying i'm sending this digital file and signing my my block stack id that proves my identity that proves that this is audio this audio is actually me this video is actually me you know because deep faking is coming it's coming it's here it's going to become more ubiquitous that's

another thing i mean we talked about this on the last episode but it's another thing the sovereign an individual touches on like in the information age it's going to be impossible to discern what is true and what is fake because of how real the fake shit will feel yeah well virtual reality also is take off right yeah if it makes that end that's like we're in some heavy territory here but i think there are some answers to these problems but so let's go back to i think it all comes down to trust right i think well what what the germans do at the post office is that they they extend the trust that that you are extending them because you you are present in person like and and they have a peer-to-peer system that or they could set up a peer-to-peer system that

checks you know this person what's the track record of this person certifying identities is Is it likely that this person would lie about getting to know someone in person? Yeah. And I think you could use game theory to model that and to say, okay, now we're going to require people to meet in person. And what would an in-person meeting proof look like? Because if you could prove, for example, if you wanted to verify my identity, that I am who I say I am, and I show you my passport, and here I am, and you see that my passport picture matches my face, so you know that my name is really Alejandro and I'm not faking my name, then you could have a reputation token. For example, like Augur does with prediction markets, right? So if you have a reputation online, you wouldn't gamble it so easily.

you you you you only have you know so much of it yeah the cost of lying has to be so high yeah that it's disincentivized exactly yeah and then yeah i think we don't we don't have the answer and i think we're we're talking way above our heads here but because of the because of the way things are playing we we don't know what what will what the solution will look like no idea but but we're getting closer towards a solution whether we know it or not we do we are we are yeah so every day this stuff evolves we're evolving with it that's that's the beauty of this space that's why it's so fucking enthralling it's because we're all learning together like there's no experts it's like holy shit we discovered something new today oh my god like this is insane it's so

addictive it's such a deep rabbit hole it never ends and it's global everybody i meet that's fallen down yeah it's like the same addiction to it it's an addiction it is yeah it really is And I think that's a good place to stop. What about you? Anything else to say? Sure. I mean, no, I think we've covered a lot of ground here. I think we've talked a lot about Venezuela.

We talked a little bit about the petro. The petro doesn't deserve a huge mention, I think. Because I think I would really emphasize that point, that I think it's more interesting to see what you could achieve with cryptocurrencies that are not the petro in Venezuela. So what could Bitcoin achieve in Venezuela? And that's what the Democracy Earth people are doing. and other people like Jonathan Wheeler is working on that,

and Jonathan Cahn and David Haye are also working on that. So how do you really achieve the vision that cryptocurrencies are supposed to bring, which is to really separate money and state and really forcefully take money away from the people who are printing it and back into the hands of the people? How do you do that? Well, that's the beauty of it. We don't have to do it forcefully.

We're doing it peacefully. which is like a mindfuck for everybody. You do it peacefully by just plugging something into the wall and contributing, you know? Exactly. And that's like the Friedrich Hayek, F.A. Hayek quote that I wrote about this week as well, is that we are not going to revert to sound money again

until you find a sly roundabout way to take the power to print money out of the government's hands. And Bitcoin is that sly roundabout way. I read that newsletter and it was insane. like i i got goosebumps alejandro where can we find out more about you well i'm on twitter i try to be active there i i love twitter what's your handle it's a-l-e-g-w-a-l-e-g-w-a-l-e-g-w this has been fun man it's a great conversation thanks for having me this is really amazing uh I've always wanted to meet you.

I've been an avid reader of your newsletter for a while, so I appreciate the work that you're doing. Stop it. Really cool. Thank you. And, yeah, it's been great. Happily, I haven't been in New York for a while, so I'm happy to be here for just a couple more days and hang out.

Well, we're going to meet up with Eduardo and crush some beers at Skinny Dennis. Yeah. Listen to some good music. you can find out more about me at martyben on twitter if you like this episode please subscribe rate, review if you don't like what I'm doing here

DM me, tell me I'm an asshole whatever you want to say I'm open, all ears thank you guys for joining us this week peace and love woo that was fun