Unchained - The Oslo Freedom Forum in New York: Why Decentralization Matters - Ep.85

Episode Date: September 28, 2018

In this fascinating and compelling panel on Why Decentralization Matters at the Oslo Freedom Forum in New York, I spoke with Alejandro Machado, a researcher at Zcash; Amber Baldet, founder and CEO of Clovyr, a decentralized software and developer tools company; Andy Bromberg, cofounder and president of CoinList, a compliant token offering platform; and Megha Rajagopalan, correspondent for Buzzfeed and former China bureau chief. In this discussion, we cover what is happening in authoritarian regimes like China and Venezuela that highlight the importance of decentralized technologies, how people in those countries are using crypto assets, and how technologists think about decentralization and censorship-resistance. We also talk about the usability issues of decentralized technologies and how people in authoritarian regimes can even get access to them. Plus, we also look at how bad state actors are also using the same technology to oppress people or evade sanctions. Thank you to our sponsors! StartEngine: https://www.startengine.com Episode links: PC Mag story on how cryptocurrency is both "an oppressor and a lifeline" in Venezuela: https://www.pcmag.com/feature/362486/in-venezuela-cryptocurrency-is-an-oppressor-and-a-lifeline Naval on Unchained talking about how money is now speech: http://unchainedpodcast.co/naval-ravikant-on-how-crypto-is-squeezing-vcs-hindering-regulators-and-bringing-users-choice Google's Dragonfly project: https://theintercept.com/2018/09/14/google-china-prototype-links-searches-to-phone-numbers/ For more on how decentralization and blockchain technology can help Alex Gladstein of the Human Rights Foundation on Unconfirmed: http://unconfirmed.libsyn.com/alex-gladstein-of-the-human-rights-foundation-on-the-first-crypto-war-ep021 A previous interview with Amber Baldet on Unconfirmed: http://unconfirmed.libsyn.com/sxsw-episode-amber-baldet-blockchain-program-lead-at-jpmorgan-on-the-potential-clash-between-blockchains-and-the-right-to-be-forgotten A previous interview with Andy Bromberg on Unconfirmed: http://unconfirmed.libsyn.com/coinlists-andy-bromberg-on-the-one-big-regulatory-issue-facing-crypto-ep030 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, welcome to Unchained. I'm your host, Laura Shin. This is a special episode of Unchained from the Oslo Freedom Forum in New York. There, I spoke with Alejandro Machado, a researcher at Seacash, Amber Baldi, founder and CEO of Clover, a decentralized software and developer tools company, Andy Bromberg, co-founder and president of CoinList, a compliant token offering platform, and mega Roger Coppollin, correspondent for BuzzFeed and former China Bureau Chief. The topic of our panel was why decentralization matters. In this discussion, we cover what is happening in authoritarian regimes like China and Venezuela that highlight the importance of decentralized technologies, how people in those countries are using crypto assets, and how people in authoritarian regimes can even get access to these technologies. Plus, we also look at how bad state actors are using the same technology to oppress people or evade sanctions. It's a fantastic discussion with some looks at the, on-the-ground usage of decentralized technologies. Enjoy. Start Engine is a regulated ICO platform

with a community of 155,000-plus registered users that's focused on issuing tokenized securities. Go to startengin.com slash unchained for a 20% discount on setup services to launch your regulated ICO. This is not legal advice. Looking to advertise your product on unchained and unconfirmed, reach out to Raylene at Laura Shin Podcast at gmail.com to find out about sponsors. sponsorship opportunities. Again, that's Laura Shin, L-A-U-R-A-S-H-I-N podcast at gmail.com to find out about sponsorship opportunities on unchained and unconfirmed. Hi, everyone. Welcome to today's working lunch here at the Oslo Freedom Forum in New York. Apparently, this monitor in front of me says that the topic is actually why decriminalization matters. But just want to let you know,

there's been no change to the, to the program. It's why decentralization matters. My name is Laura Shin, and I'm a journalist covering the crypto space, and I host two podcasts in crypto called Unchained and Unconfirmed. And I've been covering this space for about three and a half years now. And oftentimes when people find out that I cover crypto, they say things to me like, oh, it's only good for speculation, and they don't see the use of it, blah, blah, blah. And I find myself having to explain that, of course, you know, here in the U.S. and other kind of more developed countries. We have really well-functioning money. We have good financial services.

And so for us, we have money we can trust and services we can trust. And so, of course, you know, if you live in a society like ours, it sort of does feel like what is the use of this. But in today's discussion, we'll be diving into how more authoritarian societies actually highlight the need for technologies like this, for technologies that governments cannot shut down or censor or otherwise control. And here to discuss this topic are Alejandro Machado, who is a researcher at Zika. She's on the way in the end there.

And next to Alejandro is Amber Balday, who's the co-founder and CEO of Clover, which is a decentralized software and developer tools company. Andy Bromberg is next to Amber, and he is the co-founder and president of CoinList, which is a compliant token offering platform. And next to me here is Mega Roger Copeland correspondent for BuzzFeed and the former China Bureau Chief. So I figured the way we would structure the discussion is kind of like some of the on the ground details of what's going on in some of these more oppressive regimes. So why don't Alejandro, why don't you start with kind of like what's been going on in Venezuela and how those trends there highlight the need for decentralized and censorship resistant technologies? Yes, so can you all hear me? Hi, my name's Alejandro. I'm born and raised in Venezuela. I lived there until

2015. I am now traveling and I, well, I started computer science and then I did a product design. I had product design background as well. I stumbled upon crypto last year and I realized the potential that it has in societies like my own. And I've never really, like ever since I left and I've left because it's very difficult to do work there. The internet speeds are really slow, and I mean, there's no community. There's very little to do,

if you just work there and focus there, especially if you are working towards freedom or towards living in a society that resembles more, like, yeah, a free market state. So I think that one of the big problems that we have today in Venezuela is authoritarianism and censorship. We have a lot of newspapers that have enclosed.

If you tweet, there's a law that you can go to jail for tweeting against the president or anyone in government. They apply this very selectively, but it happens. And it's just a way to scare people into submission. And besides that, there is horrible economic mismanagement, which I think we're going to talk more about. And decentralization matters in Venezuela because of censorship, because of control of information, but I think even more so for control of money, the government of Venezuela has debased the currency incredibly, and we are now experiencing hyperinflation that has been going on since December of last year.

So we have like a couple million percent inflation this like for a year, like from last year to this year. It's just unimaginable. In the United States, I think three, four percent inflation is like already too much. We have in the order of millions of percent. Yeah, I actually, just to jump in here, I copied some stats from this article that came out in PCMag, if anyone is interested in learning more about this. But they were saying that Bloomberg apparently has this Cafe Con Leche Index. and it tracks the fluctuating price of a cup of coffee at a bakery in the capital of Caracas.

And in August 2016, a coffee cost 450 boulevars. And this past July, a cup of coffee cost 1.4 million bolivars. Yeah, it's insane. So the problem with this is the government has no idea how to have a responsible monetary policy. and so we are locked into a system where we depend on very bad bureaucrats and very bad people that don't know what they're doing and well maybe they know what they're doing and they are fine with making us all poorer and you have no access to a currency like the US dollar or the euro or other like national currencies but you do have access to Bitcoin and you do have access to other open money systems

and that is where the game changes and I think that states like our, they have not realized how much of like a disruption this could be. And, you know, like they became famous last year because they ran the ICO of the Petro, which was a complete disaster. But I think that what we would like to focus on more is the potential benefits of cryptocurrency for the average citizen, for accessing a money system that is open and that anyone can opt into. And can you actually dive into more detail on how everyday people in Venezuela are trying to use Bitcoin and other cryptocurrencies and then on the flip side, give a little bit more details on what

happened with the Petro ICO? Sure thing. So I have a few friends. I mean, as I said, I grew up there, so I have many friends who are still there. And for example, there's this friend who's a doctor, medical doctors, as a postgraduate and everything. He earns about $10 a month being a doctor, you know, performing, you know, like arguably the best service that you could do for society, $10 a month. And that's obviously not enough to eat and to have like a normal life. So he stumbled upon cryptocurrency mining about two years ago or so. So he started mining Ethereum. And that's how he makes a living, like a more proper living. He earns about $150 a month by mining Ethereum. And he recently told me that his, so Venezuela is a very complicated place like infrastructurally.

It's also very violent and, you know, like there's just complete chaos going on right now. So they told me that his like the wires of his like wired internet connection were stolen because they they wanted like the dogs weren't to sell the copper in the black market because they it's just like something that is easy to steal and resell. So he's without internet but he's still mining through his 3G connection. So it's 60% efficiency. So he's not earning quite the 150 he used to earn but still quite enough to sustain a living. And then go into more details on the petro ICU. Yeah, the Petro ICO, so Maduro, like, what were, like, very scammy people trying to do last year, like, a easy way to get money? I think, like, the trendiest thing to do was to run an ICO, right? Not to say that they were not legitimate ICOs, they were absolutely fantastic projects that I think ran very responsible ICOs, but I think it was also, like, if you look at the space, just the numbers, they were rife with, like, very bad projects. I just wanted to make a quick buck and exit.

So the government saw that, and since they're con artists, they're like dealing narcotraffic. They deal in like, you know, lots of shady businesses, kidnappings. Like, they make a living with all of these, like, very questionable activities for society. They also got into ICOs, and because they just saw it as a quick way to make money. and they tried to raise, they say they wanted to raise like $6 billion. They have not specified how much they actually raised, and I'm very skeptical of any claims that they make.

I think it was a complete disaster. Technically, like the website didn't work the time that it was supposed to be launching. I pretended to be a buyer, and I uploaded like a blank image as my passport to KYC, and they took it. So you could imagine the level of sophisticated, and like, you know, the way that they've been running things, I don't think that they actually were successful. Yeah. And for people who don't know what an ICO is, just in case,

it stands for initial coin offering, which is basically a way to crowd fund in cryptocurrency and you, the product that you give to people is another cryptocurrency. So I think, like, what's really, really interesting about what's going on in Venezuela is that you see kind of like both sides of, you know, the potential in this technology. Obviously, there is a lot of, positive that can come out of it, that you know, you can use it to circumvent maybe like what oppressive regimes are trying to do. However, then on the flip side, of course, you know, they can use these technologies as well, which is what, you know, has been going on Venezuela, which is so interesting. So let's find out more about what's going on the ground in China. I think, you know,

the focus there, or at least kind of the things that the government is doing highlights, you know, what other areas of technology we need decentralization for or censorship resistance for. So what are some of the things you're seeing on the ground in China? Yeah, I think one of the big things that I've written about in China over my six or seven years there is the kind of rising tide of government surveillance. And that touches on a lot of different aspects of the way people communicate, including things like travel and spending money and stuff like that. I guess one of the biggest kind of life-shaping things that has changed in China over the past couple of years is the rise of e-payment.

And e-payment there is just very, very widely accepted, like, everybody from, you know, homeless people on the street using QR codes to my, like, 95-year-old Shanghaiese landlady is, like, accepting e-payment in Leo of Cash. A lot of people think that cash in China is just not going to be used. in a couple of years. People have, like, the culture around cash has changed so dramatically, like to the point where people find cash to be, like, dirty and, like, kind of inconvenient, like, just don't even want to have it around anymore. And if you think about that from a privacy standpoint, it's actually really damaging. So, WeChat is owned by Tencent, obviously one of the biggest Internet companies in the world.

Tencent is obligated by law to hand over information about using. to various authorities within the Chinese government when asked. If, you know, for an internet company here, there's sort of a legal process for that. There's a subpoena that has to be filed. There's a level of evidence. There's a threshold that has to be met. In China, that's not necessarily the case. So you can see this in practice in terms of these kind of algorithmic or big data policing

programs that are being rolled out across the country. This is particularly egregious in places like Tibet and Xinjiang, which are home to, ethnic minorities. These are like big, big regions in the country's west. But it applies to really, you know, police departments all over the country. And one of the things that these police departments are doing is using a predictive policing system called the police cloud, which factors in lots of data from different areas of people's lives. You know, it includes things like medical records, you know, whether you're taking birth control, your academic history, your performance reviews at work, but it also includes things like stuff that you, you know, it includes things like stuff that you,

pay for, things like train tickets, your stay-at-a-hotel room, as well as things like social media, your online purchases, all of that sort of stuff. And a lot of the information is gleaned from tech companies, right? And there are documents in Chinese state media and an official reports that state that, you know, the police, in addition to people like petty criminals and stuff like that, they're specifically targeting dissidents and ethnic minorities. So from that point of view, the aggregation of a lot of these kind of information into the hands of law enforcement and state security authorities can be really, really problematic from a freedom of expression and privacy standpoint. Yeah, I think, I don't know if you know, but here even in the U.S., like if a person goes missing or has been thought to commit a crime, one of the first things that they do is look at what their recent financial transactions were and stuff. So having kind of like all this taking place on these centralized systems.

that work with the Chinese government is actually hugely problematic in terms of privacy. Yeah. And there were a few other things that you also mentioned, like, or, well, actually, this one was a big one that's been in the media, which is credit scoring in China. But you said you didn't think it was such a big problem. Can you talk a little bit more about what's going on there? It's not so much that I don't think it's such a big problem. But basically what Laura's talking about is something called the social credit system,

which has gotten a lot of press. basically social credit system is like this collection of government programs at kind of all levels of government from like local governments to like provincial level and so on that basically uses a system of like rewards and incentives as well as punishments to get people to engage in desirable behavior right so like you know there's stuff like like the most kind of benign example is jaywalking okay so we don't want jaywalking so we're going to install a big camera at that intersection and just like literally shame you by showing footage of you, jaywalking. And the kind of vision of some of these programs is that a lot of these kinds of behaviors, like everything from like jaywalking and like turnstile jumping to the subway on the subway to like stuff like things that you say online is going to be kind of compiled and aggregated in some fashion and used in a way that assesses you.

And if you do well on some of these metrics, you can get certain advantages, things like getting discounts on airfares or making it easier for you to get a loan. at a bank, for instance, to buy your house to punishments, like being put on a blacklist where you can't buy, you know, luxurious train tickets and flights to certain places and things like that. So all of these programs, it's kind of confusing because they all work in different ways depending on where you are. There's also private versions of these programs by like Ant Financial, which is the Financial

Services wing of Alibaba and a few other companies like that. And right now it's really, really unclear how these programs are going to fit together at a national level. But the reason that I brought that up with Laura is that I actually think these programs, like while they're really important, from a privacy standpoint, they're actually less troubling than some of the other programs that are used by law enforcement that specifically target people that are thought to be problematic for the state, people like racial minorities, dissidents, and political opponents, et cetera. Yeah, and one other thing that I wanted to highlight here was just in the days leading up to this event, we learned a little bit more about a new program that Google's working on called Google Dragonfly. which is the service I think that maybe they're looking to offer in China. And just for me, as somebody who remembers Google as having been founded on the motto of not being evil, I was a little bit surprised by what I was reading.

So, Megha, can you summarize what they're thinking about doing? Yeah. So to be clear, Google has basically said almost nothing about this, except that this is like a very early stage program. But the story was broken by the Intercept a few weeks ago. And basically, it's that Google is building kind of a censored version of its search engine. I think it's a censored app to use in China. So the history of this is that Google was in China until about 2010.

And then for a combination of factors, one was that I think there were sort of suspicions of like a state-sponsored hacking attempt on them. There were kind of like anti-competitive practices that were being used against Google. And, you know, they had only about a third of the search market at the time. They made this decision to pull out of China. And in interviews around that time, Sergey Brin, you know, sort of alluded to his own personal history, you know, as someone who spent some formative years in his childhood in the Soviet Union and how that kind of made him feel about his company being party to, like, one of the world's most sophisticated Internet censorship systems. And Google being Google, they sort of drew a line in the sand,

and everybody since has had to live up to that standard, right? That they're not going to be complicit in this kind of authoritarianism. But that is really the subject of a lot of controversy within Google, I think, especially considering that China is the world's largest market for Internet users, you know, quickly growing and intensely powerful consumer class. It sort of led other people within the company to sort of question whether that's the right to And, you know, in my opinion, I do think that other tech companies are going to be looking at this and saying, well, if China is going to, or sorry, if Google is going to go along with Chinese government censorship, then, like, you know, why are we staying out of this market? So these are companies like Twitter, Facebook, et cetera, who could probably get back into the Chinese market if they agreed to censor on the Chinese government terms, but, you know, haven't been successful in doing that so far. And then just to get into Dragonfly, like, what?

are they going to be doing? So Dragonfly would be the censored search, basically. Right, and I think they're tying it to people's individual phone numbers and stuff. So it is pretty... Yeah. Yeah, I mean, although, like you said, this isn't officially from Google. It's just... Right, right.

Censored, they're also collaborating with the Chinese authorities. Like, they're giving information to the Chinese authorities, which could end up in deaths, right? Correct. So one of the big problems with this is that basically by Chinese law, they have to... under this project, they would have to store user information on servers in the PRC, which essentially makes information about Chinese users, like, it makes it possible for government authorities to collect that information on demand, which is really, really problematic if you think about, like, the surveillance they're already carrying out on ethic minorities and dissidents.

So just to give you an idea, like, I've written a lot about this region called Xinjiang, which is in the west of China, which has been in the news quite a lot recently. Basically, people in Xinjiang, like Muslim ethnic minorities there, are being sent to re-education camps for, like, very, very small things. Like, things like having a photograph of a mosque, right, on your phone, sending a text message to a relative that lives in Egypt or Turkey. All of these things are, like, reason enough for you to be sent to re-education camp.

So if you think about that in the context of Google, right, if a police department in some town in Xinjiang says, I want information on what this person is searching for, and they search for something that has some, like an Arabic pop song or a photo of the highest of fear, like whatever, that could be used as evidence against them to effectively incarcerate them for four months or more. Wow.

So this has been, like, hugely, hugely interesting, especially for somebody who's always thinking about just blockchain and crypto and not kind of, you know, I guess, of these political issues, but Andy and Amber, I'm sure all the things that they were saying have sparked some ideas in your mind, and I'm just sort of curious, as the two technologists here, you know, what it is that you see people are building in the world of decentralized projects that could address some of these actions being taken by these governments. Sure. Yeah, I mean, building tools to thwart authoritarianism isn't something that

started with blockchain or crypto, right? I mean, this is something that's been going back decades, and if you trace back the evolution of internet protocols as well, there's a lot of geopolitics baked into how they're designed. We take for granted that much of the software that we use today was developed in the West and that it has been a generalized conduit for things like Wikipedia around the world. And soft power projection is something that governments care about, and that's something that we achieve by getting ideas beyond things like the Great Firewall. So how you build software absolutely matters.

And it's not just about, well, we're seeing this kind of odd dematerialization of speech and money and code, where these used to be discrete different things, and now they're kind of all conflated, and it's causing a lot of really interesting challenges and problems. So as you're speaking, as Alejandro speaking about Venezuela, it's interesting because as a government releasing the Petro, I mean, maybe they're naive and silly and trying to make a quick book, but they're also trying to circumvent global capital control systems. And most other governments, like if you look at, well, several other governments are looking at how to digitize their version, their own sovereign currency. But they want to do that in line with existing monetary policy. They want to make sure that you can do quantitative easing. They want to make sure that you don't disrupt interest rate controls.

But if your currency is failing, then you want to create something that has a completely separate fluctuation as a hedge against that. And, you know, China as well is backing Neo as a separate project, and you see Master Chain in Russia as well. They're all over the place, what these different countries are doing. So some of the things that I am concerned about as we move forward, I guess, is how the very complex geopolitics geopolitical cyber threat landscape is now evolving to embrace and simply see, not decentralized technology necessarily, but when you start looking at cryptocurrencies, them is simply a new landscape to enact the exact same policies. We really take, or there's this illusion of choice that we have right now

where it feels like you can choose, you know, Visa or MasterCard or Amex or what have you, but really it's all the same banking system. When you get these tech providers that then collude behind the scenes where you can't necessarily consent to opt out because there is no longer a way to get off the grid, then the software comes to kind of define the entirety of your life through these credit programs or otherwise. Yeah, and I know Andy has some thoughts about, like,

kind of different levels of censorship resistance or decentralization, and I'm kind of curious to know about that because I'm also... Yeah, well, let's just start there. Yes. Sure. Yeah, just to tack on to what Amber was saying there, I think the Venezuela and China examples are really interesting because they demonstrate that decentralization, if we're going to talk about how it can solve these problems, can solve wildly different problems. Talking about Venezuela, we were talking about currency issues and instability and not talking about things like censorship and surveillance. And then talking about China, we're talking about censorship and surveillance and not talking about issues with the currency. Those are totally separate categories of issues. And what's so interesting about this technology is.

this decentralized technology is that it can solve both of them. And so the analogy I think a lot of people use might be a little bit overused is that it's a lot like this internet revolution that happened where the internet itself doesn't do anything specific for end users other than convey information. But that can be used to build a news website. It can be used to build a shopping website. It can be used to build a search engine.

It can build a whole bunch of things. And in the exact same way this decentralized technology can build a number of different applications on top of it that are used for wildly different purposes to solve wildly. different problems. So when we think about these, they have different requirements. If we're aiming to solve currency issues, it doesn't necessarily have to be a totally massively decentralized system that is resistant to intervention by massive governments. What you need is the globalization aspect of it. So these decentralized technologies can be built anywhere in the world and can be used

anywhere in the world that has access to protocols to interact with them. And that's all you need for that. Now, the more decentralized it is, you might argue it's better. It's harder for governments to interfere, but you might just need what people often call kind of platform-grade censorship resistance. A censorship resistance and decentralization that just avoids single parties controlling it, which is the issue with most centralized services today, but controlled by a smaller set of people. But then if we're talking about things like censorship resistance and surveillance, we need these things to be massively, perfectly decentralized so that even if a nation like China said, we're going to try and attack this

and get into it and get access to it, they wouldn't be able to. Those are very different technology. So you look at the rise of stable coins, for example, which is a class of cryptocurrencies that are intended to be pegged to some sort of stable value, whether that's the US dollar or the CPI or some other sort of basket of goods. That is really useful for a country with massive currency instability. But that is still pegged to something real and semi-centralized, and that might be okay for that specific use case.

But then you look at something where you're trying to prevent China, a nation with unimaginable resources, both in terms of people and money and computing power, everything you can imagine from accessing that network, you really can't rely on anyone or anything. And so that's where this concept of kind of pure decentralization comes in where you need a massive network of people around the world driving this forward, driving this network forward,

without relying on any specific party. So that, just to draw on the difference that Laura was alluding to, is often called in the crypto world kind of platform-grade censorship resistance and then sovereign-grade censorship resistance. And there are trade-offs. objectively better than the other, but it depends on what you're looking for and what problem you're actually trying to solve.

One of the problems there for a lot of people is identifying which you need requires understanding what your threat model is, and most humans have never heard that phrase, let alone had thoughts about it, right? So these decisions are then made for them, and they choose based on usability. They choose based on where their friends are. They choose based on which chat messenger has inline gifts rather than which one has end-to-end encryption. And people make poor choices, not because they don't care, but because they don't know and they don't understand what they're necessarily giving up. Yeah, that's a challenge.

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for a free consultation and a 20% discount on future regulated ICO setup services. That's start engine.com slash unchained. This is not legal advice. This ad spot could be yours. Got a great product or service for unchained or unconfirmed listeners. Reach out to Raylene at Laura Shin Podcast at gmail.com to find out about sponsorship opportunities on unchained and unconfirmed. Again, that's Laura Shin Podcast at gmail.com. L-A-U-R-A-S-H-I-N podcast at gmail.com. One comment about actually something earlier that Amber said was she talked about this, how previously there was a separation between money and free speech.

And I actually wanted to just flag for people that this was actually a moment in an interview I did with Naval Robicant on my podcast Unchained, where he talked about this, how this was breaking down. And it was like easily one of the most tweeted parts of any interview I've ever done. So you guys should go back and check that out. But actually, Amber, you also raised usability, which is actually where I wanted to go next because I'm just curious to know, well, so two things. So I want to hear Alejandro and Megha talk about what it is that has made certain alternatives usable by people and what people have actually been using on the ground. But then also, you know, kind of try to analyze, like,

why do you think those things worked? And who was using them? Was it just limited kind of like to a certain subset of people or did it kind of, you know, gain wider adoption? And if not, what were the challenges and stuff? So does one of you want to start? Yeah, so I have spent the summer working at Zcash, Zcash company, for those that you don't know, as a cryptocurrency that has been developed here in the U.S., led by Zuko Wilcox, a prominent cryptographer, and got a great team, a really big fan of the team they got there. And they care a lot about privacy, they care a lot about censorship resistance, and Zucco particularly cares about what's going on in Venezuela.

So he set up this group, which Jill Carlson and I have been working. over the summer to research how cryptocurrency could help in Venezuela. And we have found that usability is a big issue because the people who are able to access cryptocurrency are tech-savvy. They have a way to access a computer. They have a way to access. And most people in Venezuela don't have computers. Most people, there are, like about 45% of the population has phones, which is pretty

significant. But there hasn't been anyone who's developed like a phone app that is very easy to use that I could point to my grandma or to my mom even, and they could get it and start accessing up like an open money system. And that's not good news for the majority of people because you need someone that really leads you into it and the lucky few are getting the benefits of cryptocurrency. So if you have someone who taught you how to use local bitcoins

and like work out the whole thing about the reputation system and how to buy and how to sell, like where the commissions are and so on, or if you have someone that is using AirtM, which is another service, that lets people access digital US dollars in Venezuela, those have been recently blocked by the government, and now you need a VPN to access. It's still pretty easy for someone that's tech-savvy to install VPN and access it,

but I couldn't tell my mom to do it. It's difficult for most people that aren't in tech. So, yes, it's definitely clear that the top problem, is the lack of a product. So I like to use this example a lot. WhatsApp popularized the use of end-to-end encryption, and we had suddenly billions of people who were able to communicate with each other securely.

And since they focused on usability, since they focused on being available in every platform possible, and they later incorporated encryption, they did a great service to the world. And I feel like we need to do that for money. Yeah, and as a very small, subtle point on that, It's the same exact encryption that Facebook implemented at the same time, all of which originated from Signal Messenger.

The only difference there is that if you use it via WhatsApp, it is turned on by default. You do not need to opt into using that end-to-end encryption. If you use it in Facebook, you have to click three different menus for every individual bilateral chat, then it's encrypted. That's the kind of software design decisions that really matter to billions of people. Yeah. Yeah. Yeah. Do you want to dive into usability?

Yeah, I mean, I would totally agree with that. I think the reason that WeChat is so widely used, including WeChat pay, is that it is, like, so easily accessible. You mentioned, like, in-line emojis and gifts. Like, that's a big part of why people use it. Like, everybody loves that stuff. It's cats, man. It's always just going to come back to the cat gift.

It's all about cats and bunnies. like seriously like yeah I remember when we chat first became popular in China like a big part of it was like sending all this like kind of kutzy stuff to your boyfriend or girlfriend and in terms in terms of like e-payment I think one of the reasons that it's it's sort of like a snowball fetch like it started just being available everywhere you could use it for every transaction the cost to both the payer and the pay the pay the the the recipient was like either zero or negligible. So even somebody who runs a fruit stand on the side of the road, you know, they can use WeChat Pay to accept payment, right? So that kind of convenience factor, I think, trumped any kind of considerations about privacy.

The other thing I would point out is like, you know, when it comes to China, like, I think adoption of these kinds of like native platforms for, you know, communications and services, because it's mirrored the development of domestically created social media in a lot of ways. Like, the reason that these services have become so popular and so widely used so quickly is not just that they're user-friendly. It's because any kind of competition from outside of China has effectively been cut out. So if we talk about encrypted apps, for instance, there are a lot of people in China who are tech savvy.

They want a more private alternative. And those people were using stuff like WhatsApp Signal and Telegram. until probably about a year and a half ago when basically, I guess probably what happened is a critical mass of people started using it and the government just sort of put a kibosh on it. So the thing about these apps is like sometimes they work and sometimes they don't, but what's clear is that they're not reliable

because you can't predict when they're going to work and when they're going to not. Well, wait, how did they do that? Like, I'm using it on my phone and how do they know that I'm using it? Like, I don't understand that. So it's not personal. It's just like, you know, it's different in different parts of the country. But if you think about how that works.

So like if I send you, we're both in Beijing, right? If I send you a WhatsApp saying like, hey, let's meet up at 6 p.m. for dinner. I don't know if you got it or not, right? So it's like even if it works that day, I don't know that it's going to work. And you might not get my message, which, you know, which means I didn't accomplish my goal, right? Wait, and so somehow the government makes it uneniable? Right, firewall. The traffic was rerouted, basically.

So when it came to signal, they simply disallowed all service that was. coming through from the Signal servers, and Signal attempted to domain front via Amazon so that it would look like all of your traffic was coming from Amazon, Amazon actually shut that down, and was able to send them like a cease and desist. And that's, when it comes to decentralization of code itself, that's something that when you have a specific company that owns a specific code base and you can call somebody and say stop it, then that's how something gets shut down. And there's really no alternative because you need that network adoption to have a community that can connect. You can't have a decentralized app that does that necessarily until you start talking

about, you know, ICOs or DAPs at this point. And actually, just to make one point on the usability piece, I really think it's, this is crucial, and I think it's important that we don't underrate the usability discussion around this. There's been such a myopic focus for the last few years in decentralization technology on just the technology, which is incredibly important. We have to get the technology right to make it work and be effective. But technology, a lot of the technology, alone is not enough. It is like developing a new medicine that cures a disease and not thinking about how to lower the cost of that medicine or distribute it to people that need it. Just having it

isn't enough in a lab somewhere. What we need is the technology and then thinking about usability. How do you make that technology actually usable for people? How do you make that medicine accessible for people? And the distribution. How do you then get that into people's hands? Even if you built a beautiful, easy-to-use app that had the best of decentralized technology to solve a currency problem or surveillance problem or whatever it may be, and you didn't have a way to actually get that in people's hands and make them want to use it, that is a useless thing to have.

And so I think we're now in this kind of wave of decentralized technology getting to this place of the professionalization of the space and increasingly seeing people think about usability and user adoption things Alejandro is talking about in Venezuela that are so critical now that we've developed a basis for that technology,

you've got to work on how to get it to people and make sure that people keep using it because otherwise it'll sit there in the lab and never have any effect on the actual real issues in the world like currency destabilization or surveillance or censorship. Yeah, and just getting exactly to that point with the chine and the firewall,

is there any way around that or, like, you know, can decentralized technologies get around that kind of firewall or no? The scorebed app here with trusted stats in real-time sports news. Yeah, hey, who should I take in the Boston game? Well, statistically speaking. Nah, no more statistically speaking. I want hot takes. I want knee-jerk reactions.

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Choose news, not noise. CBC News. Yes and no, I think it's part of it. It depends kind of what we're talking about. Metadata analysis-resistant protocols are a completely different area of study that has to do with making it through and past those kind of firewalls are making it at least difficult. to find out what's going on so you know when people are doing stuff that you would want to censor. And certainly there are a lot of projects you've probably heard of the Tor project as well.

There have been several other projects over the last several decades that people have worked on to either further decentralize or further, you know, remove those single points of failure for people that are just trying to navigate the Internet. It's not, you can't just throw a VPN in there and necessarily call it a day. Yeah, and just to build on what Amber's saying there, one of the promises of decentralized technology and I'll explain what this means is that decentralized technology

moves the advantage from the attacker to the defender. In a system with centralized technology, it's always a cat and mouse game for trying to get around the great firewall or whatever you're trying to avoid. Always a cat and mouse game of technology improving that makes it easier to get around

and then kind of the attackers, China, for example, catching up and figuring out how to invade that and get back into the protocol and then it develops again, develops again. And what I think is so powerful with this technology is that it moves that advantage from the attacker to the defender. In a centralized system model, nation states, that's what we're talking about, have an advantage, because they can walk into Facebook's headquarters or Google's headquarters like we're talking about

and say, hey, this is the deal. If you want to operate in our country, you put your servers here, we have access to them, and that's the way it's going to be. Advantage attacker, right? But in this decentralized world, it's not that it's a magic wand that we can wave and say, well, now the Great Firewall doesn't work anymore. China has no chance at ever defending against this. What it does say is that the defender, the people that are using it now have the advantage. And that people developing the technology can build it knowing that it's their turn to make things better and more kind of attack avoidant, more resistant to threats. And then China may come up with a way to block that somehow, the signal example, we're going to take down these servers.

Signal can then say, well, we're going to distribute this a little bit further. China figures out a way to attack that. They can distribute a little bit further. And that advantage shift is what we're going for. And eventually the hope is that with some of this decentralized technology, the advantage of become so big that it becomes functionally impossible to broadly attack these things in a highly surveyed or censored way. Yeah, it can get very complicated, though.

I mean, I think, and we haven't really seen a functioning, decentralized autonomous sort of application. I think the Ethereum Dow was the first one, and it blew up relatively quickly. But the problem is, besides just cat gifts, but on the internet, no one knows you're a cat. on the internet, no one knows whether or not you're an intelligence operative. So when you don't actually have a specific company that has a jurisdiction and has said, you know, as Google did previously, we're not going to do this. This is our line in the sand.

Maybe they change the way that they're going to operate, but it's in the news and we know about it. The best defense that we have against that in a decentralized software sense would just be that it's open source, which requires that qualified people with the right eyeballs, look at it, at the right time and then raise some sort of alarm bells. But as you decentralize that control, you are giving away that trust, that we have placed trust. Every app that is on your phone, you are implicitly trusting the people that have written that software to not just be completely doing something that they, is disingenuous and malicious to you.

Yeah, I actually also want to circle back to something that you mentioned earlier, which is that so far for most of this conversation. We've been talking about decentralized technologies as being kind of the solution to these problems kind of being perpetrated by these authoritarian regimes, but Amber did allude to earlier how obviously some of them are also trying to use this for their own ends, and Alejandro mentioned that as well. And so even though this is a slightly negative note, although I think this is going to be our last official question, then we might have

one more question from an audience member. But I'm just curious to know kind of how you guys think authoritarian regimes are actually trying to use these technologies and why? Is it to avoid sanctions or to oppress their people in other ways or how are they using them? Are we just going down? Yeah, well, I think that

you could argue that the Petro, if well executed, could effectively skirt sanctions and not just the Petro, but like other cryptocurrencies, right? Because they weren't receiving payments in Petro's. They wanted to get money in Bitcoin or Ether and what have you.

And I think that there's some evidence that North Korea has hackers that target computers in the West that have, and then they request like payment in Bitcoin or an ether. So they are definitely interested in money that is able to flow freely across borders. And that's the way that they can get like an advantage of this. But I think what... Yeah, I think that WannaCry hack was North Korea. And that's where they were like locking your computer. and then requesting Bitcoin be paid for the ransom.

And I think the other thing is that there were some really big crypto hacks in crypto exchange hacks in South Korea, and at least inferior is that North Korea is behind those. Yes, yes. So I think there's definitely a concern there that we should all be aware of and that we should try to mitigate. But I would refer back to your point that this is supposed to give the advantage to the defender

and not to the attacker. And like this is supposed to be give the power, shift of power back to the individual rather than the state. So it shouldn't matter that much if the state is able to do this, like as an individual actor, because there's many, many other individual actors who will overwhelm the state with their good intentions or with their good behavior.

Yeah, although the problem in North Korea is that, of course, the everybody person is not have access to the Internet, so only the government does. All right, so does anybody else want to add anything? I would just add quickly about North Korea. Yeah, I mean, the reason that North Korea is interested in cryptocurrency is because they literally do not have access to global financial markets because of, like, the encroachment of international sanctions. So, I mean, if you think about North Korea's government as essentially an international criminal enterprise, like they will use lots of different ways to smuggle money in and out of their country, like everything from putting it, in their diplomat suitcases, to selling drugs,

to just all manner of illicit commerce. And I think they see cryptocurrency as one more vehicle for that. And I think that's interesting because it shows that, like, you know, a currency that sort of promotes privacy and is sort of outside the norms of the global financial system has all of the kind of benefits and pitfalls of that. So for somebody who is engaging in something that we would consider legitimate, right, like something like, you know, advocacy or something like that,

that can be a very positive thing. But it also empowers people who are seeking to use that privacy to do something that would ultimately be harmful, I think. Yeah. At the end of the day, technology doesn't have morals. Exactly. Technology can be used by good actors or bad. Yeah.

And it's up to those actors. You can develop a utopian or a dystopian world for any technology where medicine or genetic testing or anything is used in certain ways. and it can be used by good people or bad people. And I think it's up to us as people that are building these applications and building the usage patterns, building the distribution, to make sure that this new set of technology around decentralized technologies is used by good people for good purposes and not by bad people for bad purposes.

All right, so I think we have time for one, maybe two questions. There's one right up front, and I have to give up my mic so I can easily walk it over. Oh, okay. Thanks. Thank you all. I know it's a point of a working lunch, but it feels very rude to eat while you're all talking. So sorry about that. Lauren, I obviously listened to your podcast, think of your content. Megha. I saw you speak on Thursday at the Blackstack event. My name is Faye. I recently joined Masari, which is a startup bringing transparency to the crypto economy. And I joined a head of design, so I'm really interested in the direction of usability in the conversation from today. I mean, obviously it's kind of under my charge in the design industry in general to bring usability and accessibility to this world. But I think that's the design industry. I think I think there's a two-pronged approach to that.

One is making the products usable and accessible and legible, and the other is making the landscape at large usable and accessible and decipherable. And I really think that speaks to what you were saying about, you know, most people not knowing their threat model. So I feel like the branch number one, easy enough. Designers, you know, there are best practices to do that. But the prong number two of the mission here is harder to think about

how to approach. And I'm curious what your thoughts are about bringing usability to the ecosystem at large. helping people understand the need for this technology. I feel like, I don't know, I feel like that's a gimmie since I'm working on building software development tools that drive usability. But, yeah, I think that it's, it's maybe not just as easy to make a bad, an application that does bad things as usable as an application that does good things, but the

application that is more usable is the one that people will probably choose. And historically, there is generally a trade-off between. security and privacy or convenience. And a lot of, I think, a sentiment that kind of runs through people, the communities of people who care is like, well, other people should just care enough to get over it. And if they understood the way that we do, then they would see the value in making, clicking this extra button or understanding these different settings or only using these three hops to get to your final destination.

Or using long passwords and stuff like that, right? Because it takes work. It does take a lot of work to be secure on the Internet, and that's, there's little way around it, right? Like, you could make certain things more usable, but ultimately you need to, like, everything is in cryptography, it's projected by randomness, and you're, like, hiding in the randomness,

and you need to be able to remember, like, a passphrase, or you need, like, there's... I feel like there's just little recourse against, you know, very, like, fundamental things, which we try to make it better or easier, but at the end of the day, it does take a little bit of adjustment, I think. And this is a very, very real problem because if you don't make it usable for people that are not trying to do malicious things, like just buy drugs with Bitcoin,

if you can't get people to pay for stuff at Starbucks, then you have no noise around your signal. And then it's very easy to make the claim that governments should say, well, we don't want this within our borders because we don't see the legitimate usability. Yeah, and I'd also just say it's about communicating. to people what the core idea of the technology is. It's been true for every technological revolution. The beginning of the Internet, people didn't understand why this thing needed to exist

and just needed to be bludgeoned over the head by people saying, this gets something you type anywhere else in the world instantly in front of that person. And that then leads to websites, that then leads to everything that we have today. Same thing with radio, telephone, every piece of technology. And the core idea behind this decentralization is that this does the things you already do,

but without relying on anyone to do it. And that idea just has to be communicated over and over again to people until they've realized what applications can be built with that idea. Okay, I think we have time just for one more question, and there's a woman in the back who's been signaling to me that she has a question for a little while. So I will hand the mic off to you. Yes, hi, I'm Marisol. I came up to Lived in Norway. So I do work with blockchain, and I also am evangelist of Ayota as well. So I go around really thinking, and I work with digitalization, so I'm a leader of digitalization in Echinore, Stato.

So my latest adventures is enterprise data, and in that I really, from being an entrepreneur, trying to do solar energy and everything, I really change my mentality on how we just look at commodities and everything that we have. in the wrong way. Right? So it's things that we have, data and everything, is ours, right? But we are moving

to our system of decentralizations with data actually is a function as a service, right? And then, that's when we start creating these things. So when we talk about a blockchain or a Yoda or distributed technology, anything that it comes is just the back end

of the architecture, right? But at the end, where we are trying to create here is businesses of people's data by also insurance that they get the service they want at the moment they want, right? And with the self-sovereign,

the traceability, and the accountability, because they have to be accounted. Right now we are not accountable for what Google does for us, right? Or anything. So I want to ask you all, what do you think of really the disruption of

industry 6.0 will be? Because I'm a my company actually. I had distributed something. And this is actually a platform for integrated. So integrate blockchain, integrate. I ought to integrate everybody, like a Netflix of data, right? So it is that integration. What do you think of the integration of the data as a function, right? Where people actually say, hey, I can do this for you, right? Or I can have an artificial intelligence or a GTHuff and then everybody just plug in the same place. It's that difficult. I know that the security for China and the firewalls, right?

I mean, I don't see it as a really difficult thing because when you just distribute it, you make it encryptable, triple encryptical. Like anything, I think that there is a way around it. The problem is customers and people getting empowered. Yeah, I can jump in on that. I think what has to happen here is the simplest applications have to, be built first for people to use. I think a lot of those will be around ownership of data, exactly what you're talking about,

that that is a core benefit that there is so much fear right now and uncertainty around who owns my data. Is it these organizations? Is it the government? Who is it? And so there will be simple applications built first that encourage people to take over ownership of their own data. And once people have their own data, that's what everything is built off of every single

service we use in our lives centralized or decentralized, relies on our data, relies on us inputting it and having it. And so we'll build these simple versions, and then from there, everything gets integrated. And I think up here, and speaking on this panel, I think we're probably all dreaming of a world where most, if not all, the technology we use, is decentralized in some way. And so you have to start with the simple pieces, and that'll get more and more integrated into your life as more services begin to use those decentralized data providers instead of the centralized hubs that we use today. And it's just a long path to get there. I think we've got a long way to go. We're very early in the ecosystem.

But it's working on things like that that are so critical to get us. to that next stage where all of these services can be decentralized and we don't need to rely on the central parties anymore. Also, there are companies working hard on the problem of how to aggregate data that is private and how to perform analytics on stuff that is anonymized. So Apple has been doing some work in differential privacy. You can look that up. It's an area of research that is active in the company because Apple really does care, but

unlike Google and Facebook about this. And, you know, there are like many projects, and maybe Amber could talk a bit more about that. That is the most important next step in all of this, is that it's not just about decentralization for decentralization's sake, but I assume a lot of people have seen Wally where, like, everybody gets kind of like fat just staring at their monitors and, like, loves kind of the, you know, robots giving them food or whatever. That's kind of how we are with surveillance capitalism today. You get a wonderful customer experience where Netflix tells you everything you might ever want to see

in a predictive way and you never have to leave the couch, right? So why on earth, or how are we supposed to convince people to take back their data if all of a sudden nothing knows anything about them anymore? It's not a better user experience. It's not a compelling reason for people to change. So unless we can provide the same kind of business value and the same experiences over that decentralized data that is private, I don't know how we're going to make these applications take off.

And that's a decade away from being pragmatically usable? Probably, yeah. At least. Okay, well, I think we're going to have to take this as an optimistic note. I'm always a ray of sunshine. Right. It's 10 years out, but, you know, we're aiming for that. An optimistic note to end on.

So thank you so much for our fabulous panelists. Thank you for the fabulous questions, and I hope you enjoyed our panel. Thank you.