How to Abolish the Dollar & the Future of Crypto

Thank you so it's a bit stuffy here can we stand up for a second just stretch a bit move around it's been a lot of thoughts in the brain so just move a bit jump if you feel like it and make it a little ah cool okay so just show of hands who here works for an intelligence agency okay we have one person actually so I'll be careful so I made this talk originally for the DEAC day that Vitalik is like making these days you know that one I only had eight minutes so I'm not be a bit slower today I'm actually a very slow person I'm not really into accelerationism unless it's a US dollar abolitionism but yes so how to abolish the US dollar and the future of crypto so I'm Julio I'm an economic anthropologist I also work on poetic technologies today's views are about mostly my work on a book I'm writing called decolonizing money and also some of the work that I've been doing and we've been doing with my with my teams over the years with circles and now poetic tech so here we go economics 101 this is what they should have taught you in school probably didn't so how does the US dollar system actually work so in 1973 and Richard Nixon on text the dollar from gold at the time you could buy an ounce of gold for $35 and that was the sort of standard that we had from the you know post-war era the Bretton Woods agreement all the way to 73 at the time Nixon was trying to pay for the war in Vietnam he was running out of gold reserve so his ability to go into deficit was limited by the amount of gold effectively right I think France was buying a lot of them and so what they came up with in the Pentagon was to say what if we just unpack ourselves from gold and become the world's currency reserve currency and also therefore the unit of account of the world now a year later with the OPEC crisis the US convinced Saudi Arabia to accept payment for oil only in US dollars and that's the beginning of what we now call the petrol dollar system which is a system whereby today any nation in the world can only buy and sell oil in US dollars and that is important because it is what if you think of oil today are still the hegemonic and energy system of the planet it is a way of capturing the production system and therefore also labor so you cannot really have a transition in ecological or economic transition unless we unlink ourselves from this relationship between the dollar and oil so that Nexus is very important and so how is the system enforced if any country wants to escape from this regime they will be visited in their door by the US Army and so many people don't know this but actually a lot of the value of the dollar comes from the violence of the US Army today the US Army has over 800 US bases Army bases around the world the biggest one is in Germany actually and in most of their allies in Korea Japan that's where most of the US Army bases are and and then we come to like dollars and Treasury IOUs what is a Treasury IOU it's effectively a promise of future dollars so today investors who want to get a risk-free or low free investment they can buy US Treasury bonds at specific maturity rates they can be three years five years seven years ten years and then eventually get dollars with interest on them so it's effectively a very cyclical system as you can tell it's a periodic structure and so why does it matter so today if you think about the US dollar the US government's credit card when they go into debt when they're going to deficit when they create money famously the Fed issues money as debt and then it's monetizing as new US dollars into the banking sector and into the industry sector and who actually pays for that if you think about this system as a world tributary system what central banks all over the world do when they hold dollars and promises of future dollars or Treasury IOUs it's effectively given the US their surpluses their an interest-free loan effectively so it's a it's a very strange system some people call it a super imperialism this kind of system or uber imperialisms in the sense that it's the first time in history where a state has managed to tax the whole world into paying tribute to them in its own currency and so this is the system that we're dealing with and basically it's a form of extraction from the peripheries to the center most countries in the world today have to pay one third to half of their national incomes in debt payments service to the IMF the International Monetary Fund and the World Bank which are appendages institutions of the US imperial industrial complex and so that's more or less how the system works any questions so far cool so what do I mean by abolition and what do I mean by democracy here so abolition democracy is a term that W.E.B. Dubois famous sociologist from the US was writing at the dawn of the end of slavery in the United States where he argued that formerly free slaves were not welcome out of slavery with new democratic institutions so that they could have the means of subsistence to be a welcome out of slavery right former slaves became wage slaves for wage laborers without any equal footing to let's say non non-slaves right and so abolition democracy is a vision of justice that sticks to dismantle oppressive structures and systems while simultaneously creating democratic equitable ones for society so it's not just about the dismantling or the abolition of systems in this case the US dollar and the US dollar institutions it's also about creating counter institutions that are democratic to take their place once those systems are abolished so that is what abolition democracy means in today's world that is people like Angela Davis and Ruth Willmore Gibson who argue about the abolitionism in the context of prisons in the US we're famously 1% of the population is in prisons within the US the majority of that are black people so you dare see the aftermath of slavery and so I try to apply this concept to the realm of money which is yes as you can see from the that like previous triad that I showed you it's maybe another form of doing abolitionism by actually tackling the monetary part you can actually potentially also abolish these other systems so but what what is the justification for my argument why do we need to abolish the US dollar so the first one and I already alluded to it is based on energy and ecological arguments so today's production system labor are structurally controlled by this oil money nexus so far as you know insofar as we have technical alternatives with different energy technologies such as solar or wind that are actually more effective and cost efficient they will not thrive because structurally speaking if you look at the distribution of investments that banks do they do when they fund projects they mostly fund non-renewable energy projects in comparison to renewables like there is a very good piece by this in bank track which is a Dutch entity that looks at how banks do investments and if structurally speaking because of this military coinage complex of the USA that isn't really any incentive for banks to go outside of that nexus right so while we do have the alternatives and while there are countries developing technologies there the structurally we still are yet to be able to make that transition and the other thing is that of course we cannot have infinite debt isn't it growth of debt in a finite planet why because that is really the driver of what people now are calling economic growth as in the expansion expansionary extractive way in which resources are taken from the earth also labor and many other things so if we imagine it as a way in which the US has infinite deficit that they can just you know keep printing money and print money that translates into climate change in the form of more fossil fuels and more extractivism it doesn't mean that we don't need production it doesn't mean that we don't need you know supplies to produce things but the way that that is structurally made today is such to fuel consumerism and the production of you know fast commodities right in the perish fast the second argument is actually on the grounds of economic democracy for me the abolition of the dollar is a means towards achieving economic democracy so today some of us are lucky enough to live in systems that are that are sort of more or less politically democratic so people get to choose their leaders every four years of course we shouldn't confuse voting with democracy but it is way better than dictatorial regimes or plutocratic regimes which we unfortunately have in the crypto world so economic democracy is something that we really don't have people don't really get to own or control the means of production at a local level and so for me abolition the dollar is a step in that direction because it will allow us to first cancel debt all these imperialist debts I mentioned with the IMF and the World Bank if countries could be released from this services they could then use that wealth to fund other things basic infrastructure basic services and also I argue a planetary but local first basic income circles was an attempt that I think that direction of thought is definitely worthwhile exploring because we live in a planetary system at this point so we have to think about global solutions to local solutions to global problems so what's the role of crypto in the fall of the dollar so the story so far right from actually the administration funny enough has this weird two-pronged seemingly contradictory strategy where they both want to devalue the dollar while maintaining its global dominance no this whole argument about bringing production back into the US and making America great again is based on this type of arguments and one of the weapons that Trump has in his pocket to do this is tariffs right which we've seen him using very strange ways as a form of so-called economic protectionism even though it's not really the historical form of economic protectionism that we see in nation states but the other aspect of this is crypto so you could think about this as a promissory time bomb you know the history of money is filled with broken promises particularly in the sense of convertibility so as I mentioned during the end of the gold standard and before that there were always these moments where people states couldn't hold the promise of a specific regime and then they had to transition out of them right this is what we what I think is happening with the dollar today and so by accepting Bitcoin and USD stable coins these retail stable coins as legitimate reserves it's actually a very funny website in the White House which is like a fact checking of all this you can check it out it's very interesting what Trump is actually doing is accelerating systemic risks by coupling assets volatile assets like Bitcoin to the rest of the economy so whenever there is a shock to the system and the level of speculative markets that will eventually impact all the other sectors and so we see this rising systemic risk so Trump wants to leverage this is again is to leverage stable coins to get other countries to invest their dollars say Japan who holds trillions of dollars into the US by telling them by saying that you know to them that oh the Fed will accept stable coins now so please take your dollars transform into crypto dollars and give them given to us right this is their strategy thing so but the problem is of course that these retail use these crypto stable coins cannot be fully regulated or controlled by the Fed right so if you look at it historically like today most of money creation happens through not state money like the Fed but actually bank money so banks create most of the dollars in existence through debt and now this is becoming even more spread out as these retail companies like Tether and Goldman Sachs and others start to issue their own private US dollars right so that means that the control that the state has over the money supply is weakening over time and so has anyone seen Tether's reserves? no right so there is a big controversies about this so when the convertibility fails the promise of the dollar will break and so ironically Trump is likely our biggest ally in toppling down the US monetary imperialism if you think about it is kind of funny because a Democrat will never be able to get away with it you know it's only a right-wing nationalist populist person that can actually get away with it which is sort of weird but hey that's how the US works the dollar is already on its way down so it's not a matter of if the dollar will fall but the when how and what can we do about it so one question I pose to you is how can we preempt Trump's top-down strategy with a more bottom-up approach to deal the fatal blow to the dollar and actually have a self-determined transition which we deeply need so here I have some US dollar abolitionist skybook I will only focus on the first part since it's about monetary sabotage and you're all hackers and cryptographers so I'm wondering to think with you about these questions so the first type of monetary sabotage is about counterfeiting counterfeiting has been used historically by states to basically do forms of economic sabotage on each other the British did it to the to the to the US government when it first started within the US Civil War the North was counterfeiting the Greyback which was the name of the currency of the South but also anarchists have been doing this so Lucio Urturbia is famous Spanish anarchist who counterfeited many Citibank checks in the 70s that almost led to the fall of Citibank and they chose bank traveler checks because the the final it was less than actually counterfeiting US dollars then but but actually more in more recent history that isn't this interesting case that happened when at the dawn of Donald Trump's second election the Chinese government created a financial product that is was effectively a US Treasury bill made in China and they sold it to the Saudi government so now the Saudis have the option to exit and say the dollars that we get from oil instead of recycling them to the war machine to the US we can give them to China and so the question I have is can we do the same in the crypto world could we make crypto equivalent US Treasury bonds second method is what I call shorting the dollar now in the 1990s I think it was the infamous George Soros did a huge trade where he basically devalued the price of the pound gaining him millions billions of pounds at the expense of basically fucking everyone over so he won a lot of enemies not just the elite but also many working-class people so my question here is how could we short the dollar in the way where we can think about we can think about it in a class conscious way so if we short the dollar and the dollar falls how could that money be used to redistribute to the to the people that are actually suffering the most from the from the growing inflation that we see today the third one is these off the dollar who here knows what DDoS is can you please spell it out for me and what is what does that do exactly so if we were to DDoS the dollar I think this is more of a bucket time based type of side channel attack in the sense that you could be those the dollar the service the dollar institutional service in moments where it really matters so for example the US the Federal Reserve of the United States has what they call swap lines which are credit lines to other central banks and they give them liquidity in times of crisis particularly in the corona crisis but in moments when they critically we need money the sub lines are activated so these are I think attacks that we can do at specific moments to deal like to borrow from Chinese medicine you know points at the right part of the body so that we can actually change the way things are going now an energy cyber nutrition friend of mine actually posed this next method to me and I thought it was quite nice which is to make organized tax and payment strikes for the dollar so this is a method that anyone can actually do that lives in the US for example they can say today we will not accept payment in dollars and we will not pay in dollars or we will not use our money to pay taxes in dollars because it funds the war machine we can instead use it to for other things so this is a form of organized strikes that have been done throughout history but at the level of the money system at the level of payments and the level of paying taxes I think tax resistance is the term that people use for it in the US the fifth one relates a little bit to a protocol that I had the luck to work on it a bit called cycles which is more about cancelling trade debt so all countries in the world have surplus and deficit accounts with one another if you do trade and a lot of that is denominated in dollars the dollar is I think it's 85% of world trade is denominated in dollars so if you could look at those relationships in the graph and you can look at the cycles within that and the world trade you could actually cancel a lot of the world debt that we have just by the mere act of doing mathematics so that is a very simple way in which you could already weaken a lot the power of the dollar by canceling a lot of the debt that is already inherent within the graph within the system and so on and so on and so on so I don't intend to give you a complete list of all the methods it's a work in progress and it's just to get people thinking about in this direction so so just just to end up on like some of poetic explorations into the future of crypto if you've all probably heard about circles circles is a peer-to-peer protocol that allows people the power to issue their own money in the form of a personal ERC 20 token beyond states and banks now you know there's many problems with circle there's many critics I have about it like we mentioned it during today there is no privacy and so on and so on but I think it's a good way to get us thinking in the direction of what would it take to claim and democratize the power to issue money away from states and banks and into the realm of the Commons into the realm of people the second thing has to do with democratizing the power to destroy money here is specifically I mean it in the form of cancelling debt so as I mentioned in the example before of cancelling trade debt this next protocol cycles by informal systems led by the great Ethan Bookman is an open credit critical where the goal is to cancel the most amount of debt with the least amount of money in a privacy preserving way which is I think it's a very nice innovation some of the other work that I've been thinking about recently is to make a quantum like money system using physical and cronable functions or pops which I won't get into the history of that because it's very geeky right now but anyways the and and then also money systems in general that are offline first and local first hedging for internet collapse so how could we make monetary systems using the cryptographic primitives that we have today so that you can do payments that are like cash without having to rely on the hegemonic internet infrastructure so thank you this is my contacts on Signal Telegram and my email please pre-order my book this is you can scan there the code and my book comes out in early spring next year so yeah feel free to contact me if you want to hang out if you want to invest in poetic or if you just want to collaborate and abolish the dollar together thank you a few questions the hood who want to go with the question yeah I will just improvise I also don't like the dollar and I thought a lot in the last years how to basically obfuscate also pay taxes in my country in Italy because I clearly how much all this money is used for something that I'm not like resonating with and I personally didn't understood clearly the DDoS attack on the dollar but always keep like trying to understand how to again push down this because I see this very clearly in my everyday life how much the dollar is there always begging everything I mean coming from Italy is easy because you we have a relationship with that country yeah so first of all DDoS I didn't suit and how do you feel I think for Italians personally is a lot also about culture like how all this money and and and and the culture floated into our our our culture and this is not easy to to detach from because actually even if I use euro is the same thing again so yeah so I think generally speaking one takeaway I would like you to get from this talk is that what we should be doing with all these methods is to destroy the trust that people have in the dollar which is I said Trump is already helping us to do but we can do more you know when it comes to the DDoS attacks as Cassandra mentioned basically you can think about it as like imagine everyone in this room or everyone in the conference starts to send requests to the servers that control the databases of the dollar where you flub them and then they just break because they cannot be you know they cannot handle so many requests at once so that is a it's a it's a cybernetic attack it's not a physical attack yeah one we have one minute more for a question yeah actually not a question but a remark to your US dollar abolitionist list I would add the climate change or the reuse of fossil fuels on that list yeah if we don't buy much oil and gas will also be a valid point to reduce yeah you mean like divestment from fossil fuels yeah yeah of course yeah maybe one thing that you have already mentioned is that cancellation and I'm wondering I'd love to hear your perspective on what do you think we can all do when it comes to debt cancelling also in our own private life not buying into this you know notion of debt as we grew up with but how can we reframe that for ourselves and how can we start cancelling debt yeah so for example there is a very nice collective in the United States called the debt collective and what they've done is that they managed to organize debtors I think the debtor classes if you want to organize and strike against their creditors so you can do it at the bank level it depends on the structure that we're dealing with but definitely organizing within the debtors unions or whatever you want to call them it's a way to start because alone it's hard to fight a bank but if you owe the bank a thousand a million dollars the bank owes you but if you owe the bank a thousand a million dollars you own the bank right so it's a it's about the power dynamics there was a question there okay you can ask me