What Are Blockchains Actually Good For? - Andy Tudhope, Anna Alexa | Kernel, Celo Foundation

good morning good morning good morning welcome to day two of Youth Belgrade um my name is Anna I work at the Cella foundation and I'm joined by Andy hey how's it going I'm Andy I help run an educational program called colonel and we're here to talk to you today about trust value and honor what are blockchains actually good for and in this presentation we have three key takeaways that we want to get across and these keys are that blockchains mean anyone can make money by enabling us to verify ourselves we can trust more people and trusting those that we exchange with directly creates more value we're going to go into each one of these and explain how this relates to blockchains but first we start with trust and the question here is can we trust each other and trust is actually kind of a complicated word because it means a lot of different things to different people and that's because it has these two roots and the one root of the word trust is triesta which it means something solid something foundational this is how you feel this is the emotional feeling of how it feels to trust somebody you know in your bones when you trust someone and then there's also this second root of the word trust and it's Veritas which comes from Latin and it means something true and something trustworthy also means something verifiable and so when people often talk about blockchains and verifiability they're talking about this second root of the word trust veritas and so when we create systems where anybody can verify that we decrease the number of assumptions people make and each person can consider to make the whole system more trustworthy and so we'll get to how this applies to blockchains but first how do we actually establish Trust this might seem kind of simple but take a minute and think for yourself how do you know when you trust someone in your real life it's something interesting to reflect upon especially as we talk about these kind of foundational systems and think about what trust really means you know there's this interpretational difficulty in English what do you really mean do you mean trust is in how it feels what it is like to trust someone trace the the strong Foundation doesn't mean the ability to verify and when we collapse those two things then we have very like reductive discussions about what trust actually is and so even in trying to understand how it is established in the world we get confused because we combine what it feels like to trust someone else which is very much about treysta right and that's that first section that you can see Tracy really is established through these elaborate rituals right which have evolved in our culture over thousands and thousands of years so where I come from in Africa we have a very particular set of handshakes when you shake someone's hand in Africa you grab the arm at the same time this is traditionally to show that you're not armed right if both of my hands are forward like this which I can't really do while I'm holding a microphone then you know that I'm not armed so there's an indication of trust in Japan when you bow to one another when you greet them the degree to which you bow is an indication of respect and social order right and this is again involved over thousands and thousands of years there's all of these elaborate rituals that we have for establishing this kind of Tracer this implicit embodied trust right again in Africa one of the things that you'll see all of the time is this kind of recitation of the lineages or the family names very interesting right but what it does is it establishes who you are in this moment based on everybody that you've come from right and you have these praise singers in closer this lovely language you'll see it when they introduce Nelson Mandela or people like this it's really incredible to listen to and they'll recite the whole family lineage just so that you can establish who you really are in this moment and thereby establish trust because you know that you're interlinked with with all of your ancestors and all the people who have come before and they're these Family Ties and Clan bonds and all this stuff that goes along with establishing trust right the other aspect of this and this is universal is gift giving and receiving I mean give gifts or receive you do this all the time when you go to somebody's house for dinner you take a bottle of wine or some cheese or it depends who you are right what you take but there's always these kinds of elaborate social rituals that have evolved in order to establish this kind of strong foundational kind of trust right and then once we know that that's really what's going on at the foundational level we can talk about verification right and verification again it begins with gift giving and receiving particularly in kind of ceremonial formats because the kind of gifts that you give the way you give it and the manner in which it is received is part of how social order and verification is established but then we go much further right because like you get to uh oh you get to these kind of repeat like you get to these repeat interactions which is like being good neighbors and you get to like the deepest kind of trust in tresa which is I trust you with my life right this trust through deep time is really really interesting because when I trust you with my life both of our lives are enriched when that trust is reciprocated and that's really really interesting so like what I want to emphasize on this slide is that there are three things that are required for really cultivating trust there's the low miscommunication which comes about through handshake spouse and uh the recitation of lineages these kind of like cultural artifacts that we have then there's the repeated interactions of being good neighbors of constantly having to be around people and then there is the win-win games of trust through deep time so and how does this actually apply to blockchains yeah well that's the question right now that we've established what trust actually means it's two different routes and how it's established in the world well we can think about like what does this actually mean in terms of blockchains and the simple answer here is that blockchains allow us to establish the order of events it's all about the sequence right so if you go back to the Bitcoin white paper Satoshi is talking about a network of timestamp servers which enables a new kind of peer-to-peer digital money right it's the timestamp servers that are really interesting he never called them miners by the way it was always these timestamp servers because blockchains fundamentally what they allow us to do is establish the order of events through an elaborate ritual we call peer-to-peer consensus right whether that's Nakamoto consensus or tenements or proof of stake it's kind of less relevant all you need to know at this particular stage there's this elaborate ritual much like we've always had but just in a digital form that is now in us right to establish trust about the way that things have happened the order in which they have happened without having to rely on anybody in the middle right and that's really important and it's kind of interesting to think about how that actually happens right because we have all of these talks which will tell you all blockchain is immutable and it's verifiable and once the thing is in the block then it's always like that but think about what actually goes on in these networks right like why is it persuasive to order the sequence of events in this particular way well it's because anybody who's participating fully in the network gets to decide the order of events in their blocks if they're rewarded the ability to move the network forward right and there are no assumptions in the consensus or in the way that these systems work about the particular order of events there's no impositional Dogma about how you have to order the events in any particular block that you mine or are elected to propose depending on what kind of consensus we're using it's really important to recognize this because there's no one unified version of reality in a blockchain it can Fork at any time it often does that's part of the design of the system right this is part of the elaborate ritual that we are enacting to establish trust about the order in which stuff has happened because all there is are transparent incentives about how power is allocated over time right so in this kind of system what we're really concerned about is our ability each person who is participating fully to decide upon the order of events and then have that etched into shared consensus over time yeah and like Andy said this means that blockchains are foundational systems for more trustworthy forms of money because we're able to decrease these unverifiable assumptions that you have to rely on third parties to trust whether or not the money has actually entered the bank or if the bank updated a ledger if that money has left the bank if it's cleared the Clearing Houses you can actually verify anybody can verify and this this this is what's actually really important about blockchains is that it creates more trustworthy forms of money yeah it's all about the money right this is something that's really important to kind of get home when we say that blockchain is all about making money I mean that very very literally I don't mean it in the sense of some corporate chill who's here to tell you oh you can make money if you use this technology I'm here to say you can actually make money and that's what's always been interesting about blockchains from the very moment that the Bitcoin white paper is published on that mailing list in 2008 it's all about the money right money is the killer application this is what Andreas Antonopoulos always used to say in his Bitcoin presentations but we you know it's not to say that we're not interested in all of the various other use cases of blockchains which are being talked about these days the social uses and various other things that are being explored in conferences like this it's just to remind people that when you really go looking for use cases of blockchains it's all about the money right if you can change the kind of money that we use to operate then you can change the way in which we achieve and establish trust between ourselves and therefore the way that we perceive what is valuable in the world this is the deepest level of what we can do with this technology it's not to say that there aren't other use cases that can be built on top of this but at its foundational level it's all about the money and that brings us to value and so the questions here are what do you value and what are your values and so Andy already talked about this a little bit in how we establish trust and we um he talked about that there's really three key things about trust and it's low miscommunication repeat interactions win-win games but how does that actually apply to money that we currently have well with low miscommunication we actually already have this with currency so everything has a price you go to cafeteria to get a coffee it has a price there's low miscommunication you pay that price you get a coffee it's really simple currency the currency that we currently have solves for this there's no miscommunication everything can have a price repeat interactions we kind of also have this but of what kind what kind of repeat interactions with money do you have on a day-to-day basis and then win-win games almost never we have win-win games with current monetary systems there's very few situations in which there's win-win games but programmable money can actually solve this and what Angie talks about about making money we literally mean programmable money and you can program money to have win-win games and will touch on one kind of money of this further in the presentation but first what is the evolution of money yeah exactly just just to really emphasize those points right like what we're here to do and what this has always been about for me for sure is about like consciously participating in the evolution of money right and it's right everything has a price in the world around us when we reduce things to price it's not necessarily A Bad Thing it does allow for these kinds of low miscommunication environments when we can specify exactly what the value of something is what people need to part with in order to get it right get a coffee at the cafeteria buy a flight to Belgrade all of these kinds of things are enabled by the fact that we have a kind of abstraction of value in the form of current money that allows us to do these things and interact in smooth and efficient manners but what we're really interested in with programmable money right is what kinds of repeat interactions can we generate such that we're living kind of more wholesome interesting balanced relatable lives and in particular right what is the nature of the win-win games that we can play most economic transactions that we enter into at the moment are called wind loss or when it takes all okay I'll explain exactly what these are in a moment but it's really really important to remember that trust is bread in environments of low miscommunication repeat interactions win-win games because those touch on both of its roots Teresa and veritas and once we understand that we can then begin to think quite deeply about what it means to program money such that it leads to win-win games the reason that this is important is because this is what the current monetary system does right there's a trade-off at work here when we get low miscommunication this is the kind of system that we have to instantiate to get that now this is the work of Untold numbers of people over many many generations so I'm not here to really denigrated that much but it is the ultimate permit scheme right like what you have in the current economic system is basically a pyramid of different kinds of money at the top the most important kind of money it used to be gold in 71 that was changed at Bretton Woods it's now Federal Reserve notes then beneath that you have deposits a rather currency deposits and credits right these are the different kinds of money that we have in our system at the moment now in boom Cycles you can see this little animation going on there it's now booming right in boom Cycles all of those monies expand you have more credits you have more deposits more currency and they all begin to look like one another right credit looks like the deposits looks like currency looks kind of like Federal Reserve notes right and in these boom Cycles it's really uh I always forget the spots it's really the monetarists who seem right right that discipline is the act of requirements in our economic systems but then in bust Cycles when the economy is squeezed or under pressure right then the differences between these four kinds of money are re-established right you very quickly in a bus to realize that your credit is not the same as deposits in a bank which are not the same as actual currency which is definitely not the same as Federal Reserve notes right and then in those kinds of Cycles the keynesians who look right and they're like ah we need more elasticity right so this is really a story about the elasticity and discipline of money which is happening at every cycle right like the economy Cycles like this at every scale that we can look at so it Cycles like this on a daily basis on a weekly basis on a monthly basis in terms of Seasons it's always cycled this way in terms of Seasons because of agricultural production and the way that that booms and busts depending on the environmental conditions and the whole work right of the monetary class of the last like literally thousand years or so has been to try and smooth these inevitable boom and bust Cycles based on the environments in which we operate right and the most powerful tools that we have for doing that when we arrange money like this such that we can achieve a little miscommunication when exchanging stuff is interest rates and the monetary Supply right so these are the two primary tools if you have Federal Reserve notes at the top of your ultimate permit scheme these are the two primary tools you have to try and smooth out the inevitable Cycles in any economic system right now we know that given the complexity of the current global economy these two little levers that most Central Bankers have are not sufficient right Central Bankers despite what you might hear in conferences like this are generally speaking nice people and they're very well educated and they're very good at what they do the problem is that they're faced with complex systems with very very limited tools when you expand the monetary supply all of a sudden you find yourself in a position a few years down the line where you need to increase the interest rates rapidly and that results in a whole bunch of banks failing because they didn't write their you know bonds to market for instance in the case of Silicon Valley but there's many other reasons right like these two tools are not powerful enough to control the inevitable Cycles in the economies and what we're talking about when we say that like blockchains allow us to make money is they allow us to make the best kind of money right what does it mean if we have programmable money that is more Dynamic flexible and responsive then Federal Reserve notes at the top of this pyramid and luckily there are alternatives and programmable money allows us to create other kinds of money like ultrasound money and so blockchains actually give us the tools to enable flexible responsive monetary policy that is different from what we've ever had before and and this is this is why money is the killer app of blockchains because it allows us to do the things that were never really possible before yeah exactly exactly when we say flexible we mean ethereum's monetary Supply it's M2 right his decided dynamically based on use of the network so when lots of people are using the network there's lots of transaction fees more eth is burnt than is produced those rewards for validators so the network is deflationary when not lots of people are using the network then more awards are given to validators than ether's burned in transactions so the monetary Supply is inflationary this is not decided by an essential group of unelected bureaucrats it's just decided by virtue of the way that the network is created that's very interesting right it goes further than this right this is just the first idea of how to do like flexible adaptive monetary Supply at the protocol level there's lots of others for instance this comes from a friend of mine called Chris goes who's part of building a network called a Noma where they're thinking well you know actually trust is the dynamic parameter so I don't need to have like Global trust to exchange with Dave we know each other he's a nice guy I don't need to like send a transaction which is settled globally just to pay him for coffee now when we go to the cafe area you can select what kind of trust you need based on the nature of the interaction you're having that's one idea right and Chris's point which I really just wanted to like bring home in this presentation is that if we want Variety in our world then we need Variety in our accounting systems right so we're not here to advocate for one kind of money we're here to advocate for the possibility of programmable money to do all kinds of things in terms of how we know and can learn to trust one another and what it means to Value stuff in the world particularly value stuff in the world in a way that aligns with our values right that's really interesting that's at the protocol layer right ultrasound money different kinds of trust trust is the dynamic parameter Chris talks about scale free credit and scale free consensus but that's just protocols right what about the application there well in order to understand that we've got the example of Mega which I'll discuss very very briefly but before saying that I just want to come back to this notion of win-win games right like what does that actually mean when you're talking about the programming of money right well there's a paper that you can see up on the slides here it's a Jupiter notebook it's really interesting it means you can go in and actually play with this thing if you can write a little bit of python and it proves the screenshot here in particular shows that the initial distribution of wealth in an economy and the geographic dispersal of actors where people are does not matter in terms of the long term generation of wealth inequality right so like if we look at the genie coefficients or these kinds of measures of inequality in a system the initial distribution of money and where people are doesn't matter the only thing that really matters in terms of how wealth inequality is generated over time is the nature of transactions right when you have win loss or Winner Takes all transactions I.E if I buy a puts or a call in a stock market right and I'm in the money that means somebody else is out of the money right if I make money when I buy a stock I mean somebody else loses money right that's a winner take all transaction these are the kinds of transactions that we enter into on a daily basis when we use the current Financial system and that ultimate permit scheme hear what we're really interested in is how do we get to win-win transactions what does that actually look like because we can prove that when we have win-win transactions it has a stark effect on Wealthy inequality in a system which is ultimately what like making programmable money is all about it's always been about Financial Freedom right like I'm not here to get more wealthy I'm here to redefine what wealth means and what wealth means is not what I can accumulate wealth means having enough to share right that's what it's always been about and here is a proof in Python that this is what actually happens when you can program win-win transactions so what does that look like well like one example is maker right it's probably the best known example at the moment there are many of them but this is my favorites because what's going on in maker is that if I hold mkr the governance token right I have the ability to make decisions about the way the system is parameterized this means the collateralization ratios the debt ceilings the different kinds of collateral that are included in the system and the die stability rates if as a holder of the mkr token I make good decisions about those kinds of parameters then the system will likely perform well more die will be brought into existence that are needed that die can be used to buy back makeup burn it decrease the supply of maker and thereby increase the price of my tokens it's a win-win transaction when I vote on particular governance parameters with token that is intrinsically important to the economic function of the system mkr functions as the lender of Last Resort in the maker system similarly speaking right there's a balanced incentive because on the other side if I make per choices about the parameters and include a kind of collateral which is too risky there is a very good chance that the system becomes under collateralized when that happens without any human intervention more Mecca is printed into existence sold on the open market and used to pay down the bad debt in the system right so you have these balanced incentives and the notion of win-win transactions begins to become attainable outside the realm of human interference which is very very interesting you don't have a like unelected bureaucrats sitting there deciding on what these parameters are in the maker system you have people voting on it right this is like the very beginning of what win-win transactions can look like at the pro at the application there and so what at the up so we have the protocol layer like ultrasound money and then we have the application layer which Andy touched on a little bit like maker is an application um and then what about money like how can you actually have applied money and programmable money and we talk about different kinds of money but but what kinds of money can we really make and in this video here um Naval talks to sep who's one of the co-founders of cellular protocol and in this talk they talk about five features of money and they present five different ideas for what kinds of money you can create with these kinds of flexible and responsive systems and one of them is natural capital-backed currencies which is really interesting um and the idea behind natural Capital back currencies here is whatever backs money people will make more of in the world so back in the day when money was backed by gold people rushed to mine gold because gold is what backed money so if you can get more gold you can have more money you can accumulate more wealth but what if money what if there's a way to program money to be backed by things we actually want to see in the world like clean forests or clean water or things that we want to preserve would that then change the incentive to instead of cutting down the rainforest to then protecting the rainforest because that's actually what backs money and there's some of the experiments around this around tokenizing carbon credits around tokenizing um land and tokenizing different tokenizing experiments but this is just one kind of money and then we also have Ubi money going directly to people there's some experiments with that none of them are by no means perfect but these are interesting things that you can you can start to think about when you understand some of these underlying principles around money um and then Demi Ridge which is the idea that you have to pay a small amount to hold money so it actually costs money or it costs money to hold money and then Community currencies there's also lots of experiments um now with Community currencies and the kind of money we're going to talk about is can be considered about a kind of community currency that we'll get to and then money without interest bearing debt and this is a really really interesting one because um currently that's not the case currently money is backed by debt yeah so we're going to talk about this right now but just before we do so I wanted to finish off our theoretical part which is the quickest that I've ever done theory in the world this and Dave can attest to that we made it uh just with a reference to where a lot of this thinking comes from right which is a man called David grieber and the whole point that I really want to drive home having now discussed everything about trace the Veritas how it applies to Value the way in which these elaborate rituals help us understand what it means to trust one another how we can verify that trust in the world how that affects the way that we think about value through loma's communication repeat interactions win-win games well it all comes down not to a body of theory but to a kind of faith right and it's really a faith in one another and it's a faith that has to be lived right in order to realize these kinds of money and the effect that they can have in the world we have to live we have to embody the kind of society which we know is possible right and this is probably like the most profound point that David makes in an incredible body of work really is that it comes down to embodying in who and how you are what it really means to live by your values right to live by your values in a way that actually can translate into the sorts of systems we use for exchanging with one another based on what we value right it's the same idea as Gandhi be the be the change you want to see in the world right this pattern comes up repeatedly but it's really worth pushing home here before we actually get to the Practical part of this talk uh that you really like like this is the thing that's difficult to communicate in all of our presentations is it's one thing to be able to write the code and show you interfaces for what different kinds of money can look like to talk about maker or to talk about a number to talk about rights talk about all of these currency experiments that represent value in a different way and that change what could be the ultimate kind of money sitting at the top of that whole scheme but what it comes down to is a certain kind of courage and honesty in each one of us to live by our values and to hold the others that we trust to that same kind of standard even though our values might differ so no it's actually making money now we actually get to make money hell yeah all right after all of that what does it mean to really make money actually make money given that we now have this programmable thing that we can do which is fundamentally different to anything that has existed prior to us well we have uh this paper it's called web3 social the soul of web3 which has been roundly criticized in the time since it was released by Glenn Weil and Zoe hitsig and vitalik because this is the paper in which they talked about Soul bound tokens and they used nfts as the example but the most interesting part of this paper is actually this quotes which is that access to high bandwidth authentic communication channels can be gated with tokens it's very interesting when you think about that particularly in the context of this talk now the problem is that when you gate access to these kinds of high bandwidth authentic communication Channels with something which is an asset right then the incentive that people have when they get into those communication channels is to manipulate others and speculate on the value of that token right and this is what we see happen over and over again in all of our communities this is why icos sucked it's fundamentally because when you use a token that is an asset to govern other people you mix the worst parts of capitalism with tyranny right think about that very carefully the next time you use tally or snapshots or these kinds of things right we're using assets to govern one another using this old kind of thinking about what value is and how it might be represented in world in the world to exercise power over one another rather than figure out how we relate to one another given that we might have different values now instead of doing that we can use the same infrastructure but we can use tokens to represent different stuff right so what happens if instead of tokens representing assets we made a token that is a deal that it deals to all of the standards in this case erc20 because it's more interesting than the nft standard for this particular kind of use case and we make it represent liabilities right so what happens then if you gate access to high bandwidth authentic communication channels or the token that represents a liability or an obligation then all of a sudden the incentive when people get into that channel is to find other people to work with and to serve so that their liabilities might be forgiven right same token same mechanism token gate but because the token represents something different which is just a story right the code is exactly the same it's the story that we tell in one another that differs here because that story is different all of a sudden the incentives shift toward much more pro-social Behavior it's really interesting so this is kind of what that looks like if you're gonna yeah it basically inverts the relationship between assets and liabilities so that now actually having a higher balance represents a bad thing because if you accumulate this token then you have more obligations to other people and then you have to have somebody to forgive those obligations to so there's no longer an incentive to accumulate the token but there's an incentive to then find other people and to collaborate and to have more pro-social outcomes and yeah this is how it would actually work so here you see the kernel website which is a educational program that I'm involved with running we have a syllabus which is free and open source and always will be but we have a particular lesson about money and speech which we've now gated with this token you don't have to pay anything to get this token you can see what's going on here is I just connected my wallet and now I can ask to take on some tokens which I do with one click right I don't have to buy these things because your payments is your commitments to participate here we are accepting those tokens and as soon as I accept the tokens and then the wallet there's the content right so it's the same kind of notion of a token gate except I don't have to buy the tokens taking on the tokens which are minted from thin air because that's what all tokens are indeed that's what all money is it's just a question of who gets to minted and under what conditions right that's always what's at stake when we're talking about quantitative easing M2 all of this economic stuff that sounds really really dry if you read like fed wire or like uh the financial times of these kinds of like really interesting but difficult to pass Publications like it's always about who gets to make these tokens and under what conditions here you want to read a particular piece of content about money and speech on a free educational website sure it's free right but now you have to take on a token which is your commitment to participate that's kind of interesting next up uh what does this actually look like at a design level I've already said that it's an erc20 standard but there are some changes to how we think about this because it's important in terms of representing value and allowing us to establish trust in interesting ways that leads to more valuable exchanges so the erc20 standard has been slightly changed in that we took out all of the transfer and approve functions so this leads to the design of all on are the same but um they're created only when I accept another person's proposal so you saw that happening over there uh basically like when somebody proposes tokens to me that's stored as a mapping in the contract and then I need to accept that proposal in order for tokens to be minted from the zero address to my address similarly speaking people can forgive me my liabilities if I do work for them if I help them if I collaborate with them if I teach them whatever it is and again when somebody proposes forgiveness to you that's thought as a mapping in in the contracts and then you can accept that which sends the tokens back from your address to the xero address so you're never transferring tokens one between the other but there is this notion that you can like propose forgive honor and accept these kinds of tokens this is very interesting right like I've done a lot of work on community currencies on maker on locally exchange traded systems on Alternative forms of currency across the board and one of the really interesting features that you find about these kinds of currencies is that they have a sort of a half-life right like they exhibit this the K function because there's two problems right like the one is that if you have like a single Community currency with a single symbol like on Hon yeah then when people leave the network I.E you know with on I can get a dentist appointment and I can go to the Baker and I can go to the Candlestick maker and I can get all of these things if the dancers leaves town and goes somewhere else in the global economy then all of a sudden the utility of my currency has dropped a lot you find this happens over and over and over again in community currencies it decays over time because people have to compete against the global economy which is really really difficult to do and it's one of the 10 in community currency design is how do you have a community currency which operates in local contexts but nevertheless has some kind of meaning in a global world it's very difficult to design that kind of stuff however with global ledges settle everywhere that's perhaps no longer the case right and the reason for this is that you can have one thing right one symbol this is on there's other symbols that you could use right people can reason about that to first degree they don't have to there's not a huge amount of mental overhead and thinking about all of these different kinds of tokens which are often a result of other kinds of community currency designs but those tokens are unique to you you can't transfer them anywhere this is very interesting they are soul bound right like what we're actually talking about here are solvent eoc20 tokens but they're not solvent in the sense that's talked about in that initial paper that I referenced because they're consensual right and they're they're one Global symbol right uh if you know anything about Community currency design you will know that there are all of these proposals to have for instance like my currency and Anna's currency and then when we in when we interact we can have a transitive web of trust such that like if I trust Anna and Anna trusts Dave then I can make send tokens to Dave through Anna right this is how circles works it's a lot of how like a lot of various different Community currency designs work it's very interesting but what it means is that like if we use these kinds of systems as our main kind of money then I have to keep track of a whole bunch of different trust connections and remember that Anna has a different kind of currency to me who has a different kind of currency to Dave and that becomes quite difficult to reason about for for human beings um so this way we have like a single currency it's Unique to each holder uh it's consensual and it results in these pro-social incentives uh if I'm well I think one one thing that's also really important to ground this whole system in is there's the technical protocol which is like how honor could actually work but then the thing with Community currencies that Angie was speaking about and about this Half-Life actually has more to do with the social protocol so how this community currency is actually used and these these are all just experiments and like this is what's really interesting is like to get you to think about what kind of experiments are possible but for example we presented this idea uh suzalu which was a community of a lot of crypto and web3 people living together in in Montenegro and we presented a very interesting use case for this for example um we were already all living there so there was already a lot of like social connections made there's a lot of like social um the web of trust was already there but then for example like what if you could use a system like this to gate access to specific events like for example to attend some of the talks and the tracks that we had um during the whole time that we were living there like what if you could propose that somebody take on one on to attend an event but then instead of this being you're paying to attend the event you're actually committing to participate actively in this event and then to forgive your liability afterwards maybe you need to put away the chairs or like clean up the space and help the organizers so then instead of paying and then making this be a transactional relationship you're actually taking on an obligation and then you have to do something in response to like help the organizers and help this whole thing function and then this completely changes the relationship from a transactional um a transactional win-loss game to something that starts to look much more like a win-win game and starts to look much more like an actual community and so these are some of the like applications in the social layer that could be possible with something like this yeah so before you show the last video which is the interface for Honor uh this is the this is the point that I really want to drive home when I say it's all about the money and it always has been coordination everything else all the other memes that you see of astronauts and astronauts and astronauts it all depends on money right who benefits where does the money go to what kind of money are we using right this is the fundamental thing that I really want to get home here is that you know we all swim in a certain kind of water of which we are not aware this is always true across history there's like some kind of Paradigm that we operate within which once it is named as Paradigm suddenly gets to be seen as obsolete but before that happens we operate as if that were just the truth of the world whereas it's not it's constructed by human perception and Collective social interactions and that particular Paradigm that we currently operate under is the simple idea right that money has to be earned and really think about that that's what we all think right like money has to be earned who I am is measured by how much money I can make and even if you're on the other side of this and you think well let's make sure that there's Ubi because AI is coming and how we need to definitely have just money given to everybody as quickly as we possibly can because we have enough resources to make sure that poverty can be alleviated across the globe and we just lack the political will all of that is true but you still think of money as a good thing right you still think of money as an asset that ought to be hoarded right when you're advocating for Ubi that is primarily based on the kind of money that is a part of that permanent scheme that we saw earlier right when you let go of that idea when you really let go of that idea that money has to be earned then all of a sudden these possibilities that we're talking about become more tangible right and I know how ridiculous that is to sound because what do you mean money has yeah if I don't earn money then how do we know whose contributions are valuable how do we determine who gets access to particular kinds of things and others who don't want to just be chaos and Anarchy unless I quoted grieva all right because Anarchy doesn't mean no rules it just means no rulers right no rulers means there's no appeal to Authority there's nobody to tell you what's right or wrong it's that dictates of your own heart and fundamentally this idea that money has to be earned it doesn't lead to a good World it doesn't lead to a happy place where we can have wholesome relationships and where we can redefine what wealth means it always leads to some kind of extraction it always leads to some kind of manipulation it always leads to incentives that are out of line with what it actually means to collaborate in a wise and healthy fashion and so the question that these kinds of programmable monies will ask all of us is what if money isn't an asset to hoard but a measure of the promises I've made a measure of the obligations that I've had that I have a very very interesting notion and hopefully one that will lead to more pro-social outcomes this is what the honor interface actually looks like at the moment if you go to honor.community you can find it and you can start using it it's on girly at the moment but you know that is less relevance because as soon as you have these kinds of systems that are able to represent value in any particular way you can use them wherever you like um what's going on here is uh one one account is proposed onto another account you can see that the trust score between them is currently zero and the proposing accounts balance is shown uh then the transaction is being accepted I'll explain a little bit more about the trust score in a moment that same account is not going to go and propose on back to the account that originally proposed it and you'll see that the trust score is increased to two this is just one possible way of building the interface all of it is open source and the thing that's really interesting about like what's going on here is it is in my opinion impossible to fully spec out a currency that can handle both creditworthiness and trustworthiness at the level of the spec right like in the code itself because credit worthiness and trustworthiness are so contextual it's really really impossible to get all of this stuff down into the level of code however when you have a very very simple design and the contracts that we can build at this application there then all of a sudden you can build any number of social interfaces to this which Implement different ways of deciding upon trust in this particular interface that we just showed the way that the trust score works is every time I interact directly with the oricons we get plus two right every time I interact with an account that you've interacted with before this kind of transitive web of trust we get plus one every time your account is involved in a transaction that is double the order of like twice two two orders of magnitude larger than the average transaction associated with that accounts it gets minus one right that's a very very very simple way of doing the trust algorithm I think they're much more interesting ways I wanted to sort of see the way that people use the system do some behavioral analysis think about ostrom's principles for the commons and graduating sanctions all of this kind of stuff can go into the trust algorithm but the fundamental point is that this is just one of many possible interfaces right anybody can write an interface and write their own trust algorithm and use the same contracts just as anybody can use on in any number of different ways again this is the power of programmable money because it gets us back to our three keys which we began to talk with and which we'll end the talk with which is that anybody can make money right that's what blockchains allow and I don't mean it isn't a show like this is going to be the way that you profit and look after you and yours right I mean it in a much much more literal way anybody can make money that is the killer application it always has been in order to understand what it actually means to make money and to do so in pro-social and healthy in Wise ways we need to recognize that being able to verify ourselves allows us to trust more people right lower number of assumptions in a verifiable system means we can trust potentially more people we can have potentially more valuable exchanges and when when we can have those exchanges directly we can create more value that's really like an absolutely critical points when we think about what it actually means to make money that enables us to interact in Wise and wholesome ways so that's it this is a quote from the Thanksgiving address I encourage you to read it it's very beautiful the Thanksgiving address is a wonderful place to start every day this comes from the end of it because we've been inverting everything for the whole presentation but thank you very much for this thing and we'll take some questions we have a few we have a few minutes to Dave the incentive to take on a token which is an asset is clear that's like our kind of uh monkey brain thinking how do you get people to how do you incentivize people to want to take on tokens which represent liabilities like what's the incentive to do that yeah that's a good question I don't really know I is the is the honest answer right like one example is the uh the token Gates on uh the money and speech content in Kano If people really want to read that post if you really want to understand what we think about money and speech then you'll take on one on uh the the same goes you know like when we're talking about access to high bandwidth authentic communication channels if you maintain one of these high bandwidth authentic communication channels then there's always an incentive to join it because like one of the one of the natural human desires or impulses or drives is to connect with others right we're social creatures that's fundamentally one of the things that we require for like Healthy Living so that seems to be like one of the most low hanging fruits in terms of like what ways could we encourage people to use the system the idea here right like when in the history of like locally exchanged traded systems for instance there's a wonderful group of people out in Canada who are called uh open Money they wrote an open Money Manifesto back in the 90s very interesting document and uh they built this system there are a bunch of functional programmers and they built like a very 90s website where you can go on and you can create your own money every everybody has their own namespaces for currency if you're a functional programmer you know what I mean and uh the idea was you would play this game right so you play this game with these functional namespace currency things and the more the people played the game the theory at least once the more they would recognize oh holy we can just use this as currency we don't need to change anything uh and so like this is some of my thinking as it applies to honor is can we get people interacting with these contracts in enough diverse contexts across different communities such that more and more we can just realize oh wow we can actually just use this as it is right it begins as like a game a sort of oh okay so you can Implement a little API and like a little token Gates on kernel that's nice but then if more and more things have this kind of feature or use these kinds of tokens another example is like build streams they're kind of strange in the sense that like the way that Austin streams money to people when you're building with him is he'll set up a stream with say five ethernets invite 10 contributors give each one 0.5 of that stream and each contributor can withdraw the full 0.

5 immediately upon joining the stream which seems very strange it's easy to manipulate it turns out people don't do that in these small social groups because they're social pressure not to and to like submit contributions that then you can get paid for because people feel that there's like a sense of accountability there but the idea for that would be that if you withdraw the whole thing at the beginning of your stream you take on more on right it's just as a representation that you're taking on more obligation by removing from the communal pool so much early on and more on means you'll then incentivized later on that month or whatever it is to teach others to give back to them uh these things it can work in tandem with current sort of like asset-based thinking that allows us to sort of Trojan Horse the stuff into our ways of thinking about value I think we're right on time yeah yeah thank you thank you very much I wish you a very happy conference [Applause]