In this episode, we sit down with Preethi Kasireddy - self-taught engineer turned entrepreneur and founder of TruStory - and Muneeb Ali, CEO of Blockstack PBC.

The two discuss Preethi’s journey of bringing TruStory to life, the regulatory challenges for crypto companies, Blockstack’s path to the SEC’s approval of its Stacks Token, and more.

0:02:13 Preethi: "I started to realize that my real passion was engineering, not finance."

0:02:48 Preethi: "I graduated college in 2012 and went to A16Z at the end of 2013."

0:02:54 Muneeb: "So this is like the early days of crypto, A16Z hadn't made the Coinbase investment yet."

0:03:10 Preethi: "It was through that investment [in Coinbase] that got me a little bit curious [in crypto]."

0:03:28 Muneeb: "How did you decide to leave Coinbase and start your own company?"

0:04:08 Preethi: "Coinbase - in the end - is a centralized company... so I wasn't really getting the kind of experience I really wanted."

0:04:55 Preethi: "I think one of the things that's missing - still, even to this day - in this space is lack of documentation and blog posts. Especially two years ago."

0:05:43 Muneeb: "It seems like you went into a deep dive on crypto... and then you ended up almost building a community around crypto. What was the thought process around that?"

0:05:58 Preethi: "I was just super passionate about this space. I also innately enjoy educating."

0:06:42 Muneeb: "[On Twitter] it seemed like a lot of these crypto communities are a little bit like religion."

0:06:57 Muneeb: "I noticed the conversation on TruStory was a lot more civil."

0:07:41 Preethi: "It bothers me a lot that people have a negative idea of what it means to debate."

0:08:18 Preethi: "We're trying to teach people the fact that debate doesn't have to be defeating... you don't need anxiety or to get angry..."

0:08:36 Muneeb: "Debates on Twitter - it's probably the worst medium for it."

0:09:23 Preethi: "You hit on two things: (1) Twitter was built for broadcast, not conversation (2) more importantly: the intent. People don't come on Twitter with the intent to seek to learn the other side."

0:10:45 Muneeb: "The kind of financial incentives that are at play here in crypto are not found anywhere else."

0:11:02 Muneeb: “But still, part of me wishes that there were those more structured, peer-review type processes in place in crypto. TruStory seems like a crypto-native take on something like that."

0:11:21 Preethi: "We can't expect crypto to be like these other industries, purely because there's money tied into it."

0:11:57 Muneeb: "You got caught up in an ICO scandal? Is that real?!"

0:12:07 Preethi: "When I was exploring early in the crypto space - just like everyone else - I had rose-colored glasses and everything looked shiny."

0:12:18 Preethi: "I ended up jumping into a project... and two months later I had to leave because the project wasn't going to work out."

0:12:39 Preethi: "It was a huge shocker for me because it was the first time I took on a role and it was catastrophic."

0:12:59 Muneeb: "Did that somehow play a role in TruStory as well?"

0:13:07 Preethi: "The way I got information in crypto in the early days is I had to crowdsource it from my friends."

0:13:23 Preethi: "And I realized this was how most people were starting to get their information in crypto, too."

0:13:43 Preethi: "[Initially,] we were trying to do claim validation."

0:14:00 Preethi: "People were not just focusing on objective claims that had a right and a wrong answer, but were using it more as a tool to get to answers that are somewhat more subjective as well."

0:14:15 Preethi: "We pivoted over to debate from verifying 'objective claims'."

0:14:56 Preethi: "You are still learning truths, but it's not like there's one objective truth for every claim. It's more that you're coming in to understand and hear the different sides."

0:15:12 Muneeb: "I think it's very interesting that you noticed similar things in crypto - that it's like the Wild West and there's a lot of misinformation."

0:15:31 Muneeb: "Our response [at Blockstack] was more like "Why don't we work with regulators and try to have the traditional checks and balances in place that pretty much exist in public markets."

0:16:15 Muneeb: "I was very curious how the industry would perceive our approach, but I've been very pleased with the response."

0:16:53 Preethi: "Basically, what we're trying to do is take the Wild, Wild West and add a little bit of rationality and rules to it - but one could argue that's antithetical to decentralization."

0:17:26 Muneeb: "A lot of people thought the regulators are never going to approve anything."

0:18:05 Preethi: "Are you hoping to be the poster child for setting the right way to do these token sales?"

0:18:40 Muneeb: "No serious company is ever going to  keep an asset on their balance sheet that they think might be illegal."

0:18:49 Muneeb: "For us it was about opening up the network in a fully regulated manner to the US markets because the other option is just to block US nationals."

0:19:02 Muneeb: "Part of the intention is also that this can help other projects."

0:19:42 Muneeb: "We were doing the analysis for the first time with our securities lawyer. Other people don't have to do it again and again."

0:20:07 Muneeb: "If you're familiar with what the SEC did with Ethereum, they effectively did not comment on how Ethereum started or how it reached a stage where they think it's no longer a security."

0:21:06 Preethi: "Being a crypto entrepreneur in the US is hard. Regulations aren't friendly, nobody's set the right path for what the right way to do anything is."

0:21:33 Preethi: "One of the TruStory community members noticed that the Blockstack token almost had to reinvent accounting principles to account for what these token sales represent."

0:22:01 Muneeb: "Accounting is different for different purposes. Like for tax purposes, we could actually recognize it as one thing, for your financial statements the treatment might be different."

0:22:20 Muneeb: "We would always take the worst case scenario in every type of treatment. We're willing to pay the highest amount of taxes and we're willing to treat our crypto holdings as fully discounted."

0:23:45 Preethi: "When you were considering going the SEC route, did you consider any other routes?"

0:23:55 Muneeb: "The alternatives were: (1) ban US investors and developers and go abroad (2) do the offering and go to court with the SEC."

0:24:56 Muneeb: "The technology can adapt to regulations faster than regulations can adapt to technology."

0:25:18 Muneeb: "Another option was to just wait for a new law to be introduced."

0:25:38 Preethi: "What about all the crypto startups that may not have as much capital?"

0:26:04 Muneeb: "People should look at the framework we used for some company that is at least a Series B stage startup from a traditional VC perspective. It's not for doing your seed round."

0:26:27 Muneeb: "Imagine going back to the 80s or 90s, where people were coming up with the typical Series A and Series B round and - interestingly - some of the decisions we made back then, we still live with them. Like four year vesting."

0:27:10 Muneeb: "It's not just the legal framework. Think about employee retention. We had come up with frameworks around how to do token drafts."

0:28:04 Preethi: "Now that you've worked with the SEC, are you more optimistic about the regulatory scenario in the US?"

0:28:16 Muneeb: "I'm extremely optimistic. A big shout out to the staff at the SEC."

0:28:48 Muneeb: "I know that to the outside world, even 10 months might seem like a long time. But for the SEC, where the securities regulations have been around since 1933 and they're trying to get a new type of an asset out. Imagine how many different questions there are."

0:29:26 Preethi: "I mean, even ICOs spend a year marketing their projects!"

0:29:39 Preethi: "What I struggle with is how to get the SEC comfortable with the fact that, unlike public company stock where it's a lot more liquid... with crypto projects, the liquidity comes way later in the network's lifecycle."

0:30:18 Muneeb: "If you go and read our SEC offering circular, it's almost like a mini IPO filing. And the section that is most comprehensive is our risk factors."

0:30:46 Muneeb: "In terms of the liquidity... my opinion is that the next big step for the industry is going to be regulated securities exchanges that will come into play."

0:31:35 Muneeb: "I think it will reduce the noise in the space. ... Unsophisticated players or obvious scams just won't be able to get through the door."

0:31:54 Preethi: "So you mean a more regulated version of an IEO?"

0:32:26 Muneeb: "[We were told] given how compliant you guys are trying to be, you're not a good fit for an IEO."

0:33:18 Preethi: "If done right, these types of token offerings are opening up the door for retail investors who never had access to this type of investing."

0:33:44 Muneeb: "The first 100,000 users of Facebook just used a free product and told all their friends about it, but they never had any financial upside in the success of Facebook."

0:34:02 Muneeb: "With a decentralized system and a crypto asset like this, the early users can also have a potential financial upside."

0:34:35 Muneeb: "Speaking of Facebook, what do you think about the recent headlines about them potentially installing backdoors in Whatsapp?"
https://www.forbes.com/sites/kalevleetaru/2019/07/26/the-encryption-debate-is-over-dead-at-the-hands-of-facebook/#6644bdc55362

0:34:56 Preethi: "It's not new, right? [Facebook]'s been doing this for about a decade almost. But I think people started to get smarter only very recently."

0:35:19 Preethi: "I think it's going to take a long time before Facebook's culture internally changes to care about privacy because their whole business around user data. So to complete change that is not an overnight thing. It's a massive shift in how they do everything."

0:35:50 Muneeb: "I've been publicly supporting efforts like Facebook Libra."

0:36:40 Preethi: "I don't think culture can change overnight. Or even in one year. ... I struggle to understand how they'll meet the future, which I think is open and decentralized."

0:37:33 Muneeb: "I've been involved with some conversations with lawmakers where they want to have antitrust actions against Google and Facebook."

0:37:42 Muneeb: "I think Facebook has a worse image, generally, but internally in the US Government, I'm noticing more hostility towards Google than Facebook."

0:38:07 Muneeb: "When Facebook comes up and says 'We're completely going  bypass a lot of these regulations that may apply and start anew global reserve currency, I think a lot of people are going to freak out."

0:38:26 Muneeb: "I never thought I would say this, but Microsoft is better positioned to deal with a lot of these things than Facebook or Google."

0:39:11 Muneeb: "Google and Facebook are two companies that are basically the native cloud computing companies. And their business model is 'let's just get as much user data as possible."

0:39:31 Muneeb: "Microsoft is actually not sitting on a lot of user data. And now, when the world is about to move away from this business model and there's a lot of heat around these big tech companies, Microsoft can come across as 'look we care about user privacy'."
https://www.coindesk.com/microsoft-launches-decentralized-identity-tool-on-bitcoin-blockchain

0:40:43 Preethi: "They specifically said they didn't want [Facebook] to be a public utility, which is interesting because if that's not the case, you can't really claim it's going to be a global reserve currency."

0:41:22 Muneeb: "Speaking of decentralization, how decentralized is TruStory right now?"

0:41:35 Preethi: "We built the backend on Cosmos SDK - which gives you the tools to build decentralized applications."
https://cosmos.network/

0:41:54 Preethi: "Right now, we only have one node running, because everything is in beta."

0:42:26 Preethi: "The actual [TruStory] app has an in-app currency, and that same currency can be used for validating transactions on the backend."

0:42:41 Preethi: "It's a Tendermint blockchain and the consensus is the same thing as Tendermint."
https://tendermint.com/

0:42:48 Muneeb: "From what I can understand, they're helping people with the SDKs to start their own blockchains, and then they're working on interconnecting the different blockchains."

0:43:00 Muneeb: "Whereas, for [Blockstack] there's the stacks blockchain that gives developers the tools for basically building their apps apps on the stacks blockchain, for the most part."

0:43:10 Muneeb: "But if some app really needs the scalability of - let's say their transactions are becoming too much for the underlying main chain, then we have the concept of an app chain, where you're logically on top of the stacks blockchain."

0:43:33 Preethi: "They have many, many blockchains and then they connect these many blockchains using something called IBC, which is their interoperability protocol."

0:43:49 Muneeb: "I wanted to invite you live, so that you can't say no, to our conference in San Francisco."
https://summit.blockstack.org/

0:44:04 Muneeb: "Neil Stephenson is going to open up the conference with Naval Ravikant."

0:45:00 Muneeb: "My PHD thesis, Chapter 1, has a quote from Snowcrash."
https://www.amazon.com/Snow-Crash-Neal-Stephenson/dp/0553380958

0:45:18 Goodbyes.

0:45:26 Credits.
Preethi Kasireddy: twitter.com/iam_preethi
Muneeb Ali: twitter.com/muneeb
Zach Valenti: twitter.com/zachvalenti

In this episode, we sit down with Preethi Kasireddy - self-taught engineer turned entrepreneur and founder of <a href="TruStory.io">TruStory</a> - and Muneeb Ali, CEO of <a href="blockstack.org">Blockstack PBC</a>.
The two discuss Preethi&rsquo;s journey of bringing TruStory to life, the regulatory challenges for crypto companies, Blockstack&rsquo;s path to the SEC&rsquo;s approval of its Stacks Token, and more.
0:02:13 Preethi: "I started to realize that my real passion was engineering, not finance."
0:02:48 Preethi: "I graduated college in 2012 and went to A16Z at the end of 2013."
0:02:54 Muneeb: "So this is like the early days of crypto, A16Z hadn't made the Coinbase investment yet."
0:03:10 Preethi: "It was through that investment [in Coinbase] that got me a little bit curious [in crypto]."
0:03:28 Muneeb: "How did you decide to leave Coinbase and start your own company?"
0:04:08 Preethi: "Coinbase - in the end - is a centralized company... so I wasn't really getting the kind of experience I really wanted."
0:04:55 Preethi: "I think one of the things that's missing - still, even to this day - in this space is lack of documentation and blog posts. Especially two years ago."
0:05:43 Muneeb: "It seems like you went into a deep dive on crypto... and then you ended up almost building a community around crypto. What was the thought process around that?"
0:05:58 Preethi: "I was just super passionate about this space. I also innately enjoy educating."
0:06:42 Muneeb: "[On Twitter] it seemed like a lot of these crypto communities are a little bit like religion."
0:06:57 Muneeb: "I noticed the conversation on TruStory was a lot more civil."
0:07:41 Preethi: "It bothers me a lot that people have a negative idea of what it means to debate."
0:08:18 Preethi: "We're trying to teach people the fact that debate doesn't have to be defeating... you don't need anxiety or to get angry..."
0:08:36 Muneeb: "Debates on Twitter - it's probably the worst medium for it."
0:09:23 Preethi: "You hit on two things: (1) Twitter was built for broadcast, not conversation (2) more importantly: the intent. People don't come on Twitter with the intent to seek to learn the other side."
0:10:45 Muneeb: "The kind of financial incentives that are at play here in crypto are not found anywhere else."
0:11:02 Muneeb: &ldquo;But still, part of me wishes that there were those more structured, peer-review type processes in place in crypto. TruStory seems like a crypto-native take on something like that."
0:11:21 Preethi: "We can't expect crypto to be like these other industries, purely because there's money tied into it."
0:11:57 Muneeb: "You got caught up in an ICO scandal? Is that real?!"
0:12:07 Preethi: "When I was exploring early in the crypto space - just like everyone else - I had rose-colored glasses and everything looked shiny."
0:12:18 Preethi: "I ended up jumping into a project... and two months later I had to leave because the project wasn't going to work out."
0:12:39 Preethi: "It was a huge shocker for me because it was the first time I took on a role and it was catastrophic."
0:12:59 Muneeb: "Did that somehow play a role in TruStory as well?"
0:13:07 Preethi: "The way I got information in crypto in the early days is I had to crowdsource it from my friends."
0:13:23 Preethi: "And I realized this was how most people were starting to get their information in crypto, too."
0:13:43 Preethi: "[Initially,] we were trying to do claim validation."
0:14:00 Preethi: "People were not just focusing on objective claims that had a right and a wrong answer, but were using it more as a tool to get to answers that are somewhat more subjective as well."
0:14:15 Preethi: "We pivoted over to debate from verifying 'objective claims'."
0:14:56 Preethi: "You are still learning truths, but it's not like there's one objective truth for every claim. It's more that you're coming in to understand and hear the different sides."
0:15:12 Muneeb: "I think it's very interesting that you noticed similar things in crypto - that it's like the Wild West and there's a lot of misinformation."
0:15:31 Muneeb: "Our response [at Blockstack] was more like "Why don't we work with regulators and try to have the traditional checks and balances in place that pretty much exist in public markets."
0:16:15 Muneeb: "I was very curious how the industry would perceive our approach, but I've been very pleased with the response."
0:16:53 Preethi: "Basically, what we're trying to do is take the Wild, Wild West and add a little bit of rationality and rules to it - but one could argue that's antithetical to decentralization."
0:17:26 Muneeb: "A lot of people thought the regulators are never going to approve anything."
0:18:05 Preethi: "Are you hoping to be the poster child for setting the right way to do these token sales?"
0:18:40 Muneeb: "No serious company is ever going to&nbsp; keep an asset on their balance sheet that they think might be illegal."
0:18:49 Muneeb: "For us it was about opening up the network in a fully regulated manner to the US markets because the other option is just to block US nationals."
0:19:02 Muneeb: "Part of the intention is also that this can help other projects."
0:19:42 Muneeb: "We were doing the analysis for the first time with our securities lawyer. Other people don't have to do it again and again."
0:20:07 Muneeb: "If you're familiar with what the SEC did with Ethereum, they effectively did not comment on how Ethereum started or how it reached a stage where they think it's no longer a security."
0:21:06 Preethi: "Being a crypto entrepreneur in the US is hard. Regulations aren't friendly, nobody's set the right path for what the right way to do anything is."
0:21:33 Preethi: "One of the TruStory community members noticed that the Blockstack token almost had to reinvent accounting principles to account for what these token sales represent."
0:22:01 Muneeb: "Accounting is different for different purposes. Like for tax purposes, we could actually recognize it as one thing, for your financial statements the treatment might be different."
0:22:20 Muneeb: "We would always take the worst case scenario in every type of treatment. We're willing to pay the highest amount of taxes and we're willing to treat our crypto holdings as fully discounted."
0:23:45 Preethi: "When you were considering going the SEC route, did you consider any other routes?"
0:23:55 Muneeb: "The alternatives were: (1) ban US investors and developers and go abroad (2) do the offering and go to court with the SEC."
0:24:56 Muneeb: "The technology can adapt to regulations faster than regulations can adapt to technology."
0:25:18 Muneeb: "Another option was to just wait for a new law to be introduced."
0:25:38 Preethi: "What about all the crypto startups that may not have as much capital?"
0:26:04 Muneeb: "People should look at the framework we used for some company that is at least a Series B stage startup from a traditional VC perspective. It's not for doing your seed round."
0:26:27 Muneeb: "Imagine going back to the 80s or 90s, where people were coming up with the typical Series A and Series B round and - interestingly - some of the decisions we made back then, we still live with them. Like four year vesting."
0:27:10 Muneeb: "It's not just the legal framework. Think about employee retention. We had come up with frameworks around how to do token drafts."
0:28:04 Preethi: "Now that you've worked with the SEC, are you more optimistic about the regulatory scenario in the US?"
0:28:16 Muneeb: "I'm extremely optimistic. A big shout out to the staff at the SEC."
0:28:48 Muneeb: "I know that to the outside world, even 10 months might seem like a long time. But for the SEC, where the securities regulations have been around since 1933 and they're trying to get a new type of an asset out. Imagine how many different questions there are."
0:29:26 Preethi: "I mean, even ICOs spend a year marketing their projects!"
0:29:39 Preethi: "What I struggle with is how to get the SEC comfortable with the fact that, unlike public company stock where it's a lot more liquid... with crypto projects, the liquidity comes way later in the network's lifecycle."
0:30:18 Muneeb: "If you go and read our SEC offering circular, it's almost like a mini IPO filing. And the section that is most comprehensive is our risk factors."
0:30:46 Muneeb: "In terms of the liquidity... my opinion is that the next big step for the industry is going to be regulated securities exchanges that will come into play."
0:31:35 Muneeb: "I think it will reduce the noise in the space. ... Unsophisticated players or obvious scams just won't be able to get through the door."
0:31:54 Preethi: "So you mean a more regulated version of an IEO?"
0:32:26 Muneeb: "[We were told] given how compliant you guys are trying to be, you're not a good fit for an IEO."
0:33:18 Preethi: "If done right, these types of token offerings are opening up the door for retail investors who never had access to this type of investing."
0:33:44 Muneeb: "The first 100,000 users of Facebook just used a free product and told all their friends about it, but they never had any financial upside in the success of Facebook."
0:34:02 Muneeb: "With a decentralized system and a crypto asset like this, the early users can also have a potential financial upside."
0:34:35 Muneeb: "Speaking of Facebook, what do you think about the recent headlines about them potentially installing backdoors in Whatsapp?"
<ul>
<li><a href="https://www.forbes.com/sites/kalevleetaru/2019/07/26/the-encryption-debate-is-over-dead-at-the-hands-of-facebook/#6644bdc55362">https://www.forbes.com/sites/kalevleetaru/2019/07/26/the-encryption-debate-is-over-dead-at-the-hands-of-facebook/#6644bdc55362</a></li>
</ul>
0:34:56 Preethi: "It's not new, right? [Facebook]'s been doing this for about a decade almost. But I think people started to get smarter only very recently."
0:35:19 Preethi: "I think it's going to take a long time before Facebook's culture internally changes to care about privacy because their whole business around user data. So to complete change that is not an overnight thing. It's a massive shift in how they do everything."
0:35:50 Muneeb: "I've been publicly supporting efforts like Facebook Libra."
0:36:40 Preethi: "I don't think culture can change overnight. Or even in one year. ... I struggle to understand how they'll meet the future, which I think is open and decentralized."
0:37:33 Muneeb: "I've been involved with some conversations with lawmakers where they want to have antitrust actions against Google and Facebook."
0:37:42 Muneeb: "I think Facebook has a worse image, generally, but internally in the US Government, I'm noticing more hostility towards Google than Facebook."
0:38:07 Muneeb: "When Facebook comes up and says 'We're completely going&nbsp; bypass a lot of these regulations that may apply and start anew global reserve currency, I think a lot of people are going to freak out."
0:38:26 Muneeb: "I never thought I would say this, but Microsoft is better positioned to deal with a lot of these things than Facebook or Google."
0:39:11 Muneeb: "Google and Facebook are two companies that are basically the native cloud computing companies. And their business model is 'let's just get as much user data as possible."
0:39:31 Muneeb: "Microsoft is actually not sitting on a lot of user data. And now, when the world is about to move away from this business model and there's a lot of heat around these big tech companies, Microsoft can come across as 'look we care about user privacy'."
<ul>
<li><a href="https://www.coindesk.com/microsoft-launches-decentralized-identity-tool-on-bitcoin-blockchain">https://www.coindesk.com/microsoft-launches-decentralized-identity-tool-on-bitcoin-blockchain</a></li>
</ul>
0:40:43 Preethi: "They specifically said they didn't want [Facebook] to be a public utility, which is interesting because if that's not the case, you can't really claim it's going to be a global reserve currency."
0:41:22 Muneeb: "Speaking of decentralization, how decentralized is TruStory right now?"
0:41:35 Preethi: "We built the backend on Cosmos SDK - which gives you the tools to build decentralized applications."
<ul>
<li><a href="https://cosmos.network/">https://cosmos.network/</a></li>
</ul>
0:41:54 Preethi: "Right now, we only have one node running, because everything is in beta."
0:42:26 Preethi: "The actual [TruStory] app has an in-app currency, and that same currency can be used for validating transactions on the backend."
0:42:41 Preethi: "It's a Tendermint blockchain and the consensus is the same thing as Tendermint."
<ul>
<li><a href="https://tendermint.com/">https://tendermint.com/</a></li>
</ul>
0:42:48 Muneeb: "From what I can understand, they're helping people with the SDKs to start their own blockchains, and then they're working on interconnecting the different blockchains."
0:43:00 Muneeb: "Whereas, for [Blockstack] there's the stacks blockchain that gives developers the tools for basically building their apps apps on the stacks blockchain, for the most part."
0:43:10 Muneeb: "But if some app really needs the scalability of - let's say their transactions are becoming too much for the underlying main chain, then we have the concept of an app chain, where you're logically on top of the stacks blockchain."
0:43:33 Preethi: "They have many, many blockchains and then they connect these many blockchains using something called IBC, which is their interoperability protocol."
0:43:49 Muneeb: "I wanted to invite you live, so that you can't say no, to our conference in San Francisco."
<ul>
<li><a href="https://summit.blockstack.org/">https://summit.blockstack.org/</a></li>
</ul>
0:44:04 Muneeb: "Neil Stephenson is going to open up the conference with Naval Ravikant."
0:45:00 Muneeb: "My PHD thesis, Chapter 1, has a quote from Snowcrash."
<ul>
<li><a href="https://www.amazon.com/Snow-Crash-Neal-Stephenson/dp/0553380958">https://www.amazon.com/Snow-Crash-Neal-Stephenson/dp/0553380958</a></li>
</ul>
0:45:18 Goodbyes.
0:45:26 Credits.
<ul>
<li>Preethi Kasireddy: twitter.com/iam_preethi</li>
<li>Muneeb Ali: twitter.com/muneeb</li>
<li>Zach Valenti: twitter.com/zachvalenti</li>
</ul>

Preethi Kasireddy and Muneeb Ali on Dapp Creation and Crypto Regulation

This episode features a conversation between Peter Van Valkenburgh - Director of Research at Coin Center, the leading non-profit focused on the policy issues facing cryptocurrencies like Bitcoin - and Muneeb Ali, CEO of Blockstack PBC.

Peter and Muneeb discuss Coin Center’s mission and recent work, Facebook’s Libra Coin, the case for a true electronic cash, and more.
0:00:50 Peter's bio
0:01:09 Peter: "[Coin Center] was my first big job out of law school."
0:02:58 Muneeb: "You're OG now. When did Blockstack start sponsoring Coin Center?"
0:03:18 Peter: "Coin Center got its start in 2014. We got some really generous runway from a couple of donors who are just individuals who wanted to see a more adult advocacy organization in Washington, D.C. focused on this stuff."
0:04:56 Peter: "Coin Center is supposed to be an independent digital civil lIberties organization that goes and represents the underlying open technologies to Congress or to regulators."
0:06:08 Muneeb: "I simply say [the people at Coin Center]... actually understand this technology and they understand the regulations and the law, which is a rare combination. And they can be the right bridge between this technology and the various regulators or lawmakers."
0:06:29 Peter: "I think that's right. A lot of what we do I often think of as translation."
0:07:13 Peter: "More often than not we're explaining the law to lawyers in this space."
0:08:51 Peter: "There's no company - and all previous financial regulations - almost all - rely on finding a regulated entity and obligating that regulated entity to achieve the policy result that government wants."
0:09:37 Peter: "In the Bitcoin case, who's the issuer of the Bitcoin security?"
0:09:52 Peter: "Who in the Zcash space should be obligated for money laundering compliance?"
0:11:38 Muneeb: "One of my working theories is that Satoshi Nakamoto - whoever that person or group of individuals were - not only understood computer science, distributed systems, applied cryptography, and game theory, they actually knew securities regulation as well and that's why we don't know who is Satoshi Nakamoto."
0:12:42 Peter: "The policy objective that securities law seek to address are correcting the asymmetric information between issuers who are promising things to investors and the investors who've paid money to the investors."
0:13:51 Peter: "There are still the potential for information asymmetries. And I've sort of gotten into this debate with Angela Walch before about whether there's information asymmetries between software developers and the users of a software."
0:15:35 Muneeb: "Speaking of securities regulation I should just make a note here: we have a public filing with the SEC."
0:16:13 Peter: "From my perspective [Blockstack] has taken a really responsible and conservative approach to securities law compliance."
0:17:06 Peter: "I'm not a huge fan of the way we do investor protection in this country because it's very permissioned and it also excludes a lot of investors from participating."
0:18:58 Muneeb: "We actually had you host our Blockstack Summit in Berlin, and you interviewed Edward Snowden there. How was that experience? And has he been more active in the space? Or was that a one off thing?"
0:19:32 Peter: "That experience was awesome - it's still probably one of the craziest things I've ever done."
0:22:36 Peter: "I do think [Edward Snowden] has been quasi-active in the Zcash development community."
0:24:43 Peter: "He's worked on something really cool with the Freedom of the Press Foundation, which is if you have an old cell phone and want to turn it into an alarm system."
0:26:16 Muneeb: "Have you checked out any of the latest stuff that's been built on Blockstack?"
0:26:24 Peter: "I have a real interest in Graphite, which is the Google Docs type app."
0:27:05 Peter: "We've been looking for a long time for some sort of non-Google "Can't Be Evil" alternative to Google Docs."
0:29:29 Peter: "Network effects are a bitch, to put it a somewhat grotesque way. If you're talking about a communication system or a system where people pay each other, the systems that succeeded are not the ones that were best architected."
0:29:55 Peter: "Just look at all the attempts and failures at doing encrypted email."
0:30:16 Peter: "You're just going to default to the one everyone's on, even if it's not great for privacy."
0:32:32 Muneeb: "We're super excited to have [Neal Stephenson] at the 2019 Summit in San Francisco. I think Naval Ravikant is going to have a fireside chat."
0:33:40 Peter: "The Diamond Age describes Zcash."
0:36:01 Muneeb: "Coming back to this idea of decentralized applications - one model I have in my mind was when Linux was starting."
0:38:51 Peter: "Maybe decentralized apps will have their best success early on in those sort of niche enterprise / highly technical persons use-cases."
0:40:16 Peter: "Good luck getting a bunch of lawyers even to this day to group edit a Google Doc, let alone use Graphite."
0:40:24 Muneeb: "I think we knew that Linux won the server wars when even Microsoft started using Linux in their data centers."
0:40:32 Peter: "[Microsoft] has done a total 180, probably because they saw the writing on the wall as far as their consumer software business."
0:40:56 Muneeb: "What do you think of Facebook Libra?"
0:41:05 Peter: "I have a lot of thoughts about Facebook Libra. I should be careful about what I say because I don't want to be unfair."
0:41:30 Peter: "It's a really complicated system they're building that is still nonetheless permissioned. It's a permissioned blockchain."
0:42:29 Peter: "[Libra] is not an open blockchain. It's not a blockchain where anyone can add transactions to the ledger and independently verify the transactions."
0:43:15 Peter: "With Bitcoin, there's a lot of regulations that don't apply because it would be nonsensical to apply them because there isn't a centralized intermediary who you can trust to achieve the policy result you want."
0:43:32 Peter: "With Libra, that's not true at all. There are identified parties who you could trust to achieve the policy result you want."
0:43:56 Peter: "Even if you're an individual, you're not allowed to transact or interact economically with someone on the SDN list, like everyone in Iran."
0:44:42 Peter: "The Libra association is going to be this group of identified persons, which are really just corporations, including Facebook, Visa, and Mastercard. Whose laws are they going to comply with with respect to sanctions?"
0:45:21 Peter: "[Libra's] not censorship resistant cash. It's not really a cryptocurrency. It's just another payment rail. Why build it in such a complicated way?"
0:45:43 Peter: "Another thought is the whole reserve thing. So aside from being permissioned vs permissionless, Lbra is going to be asset-backed."
0:46:36 Peter: "If you are a company that has assets in a reserve, and people are trading - effectively - a pro-rata share of the value of those assets? That sounds like a security to me."
0:47:16 Peter: "And yet, I don't think there's plans to register Libra as a security because, frankly, if you did, it would be very useless as a currency, because it would only be allowed to be traded on securities exchanges."
0:48:09 Peter: "I've never seen such a rapid and aggressive response from members of Congress to a new tech project."
0:49:28 Muneeb: "Do you think the reaction from Washington is linked with some of the antitrust stuff as well?"
0:50:07 Peter: "Maybe they thought, 'This is us proving that we're investing in being less powerful'? Kind of like how they talk about WhatsApp a lot now."
0:51:03 Peter: "People in Congress ... are gonna say, 'This is Facebook, who some of us are already talking about anti-trust issues, and now they want to become the global reserve currency for all payments everywhere?"
0:51:40 Peter: "If any company is going to build a payments tool, they should build cryptocurrencies. I'm just disappointed they didn't basically fork Bitcoin or integrate it."
0:52:13 Muneeb: "That's what they say in the whitepaper, 'We're giving ourselves five years to figure out how to build an open system, but in the meanwhile - because of scalability - the only way to scale to a billion users is to use a closed system."
0:52:54 Peter: "I've heard a lot of people say that Move, the smart contract language [Facebook's] architected, is apparently extremely elegant."
0:53:17 Muneeb: "The motivation for Move is very similar to the smart contract language that we launched yesterday, Clarity."
0:54:38 Peter: "God knows that Solidity has had this particular issue where it's hard to know exactly what you just wrote in a smart contract until you launch it on Mainnet and someone breaks it in the DAO hack example."
0:55:44 Muneeb: "Ethereum is very interesting. They have a large community and kind of started everyone in the industry in a certain direction from a technology perspective. And I believe that most of those things were wrong."
0:57:05 Peter: "Maybe the network effects are just age-based, but it could also be this willingness to push stuff out there maybe before it's fully manicured or even fully compliant with the law."
0:57:51 Peter: "I should disclose that I'm a member of the Zcash Foundation's Board of Directors."
1:00:00 Muneeb: "I swear we're not doing this on purpose, but every decision we make ends up being the exact opposite of Ethereum."
1:04:13 Muneeb: "What's the biggest project you're spending your time on these days?"
1:05:50 Peter: "We were faced around a year and a half ago with, 'What's going to be a big issue in a year or two years? What do we need to start laying the groundwork on from a policy perspective now in order to have good policy outcomes later?'"
1:07:12 Peter: "Bitcoin, I think, ultimately needs to change and be more private and a lot of the privacy coins that we now see were originally proposed as amendments to the Bitcoin protocol."
1:08:38 Peter: "Any of the very public blockchains will ultimately need to find ways to obscure that transaction graph because, otherwise, we're gonna just be giving totalitarian states the best tool for mass surveillance that anyone's ever developed."
1:08:52 Peter: "So, with that in mind, we said 'What are the policy issues here?' And the big ones are anti money laundering law."
1:09:18 Peter: "Bank robbers use getaway cars. Even terrorists use encrypted messaging. This is just a reality, but that doesn't mean we should ban automobiles and encryption."
1:10:06 Peter: "We use the term 'electronic cash' because it's really like cash then. You can send it from one person to another, no one is in between, it's censorship resistant, and it doesn't leave a record."
1:10:23 Peter: "What if we get some sort of overbearing, overzealous response from policy makers that says we can't have these things anymore?"
1:11:51 Peter: "Most people have written about First Amendment issues here: ... if you're writing in computer code... it's still speech."
1:12:44 Peter: "What I don't think is a well enough explored area are the Fourth Amendment issues. The Fourth Amendment in the US says you need a warrant if you're a law enforcement and want to search somebody."
1:13:43 Peter: "Banks have been reporting our entire transaction history to governments whenever they ask, without a warrant, since 1970."
1:14:12 Peter: "The reason why that's constitutional in this context is because people willingingly hand over those records to banks during the regular course of business. ... You lose your reasonable expectation of privacy because your sharing it with a third-party."
1:15:09 Peter: "There's no reason for a developer to have all that private information about the users of their software. There's definitely a reason for a bank to have a bunch of information about the users of the bank."
1:15:48 Peter: "From a constitutional law standpoint... the only reason why it's okay for banks to bulk collect, surveil their users, and report that to government without a warrant, is that they have a reasonable business purpose to collect that information."
1:16:03 Peter: "There's no reasonable business purpose for an open source software developer to collect information about the users of their software - it just doesn't make sense."
1:16:29 Peter: "If it's interesting to your audience, I highly recommend you pick up our report. It's explained much more carefully and you don't need to be a lawyer or to have gone to law school to understand it."
1:17:33 Muneeb: "Where can people find you?"
1:17:37 Peter: "All our work at Coin Center is made public and made available at CoinCenter.org. And we rely on donations from people who are just excited about the technology and want to see good advocacy in DC."
1:18:18 Muneeb: "Blockstack is a supporter and we've been extremely happy with our involvement with Coin Center. They've been super helpful whenever we need them."
1:18:29 Muneeb: "Goodbyes."

Peter Van Valkenburgh http://twitter.com/valkenburgh
Muneeb Ali http://twitter.com/muneeb
Zach Valenti http://twitter.com/zachvalenti

This episode features a conversation between Peter Van Valkenburgh - Director of Research at <a href="https://coincenter.org">Coin Center</a>, the leading non-profit focused on the policy issues facing cryptocurrencies like Bitcoin - and Muneeb Ali, CEO of <a href="http://blockstack.org">Blockstack PBC</a>.
Peter and Muneeb discuss Coin Center&rsquo;s mission and recent work, Facebook&rsquo;s Libra Coin, the case for a true electronic cash, and more.
<ul>
<li>0:00:50 Peter's bio</li>
<li>0:01:09 Peter: "[Coin Center] was my first big job out of law school."</li>
<li>0:02:58 Muneeb: "You're OG now. When did Blockstack start sponsoring Coin Center?"</li>
<li>0:03:18 Peter: "Coin Center got its start in 2014. We got some really generous runway from a couple of donors who are just individuals who wanted to see a more adult advocacy organization in Washington, D.C. focused on this stuff."</li>
<li>0:04:56 Peter: "Coin Center is supposed to be an independent digital civil lIberties organization that goes and represents the underlying open technologies to Congress or to regulators."</li>
<li>0:06:08 Muneeb: "I simply say [the people at Coin Center]... actually understand this technology and they understand the regulations and the law, which is a rare combination. And they can be the right bridge between this technology and the various regulators or lawmakers."</li>
<li>0:06:29 Peter: "I think that's right. A lot of what we do I often think of as translation."</li>
<li>0:07:13 Peter: "More often than not we're explaining the law to lawyers in this space."</li>
<li>0:08:51 Peter: "There's no company - and all previous financial regulations - almost all - rely on finding a regulated entity and obligating that regulated entity to achieve the policy result that government wants."</li>
<li>0:09:37 Peter: "In the Bitcoin case, who's the issuer of the Bitcoin security?"</li>
<li>0:09:52 Peter: "Who in the Zcash space should be obligated for money laundering compliance?"</li>
<li>0:11:38 Muneeb: "One of my working theories is that Satoshi Nakamoto - whoever that person or group of individuals were - not only understood computer science, distributed systems, applied cryptography, and game theory, they actually knew securities regulation as well and that's why we don't know who is Satoshi Nakamoto."</li>
<li>0:12:42 Peter: "The policy objective that securities law seek to address are correcting the asymmetric information between issuers who are promising things to investors and the investors who've paid money to the investors."</li>
<li>0:13:51 Peter: "There are still the potential for information asymmetries. And I've sort of gotten into this debate with Angela Walch before about whether there's information asymmetries between software developers and the users of a software."</li>
<li>0:15:35 Muneeb: "Speaking of securities regulation I should just make a note here: we have a public filing with the SEC."</li>
<li>0:16:13 Peter: "From my perspective [Blockstack] has taken a really responsible and conservative approach to securities law compliance."</li>
<li>0:17:06 Peter: "I'm not a huge fan of the way we do investor protection in this country because it's very permissioned and it also excludes a lot of investors from participating."</li>
<li>0:18:58 Muneeb: "We actually had you host our Blockstack Summit in Berlin, and you interviewed Edward Snowden there. How was that experience? And has he been more active in the space? Or was that a one off thing?"</li>
<li>0:19:32 Peter: "That experience was awesome - it's still probably one of the craziest things I've ever done."</li>
<li>0:22:36 Peter: "I do think [Edward Snowden] has been quasi-active in the Zcash development community."</li>
<li>0:24:43 Peter: "He's worked on something really cool with the Freedom of the Press Foundation, which is if you have an old cell phone and want to turn it into an alarm system."</li>
<li>0:26:16 Muneeb: "Have you checked out any of the latest stuff that's been built on Blockstack?"</li>
<li>0:26:24 Peter: "I have a real interest in Graphite, which is the Google Docs type app."</li>
<li>0:27:05 Peter: "We've been looking for a long time for some sort of non-Google "Can't Be Evil" alternative to Google Docs."</li>
<li>0:29:29 Peter: "Network effects are a bitch, to put it a somewhat grotesque way. If you're talking about a communication system or a system where people pay each other, the systems that succeeded are not the ones that were best architected."</li>
<li>0:29:55 Peter: "Just look at all the attempts and failures at doing encrypted email."</li>
<li>0:30:16 Peter: "You're just going to default to the one everyone's on, even if it's not great for privacy."</li>
<li>0:32:32 Muneeb: "We're super excited to have [Neal Stephenson] at the 2019 Summit in San Francisco. I think Naval Ravikant is going to have a fireside chat."</li>
<li>0:33:40 Peter: "The Diamond Age describes Zcash."</li>
<li>0:36:01 Muneeb: "Coming back to this idea of decentralized applications - one model I have in my mind was when Linux was starting."</li>
<li>0:38:51 Peter: "Maybe decentralized apps will have their best success early on in those sort of niche enterprise / highly technical persons use-cases."</li>
<li>0:40:16 Peter: "Good luck getting a bunch of lawyers even to this day to group edit a Google Doc, let alone use Graphite."</li>
<li>0:40:24 Muneeb: "I think we knew that Linux won the server wars when even Microsoft started using Linux in their data centers."</li>
<li>0:40:32 Peter: "[Microsoft] has done a total 180, probably because they saw the writing on the wall as far as their consumer software business."</li>
<li>0:40:56 Muneeb: "What do you think of Facebook Libra?"</li>
<li>0:41:05 Peter: "I have a lot of thoughts about Facebook Libra. I should be careful about what I say because I don't want to be unfair."</li>
<li>0:41:30 Peter: "It's a really complicated system they're building that is still nonetheless permissioned. It's a permissioned blockchain."</li>
<li>0:42:29 Peter: "[Libra] is not an open blockchain. It's not a blockchain where anyone can add transactions to the ledger and independently verify the transactions."</li>
<li>0:43:15 Peter: "With Bitcoin, there's a lot of regulations that don't apply because it would be nonsensical to apply them because there isn't a centralized intermediary who you can trust to achieve the policy result you want."</li>
<li>0:43:32 Peter: "With Libra, that's not true at all. There are identified parties who you could trust to achieve the policy result you want."</li>
<li>0:43:56 Peter: "Even if you're an individual, you're not allowed to transact or interact economically with someone on the SDN list, like everyone in Iran."</li>
<li>0:44:42 Peter: "The Libra association is going to be this group of identified persons, which are really just corporations, including Facebook, Visa, and Mastercard. Whose laws are they going to comply with with respect to sanctions?"</li>
<li>0:45:21 Peter: "[Libra's] not censorship resistant cash. It's not really a cryptocurrency. It's just another payment rail. Why build it in such a complicated way?"</li>
<li>0:45:43 Peter: "Another thought is the whole reserve thing. So aside from being permissioned vs permissionless, Lbra is going to be asset-backed."</li>
<li>0:46:36 Peter: "If you are a company that has assets in a reserve, and people are trading - effectively - a pro-rata share of the value of those assets? That sounds like a security to me."</li>
<li>0:47:16 Peter: "And yet, I don't think there's plans to register Libra as a security because, frankly, if you did, it would be very useless as a currency, because it would only be allowed to be traded on securities exchanges."</li>
<li>0:48:09 Peter: "I've never seen such a rapid and aggressive response from members of Congress to a new tech project."</li>
<li>0:49:28 Muneeb: "Do you think the reaction from Washington is linked with some of the antitrust stuff as well?"</li>
<li>0:50:07 Peter: "Maybe they thought, 'This is us proving that we're investing in being less powerful'? Kind of like how they talk about WhatsApp a lot now."</li>
<li>0:51:03 Peter: "People in Congress ... are gonna say, 'This is Facebook, who some of us are already talking about anti-trust issues, and now they want to become the global reserve currency for all payments everywhere?"</li>
<li>0:51:40 Peter: "If any company is going to build a payments tool, they should build cryptocurrencies. I'm just disappointed they didn't basically fork Bitcoin or integrate it."</li>
<li>0:52:13 Muneeb: "That's what they say in the whitepaper, 'We're giving ourselves five years to figure out how to build an open system, but in the meanwhile - because of scalability - the only way to scale to a billion users is to use a closed system."</li>
<li>0:52:54 Peter: "I've heard a lot of people say that Move, the smart contract language [Facebook's] architected, is apparently extremely elegant."</li>
<li>0:53:17 Muneeb: "The motivation for Move is very similar to the smart contract language that we launched yesterday, Clarity."</li>
<li>0:54:38 Peter: "God knows that Solidity has had this particular issue where it's hard to know exactly what you just wrote in a smart contract until you launch it on Mainnet and someone breaks it in the DAO hack example."</li>
<li>0:55:44 Muneeb: "Ethereum is very interesting. They have a large community and kind of started everyone in the industry in a certain direction from a technology perspective. And I believe that most of those things were wrong."</li>
<li>0:57:05 Peter: "Maybe the network effects are just age-based, but it could also be this willingness to push stuff out there maybe before it's fully manicured or even fully compliant with the law."</li>
<li>0:57:51 Peter: "I should disclose that I'm a member of the Zcash Foundation's Board of Directors."</li>
<li>1:00:00 Muneeb: "I swear we're not doing this on purpose, but every decision we make ends up being the exact opposite of Ethereum."</li>
<li>1:04:13 Muneeb: "What's the biggest project you're spending your time on these days?"</li>
<li>1:05:50 Peter: "We were faced around a year and a half ago with, 'What's going to be a big issue in a year or two years? What do we need to start laying the groundwork on from a policy perspective now in order to have good policy outcomes later?'"</li>
<li>1:07:12 Peter: "Bitcoin, I think, ultimately needs to change and be more private and a lot of the privacy coins that we now see were originally proposed as amendments to the Bitcoin protocol."</li>
<li>1:08:38 Peter: "Any of the very public blockchains will ultimately need to find ways to obscure that transaction graph because, otherwise, we're gonna just be giving totalitarian states the best tool for mass surveillance that anyone's ever developed."</li>
<li>1:08:52 Peter: "So, with that in mind, we said 'What are the policy issues here?' And the big ones are anti money laundering law."</li>
<li>1:09:18 Peter: "Bank robbers use getaway cars. Even terrorists use encrypted messaging. This is just a reality, but that doesn't mean we should ban automobiles and encryption."</li>
<li>1:10:06 Peter: "We use the term 'electronic cash' because it's really like cash then. You can send it from one person to another, no one is in between, it's censorship resistant, and it doesn't leave a record."</li>
<li>1:10:23 Peter: "What if we get some sort of overbearing, overzealous response from policy makers that says we can't have these things anymore?"</li>
<li>1:11:51 Peter: "Most people have written about First Amendment issues here: ... if you're writing in computer code... it's still speech."</li>
<li>1:12:44 Peter: "What I don't think is a well enough explored area are the Fourth Amendment issues. The Fourth Amendment in the US says you need a warrant if you're a law enforcement and want to search somebody."</li>
<li>1:13:43 Peter: "Banks have been reporting our entire transaction history to governments whenever they ask, without a warrant, since 1970."</li>
<li>1:14:12 Peter: "The reason why that's constitutional in this context is because people willingingly hand over those records to banks during the regular course of business. ... You lose your reasonable expectation of privacy because your sharing it with a third-party."</li>
<li>1:15:09 Peter: "There's no reason for a developer to have all that private information about the users of their software. There's definitely a reason for a bank to have a bunch of information about the users of the bank."</li>
<li>1:15:48 Peter: "From a constitutional law standpoint... the only reason why it's okay for banks to bulk collect, surveil their users, and report that to government without a warrant, is that they have a reasonable business purpose to collect that information."</li>
<li>1:16:03 Peter: "There's no reasonable business purpose for an open source software developer to collect information about the users of their software - it just doesn't make sense."</li>
<li>1:16:29 Peter: "If it's interesting to your audience, I highly recommend you pick up our report. It's explained much more carefully and you don't need to be a lawyer or to have gone to law school to understand it."</li>
<li>1:17:33 Muneeb: "Where can people find you?"</li>
<li>1:17:37 Peter: "All our work at Coin Center is made public and made available at CoinCenter.org. And we rely on donations from people who are just excited about the technology and want to see good advocacy in DC."</li>
<li>1:18:18 Muneeb: "Blockstack is a supporter and we've been extremely happy with our involvement with Coin Center. They've been super helpful whenever we need them."</li>
<li>1:18:29 Muneeb: "Goodbyes."
<ul>
<li>Peter Van Valkenburgh <a href="http://twitter.com/valkenburgh">http://twitter.com/valkenburgh</a></li>
<li>Muneeb Ali <a href="http://twitter.com/mueeb">http://twitter.com/muneeb</a></li>
<li>Zach Valenti <a href="http://twitter.com/zachvalenti">http://twitter.com/zachvalenti</a></li>
</ul>
</li>
</ul>

Peter Van Valkenburgh and Muneeb Ali on Crypto and The Law

Hi there and welcome to the Stacks Podcast, I’m Zach Valenti.

Today, we have a conversation between Jameson Lopp - former Bitcoin engineer, professional cypherpunk, and CTO at the key security company, Casa - and Muneeb Ali, the CEO of Blockstack PBC.

Jameson and Muneeb cover a lot of ground here, starting with mining Bitcoin at home, moving on to the importance of personal privacy, delving into the quasi-religious in-fighting in the crypto space, and more.
0:00:41 Welcome.
0:00:57 Muneeb: "I bet you have some Bitcoin miners set up in your home as well."
0:01:03 Jameson: "I only ever mined on testnet."
0:01:15 Muneeb: "Speaking of miners, what do you think of these new consumer mining equipment companies?"
0:01:35 Jameson: "I like the idea at a high level."
0:02:09 Jameson: "Basically using your electricity bill as a way to receive crypto."
0:02:48 Muneeb: "From a purely 'can this be profitable?' perspective, there's no way."
0:03:32 Jameson: "I actually argue we should move to a model where most people are mining unprofitably as the best way to decentralize mining."
0:04:22 Muneeb: "If you look at the first wave of peer-to-peer networks, people would run peers without any incentives."
0:05:55 Jameson: "If we really want people to be running these Internet connected devices that need to have pretty good uptime... we need to figure out how to automate away as much of the boring IT aspects and really make a nice user interface."
0:06:24 Muneeb: "Operating your own node is one of those things that computer geeks would love to do it, but they're relatively only a small subset of the population."
0:06:44 Muneeb: "What's your current working theory on - let's say five to ten years from now - do you believe in a world where everything just converges to Bitcoin? Or do you see a world with more fragmentation?"
0:07:26 Jameson: "That's complicated."
0:08:58 Jameson: "We're going to have thousands of these cockroaches running around and continuing to exist, though they will probably not be as utilized as Bitcoin."
0:09:26 Muneeb: "When does a blockchain die?"
0:09:46 Jameson: "What's more interesting than whether some machines are running the protocol is whether people are using the protocol and maintaining it."
0:10:11 Jameson: "The example I like to use is dogecoin."
0:11:00 Muneeb: "I don't know about hundreds of useful tokens out there, but I can definitely imagine a handful, maybe tens of them."
0:11:37 Muneeb: "How do you see the Internet evolve, let's say five years from now, and how will the typical user interact with it?"
0:11:51 Jameson: "The real trade off between most of this is usability and security."
0:12:55 Jameson: "Perhaps the hardware will just start to be rolled out with your common, every day computing platforms."
0:13:30 Jameson: "The onus for a lot of this stuff to go really mainstream is going to be on the enterprises to basically build in defaults so people don't have to make a lot of choices."
0:14:41 Muneeb: "Let's say people start keeping twenty to thirty percent of their net worth in crypto tokens. That also means they start becoming targets as well."
0:14:58 Muneeb: "I love the article that came out in The New York Times that talked about how to disappear from the face of the earth, featuring you.”

https://www.nytimes.com/2019/03/12/technology/how-to-disappear-surveillance-state.html
0:15:09 Muneeb: "What do you think about personal privacy?"
0:15:33 Jameson: "There are people who are 'being their own bank' and right now a lot of the criminals are still catching up to that."
0:16:32 Jameson: "What do we need to do? It needs to be like a herd immune defense."
0:17:46 Jameson: "There's probably even more complexities asking people to be their own bank than asking them to be a server administrator."
0:18:21 Muneeb: "Speaking of key management, what's the latest at Casa?"
0:18:35 Jameson: "Over the past few months we've been evolving our product lines. The original being Casa Keymaster."
0:20:48 Muneeb: "We have an early generation Casa node running in one of our conference rooms here."
0:21:32 Muneeb: "What does it look like we're focused on at Blockstack from the outside?"
0:21:48 Jameson: "From my perspective, it is another take on trying to decentralize as much of the Internet stack as possible."
0:22:23 Jameson: "There's a lot of pieces of the infrastructure that are actually a lot more fragile and brittle than we would like."
0:23:04 Jameson: "The idea that we can move back to a more decentralized platform, I think is going to make [the Internet] more robust."
0:23:45 Muneeb: "We will figure out the problems and computer science challenges at the infrastructure layer and then we want to give the right tools to the developers to build on top of that."
0:24:59 Jameson: "I'd actually be very interested to see a really decentralized social media app."
0:25:22 Jameson: "Today, I think we saw block.one announce they were releasing a new EOS social app, but to fix trolling and spam they will require government IDs for every account."

https://www.coindesk.com/block-ones-new-social-media-site-will-do-identity-checks-for-every-user
0:25:52 Muneeb: "Are they thinking that all the data would be stored on the EOS blockchain? Last time I checked, their block producers were running out of disk space."
0:26:13 Jameson: "I saw something about $20 million dollars worth of RAM being purchased by some of the block producers."

https://thecryptoreport.com/eos-leader-block-one-spends-20-million-on-ram-for-big-announcement-coming-on-june-1/
0:26:24 Jameson: "It's almost like each one of these networks has their own ideology and personality and is willing to make different trade offs."
0:26:46 Muneeb: "In many ways these networks are valuable because of the community, because of all the believers..."
0:27:23 Muneeb: "... the entire industry is so small that you could argue the blue ocean is outside of our industry right now, and people should be externally focused, expanding the size of the market. Instead, we see a lot of in-fighting. Would love to hear your thoughts about it."
0:27:50 Jameson: "I agree on the idea that we should be expanding the size of the pie."
0:28:49 Jameson: "Part of it - at least on the Bitcoin side - there's at least a large number of the early adopters that are anti-authoritarian."
0:29:46 Muneeb: "Once these kind of wars started happening between Bitcoin and Bitcoin Cash and others, my reaction was 'I'm going to distance myself until this settles down.'"
0:30:08 Muneeb: "Do you feel like over time it's becoming more toxic or getting better?"
0:31:04 Jameson: "With the 50+ Bitcoin forks, pretty much everyone behind them started to try and improve Bitcoin and become the dominant player. When, ultimately, that doesn't happen, the question becomes 'how long will the supporters continue?'."
0:32:22 Jameson: "This is part of this system that is fascinating because it is the philosophical and ideological side."
0:32:55 Jameson: "A lot of the arguments that are happening are technical, but fundamentally the schism is ideological and it's about tradeoffs that people are willing to make."
0:33:57 Muneeb: "It was more contentious because everyone was trying to say 'this is the real Bitcoin' - they wanted the branding of Bitcoin to attract new users."
0:34:17 Jameson: "There is no authority that can define what Bitcoin is or what it should be."
0:34:51 Jameson: "It's hard to even describe how the definition of Bitcoin comes about because it's like trying to define how the definition of some colloquial word has come about."
0:35:18 Muneeb: "I find the analogy of religion super interesting here, not only because of the forks, but also because sometimes logic doesn't appeal to the die hard followers."
0:35:50 Muneeb: "I grew up in Pakistan and there were a lot of very religious people around me. And this is something I've noticed: I tend to gravitate towards logic, and reasoning, or engineering and science."
0:36:55 Jameson: "It's almost like a kind of fundamentalism people can fall into."
0:37:38 Muneeb: "My early memories of the Internet are of a very friendly community that was pro open-source and helpful to newcomers."
0:38:37 Jameson: "I'd be very interested in reading some historical works about the early Internet protocol wars. ... It was really hard for me to find anything, and maybe that's because history is written by the winners."
0:39:13 Muneeb: "One thing I can tell you about is this almost constant war between keeping the core of the network simple versus keeping the core of the network more complicated."
0:39:23 Muneeb: "That's kind of like the beginning of the end-to-end design principle by David Clarke, the chief protocol engineer of the Internet."

http://web.mit.edu/Saltzer/www/publications/endtoend/endtoend.pdf
0:40:01 Muneeb: "Unix was a new concept."
0:40:19 Muneeb: "We're seeing that play out in blockchains as well."
0:40:57 Jameson: "We can make all the arguments we want... ultimately they're all going to have to play out."
0:41:36 Muneeb: "I notice you've done a bunch of work helping to educate beginners."
0:42:15 Jameson: "I think one of the most valuable things those of us who have been in it for a longtime can try to do is to distill the knowledge and lower the steepness of the learning curve to get into the system."
0:44:44 Muneeb: "I see that you have Bitcoin resources and then Lightning resources. Is there any other category you're thinking about adding if you had time in the future?"

http://bitcoin.page
http://lightning.how
0:44:54 Jameson: "It comes down to what people are asking me about the most."
0:45:48 Jameson: "I'm working on my next blog post / presentation right now where I'm trying to figure out what the unwritten rules of Bitcoin are."
0:46:21 Muneeb: "Personally, I'd be super interested in a section on personal security."
0:46:49 Jameson: "That is one of the dozen blog post drafts I'm working on right now."
0:47:16 Muneeb: "Switching topics, what's a more controversial opinion that you hold that you would think twice about before tweeting it out?"
0:47:27 Jameson: "The things that I have been self-censoring more frequently these days are some of the more libertarian viewpoints."
0:49:23 Jameson: "I think that we can try to be inclusive at least to the point of not being assholes to newcomers."
0:51:43 Muneeb: "It's good to see those discussions happen... that people are thinking about how inclusive are you really being in some of these ecosystems, which might end up impacting a very large population of the world if they're successful."
0:52:16 Jameson: "Very easy to find me because I'm the only Jameson Lopp in the world."

http://lopp.net
0:52:43 Goodbyes.
0:52:55 Credits.

Jameson Lopp: twitter.com/Lopp
Muneeb Ali: twitter.com/Muneeb
Zach Valenti: twitter.com/ZachValenti

Hi there and welcome to the Stacks Podcast, I&rsquo;m Zach Valenti.
Today, we have a conversation between Jameson Lopp - former Bitcoin engineer, professional cypherpunk, and CTO at the key security company, <a href="https://keys.casa">Casa</a> - and Muneeb Ali, the CEO of <a href="http://blockstack.org">Blockstack PBC</a>.
Jameson and Muneeb cover a lot of ground here, starting with mining Bitcoin at home, moving on to the importance of personal privacy, delving into the quasi-religious in-fighting in the crypto space, and more.
<ul>
<li>0:00:41 Welcome.</li>
<li>0:00:57 Muneeb: "I bet you have some Bitcoin miners set up in your home as well."</li>
<li>0:01:03 Jameson: "I only ever mined on testnet."</li>
<li>0:01:15 Muneeb: "Speaking of miners, what do you think of these new consumer mining equipment companies?"</li>
<li>0:01:35 Jameson: "I like the idea at a high level."</li>
<li>0:02:09 Jameson: "Basically using your electricity bill as a way to receive crypto."</li>
<li>0:02:48 Muneeb: "From a purely 'can this be profitable?' perspective, there's no way."</li>
<li>0:03:32 Jameson: "I actually argue we should move to a model where most people are mining unprofitably as the best way to decentralize mining."</li>
<li>0:04:22 Muneeb: "If you look at the first wave of peer-to-peer networks, people would run peers without any incentives."</li>
<li>0:05:55 Jameson: "If we really want people to be running these Internet connected devices that need to have pretty good uptime... we need to figure out how to automate away as much of the boring IT aspects and really make a nice user interface."</li>
<li>0:06:24 Muneeb: "Operating your own node is one of those things that computer geeks would love to do it, but they're relatively only a small subset of the population."</li>
<li>0:06:44 Muneeb: "What's your current working theory on - let's say five to ten years from now - do you believe in a world where everything just converges to Bitcoin? Or do you see a world with more fragmentation?"</li>
<li>0:07:26 Jameson: "That's complicated."</li>
<li>0:08:58 Jameson: "We're going to have thousands of these cockroaches running around and continuing to exist, though they will probably not be as utilized as Bitcoin."</li>
<li>0:09:26 Muneeb: "When does a blockchain die?"</li>
<li>0:09:46 Jameson: "What's more interesting than whether some machines are running the protocol is whether people are using the protocol and maintaining it."</li>
<li>0:10:11 Jameson: "The example I like to use is dogecoin."</li>
<li>0:11:00 Muneeb: "I don't know about hundreds of useful tokens out there, but I can definitely imagine a handful, maybe tens of them."</li>
<li>0:11:37 Muneeb: "How do you see the Internet evolve, let's say five years from now, and how will the typical user interact with it?"</li>
<li>0:11:51 Jameson: "The real trade off between most of this is usability and security."</li>
<li>0:12:55 Jameson: "Perhaps the hardware will just start to be rolled out with your common, every day computing platforms."</li>
<li>0:13:30 Jameson: "The onus for a lot of this stuff to go really mainstream is going to be on the enterprises to basically build in defaults so people don't have to make a lot of choices."</li>
<li>0:14:41 Muneeb: "Let's say people start keeping twenty to thirty percent of their net worth in crypto tokens. That also means they start becoming targets as well."</li>
<li>0:14:58 Muneeb: "I love the article that came out in The New York Times that talked about how to disappear from the face of the earth, featuring you.&rdquo;
<ul>
<li><a href="https://www.nytimes.com/2019/03/12/technology/how-to-disappear-surveillance-state.html">https://www.nytimes.com/2019/03/12/technology/how-to-disappear-surveillance-state.html</a></li>
</ul>
</li>
<li>0:15:09 Muneeb: "What do you think about personal privacy?"</li>
<li>0:15:33 Jameson: "There are people who are 'being their own bank' and right now a lot of the criminals are still catching up to that."</li>
<li>0:16:32 Jameson: "What do we need to do? It needs to be like a herd immune defense."</li>
<li>0:17:46 Jameson: "There's probably even more complexities asking people to be their own bank than asking them to be a server administrator."</li>
<li>0:18:21 Muneeb: "Speaking of key management, what's the latest at Casa?"</li>
<li>0:18:35 Jameson: "Over the past few months we've been evolving our product lines. The original being Casa Keymaster."</li>
<li>0:20:48 Muneeb: "We have an early generation Casa node running in one of our conference rooms here."</li>
<li>0:21:32 Muneeb: "What does it look like we're focused on at Blockstack from the outside?"</li>
<li>0:21:48 Jameson: "From my perspective, it is another take on trying to decentralize as much of the Internet stack as possible."</li>
<li>0:22:23 Jameson: "There's a lot of pieces of the infrastructure that are actually a lot more fragile and brittle than we would like."</li>
<li>0:23:04 Jameson: "The idea that we can move back to a more decentralized platform, I think is going to make [the Internet] more robust."</li>
<li>0:23:45 Muneeb: "We will figure out the problems and computer science challenges at the infrastructure layer and then we want to give the right tools to the developers to build on top of that."</li>
<li>0:24:59 Jameson: "I'd actually be very interested to see a really decentralized social media app."</li>
<li>0:25:22 Jameson: "Today, I think we saw block.one announce they were releasing a new EOS social app, but to fix trolling and spam they will require government IDs for every account."
<ul>
<li><a href="https://www.coindesk.com/block-ones-new-social-media-site-will-do-identity-checks-for-every-user">https://www.coindesk.com/block-ones-new-social-media-site-will-do-identity-checks-for-every-user</a></li>
</ul>
</li>
<li>0:25:52 Muneeb: "Are they thinking that all the data would be stored on the EOS blockchain? Last time I checked, their block producers were running out of disk space."</li>
<li>0:26:13 Jameson: "I saw something about $20 million dollars worth of RAM being purchased by some of the block producers."
<ul>
<li><a href="https://thecryptoreport.com/eos-leader-block-one-spends-20-million-on-ram-for-big-announcement-coming-on-june-1/">https://thecryptoreport.com/eos-leader-block-one-spends-20-million-on-ram-for-big-announcement-coming-on-june-1/</a></li>
</ul>
</li>
<li>0:26:24 Jameson: "It's almost like each one of these networks has their own ideology and personality and is willing to make different trade offs."</li>
<li>0:26:46 Muneeb: "In many ways these networks are valuable because of the community, because of all the believers..."</li>
<li>0:27:23 Muneeb: "... the entire industry is so small that you could argue the blue ocean is outside of our industry right now, and people should be externally focused, expanding the size of the market. Instead, we see a lot of in-fighting. Would love to hear your thoughts about it."</li>
<li>0:27:50 Jameson: "I agree on the idea that we should be expanding the size of the pie."</li>
<li>0:28:49 Jameson: "Part of it - at least on the Bitcoin side - there's at least a large number of the early adopters that are anti-authoritarian."</li>
<li>0:29:46 Muneeb: "Once these kind of wars started happening between Bitcoin and Bitcoin Cash and others, my reaction was 'I'm going to distance myself until this settles down.'"</li>
<li>0:30:08 Muneeb: "Do you feel like over time it's becoming more toxic or getting better?"</li>
<li>0:31:04 Jameson: "With the 50+ Bitcoin forks, pretty much everyone behind them started to try and improve Bitcoin and become the dominant player. When, ultimately, that doesn't happen, the question becomes 'how long will the supporters continue?'."</li>
<li>0:32:22 Jameson: "This is part of this system that is fascinating because it is the philosophical and ideological side."</li>
<li>0:32:55 Jameson: "A lot of the arguments that are happening are technical, but fundamentally the schism is ideological and it's about tradeoffs that people are willing to make."</li>
<li>0:33:57 Muneeb: "It was more contentious because everyone was trying to say 'this is the real Bitcoin' - they wanted the branding of Bitcoin to attract new users."</li>
<li>0:34:17 Jameson: "There is no authority that can define what Bitcoin is or what it should be."</li>
<li>0:34:51 Jameson: "It's hard to even describe how the definition of Bitcoin comes about because it's like trying to define how the definition of some colloquial word has come about."</li>
<li>0:35:18 Muneeb: "I find the analogy of religion super interesting here, not only because of the forks, but also because sometimes logic doesn't appeal to the die hard followers."</li>
<li>0:35:50 Muneeb: "I grew up in Pakistan and there were a lot of very religious people around me. And this is something I've noticed: I tend to gravitate towards logic, and reasoning, or engineering and science."</li>
<li>0:36:55 Jameson: "It's almost like a kind of fundamentalism people can fall into."</li>
<li>0:37:38 Muneeb: "My early memories of the Internet are of a very friendly community that was pro open-source and helpful to newcomers."</li>
<li>0:38:37 Jameson: "I'd be very interested in reading some historical works about the early Internet protocol wars. ... It was really hard for me to find anything, and maybe that's because history is written by the winners."</li>
<li>0:39:13 Muneeb: "One thing I can tell you about is this almost constant war between keeping the core of the network simple versus keeping the core of the network more complicated."</li>
<li>0:39:23 Muneeb: "That's kind of like the beginning of the end-to-end design principle by David Clarke, the chief protocol engineer of the Internet."
<ul>
<li><a href="http://web.mit.edu/Saltzer/www/publications/endtoend/endtoend.pdf">http://web.mit.edu/Saltzer/www/publications/endtoend/endtoend.pdf</a></li>
</ul>
</li>
<li>0:40:01 Muneeb: "Unix was a new concept."</li>
<li>0:40:19 Muneeb: "We're seeing that play out in blockchains as well."</li>
<li>0:40:57 Jameson: "We can make all the arguments we want... ultimately they're all going to have to play out."</li>
<li>0:41:36 Muneeb: "I notice you've done a bunch of work helping to educate beginners."</li>
<li>0:42:15 Jameson: "I think one of the most valuable things those of us who have been in it for a longtime can try to do is to distill the knowledge and lower the steepness of the learning curve to get into the system."</li>
<li>0:44:44 Muneeb: "I see that you have Bitcoin resources and then Lightning resources. Is there any other category you're thinking about adding if you had time in the future?"
<ul>
<li><a href="http://bitcoin.page">http://bitcoin.page</a></li>
<li><a href="http://lightning.how/">http://lightning.how</a></li>
</ul>
</li>
<li>0:44:54 Jameson: "It comes down to what people are asking me about the most."</li>
<li>0:45:48 Jameson: "I'm working on my next blog post / presentation right now where I'm trying to figure out what the unwritten rules of Bitcoin are."</li>
<li>0:46:21 Muneeb: "Personally, I'd be super interested in a section on personal security."</li>
<li>0:46:49 Jameson: "That is one of the dozen blog post drafts I'm working on right now."</li>
<li>0:47:16 Muneeb: "Switching topics, what's a more controversial opinion that you hold that you would think twice about before tweeting it out?"</li>
<li>0:47:27 Jameson: "The things that I have been self-censoring more frequently these days are some of the more libertarian viewpoints."</li>
<li>0:49:23 Jameson: "I think that we can try to be inclusive at least to the point of not being assholes to newcomers."</li>
<li>0:51:43 Muneeb: "It's good to see those discussions happen... that people are thinking about how inclusive are you really being in some of these ecosystems, which might end up impacting a very large population of the world if they're successful."</li>
<li>0:52:16 Jameson: "Very easy to find me because I'm the only Jameson Lopp in the world."
<ul>
<li>http://lopp.net</li>
</ul>
</li>
<li>0:52:43 Goodbyes.</li>
<li>0:52:55 Credits.
<ul>
<li>Jameson Lopp: twitter.com/Lopp</li>
<li>Muneeb Ali: twitter.com/Muneeb</li>
<li>Zach Valenti: twitter.com/ZachValenti</li>
</ul>
</li>
</ul>

Jameson Lopp and Muneeb Ali on "Religion" in Crypto

Today’s episode features a discussion between Nic Carter, partner at Castle Island Ventures and co-founder of the blockchain analytics platform, Coin Metrics, Jude Nelson, an Engineering Partner at Blockstack, and Patrick Stanley, Blockstack’s Head of Growth.

The three dig into the opportunities and challenges of crypto - in particular the problem of incentivizing development and measuring progress on crypto networks early on.
00:41 Introductions.
01:29 Patrick: "Nic, can you talk about Proof of Reserves?"
01:42 Nic: "I'm on a one man quest to get exchanges to institute proofs of reserves."
03:34 Nic: "Coinfloor created a proof of reserve for 60 months running."

https://www.coinfloor.co.uk/
03:57 Patrick: "You're seeing similar things in the dapp space, where you have these dapp stores that are effectively ranking dapps based on transaction throughput and volume."
04:13 Patrick: "What's happening is people who are cheerleaders for the apps are simulating activity."
04:52 Nic: "We have the precise problem at Coin Metrics."
0:05:28 Nic: "The objective becomes to game the ranking and create a semblance of vibrancy."
06:21 Patrick: "My sense is that the dapp stores that continue to participate in a Red Queen's race... are going to be the ones that people don't trust and will leave for better alternatives."
06:55 Patrick: "Jude, do you have any opinion on the tradeoffs of free transactions in the long term and why a crypto network would not want to bias their network in that way?"
07:08 Jude: "Before I answer that, there's no such thing as a free transaction - somebody is still going to have to pay for it."
07:31 Jude: "I expect some of these platforms are biting the bullet right now to make it look like there is activity."
07:56 Patrick: "Why would you want to stay away from that from a long term perspective?"
08:07 Jude: "My favorite story about this goes back to the early 2000s when Gmail first came online."
08:31 Jude: "Someone created Gmail FS, which let you use it as a file backup. If you create something akin to free storage, someone is going to turn it into their backup solution."
10:21 Nic: "The Bitcoin SV case study recently, where they kept orphaning blocks because they were making them too big is a cool real-world example of these cautionary tales we told ourselves for years and years."
10:53 Nic: "So Blockstack uses Bitcoin as the anchor layer, is that right?"
10:57 Jude: "Yes. ... Right now we're building the second generation Stacks blockchain."
12:26 Nic: "Do you have independent validation on the Stacks chain? Or is it all dependent on Bitcoin's own security?"
12:33 Jude: "We just use the hashpower and the difficulty of reorganization from Bitcoin."
12:45 Jude: "We use a novel consensus protocol called proof of burn, where instead of destroying electricity to produce tokens - like a Proof-of-Work system - you destroy an existing cryptocurrency to produce Stacks blocks."
13:11 Nic: "I think this is in a class of a new set of blockchains anchoring themselves to Bitcoin - Fairblock being another easy example."
13:59 Jude: "Ethereum lowered the barrier of entry for creating  your own alt coin."
14:13 Patrick: "Nic, how'd you get into Bitcoin?"
14:18 Nic: "I was really big on Reddit from 2010 onwards... and Bitcoin was fairly prominent on all the tech subreddits."
15:44 Nic: "Professionally, I got into crypto while doing a Masters in Finance where I sought to learn valuation techniques and apply the ones from equity valuation to cryptocurrency, which proved to be an impossible task."
16:21 Nic: "Coming out of school, I got connected to folks at Fidelity, who were super progress about Bitcoin."
17:36 Patrick: "Aside from finance, you also studied philosophy, right? How did that shape your view on this space?"
17:58 Nic: "One concept I think about a lot from my philosophy degree is the 'ontology of blockchains'."
20:08 Patrick: "Circling back to your role in VC - outside of Bitcoin, what other public blockchains interest you?"
20:47 Nic: "If you're building on the 20th most popular smart contract platform, there's a very real chance the main developers give up and you'll be marooned on this obsolete chain."
22:07 Jude: "Our co-founder, Muneeb, used to tell the story of how Blockstack was originally going to run on Namecoin."
22:49 Jude: "One mining pool controlled over 60% of Namecoin... for months... and no one noticed or cared."
23:41 Nic: "This reminds me of a pretty entertaining episode of my startup, Coin Metrics."
25:27 Nic: "We still get bugs on Bitcoin. We had a critical one recently."
25:33 Jude: "I predict that if such a bug like that got exploited... miners would unwind the chain to mitigate it before developers had a chance to patch it."
26:16 Jude: "Bitcoin is more than just software. It's a social contract realized as a software artifact."
27:41 Nic: The interesting thing about forks is there are very few cases where the developers didn't bless the chain that ended up winning."
28:53 Jude: "Unless it's a case like Monero where it's one person being a jackass and that person gets jettisoned."
29:43 Jude: "I think people get very emotionally invested in whatever fork they prefer, whether or not there's a crypto token involved."
30:14 Nic: "I think it's been a myth in crypto in 2017, which is that developers are mercenaries and we need to fund them exclusively with built-in inflation from the protocol."
30:47 Nic: "And I would say in some cases it's a risk - take the Zcash situation."
31:59 Jude: "With systems like Zcash's founder's reward, beneficiaries can get complacent because they receive the reward either way, whereas with Blockstack's app mining system, you have to compete all the time to receive a reward."
32:17 Patrick: "I definitely see crypto as inherently political."
33:37 Patrick: "In our initial version of app mining, we actually learned a lot of really valuable lessons."
35:03 Nic: "What's the aggregate value of rewards being paid out through app mining?"
35:07 Patrick: "$100,000 per month in bitcoin."
35:25 Patrick: "Subject to SEC Reg A filing, that would become $1,000,000 per month."
36:28 Nic: "I have to say... Blockstack's SEC filing was the first disclosure I ever read that was sufficient for a token raise."
38:42 Nic: "Are app mining tokens granted to developers or users?"
39:10 Patrick: "Our goal is really to make developers as happy as possible while also being as fair as possible."
39:34 Nic: "Where would you situate Blockstack in the existing ranking of dapp platforms?"
0:40:13 Patrick: "I think we're #1."
40:43 Patrick: "Our mission is really upgrade the Internet."
41:51 Patrick: "The Internet we're operating on today is really like a third world country where people don't have property rights."
43:21 Nic: "So much of the time in crypto we recreate these messy and ugly human institutions like voting driven governance that becomes cartelized in short order, or corrupted."
44:37 Nic: "One thing I critique a lot is this modeling of humans as what I call 'rationality vending machines'."
45:41 Jude: "A lot of these governance systems are designed by people maybe qualified to write software, but certainly not qualified to develop political systems."
46:35 Nic: "Jude, so you would prefer that there's always a way to veto these systems or shut them down?"
46:43 Jude: "Absolutely. ... We have failed as a species if we manage to build machines that enslave us."
47:44 Nic: "It surprises me that the laundering scandals have not really hit crypto yet."
48:55 Patrick: "What books or resources would you recommend for people to dive deeper into crypto?"
49:23 Nic: "The Princeton textbook on crypto... "Applied Cryptography"... and "The Information."
50:20 Nic: "I also really like Taleb's canon."
51:55 Goodbyes.
52:19 Credits.

Nic Carter: twitter.com/nic__carter
Jude Nelson: twitter.com/JudeCNelson
Patrick Stanley: twitter.com/PatrickWStanley
Zach Valenti: twitter.com/ZachValenti

Today&rsquo;s episode features a discussion between Nic Carter, partner at <a href="http://www.castleisland.vc/">Castle Island Ventures</a> and co-founder of the blockchain analytics platform, <a href="https://coinmetrics.io/">Coin Metrics</a>, Jude Nelson, an Engineering Partner at Blockstack, and Patrick Stanley, Blockstack&rsquo;s Head of Growth.
The three dig into the opportunities and challenges of crypto - in particular the problem of incentivizing development and measuring progress on crypto networks early on.
<ul>
<li>00:41 Introductions.</li>
<li>01:29 Patrick: "Nic, can you talk about Proof of Reserves?"</li>
<li>01:42 Nic: "I'm on a one man quest to get exchanges to institute proofs of reserves."</li>
<li>03:34 Nic: "Coinfloor created a proof of reserve for 60 months running."
<ul>
<li><a href="https://www.coinfloor.co.uk/">https://www.coinfloor.co.uk/</a></li>
</ul>
</li>
<li>03:57 Patrick: "You're seeing similar things in the dapp space, where you have these dapp stores that are effectively ranking dapps based on transaction throughput and volume."</li>
<li>04:13 Patrick: "What's happening is people who are cheerleaders for the apps are simulating activity."</li>
<li>04:52 Nic: "We have the precise problem at Coin Metrics."</li>
<li>0:05:28 Nic: "The objective becomes to game the ranking and create a semblance of vibrancy."</li>
<li>06:21 Patrick: "My sense is that the dapp stores that continue to participate in a Red Queen's race... are going to be the ones that people don't trust and will leave for better alternatives."</li>
<li>06:55 Patrick: "Jude, do you have any opinion on the tradeoffs of free transactions in the long term and why a crypto network would not want to bias their network in that way?"</li>
<li>07:08 Jude: "Before I answer that, there's no such thing as a free transaction - somebody is still going to have to pay for it."</li>
<li>07:31 Jude: "I expect some of these platforms are biting the bullet right now to make it look like there is activity."</li>
<li>07:56 Patrick: "Why would you want to stay away from that from a long term perspective?"</li>
<li>08:07 Jude: "My favorite story about this goes back to the early 2000s when Gmail first came online."</li>
<li>08:31 Jude: "Someone created Gmail FS, which let you use it as a file backup. If you create something akin to free storage, someone is going to turn it into their backup solution."</li>
<li>10:21 Nic: "The Bitcoin SV case study recently, where they kept orphaning blocks because they were making them too big is a cool real-world example of these cautionary tales we told ourselves for years and years."</li>
<li>10:53 Nic: "So Blockstack uses Bitcoin as the anchor layer, is that right?"</li>
<li>10:57 Jude: "Yes. ... Right now we're building the second generation Stacks blockchain."</li>
<li>12:26 Nic: "Do you have independent validation on the Stacks chain? Or is it all dependent on Bitcoin's own security?"</li>
<li>12:33 Jude: "We just use the hashpower and the difficulty of reorganization from Bitcoin."</li>
<li>12:45 Jude: "We use a novel consensus protocol called proof of burn, where instead of destroying electricity to produce tokens - like a Proof-of-Work system - you destroy an existing cryptocurrency to produce Stacks blocks."</li>
<li>13:11 Nic: "I think this is in a class of a new set of blockchains anchoring themselves to Bitcoin - Fairblock being another easy example."</li>
<li>13:59 Jude: "Ethereum lowered the barrier of entry for creating &nbsp;your own alt coin."</li>
<li>14:13 Patrick: "Nic, how'd you get into Bitcoin?"</li>
<li>14:18 Nic: "I was really big on Reddit from 2010 onwards... and Bitcoin was fairly prominent on all the tech subreddits."</li>
<li>15:44 Nic: "Professionally, I got into crypto while doing a Masters in Finance where I sought to learn valuation techniques and apply the ones from equity valuation to cryptocurrency, which proved to be an impossible task."</li>
<li>16:21 Nic: "Coming out of school, I got connected to folks at Fidelity, who were super progress about Bitcoin."</li>
<li>17:36 Patrick: "Aside from finance, you also studied philosophy, right? How did that shape your view on this space?"</li>
<li>17:58 Nic: "One concept I think about a lot from my philosophy degree is the 'ontology of blockchains'."</li>
<li>20:08 Patrick: "Circling back to your role in VC - outside of Bitcoin, what other public blockchains interest you?"</li>
<li>20:47 Nic: "If you're building on the 20th most popular smart contract platform, there's a very real chance the main developers give up and you'll be marooned on this obsolete chain."</li>
<li>22:07 Jude: "Our co-founder, Muneeb, used to tell the story of how Blockstack was originally going to run on Namecoin."</li>
<li>22:49 Jude: "One mining pool controlled over 60% of Namecoin... for months... and no one noticed or cared."</li>
<li>23:41 Nic: "This reminds me of a pretty entertaining episode of my startup, Coin Metrics."</li>
<li>25:27 Nic: "We still get bugs on Bitcoin. We had a critical one recently."</li>
<li>25:33 Jude: "I predict that if such a bug like that got exploited... miners would unwind the chain to mitigate it before developers had a chance to patch it."</li>
<li>26:16 Jude: "Bitcoin is more than just software. It's a social contract realized as a software artifact."</li>
<li>27:41 Nic: The interesting thing about forks is there are very few cases where the developers didn't bless the chain that ended up winning."</li>
<li>28:53 Jude: "Unless it's a case like Monero where it's one person being a jackass and that person gets jettisoned."</li>
<li>29:43 Jude: "I think people get very emotionally invested in whatever fork they prefer, whether or not there's a crypto token involved."</li>
<li>30:14 Nic: "I think it's been a myth in crypto in 2017, which is that developers are mercenaries and we need to fund them exclusively with built-in inflation from the protocol."</li>
<li>30:47 Nic: "And I would say in some cases it's a risk - take the Zcash situation."</li>
<li>31:59 Jude: "With systems like Zcash's founder's reward, beneficiaries can get complacent because they receive the reward either way, whereas with Blockstack's app mining system, you have to compete all the time to receive a reward."</li>
<li>32:17 Patrick: "I definitely see crypto as inherently political."</li>
<li>33:37 Patrick: "In our initial version of app mining, we actually learned a lot of really valuable lessons."</li>
<li>35:03 Nic: "What's the aggregate value of rewards being paid out through app mining?"</li>
<li>35:07 Patrick: "$100,000 per month in bitcoin."</li>
<li>35:25 Patrick: "Subject to SEC Reg A filing, that would become $1,000,000 per month."</li>
<li>36:28 Nic: "I have to say... Blockstack's SEC filing was the first disclosure I ever read that was sufficient for a token raise."</li>
<li>38:42 Nic: "Are app mining tokens granted to developers or users?"</li>
<li>39:10 Patrick: "Our goal is really to make developers as happy as possible while also being as fair as possible."</li>
<li>39:34 Nic: "Where would you situate Blockstack in the existing ranking of dapp platforms?"</li>
<li>0:40:13 Patrick: "I think we're #1."</li>
<li>40:43 Patrick: "Our mission is really upgrade the Internet."</li>
<li>41:51 Patrick: "The Internet we're operating on today is really like a third world country where people don't have property rights."</li>
<li>43:21 Nic: "So much of the time in crypto we recreate these messy and ugly human institutions like voting driven governance that becomes cartelized in short order, or corrupted."</li>
<li>44:37 Nic: "One thing I critique a lot is this modeling of humans as what I call 'rationality vending machines'."</li>
<li>45:41 Jude: "A lot of these governance systems are designed by people maybe qualified to write software, but certainly not qualified to develop political systems."</li>
<li>46:35 Nic: "Jude, so you would prefer that there's always a way to veto these systems or shut them down?"</li>
<li>46:43 Jude: "Absolutely. ... We have failed as a species if we manage to build machines that enslave us."</li>
<li>47:44 Nic: "It surprises me that the laundering scandals have not really hit crypto yet."</li>
<li>48:55 Patrick: "What books or resources would you recommend for people to dive deeper into crypto?"</li>
<li>49:23 Nic: "The Princeton textbook on crypto... "Applied Cryptography"... and "The Information."</li>
<li>50:20 Nic: "I also really like Taleb's canon."</li>
<li>51:55 Goodbyes.</li>
<li>52:19 Credits.
<ul>
<li>Nic Carter: twitter.com/nic__carter</li>
<li>Jude Nelson: twitter.com/JudeCNelson</li>
<li>Patrick Stanley: twitter.com/PatrickWStanley</li>
<li>Zach Valenti: twitter.com/ZachValenti</li>
</ul>
</li>
</ul>

Nic Carter, Jude Nelson, and Patrick Stanley on Incentivizing and Measuring Crypto Networks

Today’s episode features a conversation between Santi Siri - Founder of Democracy Earth Foundation, the Y Combinator-backed non-profit enabling token-based community participation - and Patrick Stanley, Blockstack’s Head of Growth.

Together, they explore the concept of democracy, the decline of nation-states, and the potential of open-source protocols and crypto networks to enable free, sovereign, and incorruptible governance.
00:42 Patrick tells the story of how he and Santi met in San Francisco through Balaji Srinivasan.
https://twitter.com/balajis
https://www.amazon.com/Sovereign-Individual-Mastering-Transition-Information/dp/0684832720
02:19 Patrick: "For the folks who don't know you: who are you and what have you been working on?”
02:24 Santi: "For the last six years or so I've been implementing new kinds of democratic experiments... which led to the formation of The Democracy Earth Foundation where we explore this intersection of using blockchain based networks to deploy democracy over the Internet."
https://democracy.earth
https://twitter.com/democracyearth
04:03 Patrick: "Can you unpack your tweet: 'The Internet is not compatible with the nation state?'"
https://twitter.com/santisiri/status/998028341633568769
05:40 Santi: "If not even the US is protected from foreign influence meddling with domestic affairs, then the nation state is no more. We have to acknowledge the fact that we live in the Age of Information.”
06:05 Patrick: "Presuming that's correct, what's next then?"
06:13 Santi: "I think it's the most interesting moment in time to be working on software."
06:55 Santi: "Democracy is simply an idea that can be extremely helpful when you really need it the most: when you face disagreements as a society or organization."
07:25 Patrick: "Where do you believe democracy should be applied in the context of deep disagreements in the crypto protocol space?"
07:36 Santi: "It is challenging in crypto because it's an environment where creating an identity is extremely, extremely cheap."
08:11 Santi: "Most of the governance happening in crypto today is fundamentally proof of stake or coin voting. For private endeavors, it works very well - it's like shareholder voting. Often less than 1% has over 50% of the vote."
08:38 Patrick: "Something about that sounds wrong, doesn't it?"
08:41 Santi: "Governance is tricky because it's not just the elite that understands how the system works. There are other constituents that are the people impacted by an economy. Not everyone is an economist, but everyone is impacted by the decisions they make about the economy."
9:00 Santi: "So if you don't want to have an elite running a society and you really want a society where everyone's input is considered, democracy becomes very useful. The challenge is not just reaching the best decision in a collective way, but reaching a legitimate decision - one that the greater constituency supports, and not just a powerful minority."
9:58 Patrick: "You've been working on quadratic voting. Can you tell folks what this is and what hopes you have for it?"
10:10 Santi: "Quadratic voting is an idea that comes from the Microsoft researcher and founder of the RadicalxChange movement, Glen Weyl..."
http://glenweyl.com/research/
https://radicalxchange.org/
10:27 Santi: "The idea is you can vote on any issue and every voter gets the same amount of credits, but the more votes you put on a specific issue, it will cost you an exponential amount.”
10:58 Santi: "If you really care for one issue, the opportunity cost will be really high for not supporting other issues."
11:11 Santi: "This leads to this outcome where the winning option is something that is the preference of the community, but also - because of this interesting quality of square roots - it's also an option that has the greatest support among the quantity of voters."
11:29 Patrick: "The one catch there that I'm thinking of is Sybil attacks... how do you stop those?"
11:50 Santi: "We're actually researching using quadratic voting to validate identities themselves."
12:32 Santi: "The two requirements of quadratic voting (qv) is that you need to have a strong consensus and identities participating. This is a requirement of any democratic system. And then you have a Universal Basic Income mechanism of some kind."
12:54 Patrick: "You mentioned previously a fear of becoming Facebook in the process of solving this problem. What's the concern there?"
13:21 Santi: "Facebook became a relevant attack vector for legacy democracies because they've become the largest identity registry in the world."
13:36 Santi: "There are two ways to subvert democracy: one is control the identity registry of voters and the other one is gossip - false information that confuses the voters."
13:53 Santi: "If we're going to do any kind of formalization of identity... to help people  trust that there's a human behind an address and that that human doesn't hold the keys to any other address within a consensus... we should do it in a way that prevents the formation of a monopoly."
14:20 Santi: "If you end up having a monopoly like Facebook  or the People's Republic of China, then you have this Orwellian situation that works against the interests of democracy: free speech, the right to legitimate information...."
14:40 Santi: "The challenge is how do you have a marketplace that does not allow for the formation of monopolies?"
15:29 Santi: "We've been very lucky at Democracy Earth to do the first quadratic voting implementation for the state of Colorado."
15:58 Santi: "It's an incredible precedent. The first official quadratic voting round under the US government."
16:15 Patrick: "Do you feel online voting has more or fewer attack vectors than traditional voting?"
16:46 Santi: "Where there are deep disagreements, the stakes are high, and where the stakes are very high, attacks will happen."
17:21 Santi: "In traditional democracies, I think the best recommendation I've seen is actually from the German Supreme Court in 2009 where they argued... that hybrid models are ultimately best."
17:47 Santi: "The idea of paper is important because in large populations there are still not 100% digital natives. ... Our parents and elders are really digital migrants and we need to respect that reality."
18:12 Santi: "Democracy, at the end of the day, is always a work in progress.... It's really an ideology about how we make decisions."
18:47 Santi: "We cannot surrender this battle in the world of crypto."
18:56 Santi: "If this is the new world that we're creating... a new kind of plutocracy or oligarchy... we deserve better... and we should be daring to think about what democracy means in all of these contexts."
19:12 Santi: "We can really make something better that what the nation state has given us."
19:17 Patrick: "What are you excited about and see as worth pursuing in the next 20 or so years?"
19:48 Santi: "The rise of nations and the idea of nationality was a consequence of information technology. The printing press allowed for people to start writing and publishing books not in the language of power - that was Latin - but in their vernacular local languages. ... that gave this sense of being part of a large imagined community through literature."
20:23 Santi: "With crypto I think we're witnessing a similar phenomenon. In the rise of maximalism and these new protocols are a kind of nationalism."
20:32 Santi: "It's very clear these are nations founded not in a common language, but actually in a common ideology. If you're an Austrian economics money fetishist, you'll be a Bitcoiner."
21:22 Santi: "We troll each other too much, but we're really good, nice idealists."
21:35 Patrick: "The great thing about Twitter is you can lose your mind in public."
21:50 Santi: "The revolution of our generation is in crypto."
22:01 Patrick: "I would classify Bitcoiners as probably more libertarian, conservative leaning, less likely to be liberal - not to say there aren't any liberals in Bitcoin - and very much in the Hayek/Austrian school of economic thinking."
22:38 Patrick: "It does feel like people are splitting up into their own ideologies, but it still does feel like it's very early on and we're kind of in the Germanic nation state building era."
22:51 Santi: "We're discovering where the boundaries and new geographies and frontiers are. But there are frontiers and maximalism as nationalism is a very real thing."
23:06 Patrick: "Definitely. And I also think there will be fights and violence and - at a minimum - cyber warfare and meme warfare and potentially physical warfare between protocols. There's a lot at stake - especially over a long enough timeline, if these things accrue value."
23:33 Patrick: "Crypto is inherently political."
24:10 Santi: "I recently was with an expert on military defense and strategy and the way they approach the idea of how the world is at right now around in terms of cyber attacks and this whole new ground of the battlefield is that we're not in war or peace, but a world of un-peace. Everyone has to assume they've already been attacked."
25:10 Santi: "In China, you have to use a VPN. It's interesting. ... being there really pushes you to think about how you're being observed."
25:38 Patrick: "What changed in your mind about China visiting recently?"
25:43 Santi: "It's the one place where Communism took over and won and it's been the highest growth country on the whole planet for the last three to four decades."
26:08 Santi: "It turns out the Communist elites are the best administrators of modern capitalism."
26:23 Santi: "You feel the authoritarian state everywhere. You see cameras everywhere."
26:46 Santi: "There are some things about the transformation of China that you can really see being there. Of course, they are the worst about free speech - you have to access the Internet through a VPN. But on climate change, the silence coming from every single motor [being electric] in Beijing is really mind blowing."
27:31 Santi: "Communism was this terrible thing in the 20th Century. I watched the horror of Venezuela very closely and went to Cuba for a month when I was very young and it was a heartbreaking environment. It really was a big failure."
27:45 Santi: "But the Chinese experiment - at the same time - had this tremendous potential of bringing 300 - 400 million people into the life of the middle class."
27:58 Santi: "I come from a developing nation and I scratch my head how we can deal with 30% of the people in my country that are below the poverty line."
28:19 Santi: "There are a lot of things going wrong [in China] - I mean they're persecuting Muslims... that's why we need the Internet."
28:32 Santi: "For Democracy Earth, I think there's no bigger, killer use case than a Chinese democracy."
28:43 Patrick: "What do you think China got right that Cuba got wrong?"
28:46 Santi: "Deng Xiaoping allowing private property and capitalism."
29:12 Santi: "It is the labor of the world - the proletariat of the world. All of our iPhones, all of our computers, all of our chips...."
29:35 Santi: "In this age where we do perceive rising inequality, we do perceive the advance of automation. ... I don't think we should be so afraid of these ideas."
30:15 Santi: "All of the revolutions that happened in the 20th century happened in poor countries."
30:47 Santi: "People are talking about taxing AIs and robots - that's kind of what Marx was talking about."
31:02 Santi: "I don't believe much in revolutions because they all have this original sin of violence and I think we have much better tools than guns."
31:26 Santi: "We can definitely use computers to create better societies."
31:34 Patrick: "If some democracy is good, is absolute democracy better? And how do you avoid the Kyklos?"
32:46 Patrick: "It's democracy, aristocracy, and monarchy. And the three degenerate forms of these are ochlocracy,  oligarchy, and tyranny."
33:08 Santi: "These thinkers are trying to find the gears of history, which are very hard to find. But if they are somewhere, I think it's looking through the lens information and information theory."
33:27 Santi: "I don't like absolutist ideas in politics. We need to use different tools for different means. It's evident that private endeavors and companies are much better governed by dictators - some people call them CEOs.”
34:04 Santi: "What I'm reading a lot lately is 'An Introduction to the Theory of Mechanism Design’ by Tobin Borgers."
https://www.amazon.com/Introduction-Theory-Mechanism-Design/dp/019973402X
34:43 Santi: "I began my career as a video game developer and today I find myself reading a lot about game theory as it applies to the context of crypto."
35:10 Patrick: "Any other recommendations for books about game theory?"
35:24 Santi: "George Gilder's 'Knowledge and Power' which applies an information theory lens to understand capitalism."
35:46 Patrick: "There's probably a lot of listeners trying to learn more about how democracy can work online and what are the hard problems being solved... what would you recommend checking out?"
36:04 Santi: "I feel compelled to recommend the work we've been doing at Democracy Earth at democracy.earth and @democracyearth on Twitter."
36:43 Santi: "Everyone I talk to is very confused about things right now."
36:50 Patrick: "What do you mean?"
37:16 Santi: "We lost our compass in terms of what's democracy in modern day America - in the civilization we're creating. So we're all in a state of confusion."
37:31 Patrick: "Any other books or blog posts you'd recommend to listeners on democracy?"
37:37 Santi: "Hélène Landemore's 'Democratic Reason'"
https://press.princeton.edu/titles/9907.html
38:07 Goodbyes.
38:19 Credits.
Santi Siri: twitter.com/SantiSiri
Patrick Stanley: twitter.com/PatrickWStanley
Zach Valenti: twitter.com/ZachValenti

Today&rsquo;s episode features a conversation between Santi Siri - Founder of Democracy Earth Foundation, the Y Combinator-backed non-profit enabling token-based community participation - and Patrick Stanley, Blockstack&rsquo;s Head of Growth.
Together, they explore the concept of democracy, the decline of nation-states, and the potential of open-source protocols and crypto networks to enable free, sovereign, and incorruptible governance.
<ul>
<li>00:42 Patrick tells the story of how he and Santi met in San Francisco through Balaji Srinivasan.</li>
<ul>
<li><a href="https://twitter.com/balajis">https://twitter.com/balajis</a></li>
<li><a href="https://www.amazon.com/Sovereign-Individual-Mastering-Transition-Information/dp/0684832720">https://www.amazon.com/Sovereign-Individual-Mastering-Transition-Information/dp/0684832720</a></li>
</ul>
<li>02:19 Patrick: "For the folks who don't know you: who are you and what have you been working on?&rdquo;</li>
<li>02:24 Santi: "For the last six years or so I've been implementing new kinds of democratic experiments... which led to the formation of The Democracy Earth Foundation where we explore this intersection of using blockchain based networks to deploy democracy over the Internet."</li>
<ul>
<li><a href="https://democracy.earth">https://democracy.earth</a></li>
<li><a href="https://twitter.com/democracyearth">https://twitter.com/democracyearth</a></li>
</ul>
<li>04:03 Patrick: "Can you unpack your tweet: 'The Internet is not compatible with the nation state?'"</li>
<ul>
<li>https://twitter.com/santisiri/status/998028341633568769</li>
</ul>
<li>05:40 Santi: "If not even the US is protected from foreign influence meddling with domestic affairs, then the nation state is no more. We have to acknowledge the fact that we live in the Age of Information.&rdquo;</li>
<li>06:05 Patrick: "Presuming that's correct, what's next then?"</li>
<li>06:13 Santi: "I think it's the most interesting moment in time to be working on software."</li>
<li>06:55 Santi: "Democracy is simply an idea that can be extremely helpful when you really need it the most: when you face disagreements as a society or organization."</li>
<li>07:25 Patrick: "Where do you believe democracy should be applied in the context of deep disagreements in the crypto protocol space?"</li>
<li>07:36 Santi: "It is challenging in crypto because it's an environment where creating an identity is extremely, extremely cheap."</li>
<li>08:11 Santi: "Most of the governance happening in crypto today is fundamentally proof of stake or coin voting. For private endeavors, it works very well - it's like shareholder voting. Often less than 1% has over 50% of the vote."</li>
<li>08:38 Patrick: "Something about that sounds wrong, doesn't it?"</li>
<li>08:41 Santi: "Governance is tricky because it's not just the elite that understands how the system works. There are other constituents that are the people impacted by an economy. Not everyone is an economist, but everyone is impacted by the decisions they make about the economy."</li>
<li>9:00 Santi: "So if you don't want to have an elite running a society and you really want a society where everyone's input is considered, democracy becomes very useful. The challenge is not just reaching the best decision in a collective way, but reaching a legitimate decision - one that the greater constituency supports, and not just a powerful minority."</li>
<li>9:58 Patrick: "You've been working on quadratic voting. Can you tell folks what this is and what hopes you have for it?"</li>
<li>10:10 Santi: "Quadratic voting is an idea that comes from the Microsoft researcher and founder of the RadicalxChange movement, Glen Weyl..."</li>
<ul>
<li><a href="http://glenweyl.com/research/">http://glenweyl.com/research/</a></li>
<li><a href="https://radicalxchange.org/">https://radicalxchange.org/</a></li>
</ul>
<li>10:27 Santi: "The idea is you can vote on any issue and every voter gets the same amount of credits, but the more votes you put on a specific issue, it will cost you an exponential amount.&rdquo;</li>
<li>10:58 Santi: "If you really care for one issue, the opportunity cost will be really high for not supporting other issues."</li>
<li>11:11 Santi: "This leads to this outcome where the winning option is something that is the preference of the community, but also - because of this interesting quality of square roots - it's also an option that has the greatest support among the quantity of voters."</li>
<li>11:29 Patrick: "The one catch there that I'm thinking of is Sybil attacks... how do you stop those?"</li>
<li>11:50 Santi: "We're actually researching using quadratic voting to validate identities themselves."</li>
<li>12:32 Santi: "The two requirements of quadratic voting (qv) is that you need to have a strong consensus and identities participating. This is a requirement of any democratic system. And then you have a Universal Basic Income mechanism of some kind."</li>
<li>12:54 Patrick: "You mentioned previously a fear of becoming Facebook in the process of solving this problem. What's the concern there?"</li>
<li>13:21 Santi: "Facebook became a relevant attack vector for legacy democracies because they've become the largest identity registry in the world."</li>
<li>13:36 Santi: "There are two ways to subvert democracy: one is control the identity registry of voters and the other one is gossip - false information that confuses the voters."</li>
<li>13:53 Santi: "If we're going to do any kind of formalization of identity... to help people &nbsp;trust that there's a human behind an address and that that human doesn't hold the keys to any other address within a consensus... we should do it in a way that prevents the formation of a monopoly."</li>
<li>14:20 Santi: "If you end up having a monopoly like Facebook &nbsp;or the People's Republic of China, then you have this Orwellian situation that works against the interests of democracy: free speech, the right to legitimate information...."</li>
<li>14:40 Santi: "The challenge is how do you have a marketplace that does not allow for the formation of monopolies?"</li>
<li>15:29 Santi: "We've been very lucky at Democracy Earth to do the first quadratic voting implementation for the state of Colorado."</li>
<li>15:58 Santi: "It's an incredible precedent. The first official quadratic voting round under the US government."</li>
<li>16:15 Patrick: "Do you feel online voting has more or fewer attack vectors than traditional voting?"</li>
<li>16:46 Santi: "Where there are deep disagreements, the stakes are high, and where the stakes are very high, attacks will happen."</li>
<li>17:21 Santi: "In traditional democracies, I think the best recommendation I've seen is actually from the German Supreme Court in 2009 where they argued... that hybrid models are ultimately best."</li>
<li>17:47 Santi: "The idea of paper is important because in large populations there are still not 100% digital natives. ... Our parents and elders are really digital migrants and we need to respect that reality."</li>
<li>18:12 Santi: "Democracy, at the end of the day, is always a work in progress.... It's really an ideology about how we make decisions."</li>
<li>18:47 Santi: "We cannot surrender this battle in the world of crypto."</li>
<li>18:56 Santi: "If this is the new world that we're creating... a new kind of plutocracy or oligarchy... we deserve better... and we should be daring to think about what democracy means in all of these contexts."</li>
<li>19:12 Santi: "We can really make something better that what the nation state has given us."</li>
<li>19:17 Patrick: "What are you excited about and see as worth pursuing in the next 20 or so years?"</li>
<li>19:48 Santi: "The rise of nations and the idea of nationality was a consequence of information technology. The printing press allowed for people to start writing and publishing books not in the language of power - that was Latin - but in their vernacular local languages. ... that gave this sense of being part of a large imagined community through literature."</li>
<li>20:23 Santi: "With crypto I think we're witnessing a similar phenomenon. In the rise of maximalism and these new protocols are a kind of nationalism."</li>
<li>20:32 Santi: "It's very clear these are nations founded not in a common language, but actually in a common ideology. If you're an Austrian economics money fetishist, you'll be a Bitcoiner."</li>
<li>21:22 Santi: "We troll each other too much, but we're really good, nice idealists."</li>
<li>21:35 Patrick: "The great thing about Twitter is you can lose your mind in public."</li>
<li>21:50 Santi: "The revolution of our generation is in crypto."</li>
<li>22:01 Patrick: "I would classify Bitcoiners as probably more libertarian, conservative leaning, less likely to be liberal - not to say there aren't any liberals in Bitcoin - and very much in the Hayek/Austrian school of economic thinking."</li>
<li>22:38 Patrick: "It does feel like people are splitting up into their own ideologies, but it still does feel like it's very early on and we're kind of in the Germanic nation state building era."</li>
<li>22:51 Santi: "We're discovering where the boundaries and new geographies and frontiers are. But there are frontiers and maximalism as nationalism is a very real thing."</li>
<li>23:06 Patrick: "Definitely. And I also think there will be fights and violence and - at a minimum - cyber warfare and meme warfare and potentially physical warfare between protocols. There's a lot at stake - especially over a long enough timeline, if these things accrue value."</li>
<li>23:33 Patrick: "Crypto is inherently political."</li>
<li>24:10 Santi: "I recently was with an expert on military defense and strategy and the way they approach the idea of how the world is at right now around in terms of cyber attacks and this whole new ground of the battlefield is that we're not in war or peace, but a world of un-peace. Everyone has to assume they've already been attacked."</li>
<li>25:10 Santi: "In China, you have to use a VPN. It's interesting. ... being there really pushes you to think about how you're being observed."</li>
<li>25:38 Patrick: "What changed in your mind about China visiting recently?"</li>
<li>25:43 Santi: "It's the one place where Communism took over and won and it's been the highest growth country on the whole planet for the last three to four decades."</li>
<li>26:08 Santi: "It turns out the Communist elites are the best administrators of modern capitalism."</li>
<li>26:23 Santi: "You feel the authoritarian state everywhere. You see cameras everywhere."</li>
<li>26:46 Santi: "There are some things about the transformation of China that you can really see being there. Of course, they are the worst about free speech - you have to access the Internet through a VPN. But on climate change, the silence coming from every single motor [being electric] in Beijing is really mind blowing."</li>
<li>27:31 Santi: "Communism was this terrible thing in the 20th Century. I watched the horror of Venezuela very closely and went to Cuba for a month when I was very young and it was a heartbreaking environment. It really was a big failure."</li>
<li>27:45 Santi: "But the Chinese experiment - at the same time - had this tremendous potential of bringing 300 - 400 million people into the life of the middle class."</li>
<li>27:58 Santi: "I come from a developing nation and I scratch my head how we can deal with 30% of the people in my country that are below the poverty line."</li>
<li>28:19 Santi: "There are a lot of things going wrong [in China] - I mean they're persecuting Muslims... that's why we need the Internet."</li>
<li>28:32 Santi: "For Democracy Earth, I think there's no bigger, killer use case than a Chinese democracy."</li>
<li>28:43 Patrick: "What do you think China got right that Cuba got wrong?"</li>
<li>28:46 Santi: "Deng Xiaoping allowing private property and capitalism."</li>
<li>29:12 Santi: "It is the labor of the world - the proletariat of the world. All of our iPhones, all of our computers, all of our chips...."</li>
<li>29:35 Santi: "In this age where we do perceive rising inequality, we do perceive the advance of automation. ... I don't think we should be so afraid of these ideas."</li>
<li>30:15 Santi: "All of the revolutions that happened in the 20th century happened in poor countries."</li>
<li>30:47 Santi: "People are talking about taxing AIs and robots - that's kind of what Marx was talking about."</li>
<li>31:02 Santi: "I don't believe much in revolutions because they all have this original sin of violence and I think we have much better tools than guns."</li>
<li>31:26 Santi: "We can definitely use computers to create better societies."</li>
<li>31:34 Patrick: "If some democracy is good, is absolute democracy better? And how do you avoid the Kyklos?"</li>
<li>32:46 Patrick: "It's democracy, aristocracy, and monarchy. And the three degenerate forms of these are ochlocracy, &nbsp;oligarchy, and tyranny."</li>
<li>33:08 Santi: "These thinkers are trying to find the gears of history, which are very hard to find. But if they are somewhere, I think it's looking through the lens information and information theory."</li>
<li>33:27 Santi: "I don't like absolutist ideas in politics. We need to use different tools for different means. It's evident that private endeavors and companies are much better governed by dictators - some people call them CEOs.&rdquo;</li>
<li>34:04 Santi: "What I'm reading a lot lately is 'An Introduction to the Theory of Mechanism Design&rsquo; by Tobin Borgers."</li>
<ul>
<li>https://www.amazon.com/Introduction-Theory-Mechanism-Design/dp/019973402X</li>
</ul>
<li>34:43 Santi: "I began my career as a video game developer and today I find myself reading a lot about game theory as it applies to the context of crypto."</li>
<li>35:10 Patrick: "Any other recommendations for books about game theory?"</li>
<li>35:24 Santi: "George Gilder's 'Knowledge and Power' which applies an information theory lens to understand capitalism."</li>
<li>35:46 Patrick: "There's probably a lot of listeners trying to learn more about how democracy can work online and what are the hard problems being solved... what would you recommend checking out?"</li>
<li>36:04 Santi: "I feel compelled to recommend the work we've been doing at Democracy Earth at democracy.earth and @democracyearth on Twitter."</li>
<li>36:43 Santi: "Everyone I talk to is very confused about things right now."</li>
<li>36:50 Patrick: "What do you mean?"</li>
<li>37:16 Santi: "We lost our compass in terms of what's democracy in modern day America - in the civilization we're creating. So we're all in a state of confusion."</li>
<li>37:31 Patrick: "Any other books or blog posts you'd recommend to listeners on democracy?"</li>
<li>37:37 Santi: "H&eacute;l&egrave;ne Landemore's 'Democratic Reason'"</li>
<ul>
<li>https://press.princeton.edu/titles/9907.html</li>
</ul>
<li>38:07 Goodbyes.</li>
<li>38:19 Credits.</li>
<ul>
<li>Santi Siri: twitter.com/SantiSiri</li>
<li>Patrick Stanley: twitter.com/PatrickWStanley</li>
<li>Zach Valenti: twitter.com/ZachValenti</li>
</ul>
</ul>

Santi Siri on Upgrading Democracy with Crypto Networks

Today’s episode features a conversation between the legendary author and investor, George Gilder, along with entrepreneur and investor Erik Torenberg, and Blockstack’s Head of Growth, Patrick Stanley.

The three dive into George’s wide-ranging perspective on economics, information theory, and how how they relate to the world of cryptocurrency - ideas George explores in his latest book, “Life After Google” (https://www.amazon.com/Life-After-Google-Blockchain-Economy/dp/1621575764).

Show Notes
2:38 Patrick asks George to talk about information theory and how it relates to economics and what George calls the cryptocosm.
4:49 Erick asks George to unpack his theory about the relationship between knowledge and power.
6:42 George: "I don't align knowledge and power. I say they're two different ways of seeing the world."
8:56 Patrick asks George why he believes information theory can be applied liberally outside the realm of computers it originated in.
9:16 George: "Money is not and shouldn't be an instrument of power. It's a measuring stick. The idea that money is wealth has been one of the great pitfalls of economic policy for centuries."
10:25 George: "Enterprise is an information process, rather than chiefly an incentive process."
11:55 Erik: "In our current economic paradigm, there's a lot of people who believe that technocrats have the knowledge. You believe it's the entrepreneur. Arnold Klen believes the knowledge lives in a broader market system. Why are those other models incorrect in your view?"
12:15 George: "There's a great effort throughout the history of economics to eliminate creativity from the economic model."
13:46 George: "I believe that entrepreneurial creativity transcends chemistry and physics."
14:14 Patrick: "What should we be measuring in the future to make a science of this entrepreneurial creativity and surprise?"
15:15 George: "Money is ultimately based on time. Time is what remains scarce when everything else becomes abundant."
17:49 Patrick: "What do you expect to happen in 2200 and there are no longer Bitcoins being minted?"
18:39 George: "This whole idea that money is an instrument of sovereignty was not true until 1971."
19:10 Patrick: "How much do you think the British Empire benefited from Newton calculating the gold standard?"
20:45 George: "Satoshi made a wonderful first draft of a potential new monetary standard that identifies money as an essential, immutable scarcity rather than some kind of manipulable instrument of government power."
21:19 Patrick: "Presumably Bitcoin could make a good measuring stick for 100 years or so?"
22:11 Erik: "One critique of an entrepreneur-centric model: some people say it's all about market - that some markets are destined to happen and entrepreneurs are just riding the trend. Why is this incorrect in your view?"
23:31 George: "How does the market come to be? My thesis is entrepreneurial creativity and the division of labor is dependent on the extent of knowledge and enterprise. The market is a product of enterprise, not the other way around."
24:29 Erik: "How else do you think your view of the economy has shaped your view as a venture capitalist?"
25:55 George: "The real, fundamental innovation is cryptocurrencies, which address the two great crises I see in the economy: (1) the collapse of internet security, which makes for a broken paradigm and (2) money, which is no longer a measuring stick or source of knowledge, but an instrument of government power."
27:31 Patrick: "Didn't Patri Friedman say that five billion dollar figure of currency trading is inflated?" (https://twitter.com/patrissimo/status/1119481823480827904)
28:37 George: "A measuring stick cannot be part of what it measures. This was one of Milton Friedman's great errors. And even he said in one of his last interviews ‘I wouldn't control the money supply as much as I once did.’"
30:19 George: "Everyone's suspicious of everybody because Internet architecture is a porous pyramid and endlessly hacked."
30:39 Erik asks what George would change about the government’s role in the economy.
30:51 George: "We desperately need a real money system. And I believe this will spring from the crypto currency realm."
31:28 George: “The problem with Bitcoin is because it is so restricted in the total amount that can be emitted it's going to be necessarily very volatile and unpredictable."
32:42 George: “The other thing we have to understand is that big banks have essentially been nationalized.... They're part of this morbid financialization whereby banking absorbs some 40% of government profits.”
33:37 Erik: "What is the ideal role and purpose of the financial sector?"
34:55 Erik asks George if he’d be excited about a world in which people were allowed to equity invest in other people.
35:32 George: "As long as they don't demand guarantees. The student loan program was not a loan program because the whole program was guaranteed. … The crucial thing is these various projects be allowed to fail."
36:30 Erik: “Bill Janeway argues government is more than just a low-entropy carrier. Do you think there's an active role in government investigation in in long term R&D projects?”
37:12 George: “I think governments do do valuable research and development. ... But the Internet - just as the semiconductor industry - only took off after it  broke loose from the government laboratories."
37:45 George: "You have to accept the world as it is and see how it can be improved. I'm not a libertarian and don't believe all government can be eliminated."
38:04 George: “These should be low entropy carriers - that is predictable carriers - that allow creativity to flourish.They shouldn't be manipulable carriers that stifle innovation.”
38:49 Erik: "How do we incentivize people to participate in activities with lots of value created and little captured? Like having kids, writing books, etc."
39:47 George: "I support low entropy carriers that support high entropy creations. This insight let me predict that all information in the world would migrate to the electromagnetic spectrum."
41:29 Patrick: "What elements need to remain low entropy in this full stack to ensure that we have a very prosperous, highly creative civilization being built on it?"
43:10 George: "Julian Simon wrote decades ago about 'The Ultimate Resource' and ‘Time Pricing.’"
45:36 Erik: “What problems arise when people don't understand money is time?”
48:04 Erik: "How do you think about the importance of community - the role religion used to play - and how we  think about measuring it in society?"
49:10 Erik: "Robert Wright has this idea of 'non-zero,' where our fates tend to become more intertwined over time and continually force us to create “Win Win” vs “Lose Lose” games. What do you think about his thesis?”
50:12 Erik: "What does that mean for the people that get left behind?"
51:29 George: "Having such a bureaucratic welfare system has made the real welfare system the homeless system. ... [A]nd it's making our cities increasing unlivable."
53:20 Patrick: "Part of me wonders if this is just a part of an ongoing cycle between essentially common sense and compassion and bureaucracy and ‘tragedy of the commons’..."
53:37 George: "Philip Howard just wrote a series of books about the death of common sense and shows how bureaucracies trying to guarantee outcomes kind of eclipses common sense."
54:53 Erik: "There's been a constant push and pull in governments over time between centralization and decentralization. ... Yuval Noah Harari writes about this. Is it self evident to you that systems tend towards decentralization over time?"
56:22 George: "One human brain has the complexity of connectivity of the entire Internet, yet one human brain uses 14 watts of energy to function, compared to billions of times more energy for the Internet."
57:12 George: "Efforts to supplant human brains with computers is futile and - thus - self destructive."
57:48 Erik: "Reflecting out to the future, do you envision global governing bodies or more fragmentation between independent city states?"
59:47 Patrick: "My concern is how you stop the lone nihilist from pushing the button as destructive technologies become increasingly available."
1:00:25 George: "I don't fear the Panopticon, particularly."
1:01:21 George: "New technologies are our only answer to problems like the ones you describe."
1:02:08 George: "I think one of the great contributions of cryptocurrencies is attestation: a timestamped record of your transactional behavior allows you to document to predatory corporations, or tax authorities, or tax collectors just what in fact you did do."
1:02:55 Patrick: "What would the Jews have done in 1941 in Germany if there'd been a surveillance state in place?"
1:03:24 George: "All this violence expressed was a collapse of the global economy and the destruction of money."
1:04:04 George: "I think it really is important the world economy work in a “Win Win” way."
1:05:06 Erik: "Would you be against the charter city movement?"
1:06:29 Erik: "In the next 20-50 years do you imagine that language or currencies will be more concentrated or more dispersed or a back and forth?”
1:07:02 George: "The condition for the world wide growth of capitalism after the industrial revolution was a single global money."
1:07:25 George: "I think money is intrinsically unitary - it's like the second. We're not going to have different timing systems all over the world that aren't interoperable."
1:08:16 Erik: "What do you make of David Graeber's ideas around debt?"
1:09:47 Erik: "Where do you find yourself disagreeing with Hayek's view?"
1:11:15 Erik: What would need to be true for you to think that the federal reserve is doing a good job or serves a core purpose and should continue to exist and flourish?"
1:12:09 Erik: "How does your view differ from the Austrian school that would even disagree with the Fed serving the role of last resort lender?"
1:13:04 Erik: “How have you evolved your assessment over time of what are or aren't low entropy carriers?"
1:15:46 Patrick: "What do you attribute your recent book's success in China to? And what do you notice about your recent visits to China and how has it changed over the years?”
1:16:09 George: "China and the US are a fascinating contrast."
1:17:26 George: "Huawei is a great capitalist story in China."
1:18:46 Erik: "What's your next book or three going to be about?"
1:18:54 George: "I’m writing a biography on Carver Mead - the engineer and physicist at CalTech. Considering writing about ‘Life After Silicon’ and potentially another book on connectomes.”
1:21:26 Goodbyes.
1:21:43 Credits.

George Gilder: twitter.com/ScandalOfMoney
Erik Torenberg: twitter.com/ErikTorenberg
Patrick Stanley: twitter.com/PatrickWStanley
Zach Valenti: twitter.com/ZachValenti

Today&rsquo;s episode features a conversation between the legendary author and investor, George Gilder, along with entrepreneur and investor Erik Torenberg, and Blockstack&rsquo;s Head of Growth, Patrick Stanley.
The three dive into George&rsquo;s wide-ranging perspective on economics, information theory, and how how they relate to the world of cryptocurrency - ideas George explores in his latest book, &ldquo;Life After Google&rdquo; (<a href="https://www.amazon.com/Life-After-Google-Blockchain-Economy/dp/1621575764">https://www.amazon.com/Life-After-Google-Blockchain-Economy/dp/1621575764</a>).
Show Notes
<ul>
<li>2:38 Patrick asks George to talk about information theory and how it relates to economics and what George calls the cryptocosm.</li>
<li>4:49 Erick asks George to unpack his theory about the relationship between knowledge and power.</li>
<li>6:42 George: "I don't align knowledge and power. I say they're two different ways of seeing the world."</li>
<li>8:56 Patrick asks George why he believes information theory can be applied liberally outside the realm of computers it originated in.</li>
<li>9:16 George: "Money is not and shouldn't be an instrument of power. It's a measuring stick. The idea that money is wealth has been one of the great pitfalls of economic policy for centuries."</li>
<li>10:25 George: "Enterprise is an information process, rather than chiefly an incentive process."</li>
<li>11:55 Erik: "In our current economic paradigm, there's a lot of people who believe that technocrats have the knowledge. You believe it's the entrepreneur. Arnold Klen believes the knowledge lives in a broader market system. Why are those other models incorrect in your view?"</li>
<li>12:15 George: "There's a great effort throughout the history of economics to eliminate creativity from the economic model."</li>
<li>13:46 George: "I believe that entrepreneurial creativity transcends chemistry and physics."</li>
<li>14:14 Patrick: "What should we be measuring in the future to make a science of this entrepreneurial creativity and surprise?"</li>
<li>15:15 George: "Money is ultimately based on time. Time is what remains scarce when everything else becomes abundant."</li>
<li>17:49 Patrick: "What do you expect to happen in 2200 and there are no longer Bitcoins being minted?"</li>
<li>18:39 George: "This whole idea that money is an instrument of sovereignty was not true until 1971."</li>
<li>19:10 Patrick: "How much do you think the British Empire benefited from Newton calculating the gold standard?"</li>
<li>20:45 George: "Satoshi made a wonderful first draft of a potential new monetary standard that identifies money as an essential, immutable scarcity rather than some kind of manipulable instrument of government power."</li>
<li>21:19 Patrick: "Presumably Bitcoin could make a good measuring stick for 100 years or so?"</li>
<li>22:11 Erik: "One critique of an entrepreneur-centric model: some people say it's all about market - that some markets are destined to happen and entrepreneurs are just riding the trend. Why is this incorrect in your view?"</li>
<li>23:31 George: "How does the market come to be? My thesis is entrepreneurial creativity and the division of labor is dependent on the extent of knowledge and enterprise. The market is a product of enterprise, not the other way around."</li>
<li>24:29 Erik: "How else do you think your view of the economy has shaped your view as a venture capitalist?"</li>
<li>25:55 George: "The real, fundamental innovation is cryptocurrencies, which address the two great crises I see in the economy: (1) the collapse of internet security, which makes for a broken paradigm and (2) money, which is no longer a measuring stick or source of knowledge, but an instrument of government power."</li>
<li>27:31 Patrick: "Didn't Patri Friedman say that five billion dollar figure of currency trading is inflated?" (<a href="https://twitter.com/patrissimo/status/1119481823480827904">https://twitter.com/patrissimo/status/1119481823480827904</a>)</li>
<li>28:37 George: "A measuring stick cannot be part of what it measures. This was one of Milton Friedman's great errors. And even he said in one of his last interviews &lsquo;I wouldn't control the money supply as much as I once did.&rsquo;"</li>
<li>30:19 George: "Everyone's suspicious of everybody because Internet architecture is a porous pyramid and endlessly hacked."</li>
<li>30:39 Erik asks what George would change about the government&rsquo;s role in the economy.</li>
<li>30:51 George: "We desperately need a real money system. And I believe this will spring from the crypto currency realm."</li>
<li>31:28 George: &ldquo;The problem with Bitcoin is because it is so restricted in the total amount that can be emitted it's going to be necessarily very volatile and unpredictable."</li>
<li>32:42 George: &ldquo;The other thing we have to understand is that big banks have essentially been nationalized.... They're part of this morbid financialization whereby banking absorbs some 40% of government profits.&rdquo;</li>
<li>33:37 Erik: "What is the ideal role and purpose of the financial sector?"</li>
<li>34:55 Erik asks George if he&rsquo;d be excited about a world in which people were allowed to equity invest in other people.</li>
<li>35:32 George: "As long as they don't demand guarantees. The student loan program was not a loan program because the whole program was guaranteed. &hellip; The crucial thing is these various projects be allowed to fail."</li>
<li>36:30 Erik: &ldquo;Bill Janeway argues government is more than just a low-entropy carrier. Do you think there's an active role in government investigation in in long term R&amp;D projects?&rdquo;</li>
<li>37:12 George: &ldquo;I think governments do do valuable research and development. ... But the Internet - just as the semiconductor industry - only took off after it &nbsp;broke loose from the government laboratories."</li>
<li>37:45 George: "You have to accept the world as it is and see how it can be improved. I'm not a libertarian and don't believe all government can be eliminated."</li>
<li>38:04 George: &ldquo;These should be low entropy carriers - that is predictable carriers - that allow creativity to flourish.They shouldn't be manipulable carriers that stifle innovation.&rdquo;</li>
<li>38:49 Erik: "How do we incentivize people to participate in activities with lots of value created and little captured? Like having kids, writing books, etc."</li>
<li>39:47 George: "I support low entropy carriers that support high entropy creations. This insight let me predict that all information in the world would migrate to the electromagnetic spectrum."</li>
<li>41:29 Patrick: "What elements need to remain low entropy in this full stack to ensure that we have a very prosperous, highly creative civilization being built on it?"</li>
<li>43:10 George: "Julian Simon wrote decades ago about 'The Ultimate Resource' and &lsquo;Time Pricing.&rsquo;"</li>
<li>45:36 Erik: &ldquo;What problems arise when people don't understand money is time?&rdquo;</li>
<li>48:04 Erik: "How do you think about the importance of community - the role religion used to play - and how we &nbsp;think about measuring it in society?"</li>
<li>49:10 Erik: "Robert Wright has this idea of 'non-zero,' where our fates tend to become more intertwined over time and continually force us to create &ldquo;Win Win&rdquo; vs &ldquo;Lose Lose&rdquo; games. What do you think about his thesis?&rdquo;</li>
<li>50:12 Erik: "What does that mean for the people that get left behind?"</li>
<li>51:29 George: "Having such a bureaucratic welfare system has made the real welfare system the homeless system. ... [A]nd it's making our cities increasing unlivable."</li>
<li>53:20 Patrick: "Part of me wonders if this is just a part of an ongoing cycle between essentially common sense and compassion and bureaucracy and &lsquo;tragedy of the commons&rsquo;..."</li>
<li>53:37 George: "Philip Howard just wrote a series of books about the death of common sense and shows how bureaucracies trying to guarantee outcomes kind of eclipses common sense."</li>
<li>54:53 Erik: "There's been a constant push and pull in governments over time between centralization and decentralization. ... Yuval Noah Harari writes about this. Is it self evident to you that systems tend towards decentralization over time?"</li>
<li>56:22 George: "One human brain has the complexity of connectivity of the entire Internet, yet one human brain uses 14 watts of energy to function, compared to billions of times more energy for the Internet."</li>
<li>57:12 George: "Efforts to supplant human brains with computers is futile and - thus - self destructive."</li>
<li>57:48 Erik: "Reflecting out to the future, do you envision global governing bodies or more fragmentation between independent city states?"</li>
<li>59:47 Patrick: "My concern is how you stop the lone nihilist from pushing the button as destructive technologies become increasingly available."</li>
<li>1:00:25 George: "I don't fear the Panopticon, particularly."</li>
<li>1:01:21 George: "New technologies are our only answer to problems like the ones you describe."</li>
<li>1:02:08 George: "I think one of the great contributions of cryptocurrencies is attestation: a timestamped record of your transactional behavior allows you to document to predatory corporations, or tax authorities, or tax collectors just what in fact you did do."</li>
<li>1:02:55 Patrick: "What would the Jews have done in 1941 in Germany if there'd been a surveillance state in place?"</li>
<li>1:03:24 George: "All this violence expressed was a collapse of the global economy and the destruction of money."</li>
<li>1:04:04 George: "I think it really is important the world economy work in a &ldquo;Win Win&rdquo; way."</li>
<li>1:05:06 Erik: "Would you be against the charter city movement?"</li>
<li>1:06:29 Erik: "In the next 20-50 years do you imagine that language or currencies will be more concentrated or more dispersed or a back and forth?&rdquo;</li>
<li>1:07:02 George: "The condition for the world wide growth of capitalism after the industrial revolution was a single global money."</li>
<li>1:07:25 George: "I think money is intrinsically unitary - it's like the second. We're not going to have different timing systems all over the world that aren't interoperable."</li>
<li>1:08:16 Erik: "What do you make of David Graeber's ideas around debt?"</li>
<li>1:09:47 Erik: "Where do you find yourself disagreeing with Hayek's view?"</li>
<li>1:11:15 Erik: What would need to be true for you to think that the federal reserve is doing a good job or serves a core purpose and should continue to exist and flourish?"</li>
<li>1:12:09 Erik: "How does your view differ from the Austrian school that would even disagree with the Fed serving the role of last resort lender?"</li>
<li>1:13:04 Erik: &ldquo;How have you evolved your assessment over time of what are or aren't low entropy carriers?"</li>
<li>1:15:46 Patrick: "What do you attribute your recent book's success in China to? And what do you notice about your recent visits to China and how has it changed over the years?&rdquo;</li>
<li>1:16:09 George: "China and the US are a fascinating contrast."</li>
<li>1:17:26 George: "Huawei is a great capitalist story in China."</li>
<li>1:18:46 Erik: "What's your next book or three going to be about?"</li>
<li>1:18:54 George: "I&rsquo;m writing a biography on Carver Mead - the engineer and physicist at CalTech. Considering writing about &lsquo;Life After Silicon&rsquo; and potentially another book on connectomes.&rdquo;</li>
<li>1:21:26 Goodbyes.</li>
<li>1:21:43 Credits.</li>
<li>
<ul>
<li>George Gilder: <a href="twitter.com/ScandalOfMoney">twitter.com/ScandalOfMoney</a></li>
<li>Erik Torenberg: <a href="twitter.com/ErikTorenberg">twitter.com/ErikTorenberg</a></li>
<li>Patrick Stanley: <a href="twitter.com/PatrickWStanley">twitter.com/PatrickWStanley</a></li>
<li>Zach Valenti: <a href="twitter.com/ZachValenti">twitter.com/ZachValenti</a></li>
</ul>
</li>
</ul>

George Gilder, Erik Torenberg, & Patrick Stanley on Life After Google

Today’s episode features a conversation between Ari Paul - the cryptocurrency investor and co-founder of BlockTower Capital who also serves as its Chief Investment Officer - and Muneeb Ali, co-founder & CEO of Blockstack PBC.

Ari and Muneeb cover a variety of crypto developments from both a Political Science and Distributed Systems Engineering perspective. They focus particularly on the issues of scaling networks like Ethereum, whether sharding is a holy grail or not, the challenges of digital asset custody, and more.  

Show Notes
0:41 Muneeb: "How we met through Naval..."
2:33 There aren't many industries or asset classes where you can show up and be talking with the leaders almost immediately.
4:13 Muneeb: "What are you up to these days?"
7:10 Muneeb: "I'd love to get your Poli Sci perspective on a complex system being directly interacted with by users versus a very simple base layer being built on top of."
8:19 Ari: "One thing you see throughout time is some form of federalism."
10:31 Muneeb: "Imagine a mainframe computer for the entire world... it's not scalable by definition."
12:19 Muneeb: "Should you even be trying to attempt sharding at the blockchain layer?"
14:19 Muneeb: "Nodes would need near global information... which kind of kills the purpose of having shards in the first place."
16:52 Muneeb: "There's this notion - if you’re interacting with the blockchain - that smart contracts are the only interface available."
19:04 Muneeb: "Imagine a word processor... what parts do you want to hit the blockchain layer?"
24:24 Ari on how development of solutions like sharding gets going.
26:50 Muneeb: "We recently got pulled into some of the Ethereum scalability research... and recently did this public review of Casper's CBC."
29:04 Ari: "It's very frustrating to me when I discover the religion in politics of crypto."
30:03 Muneeb: "Sometimes people will ask me 'How is your Gaia storage system different FileCoin?'"
32:58 Ari: "Are you going to be integrating any Craig Wright innovations into Blockstack?"
35:34 Ari: "When you're playing poker, you want to play rational actors."
36:11 Ari: On custody and the value of vanishing.
37:07 Muneeb: "I do think [custody is] something that more and more people will start worrying about as our assets are in crypto currencies."
40:11 Ari: "Something that scares me in an existential sense: all tech is breakable."
42:30 Muneeb: "We really believe in the ability to exit."
45:32 Ari: "My concern is in the asymmetry."
47:57 Muneeb: "Look at SSL: maintained by one individual, then Heartbleed happened."
49:24 Ari: "I think it's wonderful we’ve had some Proof of Work attacks on the Ethereum Classic network... that's antifragile."
49:59 Ari: "The financial system doesn't worry about this because there's the fallback to legal."
50:57 Ari: "Andreas Antonopoulos would say Bitcoin is uncensorable because the network can block bad actors, but..."
51:28 Goodbyes.
51:52 Credits.

Today&rsquo;s episode features a conversation between Ari Paul - the cryptocurrency investor and co-founder of BlockTower Capital who also serves as its Chief Investment Officer - and Muneeb Ali, co-founder &amp; CEO of Blockstack PBC.
Ari and Muneeb cover a variety of crypto developments from both a Political Science and Distributed Systems Engineering perspective. They focus particularly on the issues of scaling networks like Ethereum, whether sharding is a holy grail or not, the challenges of digital asset custody, and more. &nbsp;
Show Notes
<ul>
<li>0:41 Muneeb: "How we met through Naval..."</li>
<li>2:33 There aren't many industries or asset classes where you can show up and be talking with the leaders almost immediately.</li>
<li>4:13 Muneeb: "What are you up to these days?"</li>
<li>7:10 Muneeb: "I'd love to get your Poli Sci perspective on a complex system being directly interacted with by users versus a very simple base layer being built on top of."</li>
<li>8:19 Ari: "One thing you see throughout time is some form of federalism."</li>
<li>10:31 Muneeb: "Imagine a mainframe computer for the entire world... it's not scalable by definition."</li>
<li>12:19 Muneeb: "Should you even be trying to attempt sharding at the blockchain layer?"</li>
<li>14:19 Muneeb: "Nodes would need near global information... which kind of kills the purpose of having shards in the first place."</li>
<li>16:52 Muneeb: "There's this notion - if you&rsquo;re interacting with the blockchain - that smart contracts are the only interface available."</li>
<li>19:04 Muneeb: "Imagine a word processor... what parts do you want to hit the blockchain layer?"</li>
<li>24:24 Ari on how development of solutions like sharding gets going.</li>
<li>26:50 Muneeb: "We recently got pulled into some of the Ethereum scalability research... and recently did this public review of Casper's CBC."</li>
<li>29:04 Ari: "It's very frustrating to me when I discover the religion in politics of crypto."</li>
<li>30:03 Muneeb: "Sometimes people will ask me 'How is your Gaia storage system different FileCoin?'"</li>
<li>32:58 Ari: "Are you going to be integrating any Craig Wright innovations into Blockstack?"</li>
<li>35:34 Ari: "When you're playing poker, you want to play rational actors."</li>
<li>36:11 Ari: On custody and the value of vanishing.</li>
<li>37:07 Muneeb: "I do think [custody is] something that more and more people will start worrying about as our assets are in crypto currencies."</li>
<li>40:11 Ari: "Something that scares me in an existential sense: all tech is breakable."</li>
<li>42:30 Muneeb: "We really believe in the ability to exit."</li>
<li>45:32 Ari: "My concern is in the asymmetry."</li>
<li>47:57 Muneeb: "Look at SSL: maintained by one individual, then Heartbleed happened."</li>
<li>49:24 Ari: "I think it's wonderful we&rsquo;ve had some Proof of Work attacks on the Ethereum Classic network... that's antifragile."</li>
<li>49:59 Ari: "The financial system doesn't worry about this because there's the fallback to legal."</li>
<li>50:57 Ari: "Andreas Antonopoulos would say Bitcoin is uncensorable because the network can block bad actors, but..."</li>
<li>51:28 Goodbyes.</li>
<li>51:52 Credits.</li>
</ul>

Ari Paul and Muneeb Ali on Scalability, Custody, and Security

Today’s episode features an interview between Meltem Demirors - cryptocurrency investor, advisor, advocate, and Chief Strategy Officer of the digital asset management firm, CoinShares - and Patrick Stanley, Head of Growth at Blockstack PBC.

The two discuss all things staking and governance. They talk about various protocols implementing staking, relate contemporary crypto networks back to classical Greek philosophy, explore the future (or lack of one) of VC in light of recent crypto developments, and more.  

Show Notes
1:01 An overview of staking.
2:18 Ethereum’s launch introduced hypothetical thing called proof of stake.
4:04 What are the benefits for stakers?
4:25 Staking does not earn a yield, but rather inflation.
5:32 Some networks are introducing negative rewards to incentivize participation.
8:38 Ancient Greek philosopher, Polybius, wrote a book called The Social Political Cycle on governance 3,000 years ago.

Learn more: https://www.britannica.com/biography/Polybius
10:13 Are stakers making governance decisions in Tezos?
10:29 Tezos’ governance system is the same as the function that secures the network.
10:49 Decred is structuring itself difference, separating those two functions into separate entities.
11:34 “History doesn’t repeat, but it certainly rhymes.”
11:54 Third point on Polybius.
13:48 Thoughts on UX and some of the pitfalls when custody is required to do staking.
16:19 How proxy voting can lead to voting cartels, as has emerged on EOS.
17:30 Meltem unpacks her quote about how ‘protocols don't exist in a vacuum when it comes to collusion, bribery, alliances, etc.'.

Original article: https://decryptmedia.com/6377/staking-meltem-demirors-proof-of-stake-coinbase-tezos
19:15 “Economically speaking, a cartel is not necessarily negative.”
21:15 “In the EOS network, BlockOne owns 10% of the tokens and actively participate in voting for block producers.”
22:01 How staking can be used in support of applications.
23:09 A challenge with applications right now is there's a competition among protocols for use cases.
24:56 Meltem's view on how VC gets involved in staking and what the evolution of that might look like.
26:37 “Financial engineering has created all of the wealth we see in America... and crypto networks are rife for financial engineering.”
29:13 “One of the things we don't think about enough are incentives.”
30:30 Are there any projects showing early signs of avoiding ‘tragedy of the commons’?
32:00 “I do have a concern about a lot of projects.”
33:34 Who outside crypto land might help accelerate the experimentation with staking and governance?
34:50 Where should people go to learn more about staking and governance?

Learn more: https://coinshares.co.uk/

Follow Us
Meltem Demirors: https://twitter.com/melt_dem
Patrick Stanley: https://twitter.com/PatrickWStanley
Zach Valenti: https://twitter.com/zachvalenti

Today&rsquo;s episode features an interview between Meltem Demirors - cryptocurrency investor, advisor, advocate, and Chief Strategy Officer of the digital asset management firm, CoinShares - and Patrick Stanley, Head of Growth at Blockstack PBC.
The two discuss all things staking and governance. They talk about various protocols implementing staking, relate contemporary crypto networks back to classical Greek philosophy, explore the future (or lack of one) of VC in light of recent crypto developments, and more. &nbsp;
Show Notes
<ul>
<li>1:01 An overview of staking.</li>
<li>2:18 Ethereum&rsquo;s launch introduced hypothetical thing called proof of stake.</li>
<li>4:04 What are the benefits for stakers?</li>
<li>4:25 Staking does not&nbsp;earn a yield, but rather inflation.</li>
<li>5:32 Some networks are introducing negative rewards to incentivize participation.</li>
<li>8:38 Ancient Greek philosopher, Polybius, wrote a book called The Social Political Cycle on governance 3,000 years ago.
<ul>
<li>Learn more: <a href="https://www.britannica.com/biography/Polybius">https://www.britannica.com/biography/Polybius</a></li>
</ul>
</li>
<li>10:13 Are stakers making governance decisions in Tezos?</li>
<li>10:29 Tezos&rsquo; governance system is the same as the function that secures the network.</li>
<li>10:49 Decred is structuring itself difference, separating those two functions into separate entities.</li>
<li>11:34 &ldquo;History doesn&rsquo;t repeat, but it certainly rhymes.&rdquo;</li>
<li>11:54 Third point on Polybius.</li>
<li>13:48 Thoughts on UX and some of the pitfalls when custody is required to do staking.</li>
<li>16:19 How proxy voting can lead to voting cartels, as has emerged on EOS.</li>
<li>17:30 Meltem unpacks her quote about how &lsquo;protocols don't exist in a vacuum when it comes to collusion, bribery, alliances, etc.'.
<ul>
<li>Original article: <a href="https://decryptmedia.com/6377/staking-meltem-demirors-proof-of-stake-coinbase-tezos">https://decryptmedia.com/6377/staking-meltem-demirors-proof-of-stake-coinbase-tezos</a></li>
</ul>
</li>
<li>19:15 &ldquo;Economically speaking, a cartel is not necessarily negative.&rdquo;</li>
<li>21:15 &ldquo;In the EOS network, BlockOne owns 10% of the tokens and actively participate in voting for block producers.&rdquo;</li>
<li>22:01 How staking can be used in support of applications.</li>
<li>23:09 A challenge with applications right now is there's a competition among protocols for use cases.</li>
<li>24:56 Meltem's view on how VC gets involved in staking and what the evolution of that might look like.</li>
<li>26:37 &ldquo;Financial engineering has created all of the wealth we see in America... and crypto networks are rife for financial engineering.&rdquo;</li>
<li>29:13 &ldquo;One of the things we don't think about enough are incentives.&rdquo;</li>
<li>30:30 Are there any projects showing early signs of avoiding &lsquo;tragedy of the commons&rsquo;?</li>
<li>32:00 &ldquo;I do have a concern about a lot of projects.&rdquo;</li>
<li>33:34 Who outside crypto land might help accelerate the experimentation with staking and governance?</li>
<li>34:50 Where should people go to learn more about staking and governance?
<ul>
<li>Learn more: <a href="https://coinshares.co.uk/">https://coinshares.co.uk/</a></li>
</ul>
</li>
</ul>
Follow Us
<ul>
<li>Meltem Demirors: <a href="https://twitter.com/melt_dem">https://twitter.com/melt_dem</a></li>
<li>Patrick Stanley: <a href="https://twitter.com/PatrickWStanley">https://twitter.com/PatrickWStanley</a></li>
<li>Zach Valenti: <a href="https://twitter.com/zachvalenti">https://twitter.com/zachvalenti</a></li>
</ul>

Meltem Demirors on the Importance of Staking & Governance

The Stacks Podcast is an on-going deep dive into the world of crypto networks with Blockstack PBC's CEO, Muneeb Ali, Head of Growth, Patrick Stanley, and Media Partner, Zach Valenti.

The Stacks Podcast

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