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Anonymous and the SovereignDAO

Published Feb 22, 2023, 9:56 PM

Listener Nathan asked me to explain why the hacktivist group Anonymous would promote SovereignDAO, so in this epic episode we learn about the origins and evolution of Anonymous, how DAOs work, and whether the components of a DAO align with the philosophy of Anonymous. 

Welcome to Tech Stuff, a production from iHeartRadio. He there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeartRadio. And how the tech? Are you all right? This is going to be an epic episode. I'm calling it now. And I got an email from a listener named Nathan who was hoping I could shed some light on something that he encountered online. He was watching a video that was published by the activist group Anonymous that directed viewers to something called Sovereign Doo. That's DAO, and he said this felt a little out of step with the group's philosophy. It felt like he was being channeled toward some kind of multi level marketing scheme or Ponzi scheme or something, and he wanted to know more about it. And there's only so much I can say about Sovereign now because I haven't joined it. But Anonymous is or has put out a video. At least someone in Anonymous has published a video that has publicized a dow called Sovereign Dow. So this whole question that Nathan has asked opens up multiple cans of worms. So in this episode, we're going to cover a ton of ground in order to get a full understanding of what this all means. That's going to include a quick review of what are not so quick review of what Anonymous is and what they're all about. We'll also refresh our minds on what a decentralized autonomous organization that is a dow a d ao, what it is and what they can do, which gets pretty broad. Will also quickly explore the word sovereign to kind of get a grip on why Anonymous would want to promote something called sovereign dow. And I think this will start to peel way the layers and let us get an understanding as to what's actually going on here, how the concept of the tao in general or not the doo. I should just say doo because there was once upon a time a doo called v doo. And also what sovereignty is and why this all actually does align with at least the perceived motivations behind Anonymous. You can't ever say super firm, definitive things about Anonymous because the organization itself defies that is, it is too amorphous to ascribe specific descriptors and say this universally applies. So let's tackle the hackers who are known for wearing Guy Fox masks both online and occasionally in public, being called Anonymous. Now, before we get to that, I'm going to explain who Guy Fox was first, because if Anonymous has adopted this image, this mask, why did they do that, Who was Guy Fox, what did Guy Fox do? And moreover, what other element in pop culture adopted the guys of Guy Fox? Because that's really what's important. But we need to understand the whole picture. Context is always critical, I say so, we have to actually look at the early seventeenth century, the early sixteen hundreds in England. Guy Fox was a Catholic living in England under the reign of King James, who was Protestant. Now James's predecessor, Elizabeth the First She was also a Protestant Church of England, which her father established in England in order to be able to divorce a woman to marry somebody else. That's a whole story we won't go into. But Elizabeth kind of walked a middle line between Protestants and catholic She did not firmly proclaim Protestantism and oppress the Catholics, at least not to huge extent, especially not considering some of her predecessors, and she wanted to avoid the chaos and violence that would break out when one side would end up persecuting the other. Her sister Mary did a really great job of illustrating what happens if a hardline Catholic decides to persecute the Protestants. Elizabeth wanted to avoid that kind of strife within her kingdom. James, he was leaning much harder into Protestantism than Elizabeth did, And for the Catholics who were living in England, who were really hoping to get another Catholic monarch, or at least someone who had Catholic sympathies, this did not sit well, particularly among the nobility who had seen some of their a lot of their wealth stripped away in the guise of religious strife, which, honestly, when you look at the history of England, really comes down to who thinks they can steal more of the other person's stuff and get away with it than anything else. That's not Maybe that's considered a controversial view, but honestly it's the truth. Likes it largely comes down to I want what that guy has. They happen to identify as Catholic. I'm a Protestant. I'll use that as the excuse to take all their stuff. Anyway, Guy Fox is a Catholic. He opposes James the Protestant, and so he joins a band of conspirators who ultimately have the goal to assassinate King James, to commit regicide and replace him as regent, hopefully with his daughter, who they saw as being more pliable and perhaps more sympathetic to Catholics. The popular, but probably apocryphal version of this story had the conspirators planning to tunnel under Parliament with the intent to stack a whole bunch of barrel of gunpowder underneath the House of Lords, and then they would light up the barrels and blow the English government into the afterlife. Do not pass go, do not persecute Catholics. Now, in truth, they actually found access to a chamber that was underneath the House of Lords, sort of like a seller, and so they didn't actually have to tunnel anywhere. They just had to get access to this chamber and then make sure that nobody else found what they were doing before they were able to execute their plan, and they secretly began loading in a bunch of barrels of gunpowder into this chamber. They hid them under piles of coal and wood, and you know, because it wasn't winner yet in England, they were hoping that no one would go poking around in there until Parliament was in session. They were essentially saying, like, this is a storage of fuel that will probably be untouched until we can get parliament. The problem was there was also plague in England at the time, and any large gathering of people was seen as a potential way of spreading plague, which was you know true, and as a result, Parliament wasn't entering into session as part of cautionary measures. So we get up to late October. Parliament is finally gearing up to go into session, having delayed several times due to plague outbreaks, and the conspirators had regularly been checking on these barrels that they had been storing in the cellar over time to make sure they were secure and that no one had found them, and no one had like the plan was on and they were getting closer to the time of attack when Parliament would go into session in early November of sixteen oh five, but some of the conspirators were a little worried because not everyone in Parliament was Protestant. There were some Catholics who were also as members of the House of Lords, and while it seemed like it was jolly good sport to blow up Protestants, it was considered bad form to do the same to their fellow Catholics. So someone among the conspirators sent an anonymous letter to Lord Monteagal that essentially said, hey, call out sick when Parliament opens up, because things are gonna get spicy. I am paraphrasing here. So then Lord Monteagle goes over to King Jimmy and he says, hey, I got some potentially really bad news, And King Jimmy commands that a security force sweeps the sellers beneath Parliament to find out what the heck is going on. And a security detail happened to come across the path of one guy Fawks, who had been sent to check in on the barrels in the cellar to make sure that everything was fine, and he was caught in the middle of the night on November fifth, sixteen oh five, and he was put to the question that's a very polite way of saying that the King's forces tortured the ever loven pants off of him, probably literally, and over the course of repeated torture sessions that got increasingly brutal, Fox gave up his co conspirators and continued to endure really brutal torture over the course of his confinement. In late January sixteen oh six, so like a couple of months after the planned attack, Fox and several of his co conspirators were transported to Westminster Hall, forced to mount a scaffold, pronounced guilty of high treason, and they were executed. That is the polite way to describe what happened to them. I will say that if you get into the details, it goes beyond the level of cruelty. Then they were also chop dup so that their body parts could be sent around England to warn other would be traders about what could happen if you plot against the crown. To this day, November fifth is Guy Fox Day, and tradition has people in England lighting bonfires to celebrate not the plan to assassinate the king, which is often how it gets portrayed, but rather to celebrate how the king escaped assassination. And there's a little poem that goes with it. Remember remember the fifth of November, Gunpowder, treason and plot, for there is a reason why gunpowder and treason should never be forgot. It changes a bit depending upon the interpretation. You have to keep in mind that the language of sixteen o six England was modern English but antiquated, so slightly different from the way we would say it today. But anyway, that was the whole point of Guy Fox Day was to remind yourself, hey, we almost had regicide in the Kingdom. It was stopped, and we also need to remember what happens if you go against the king. That's kind of the purpose of Guy Fox Day. Now skip ahead a couple of centuries and get up to nineteen eighty two. You had writer Alan Moore and artists David Lloyd and Tony Weir who create a comic strip titled V for Vendetta, and the comic strips were later collected into a graphic novel. Now, in this story, there's an anarchist who simply goes by V and he commits acts of violence in an attempt to bring down a fascist government in England, and he does it while wearing a Guy Fox mask. So it's really more this version of Guy Fox that Anonymous would draw their iconic look from, as opposed to the actual historic figure they were taking it from, this pop culture comic book version. And again v is not Guy Fox. He's adopted that because he is an anarchist. He opposes not just fascism, he's really not in favor of any kind of organized government at all. He sees government as ultimately an institution that is bound for corruption, like there's just no way to avoid it, and so he prefers anarchy to any kind of organized government. Moreover, V for Vendetta is the story of someone who is special in that he is willing to go to whatever extreme is necessary to defeat an overreaching, unjust, unfair, corrupt status quo. So he's not a superhero, right, He doesn't have superpowers. He does display some pretty unbelievable skills and physical abilities through the course of v FA Vendetta, but he's ostensibly a regular old human being, and the message seems to be anyone can change the world. And in this graphic novel, the rhyme of remember remember the fifth of November is not about remember how this traitor nearly committed regiside. It's about remember how the normal person can upend an entire government. So the message gets flipped with V for vendetta than it did in actual history. Now, the decentralized, loose confederation of activists, activists, anarchists, trolls and others that would form Anonymous did not immediately adopt the guy Fox mass that would come later in their history. Initially, if you look at the very earliest kind of emergence of anonymous, you have to look at the image based message forum for Chan, and this used to be looked at as one of the wilders on the wild West. That was the web, right, Like the web was this place where you had established brands, but you also had these kind of pools of anarchy where all sorts of shenanigans could happen. And four Chan at the time was looked at as like kind of like Moss Eisley, the hive of scum and villainy. These days, other forums like eight chan and Kiwi Farms have said hold my beer and really taken the mantle of home to the worst of the worst on the web. But four chan used to be the place. Now when we come back, I'll talk about how anonymous first began to take shape on four Chan. But first these messages okay, we're back. So if you were to join four Chan, you could do so without creating a handle, right, You didn't have to create a handle that would identify you as someone who is a participant. You could just join and you would get the default user name anonymous. And so you had these groups of like minded people trolls on four Chan who began to coordinate their efforts to essentially cause grief and frustration to other online communities, often to online communities that were catering to younger users, because it just seemed really funny to them to upset and upend these communities. They say, Hey, look at these little kids who are trying to have fun online. How about we mess with them very much? Not a noble cause, right, is undeniable that they were just out to cause trouble and to make people upset for their own amusement. So they got joy out of making life miserable for other people. A quick note just in my own experience, I have found that you actually can get way more joy out of doing nice things for people than you get from causing grief to folks. Although I get it, like there's some people out there that just seem like they really need to have some misery visited upon them because they are causing misery to other people. Right, you might see someone and say, this person is disproportionately making life terrible for lots of people. I want to see some come upance. I get that, but I also think that you know, just anonymously trying to cause strife to people who you don't know and have no connection to. I think that's just lame. I would much prefer to see people do nice things. It takes a little more effort, but I think it has way more payoff. Anyway, that's getting sidetracked. Okay. From two thousand and three to around two thousand and six or so, these trolls, which began to collectively identify themselves as anonymous because again that's the default anonymous user name on four Chan, they started to harass various online communities just for fun. Some of these communities were also trollish, so in some cases you had trolls attacking other trolls. This escalated by two thousand and six to targeting specific people rather than an online community. So in other words, you might target an actual individual who you think deserves to be taken down a peg for whatever reason. So typically these people were fairly high profile, They had some sort of platform from which they espoused their views, and they had come to offend this group of trolls on four Chan through saying those views. In some cases, these were like far right commentators and media, and they became prime targets. But it wasn't just them really, anyone one who was seen as being you know, hypocritical or insincere, anything like that. If they seem like they were putting up a front that hidden motives, they can become a target too. Now Anonymous went after them in an effort to really humble these folks, but it was mostly again for the lulls. It wasn't like a crusade to right wrongs. It was more about this person deserves some frustration in their life or worse, so we're gonna do it and we're gonna laugh about it. Now, you might wonder how did this group transition from being this loose collective of trolls to turn into a decentralized activist group. A big part of that transition actually came from outside the group itself. It came due to mainstream media, which kind of just got the whole thing wrong. Mainstream media ended up having the wrong interpretation of what Anonymous was, and that in turn kind of shaped Anonymous. So there was like a broadcast in Los Angeles that was on Fox Television. They reported about Anonymous and suggested that Anonymous was in fact a domestic terrorist group. Now keep in mind, Anonymous had been targeting some far right media personalities at this point, so perhaps that was part of it. Because Fox often kind of, you know, at least leans to that side. In some markets, it doesn't lean, it absolutely lays down on the far right side. So they were saying that Anonymous were domestic terrorists capable of great acts of violence. They even included in their broadcast video footage of a van exploding. Never Mind, this had no connection to Anonymous, Like, Anonymous had not done any kind of acts of violence. They were rassing people, but they didn't bomb cars or anything. So this was like just it was so absurd. It had no connection to the actual group, but the group was being portrayed as if they were this incredibly sinister, dangerous group of individuals, which, honestly, if you are not identified as being part of that group. But you get the benefit of feeling like people are looking at you and thinking you're important and dangerous. That can really boost your ego quite a bit, right, Like it feels good to be looked at and thought of as a badass. That just it's like an ego boost to that the world thought that Anonymous was dangerous, at least the Fox broadcast station in Los Angeles did, anyway, and that kind of made them feel like they were important. There was also the case of a Canadian Security Intelligence Service agent who went to a guy named Aubrey call who was involved in Anonymous and tapped him as joining a task force designed to infiltrate and disrupt online terrorist groups. But Caddle was like, I just mess with people to make them angry. I don't like this is like James Bond level stuff, and I am not James Bond. But again, it showed that the outside world was looking at Anonymous as being way more powerful and capable than they actually were, and it made people who were part of Anonymous feel important and more people wanted to join because they wanted to feel like they were part of this power group. And then we get to Tom Cruise. And you know, I think without Tom Cruise, we wouldn't have the Anonymous that we have today. In fact, the group Anonymous might not even exist without Tom Cruise. This is not hyperbole. So by early two thousand and eight, Anonymous was still mostly a group of folks who like to harass people, and again, mostly they were doing this online, and mostly the people they were harassing were people they felt deserved to be harassed, although the criteria for what made someone deserving varied depending upon who in the group was doing it. And Tom Cruise would change things. So on January fourteenth, two thousand and eight, someone published a video of Tom Cruise talking about Scientology and his participation in the Church of Scientology. Now, this episode's already going to be a long one, which means I am not going to dive into the rat's nest that is Scientology. I will say it is an organization that's registered to be a religious organization, which means that they enjoy tax exempt status in the United States. It's an organization that has a very long history of allegations made against it and its leadership that range from stuff like the organization encouraging members to surrender more and more of their own personal wealth to the church, essentially saying that the church siphons money out of its members to super scary allegations like the church using the US legal system to intimidate or even bankrupt people who were identified as threats to the church itself, including people who were just trying to leave the organization. It's got a really bad reputation, which is putting it lightly. Anyway, Tom Cruz's interview did not make him look very good, and it made the church look even worse. Cruz was not trying to bring down the Church of Scientology, far from it. He was an eager participant. However, his descriptions and demeanor in this video we're seen as harmful to the image of the Church of Scientology, and so the church sent YouTube a copyright violation claim that prompted YouTube to remove the video, and that is where anonymous would jump in. So people with an anonymous saw Scientology's actions as leveraging a company's policies, in this case YouTube, in order to commit censorship to remove information from the Internet, which just kind of goes against the whole ethos of the Internet and the Web in general. Like you've probably heard like once it goes up on the Internet, that's it. It's there, Like whether you try and take down the original one or not, it's up there. People have shared it, people have cloned it. Whatever. Now they were thinking that the Church of Scientology was abusing YouTube's policies in an attempt to hide information that was not very flattering to the church from the general public. Then there were all the other alleged misdeeds that the church was said to have committed. So on top of that, there's everything else. If you really want to go down a rabbit hole, search the term fair Game and Scientology and you'll see what I'm talking about, a tip of the iceberg really of what I'm talking about. So Anonymous thought of Scientology as being an organization that was perfect to take down a few pegs, like this was an organization that clearly had a lot of power and influence, and in the opinion of those an Anonymous should not have those things. So they wanted to hold an operation. That's what a lot of projects within Anonymous end up being called an operation. This one was actually called Project Channology, in which Anonymous organized protests against the church in the real world. People showed up at locations connected to the Church of Scientology, many of them wearing guy Fox masks. And meanwhile, the online part of Anonymous was using all sorts of tactics to disrupt Scientology's Internet based operations. So they were doing things they were actually pretty simple in the grand scheme of things like denial of service attacks. These are not sophisticated online attacks, but they can be effective. Essentially, what you're doing is you're targeting a web server and you are sending an enormous amount of traffic to that web server in order to overwhelm it so that it cannot respond to legitimate messages. So like you could target the web server that hosts the Church of Scientology's web page, and because you have overwhelmed that server, anyone trying to go to the Church of Scientology's webpage is going to get an error message. Again, this is not a very sophisticated attack. There are actually a lot of companies out there that you can and work with that specifically look for that kind of attack so that they can prevent it from affecting your web servers. So it's not something that typically gets used a ton against high profile targets. Because a lot of high profile targets have moved to adopt these measures to protect themselves against that kind of thing. But these actions marked a real change for Anonymous. Rather than harassing folks and communities just for the lulls, the group began to use its base of skills and decentralized membership and desire to push back against what they saw as overreaching authority to create change both in the real and in the online world. The group would target large financial institutions, which were seen as foundations of power and influence that have a disproportionate amount of control over our lives. They would target government organizations that they felt were corrupt or that were infringing upon people's freedoms, including issues like agencies like the NSA that were found to conduct espionage on American citizens. They supported social movements like the Arab Spring and Black Lives Matter. They took aim at things like child pornography rings to bring those down. They continue to provide support to Ukraine in its war against Russia. They've used their skills to disrupt Russia's online operations to varying degrees of success. But at the heart of things, Anonymous is still a decentralized organization. In fact, to call it an organization is a bit of a stretch. Anonymous consists of lots of people. How many is impossible to say. There's no official membership for obvious reasons. If you want to be Anonymous, you can't have one, And within the group there are a variety of opinions and political philosophies and value. So not everything attributed to Anonymous is necessarily the result of Anonymous, or at least not of the overall collection of people who identify as being part of Anonymous. In some cases, it's a splinter group of folks who have a common goal, but it's not necessarily a goal that's supported by the overall Anonymous community, and they go out and do their own operations. Sometimes the media connects those operations with Anonymous overall, and on rare occasions, the overall organization might even distance itself from some of those activities. Okay, we're going to continue talking about Anonymous and then Dows, but first let's take another quick break. Okay, we're back. So I described earlier how Anonymous works generally, and it's mostly through consensus and brainstorm. People within the community start to toss back and forth some ideas, including who they think is at fault for perhaps oppressing others, and then potential ways to address that oppression. Sometimes a small group of folks within Anonymous will adopt a cause and gain more support from other members as things evolve and it becomes the overall group's objective. Sometimes a person, government agency, or a company will behave in a way that is so counter to anonymous as core values of individual freedom and a desire to wrest control away from institutions that it really won't take a lot of convincing. The whole group will more or less beyond the same page, and what needs to happen is consensus on what to do about it. So that is Anonymous. Now let's talk about decentralized autonomous organizations or doos d aos. This is a continuation on our recent episode about Web three and the hype cycle which published last week, so it kind of builds on that as well. Now, what the heck is a decentralized autonomous organization the DAO or DOO. Well, at a very high level, it is an organization made up of people who share some common goal. Now, the specifics of how to achieve that goal, or what conditions need to exist in order for each member to consider the goal to have been achieved in the first place. That can be different from person to person, and it can require a consensus among the group to decide on particulars, but generally speaking, the group has the same outcome in mind. So a DAO can kind of act like a company, or it can act like a charitable organization or a community action group. It can have a single purpose. For example, one DOO actually had the express purpose of purchasing an original copy of an historic document, which we will get to in a bit, Or it could have a more general purpose, like it exists for the betterment of a specific community or maybe the global community, and in the process of doing that it could pursue many smaller but related goals. However, a DOW is owned and operated by the members of that organization, So instead of having a single hierarchical leader or even a board of directors who ultimately are allowed to approve or deny requests for specific business decisions, the overall group gets to vote on these things. So instead of having one person decide, well, our goal is X, so we're going to do why and that will achieve our goal. The whole groups to decide if why is the right thing to do or may mean there should be some other method to achieve that goal. And in fact, with enough support, the organization can actually choose to change the goal, so it's not X at all, it's something else. They could do that with enough support and with a successful vote. Now, the way this thing works is through voting, but it's not necessarily a case where every member has a single vote. No, that's not necessarily the case. It can work to be more like shareholders in a publicly traded company. So the more shares of the company you own, the more votes you have. If you own a high enough percentage of the shares that exist, effectively you can actually dictate the direction of the company right if you were to own that much. Even if all the other shareholders collectively disagreed with you, tough for them, because if you hold enough votes to decide what you say goes, then that's it. This is actually one of the challenges that dows can face, but will touch on that leader as well. So basically, a DOW is a way for a group of people to identify and pursue a common goal through a decentralized democratic process, and in that way, I think you could probably see how Anonymous would want to adopt a DOW. Anonymous is a decentralized organization of people who share some common values and beliefs and goals, but not everyone shares every specific goal with everyone else. There's a lot of then diagram stuff going on. So you've got some groups with an anonymous who have an overlap with the overall groups values and beliefs, but there's also some outliers. Then you have other subgroups that maybe just barely tap into the same value system that the overall group of anonymous has, but they're all part of Anonymous, at least as far as being part of Anonymous goes. Okay, So now let's talk about how a DOW actually works, because so far we've just been looking at really a high level approach. A DOW is built on top of the blockchain, and we're usually talking about the Ethereum blockchain here, and so this is the blockchain is the thing that cryptocurrencies like Bitcoin and ether depend upon. In fact, Bitcoin introduced the concept of the blockchain a couple of decades ago at this point, or almost a couple of decades ago. A blockchain is essentially a record of transactions, and they're grouped into blocks that have been verified by the overall community that makes up the system, and then each block is added sequentially to a chain of earlier blocks of transactions. In the case of bitcoin, those transactions are stuff like actual financial transactions, but they can pretty much be anything that involves data points that track chronologically and that can transition in state in some way. One other important factor about the blockchain is that its structure makes it very difficult to change earlier points of data within the chain, So each block's identity depends in part on all the blocks that came before it, and everyone in the system who is part of this blockchain system. Everyone can view the blockchain. It becomes a common ledger, a publicly shared ledger that everyone is able to see. And since everyone's able to see it, they can see if someone tries to mess with it. So if someone were to try and go back and change a data point that happened earlier on in this chain of blocks of data, that change would be reflected in that block's identity, but that would also affect every single block that came after it, so let's say that your blockchain is twenty blocks long and someone try to change the data that was in block fifteen. Well, from block fifteen to block twenty, that change perpetuates down the chain. Everyone connected to the system would see that something hinky was going on. They could clamp down and stop it reverse it. By the way, there are some issues with this system. For example, if the overall organization, whether it's a cryptocurrency community like bitcoin miners or a dow if they cannot come to consensus on the direction of the blockchain, you can have a fork. So, for simplicity's sake, let's say that half of this blockchain community thinks that they need to go in one direction, like this happened with In fact, it's happened with like all the major cryptocurrencies, but this did happen with Bitcoin. Let's say that like half of the community thinks, we want to implement some improvements to blockchain and bitcoin, but it's going to necessitate that you download new software to be able to interact with the blockchain system in order to adopt this motion. But let's say the other half of the community is like, no, I kind of like the way it's working now. I don't want to adopt these new approaches and I want it to stay the same. And you get to a point where half the group chooses to update their software to adopt this new direction, the other half doesn't. You have two different versions of bitcoin at that point, right, You've got the updated version and you have the original version. Eventually, what you have there is a fork. Both versions continue to build upon the original blockchain, but they branch off into different directions because of this change in the community, this disagreement within the community. Sometimes both of these branches can continue and become healthy and stay solvent the entire time. Sometimes one will collapse, maybe both collapse. It can happen. That's a risk, and arguably you could say this is a risk with any organization. Right, you can get to a point where within the organization there's a disagreement about how to do stuff, and that disagreement might lead to the point where part of the organization splits off to become its own thing. Happens all the time, well, the same thing is true with blockchain. With cryptocurrencies, some exchanges will actually suspend trading in the wake of a hard fork or even a soft fork in an effort to mitigate risk and volatility, because the value of these cryptocurrencies can change even more dramatically than they already do in the wake of a fork. Those suspensions usually last long enough for the dust to settle before trading commences again. But if one of the forks seems particularly unstable, the exchanges might just ignore that one and only accept the other fork. And it may be that no matter how many people believe passionately that they've done the right thing, their efforts will be in vain. Okay, back to DOW. Now, I haven't really touched on the autonomous part of decentralized autonomous organization. A DOW runs by using rules called smart contracts to guide specific actions in pursuit of a larger goal. So the smart contracts essentially take action when certain criteria are met. You can think of it as, let's say that you got like a long term goal, and you break down that goal into steps, the steps you need to take in order to achieve your goal. The smart contracts represent the action points of those steps, and if you can think of them in very simple programming terms, you can think of a smart contract as being kind of an if then statement like Let's say a very simple one is that you join a dow that's going to be investing in bitcoin ultimately and maybe the if then stay and as if the value of bitcoin drops below twenty thousand US dollars per bitcoin, buy x dollars value in bitcoin. Then if the value bitcoin is above twenty thousand dollars, the smart contract doesn't take any action. But if the value drops bid leath twenty thousand, the smart contract comes into play and the doll starts to buy a bitcoin, with other smart contracts deciding when it stops. Like there could be another if then, like if the amount in the doll's treasury drops below x amount of dollars, stop all purchasing activities. This is an extremely basic, oversimplified example, mind you, but it's one that I thought could be helpful. So that's the autonomous part. You have these smart contracts that are doing the work so that humans don't have to assuming that the conditions are met for the smart contract to actually come to play. Otherwise remains dormant and all the while it's trying to achieve this shared goal. Now, the humans as the part of the DOO, they collectively decide what the smart contracts do. So. It might be that a DOO exists for a while and someone in the organization says, you know, this is not the most effective way we could do this. These smart contracts are clumsy. They are not achieving our goal efficiently. Let's do it this other way, where we'll rework the smart contracts so they work under these new conditions. Well, then the group would have to decide and come to a consensus about whether or not to adopt or reject that proposal, and the DOW would just keep on behaving autonomously. It would change, however, if the consensus agreed on the change, and then people implement a new smart contracts and overhauled the DOO, at which point it would now behave under these new rules. Now for all of this to work, there's got to be money involved, right, Like this stuff like, it doesn't matter what your doll is are, what your goals are, or anything like that if there's no money behind it, because nothing gets done. So your typical doll receives outside investment. You typically are seeking capitalists to invest into the DOO, and then the members of the doll also have to hand over their cold hard cash in return for tokens that cold hard cash, maybe in the form of cryptocurrencies like ether, but you do this to purchase tokens that represents membership and voting power within the organization. So these are digital tokens. They're similar to cryptocurrency, except instead of behaving like a currency, and don't get me started, because cryptocurrency doesn't always behave like a currency. In fact, many times it doesn't, but that's a separate topic. They behave like a share in the overall organization, and you can own more than one token. You can own as many tokens as you want to buy that the organization will meant anyway. And these collected funds that people have poured into the TAO, they become the treasury for this organization. The members get to vote on how the organization will direct the money in the treasury to be spent in its effort to achieve whatever the goals of the organization happened to be. All right, let's talk about a couple of specific doos for a moment to understand some more issues with this approach. Way back in April twenty sixteen, a group of investors got together. They pulled a huge amount of money into an organization that they called the Tao. It was meant to serve as a venture capital fund, so in many ways, the idea here was to give smaller investors the chance to take part in bigger investment opportunities, the kind that you would normally see huge VC firms participate in when funding a startup, for example. Unfortunately, the group hit a major snag. So the Dow's token also called DOO. Dao was listed on cryptocurrency exchanges and it was built on top of the Ethereum blockchain. But the Dow's security had a really serious vulnerability in it, and in June of twenty sixteen, just a couple of months after it got started, someone stole oh about a third of the money in the organization's treasury. That was around fifty million dollars worth of Ether currency that was stolen from the DOO and the stolen funds were moved into a different Ethereum account. However, thankfully, the dow had some smart contracts that put some some limitations on this. The money had a twenty eight day holding period on it, so the people who who conducted this theft were not able to access the money and then withdraw it, So there was a ticking clock that was going where there was this twenty eight day hold on the money in this account, and then the ethereum community had to decide want to do about it, and some wanted to reverse the transaction and return the funds to the DOW and its investors because they had been stolen from even though some would say, well, it was due to the fact that they had poor security measures in place, Others said, yeah, but that you know, you can't blame them for a theft. A theft is an action taken by someone else, right, It's not like they misplaced the money, It's that someone purposefully redirected money. So there was some people who said, let's reverse that transaction, but that means we're gonna have to go back in the chain and change that, and as we've said, that means changes all the way forward down the chain from that point, and that can cause a headache for anyone else who's done transactions on this chain. The people are saying, no, no, no, no no, no no no. I don't want that to mess with everything else. We don't want to upset the whole apple cart because of this one instance. The theft was awful it technically didn't violate the rules because the rules were constructed poorly, but it's clearly an awful thing. But we don't want everything else to suffer because of this one incident, so we have to keep it going. Ultimately, Ethereum had a hard fork. The original version of Ethereum continued as Ethereum Classic, and the new version, which returned the funds to the TAO, became Ethereum Blockchain. There are other examples of DOO as well, including Constitution Dow, which formed to purchase a copy of the US Constitution. I referenced that earlier in this episode, and that's an interesting story too, and I have a little more to say about that, but we're getting super long, so we're going to take another quick break. When we come back, I will wrap all this up. Okay, I know it's an epic episode. I don't usually have that many breaks in one, but this one I felt was a great question and it was really important. So we're getting back to Constitution Dow. We get this DOO where you have a group of investors who collectively their goal is to purchase an original copy of the United States Constitution that was going on auction at Sotheby's. Members of the TAO invested heavily into this organization. I want to say they raised nearly fifty million dollars. However, not all of that money would be available for bidding on the copy of the Constitution for reasons I'll get into in a second. Ultimately, the DOAO did not have the highest bid. The highest bid was for more than forty three million dollars and the Constitution dow law this auction. Now, again, the only purpose for the existence of this dow was to purchase that copy. So once the auction was over, the DOW had no purpose anymore and it was going to just disband. So you had all these people who had poured money into it. They wanted to get their money back because the thing that they wanted to have happened did not happen. Here's where they started to run into problems, and it is an issue with dows that are built on top of blockchain. For blockchain transactions to happen, you have to cover the costs of the computational power needed to process the transactions in question. As part of that, there is a transaction fee for every transaction you make. It's not that different from transaction fees you encounter when you use things like credit cards. Often these transaction fees are invisible to the consumer. The vendor is the one who has to handle it. That's why you you go to some stores you might see a sign that says no credit card transactions for below a certain amount of money. It's because there are transaction fees which cut into the money that the vendor gets in that actual transaction right well. With cryptocurrency, the transaction fees also known as gas fees, to cover the cost of the computational resources needed to handle these transactions. They can be significant, especially for proof of work based cryptocurrencies, which Ether was at this point. Ethereum has since moved to a proof of stake, which is a different approach to cryptocurrency than proof of work. The proof of work is what Ethereum worked on at the time that this happened. It's also the way bitcoin works. This is where you have bitcoin or cryptocurrency mining operations that are competing against each other to verify a block of transactions. In return, you get awarded a certain number of crypto coins, so that is a gas fee. The problem is the people who engaged in constitution DAO. The people who invested into it, they were investing relatively small amounts of money. I mean like like sometimes like one hundred bucks, two hundred bucks, something like that, which is you know, enough for It's considered a large amount of money for a lot of people, but in the grand scheme of investments, it's tiny, right. We often talk about investors in the tech space who are working on the millions, if not billions of dollars scale, But this was something that was positioned as a way for the average person to be involved in this particular d AO. So you had people who are putting in one hundred or two hundred bucks. The problem is the gas fees at the time, we're ranging at around seventy dollars per transaction. That means seventy dollars of your transaction of depositing money into the doll is taken out as gas fees, and seventy dollars of the transaction has taken out when you withdraw. If you put in less than one hundred and forty bucks, it meant that the transaction fees were the same amount or greater than the money you put in, which means you didn't get anything out all that money was gone. It got burned away in gas fees. This is an issue with the blockchain based organizations. Now the gas fees are not always that exorbitant. It's not like we're still seeing these crazy fees for all transactions. But it does mean that there is risk associated with DAOs. Even if you have a DO where you're allowed to withdraw your money at any time, you're not going to get the same amount of money back as you put in because they're going to be these transaction fees that will be deducted from those transactions. So you know, if if the loss is small, it might be trivial, you might not care. But in this particular case with constitution now it was one of those things that left a bad taste in a lot of people's mouths and made them feel like the DOO approach has some real drawbacks. But all that being said, we can start to understand why anonymous would embrace a DOW because you can participate in a DOO anonymously. It's one of the big benefits of blockchain. It's one of the foundational concepts of decentralized finance, is this anonymity where you are allowed to make these transactions without them being tied to your personal identity. So instead of being something that is forever associated with you, like every purchase on Amazon that you make is associated with you, right, and that history of transactions ends up being a portrait of who you are as a person that has value. Well, these decentralized approaches have anonymity baked into them, so that you can purchase whatever you want, it's never tagged with you. You can live your life without everyone knowing what it is you like or don't like. So that whole market of dealing with your information kind of disappears if you're doing everything through blockchain, because you can do it through this anonymous approach. Obviously that falls right into anonymous's ethos, so you understand where that fits with the anonymous approach. Also, you participate in the governance of the group, right, because you have these tokens that represent your membership, that represents your voting power, So you can vote for or against measures proposals within the TAO that are designed to achieve certain goals or complete certain tasks. You can be an active participant in that, and that way you can have this group of people who collectively have some simil allure beliefs and values, but not necessarily identical ones, and you can hash out what the group will and will not do. So instead of having like a splinter group go off and do something and then the whole of that operation gets associated with Anonymous, when the whole group may not have approved of it, you now have a system where ideas can be approved or rejected collectively. So that obviously folds in with Anonymous's ethos as well, and I can understand that. Now, let's talk about the sovereign part of the name of sovereign Dow. Remember that's the name of the dow that Anonymous's video was pointing people to. Sovereignty relates to authority, So it's who holds authority over an entity, whether that's an individual, an organization, a nation. So a sovereign nation has ultimate authority over its governance, it has authority over its borders. A country that invades a different country, like Russia invading Ukraine violates the other nation's sovereignty. Russia violated Ukraine's sovereignty by invading it and claiming that it had ownership over territories that internationally are thought to belong to Ukraine. Sovereignty is something that has to be recognized both within and outside of the entity. It's not enough for you to declare yourself sovereign. Others have to recognize you as sovereign as well, so it becomes a tricky thing now. Within blockchain, sovereignty also means partly that the organization is independent. It's also resistant to outside interference, so it is able to act on its interests without the interference of say, regulators or government authorities. Also, sovereignty partly first to the fact that the individual members of the DAO have the sovereignty to engage in transactions with any other members and nothing can stop that. So let's say that you and I are both connected to the Ethereum blockchain. I could send you ether plus the gas fees needed to cover the transaction, and you could accept the ether, and no one else in the system would be able to stop and say hang on, you can't do that. That also plays into the anonymous ethoughts, So you start to see where this approach to organization and governance within an organization falls in line with the goals of anonymous. There are still problems you have to address. You have to address how do you handle voting. If someone accumulates enough tokens, could they become essentially a bully or banned with a few others who also have a lot of tokens, and together they become bullies who dictate the moves of the organization at the expense of what everyone else wants. You have to address that. This can be addressed by the way, but it has to be built into the system. It can't just be left up chance. Another potential issue is if you have lots and lots of members, but a lot of them are inactive. If they're inactive, then they're not voting. And if you require a certain percentage of votes in order to pass particular measures, you may never be able to achieve that percentage because of the number of inactive accounts that are connected to the system. That's also something you can work around, but it's another inherent danger with dows. So again, the DOW as a concept I think is interesting. I don't think it's a cure all solution. It requires a lot of careful thought and architecture to make sure that it actually does the thing it purports to do, and it doesn't just become a way for a single entity or a small group to completely take over control of something that's meant to be a democratic and decentralized approach. One of the big dangers of doos, by the way, is if they are not constructed properly, you could potentially enter into a situation where, let's say you've got someone who has an enormous number of tokens and there are huge contributors, like lots and lots of money has been contributed into the treasury. If one person has enough power, they could propose a resolution to award them the entirety of the treasury, like they could just take all the money out of the treasury of the Tao, and if they have enough votes to make that proposal pass, they could do it. Now. Usually you have protections in place where you need to have not just a simple majority, but an overwhelming majority for something like that to happen, which mitigates that risk. But it is a potential risk, and it does say that you have to be careful when constructing the tao. As for the construction of sovereign Tao, I have no common on that. I don't know what they've done, I don't know how it's built, I don't know the nature of the smart contracts. So I don't know how effective or safe or risky it is, but I can say that it doesn't surprise me to see Anonymous trying to move toward a DOO structure for the purposes of achieving its goals, because all of the composite elements of a tao seem to fall in line with the core values of Anonymous itself. I hope that's there's your question. I know this was a super long episode, but I feel like it was covering some really important things and again giving us that context. We need to understand where stuff comes from and how it plays together to really be able to form opinions about it. Otherwise our opinion is going to be uninformed, and often it means we can make decisions that are not necessarily the best for us, simply because we did not have a full appreciation of the information that's out there. So that was my purpose for going super long with this episode, which is funny because typically on Wednesdays I aim for tech stuff tidbits that are supposed to be short. This is clearly not one of those, all right, If you have suggestions for future topics of tech stuff, you can reach out to me by tweeting at tech stuff. It's tech stuff hsw on Twitter. Send me a message there. Or you can download the iHeartRadio app. It's for you to download and use. Navigate over to tech Stuff by putting it into the little search bar. It'll take it to the text page. You can click on the little microphone icon and leave me a voice message up to thirty seconds in length. Let me know what you would like to hear. Or you could be like Nathan and do some work, then find an email address for me out there in the world and send me an email. I'm not going to share my email because I already get a ton of stuff and I can't even file through all of it. But if it gets through to me and it's interesting, yeah, I'll tackle it. Good job, Nathan, Yeah, jerk, I don't mean that. I'm just joking because you found a way to email me, all right. One way to email me, by the way, is if you're a fan of Ridiculous History, because occasionally Ben Bolan likes to give out my email address as the complaints department. So there you go. All right, that's it. I'll talk to you again really soon. Text stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

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