Tech Innovations Building a Brighter Future

Tech Innovations Building a Brighter Future

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This panel is called Technologies of Freedom.  My name is Naomi Brockwell and I make a lot of   videos about this subject and have three amazing  people on stage with me who are experts in this   field. And basically the premise of this talk  is how can we use technology to carve out more   freedom in our daily lives? And it's great to  have at a conference like this because I feel   like there are a lot of panels here, a lot of  people speaking about how to shift policy. It's  

super important work and I think a lot of people  miss how empowered they already are in their own   lives and that we already have technology  at our fingertips that can help us carve   out more freedom. Now without having to beg for  permission from politicians or kowtow to anyone,   we can build a more free life now. And it could be hard to understand, there can   be barriers to entry in terms of understanding.  And so I have three people on the stage here who  

are going to basically dive into this so that you  could start to understand just how empowered we   are, how exciting it is to live at this current  time when we have all of these cool censorship   resistant technologies that help give us back  freedom of speech, freedom of financial choices,   all of that good stuff. So let's dive into  it. I wanted to introduce the people here on   the stage. To my left, I've got Jerry Brito, he's  the executive director of Coin Center, which is a   fantastic think tank. They're focused on public  policy issues facing cryptocurrency, doing some   tremendous work that I'm sure he's going to talk  about. Then I have Eric Voorhees, he's the founder   and former CEO of shapeshift before it became  a decentralized autonomous organization.   And if your head's exploding because you have  no idea what that means, I'm sure that Eric   is going to explain it later on. And then we  have Paul Briner, who's the host of a really  

fantastic podcast if you're interested in policy  around cryptocurrency. It's called Pretty Good   Policy. Who understands the pun? No. Alright, go  slow everyone. Go slow. So this is a fantastic   podcast. Basically it focuses on all of the good  things around regulation in crypto at the moment.   When I say good things, there aren't many good  things around regulation and crypto at the moment,   but we'll dive into that. He's also the head of  US public policy and strategic advocacy at the  

Electric Coin Company. So let's get started.  All three of you come from the crypto space.   So let's start with cryptocurrency as one of the  most empowering tools for freedom that we have   seen in a generation. It's pretty phenomenal. I  think a lot of people are still sleeping on it   perhaps because they don't quite understand the  implications. So do you want to start us off,   Jerry, and just talk about why you think  Bitcoin, why you think decentralized   cryptocurrencies are important? Jerry: Sure. Well thank you Naomi,   and thank you all for coming. The reason that I  think cryptocurrency is so important, and indeed  

I've dedicated my life to making sure that it's  sustained, is that it is censorship resistant,   which is a word, a term that I'm sure you've  heard. But essentially it allows you to transact   with a counterparty, right? Engage in trade for  mutual benefit without the interference of anybody   else. And as we move to an increasingly electronic  digital world where we are engaging in commerce   and trade globally with folks around the world, we  are no longer using cash. And so when you move to   a world that no longer has physical cash, before  the invention of cryptocurrency, you had to rely   on third party intermediaries, right? So if you  and I meet and we engage in a trade and I give you   a hundred dollars bill when I hand it over to you,  you have it. And I don't. And we can verify this  

by looking at our hands, right? You've got it. I  don't. And there's nobody between us, right? No,   it's just you and me and the transaction is  completely private. Nobody can stop us from   doing it. You can be punished after the fact if  the transaction is illicit in some way, but the   transaction itself cannot be prevented if you try  to do that electronically. Before the invention   of cryptocurrency, there always had to be a third  party between you and me. There always had to be a  

bank, a PayPal, somebody like that between you and  me who can number one, know what transaction was   happening. Number two, decide whether they wanted  you to have a transaction or not or even let you   have an account or not. And three can report to  the government what transaction was, et cetera.   And that is a big loss of freedom and autonomy  and of dignity. With the invention of Bitcoin and   cryptocurrency, we return to a world where you can  have online transactions that are person to person   without that intermediary and by nature they  can be a lot more private and they're censorship   resistant. So to me that's just foundational  to why this technology is so important.  

Naomi:Eric, do you want to go next? Also, Eric  has a fantastic blog. He was one of the first   people to get me into cryptocurrency like a  decade ago that ties in Austrian economics   into crypto. So if you are interested in that  tie in, highly recommend you check that out.   Eric: Yeah, I want everyone to maybe imagine if  all of your written communications, like all your   texts, all your emails, all your letters, if every  time you wanted to write something to someone   else, it had to go through a gatekeeper like the  Bureau of Communication, the Federal Bureau of   Communication and everything that you wrote to  someone, whether like a romantic interest or a   family member or a friend or a business colleague  for any reason had to go through that filter.   That would be a horrible infringement on your  liberty and on your privacy, especially if that   department could at whim decide not to convey  the communication or tell you certain kinds of   those communications couldn't happen. Hopefully  Americans would not put up with such nonsense. And   thankfully we don't have to deal with that. And  yet Americans have put up with that exact nonsense  

in the realm of money. All of your transactions  at distance pre crypto had gatekeepers who could   see what it was for and they could stop it if they  wished. Cryptocurrency is the tool by which we get   around that entirely, and that is incredibly  empowering. We don't need the permission of   a single politician to do this. We just built  it out of open source software. Obviously the  

government is not happy about that, but I think  as a good American, it behooves everyone who cares   about freedom to understand these systems and  to try them out and to be familiar with them.   Naomi: Paul? Paul: First I want to thank   Atlas Network and Naomi and these panelists,  amazing group here. I am so honored to be here   among this group and talk about these issues  with you. The company I work for is Electric  

Coin Company and we are a developer, a software  developer for a particular cryptocurrency that has   privacy enhancing features. I would say we align  very, very closely with the general Cypherpunk   movement. I think we're probably one of the best  examples of a company that you would look to say   these are people that came from the earliest days  of Bitcoin and are hardcore cypherpunks. Can't say   that for myself. I wasn't along that full ride,  but my colleagues have been. And what that means  

is that we advocate for strong encryption and  we advocate for the use of privacy enhancing   technologies to promote positive social change.  And we in particular are known for some of what I   think are some of the most important developments  in cryptography in the cryptocurrency space,   which is something referred to as zero knowledge  proof, cryptography. We might talk about that   a little bit more. We're also known for the  tagline, privacy is normal. And I think that we   all probably think privacy is normal, but there's  this straw man that's been put up to say that,   well, if you need privacy, perhaps you're  doing things that are unsavory or maybe you   need to try to hide yourself because you, you're  doing something illegal, perhaps even. Well,  

we believe that privacy is actually not just  normal, but it is fundamentally required for   personal dignity and economic freedom. Our  mission, a company in fact, is to empower   economic freedom and to give everyone access to  a fair and open currency. Our cryptocurrency is   called Zcash. With Zcash, you can transact with  full privacy at your option. It's up to you as an   individual using it. You have consent and you have  control. So with that, I'm very excited to talk   about that more and all the implications  of all that we've all just introduced   Naomi: For sure. And we're going to dive into  financial privacy and privacy as a principle as  

well in a little bit. But first, before we move  on from crypto, there's a lot to dive into here.   And I specifically want to know, I mean we have  this tool of freedom at our disposal. It's already   been used in communities like New Hampshire,  I know a lot of people who are living entirely   off cryptocurrency, who are paying their bills  in cryptocurrency, who are buying their meat in   cryptocurrency. This is a functioning ecosystem,  and it's not just New Hampshire. There are places   all over the world where this is a reality that  you can actually opt out of the traditional   financial system, which is really cool to have  a way to opt out. It's like the first time we've   had a way to opt out, but I'm wondering what the  future holds because you have this traditional   financial system where surveillance gets worse  and worse every year. I'm not just talking about  

that $10,000 reporting requirement where as our  purchasing power disappears, it's going to become   like a $5 reporting requirement or something. But  just the increased laws that are being passed,   it's not just the Bank Secrecy Act. We've got  the Patriot Act, we've got all of these laws   that keep getting passed that say you do  not have the right to make any financial   transactions in private. So I want to know about  this future where we have this option, we have   this surveilled traditional financial system. Can  these two things coexist? Are people going to be   scared into just using the Tradify world people?  Is the gray market with this cryptocurrency world   just going to get larger and larger until it  consumes the entire economy? What are your   thoughts on that? Do you want to start, Jerry? Jerry: I think we have to keep in mind, so this is   an international conference and we have to think  globally. And so I think there are many parts  

of the world where it's even worse than you can  believe it, worse than it is the United States,   all kidding aside, it's very, very bad. And  that's I think where cryptocurrency is most   in need and where it can really be a way to opt  out of the existing regime, whatever it may be.   So I think that's where it's most important in  the developed world, in the free world, I think   the traditional finance system and cryptocurrency  can coexist. And to me, crypto succeeds basically  

my standard for success for crypto is if it is  an option that everyone has to exit and to exit,   not necessarily. I mean, if you want to  exit completely and pay everything with   crypto and be completely surveilled, et cetera,  that's an option. But to me it really succeeds   when you have it as an option for particular  transactions for when you find resistance,   when you're doing something politically incorrect  that otherwise you may not be able to do. As long  

as that option is there, I think crypto succeeds  and it is here right now. And I think that if we   play our cards right, it can remain that way. Eric: I think fiat currency is going to have   trouble coexisting when all it does is collapse  and fall apart and diminishing value. You,   the world has not been through a phase where  a major global reserve currency has fallen   apart when it was not just replaced with another  fiat currency, like another centralized money,   the dollar loses two to 10% of its value every  year forever. It does not take too long. It  

does not take too many generations before people  will think maybe I should use a different form of   savings than the dollar. There's a lot of inertia  in that habit. But as that inertia disperses,   I think you'll find that people will move at  the margins to better forms of money and away   from worse forms of money. And so I don't see  coexistence because fiat is fundamentally unsound   and I don't see a world in which people prefer  to use that over the long term. Now that might   be a 20 to 40 year horizon, so this doesn't happen  too quickly. But yeah, I'm a little more skeptical  

about them both existing at the same time. The  trick will be to what degree states permit this   process to unfold naturally. Certainly the market  process would cause it to unfold. To what degree   will the state try to interfere with the market  process? I would say a high degree. And then the   question is how successful will they be? And that  remains to be seen. But everyone that's in the   crypto world and trying to build this stuff, we  are trying to build these systems in anticipation   of fiat ultimately going away. At least the more  radical of us. And hopefully enough people in   various levels of government will understand  that it's actually in the public interests to   have sound money. And we'll realize that that's  not something to be fought, but to be supported.  

Paul: I do think that crypto is going to be much  better than fiat. I don't know if we're going to   get there in 20 to 40 years though. I think it's  going to be a pretty long path for us to make a   transition like that. So I would say that as  I think about the issue that you've kind of  

pointed out there about wanting to be able to  perhaps move to a decentralized finance world,   but having this tension with government and on  the illicit finance front, well, it really comes   down to this basic fact that the transmission  of value and the transmission of information   now are essentially indistinguishable. And that  is just really difficult because that's never   really been the case before the advent of Bitcoin  and cryptocurrencies. You really didn't have that   easy way to transmit value. So it creates this  huge tension in trying to control the fundamental  

rails of finance and stop illicit finance and to  use that infrastructure to prevent very bad acts,   and also to be able to empower a vibrant  and free economy. And it's really frankly,   I think a paradox, which there is no answer  to. I don't think you can have both. I think   you have to choose one. And I think from my  perspective, I am going to be on the side of  

choosing freedom and liberty in an economy that I  think is required and we have to use other means,   investigatory means and other means to stop  this illicit activity, which is going to be   very difficult. I agree. And I think that's  going to be a huge challenge for society.   Naomi: This idea that we have a decentralized  currency was initially obsessed with it. I was   like, this is uncensorable. Until I realized  that a lot of cryptocurrencies are completely   transparent, and if the government doesn't  want you to use something and they can see   that you're using it in broad daylight, then  they can just target individuals rather than   having to shut down a decentralized system.  So I became obsessed with privacy and that   understanding that in order to have freedom of  choice with money, we need to be able to use the   internet privately. Privacy is a fundamental  pillar of a free society. Do you want to just  

talk about the role of privacy in money? Paul: So the role of privacy, I would say is   something that I think is fundamental here as  well, because if you don't have private financial   transactions, if you think about it for a moment,  really all of your fundamental liberties are at   risk, your freedom of association, the freedom of  doing any really activity of your daily life is   reliant on your ability to transact. So you have  to have privacy there in order to have fundamental   freedom. So I think we can't lose sight of that.  We have to continue to focus on that basic fact,   otherwise really all of our freedoms are at risk. Naomi: And on that note, it's a good segue to just   talk a little bit about CBDC. Who in the audience  has heard the term CBDC? There are a handful of  

you. So this is a really important thing that  you need to know about and it's coming down   the pipeline and it's going to jeopardize all of  your financial privacy completely. The idea of   the Federal Reserve being at the center of every  financial transaction of being able to track every   financial transaction, the elimination  of cash in society, that is all coming,   every government in the world has a pilot  program right now is exploring it. Biden   has an executive order out where he says  that this should be a top priority for the   treasury to be exploring right now. This is  a thing that's coming. Given that there are a  

lot of people in the audience who don't quite  understand the concept of programmable money,   what this actually means, why this is  a paradigm shift away from the current   situation. Do you guys want to just fill in that? Jerry: Maybe just to start, explain that CBDC is   a central bank digital currency, and basically  what it is is today you all have dollars. Those   dollars, some of them probably a small proportion  of all the dollars that you own are going to be   paper bills in your wallet. The vast majority  of your dollars are going to be digits in a   bank account somewhere, but there are many  banks and eventually those banks bank with   a federal reserve, et cetera. What if you could  have an account yourself at the Federal Reserve?  

We could eliminate banks and we all would  just have accounts with the Federal Reserve,   the government essentially, and we would have  credits with them and basically transacting among   different accounts would be done on one master  ledger at the national level. That's essentially   a CBDC. And it has a lot of efficiencies relative  to what exists today, but it puts complete control   over your transactions in one party at the  national level and allows the government,   I keep saying the federal government, I mean  the national government because this is coming   to every country to have complete visibility  into how the entire population transacts and   what they're doing and who they're paying and  what. So pretty scary stuff. What I'll say is   you don't have to design CBDC that way, right?  We have the technology to build a central bank   digital currency in a complete spectrum of ways.  You could have something like a Chinese style   system where your access is controlled based on  your social credit score, and that's programmable,   as you were saying, completely surveilled, et  cetera, to you could in theory have a system   where you had digital dollars that were bearer,  that were completely private, but of course we   probably won't choose that option. So I think  it's a range. I think it can be from completely   totalitarian to completely freedom preserving. And  it's going to be interesting to see where in the  

spectrum we, in the US land, if we land at all by  the way, because I think in the US in particular,   you're going to have a lot of resistance to a real  CBDC from the financial industry who is competing   with this ultimately. And there is already a  grassroots movement against the most invasive   kind of vision of this, but certainly in western  Europe, in Asia, eastern Europe, we're beginning   to see essentially the elimination of cash where  you're no longer even going to have the option   to pay with bills. So all transactions will have  to be, there's not one single transaction you're   going to be able to do that isn't going to be  intermediated and isn't going to be surveilled.  

And we're ready to beginning to see that. So Naomi: All right. I'll add something. So we've   heard rhetoric from politicians about CBDC  so far. We had some politician who works for   the UK Central Bank who was salivating  over the idea of how they'd be able to   control where people can spend their money,  where they'd be able to determine like, well,   this is a welfare check and we don't want them  spending that on alcohol, so we're going to   dictate how you could spend the money that we're  giving you. And they were really excited about   this level of control. So that's the mindset that  a lot of people are thinking of CBDC in terms of,   and that's frightening to me that we're going to  have governments literally controlling what they   think are good choices and what they think are  bad choices. The types of things that come along   with programmable money include the ability to  just make money in your account disappear if you   don't spend it fast enough. We're all given  stimulus checks during covid, and the whole  

idea of this was let's get the economy pumping,  let's get that money going through society so   we can make inflation happen much quicker.  And so they wanted that money to be spent,   and if they had CBDC, well they could have just  said, listen, if you spend it by this deadline,   we're just going to make that money disappear  because it's for that purpose. That's scary to   me too that we no longer have control over our  savings. So there are all kinds of things that   come along with programmable money that I think  people haven't quite thought of because it is a   paradigm shift away from current digital money.  And I think we need to start thinking about this,   but Paul, I might go to you because you mentioned  the phrase privacy is normal earlier. We have the   potential to write two different futures, and one  of them is completely surveilled and monitored and   controlled, and there's more censorship on freedom  of speech and financial transactions. But we have  

the technology, as Jerry was saying, to create an  entirely different future. We could have a CBDC   that's privacy preserving. We could have CBDC,  that's freedom enabling, and we could be using   email providers that are privacy, preserving  and freedom enabling. We could be doing all   these things. And I think the main obstacle is  culture. I feel like people really aren't standing   up for privacy when it's taken away. They're not  understanding the consequences of it being taken  

away. And that culture shift is a big battle  that I think we have to start fighting hard on.   So talk to me about privacy is normal. Talk to  me about that catchphrase and why you guys are   drilling down hard on this culture shift. Paul: Sure. Well, privacy is normal just   because that's the way all of humanity  has basically worked up until recently,   until the advent of digital technologies and  then big tech and large data collections,   and now we feel like we don't have any privacy.  So for some reason people think it's not normal  

anymore. So that's why we continue to push on  that front just to remind people that it's normal   and it can be normal if you're using the right  kind of technologies. And as you point out, it   would be nice to think we might have a CBDC that  would be privacy protecting and that all the world   governments would follow that path. I think the  chances of that are zero, basically. I don't think   that there's any chance that we would ever move in  that direction just because of this thing that I   mentioned earlier about the dilemma of government  being so accustomed to using the rails of finance   to implement not only controls over illicit  finance, but try to flex foreign policy and to   affect other realms all through the economic power  and being able to control currency through fiat.  

Paul: I am too extraordinarily concerned  about anything to do with CBDC, no matter   the fact that I think if it did have the  right privacy productions, it could be   something that would be workable. I don't think  it's possible in our world for that to happen   in any political environment that I'm aware of. Naomi: Eric, I want to switch to you because you   have a really interesting history. So for those  who don't know Eric's background, he had a company   that was a vocal point for governments to target,  and he decided to decentralize his company, and   technology allows you to do that today. So I kind  of want to talk about this power that's within   our grasp to create entities that are uncensorable  that can't be targeted and shut down because we're   not just talking about cryptocurrency when we're  talking about decentralized technologies. We're   talking about encryption as a technology that  gives us more freedom. We've got 3D printers,  

which is a technology that gives us more  freedom. We've got all of these tools that   our disposal that I feel like the cat's  kind of out of the bag and the tables of   power have turned and we are just catching up  and realizing that. So just talk to me, given   your context about this shift that's happening,  are we more empowered now than people realize?   Eric: Yes. So as technology emerges, those  who understand it gain the power of the new  

technology. But of course, many people don't  understand the technology and so they become   increasingly in the dark. And this is really where  personal responsibility comes down. If you're not   staying on the cutting edge of what's possible for  you to do with the technologies around you, then   by definition you are falling behind the curve. So  if you want a little sense of where some of this   frontier stuff is. So yeah, we decentralized my  company shapeshift. So to put this very simply,   this is a little bit more of an advanced  crypto topic, but a company has an entity,   a legal entity in a specific jurisdiction.  It generally has a bank account and it has   shareholders. It turns out when you don't need to  use banks, you don't actually need that structure  

at all. And what we did was we essentially took a  central company, we issued our own cryptographic   token, and instead of shareholders in a central  entity in a jurisdiction, we had token holders.   They were all operating to govern the creation  of an open source software project. This meant   it's not an American thing, it's not based in  any specific place. It doesn't follow HR laws   because there are no employees. It doesn't need  to submit to banking rules because it has no  

bank and it is just individuals interacting with  each other freely through mutual contract. It is   completely market-based and it feels alien to  people because society has moved so far away   from being market-based unfortunately. But  I'll leave it there certainly if you want to   understand more about these things, they're called  DAOs, DAO, decentralized autonomous corporation,   and it's just one of the branches that  people are exploring now that we have   decentralized blockchains and those technologies. Naomi: Jerry, you wanted to add something?  

Jerry: Yeah, I think one thing to keep in mind  is that what these technologies do is that they   raise the cost of governments to enforcement of  their laws. It doesn't prevent the government   from enforcing its laws, it just raises the cost,  which I think is an important thing to keep in   mind because we talk about censorship resistance  and we talk about how this technology allows you   to do stuff you couldn't do before. And that's  true, but if the government ultimately wants to   come after you, they will. It's just that the cost  is going to be higher. So as a result, if there's   a fixed budget, they're going to have to be choosy  about who they enforce against. So that's the one   I would keep in mind. And then the other thing I  would say is going to what you were saying before,  

I think it is cultural. This technology exists  today. You can do uncensorable transactions, you   can do private transactions, you can decentralize  an organization, but most people don't bother to   do any of that because it's hard. It's difficult  to use these things. They're hard to understand,   and the return on investment isn't there for most  people. I think of Václav Havel’s shopkeeper who   just puts the sign on the door just to be left  alone. And I think that's where most people are   at. And I think it's very difficult to try to  convince people that they have a problem that  

they don't realize they do. As we fragment into  more and more niches, we no longer have a lowest   common denominator society. A lot of folks find  themselves on the fringe and find themselves to   be on the other side of politically incorrect.  And what they find is that when they're using a  

centralized system to communicate with the rest of  the world, oh, their messages aren't being allowed   when they're trying to make a contribution to  a cause or a payment to a particular type of,   for particular type of commerce, they're finding  they can't do that. And so they then begin to   look for that escape hatch. But for the vast  majority of people in the developed world,   I think it took a frog being boiled. And I  think our job and my job at least is to just  

try as much as possible to have this escape hatch  always remain an option for the day when somebody   finds that they need to use it, that it's there. Paul: I just want to emphasize a point that Jerry   made there and about the cost of enforcing our  laws. I think that especially in an audience like   this, what we should view that as is the cost of  freedom and liberty. And we should not think of   it as like this is an overhead because we're no  longer willing to take advantage of technology or   we're not moving forward. We actually are doing  so, but we're doing so in a way that maintains   our freedom and liberty. So it will be a difficult  choice to make and it will be something that will  

be expensive on society to do that, but in my  view, it's very well worth it. It's something   that we should not move forward without. Naomi: What are the steps forward? How do   we fully embrace this technology so that  we can leverage the freedom opportunities   that it provides us with? Is it about  education? And you mentioned something Jerry,   which was interesting. You said you want  this escape hatch so that we always have  

that option. You want that option to always be  there. And there are other people who would take   the stance that if we're not using this today, if  we're not building out the infrastructure today,   if we're not giving signals to the market to  say, build this technology because I value   privacy today, then actually we're not really  building that escape hatch. So what should we   be encouraging people to do? Should they all  be diving into this, starting to exploring   it now? How do we build a better future? Eric: I suppose this take could be considered   cynical, but I don't think it is really the reason  this all unfolds and the reason it becomes adopted   is because the price of Bitcoin goes up. And this  is something I wouldn't have really appreciated   when I was younger, but I can make arguments,  logical, emotional, rational for hours with   people and try to convince them that some of these  things are important and try to convince them why   Bitcoin is a better money. Teach them the history  of Austrian economics and why fiat currencies are   destined for decline. And some of them will think  some of those arguments are interesting, some of   them might even be convinced. But you know what  really gets people is when they own something and  

the price of it went up. It's like a reptile brain  dopamine, serotonin phenomenon. And this actually   gives me a lot of relief because I understand the  economics of why Bitcoin over time will appreciate   against the dollar if for no other reason than  the dollar will just decline forever. And as the   world sees this price of Bitcoin go up and up  and up and up and up and up in a volatile way,   but up over the long term, some portion of them  just get intrigued. Some of them buy some and   then their money went up and then their mind is  open and they just start changing their behavior   because of that. So what it means is we don't  actually have to do too much. On some level,   the laws of economics play out and the laws of  economics are much stronger than any laws of   any government. This gives me a lot of peace  actually. And something that I stressed over   when I was early on in this industry, it was like  how do we convince everyone to believe it? And I   don't think we do. We just let economics play  out. And so anyone in the audience just learn  

about this stuff, use it, understand it, and  I think the rest will take care of itself.   Paul: I'm really hopeful for that future. I love  the fact that I think Bitcoin is going to go up   too. I think that's very likely. So Naomi: This is not investment advice.  

Paul: Not investment advice, this  is not investment advice. But again,   just my guess I would say that however, I think  that Bitcoin has a very niche use case in my view,   potentially as a store of value or digital gold.  We might disagree on that, but I would say kind   of a hot take here is that I don't think much  of any cryptocurrency or decentralized finance   has much societal utility for protecting liberty  and freedom if it does not have privacy enhancing   features involved. And I'm not saying it's Zcash.  In fact, what I am saying is what I've seen over   the past couple of years is a remarkable change  in the whole cryptocurrency venture capital space   where a lot of the investment is going into adding  privacy enhancing features to cryptocurrency   projects. That gives me a ton of hope. I think  it's happening. I think we'll see the fruits of   that over time. What I am deeply concerned about  is what's happening with government agencies,   one in particular that maybe Jerry's going to talk  about for a moment with what we see happening at   the Financial Crimes Enforcement Network. And  there are some things there that are happening  

that I think are seriously disincentivizing  investment in these privacy enhancing   technologies. So Jerry, can I pass it to you to  say something about that put you on the spot?   Jerry: I don't know if I'm going to go into  the weeds about what's happening yet, maybe   Paul: Too much for this group Jerry: At a government agency, but look, to   answer the question you're asked directly, I think  folks in this room should definitely be educating   themselves, but this technology and how it might  help what they're working on, I think you're   right. If the price goes up, that's going to  drive the market incentives to make the technology   easier to use for more people who are going to be  demanding it. But at the moment, unfortunately,   for this stuff to really be a seamless option, it  has to be as easy to use as Venmo. And it's not,  

it's almost there. But certainly, and it's  interesting, the more easier you make crypto   to use, the more intermediaries you reintroduce.  Thus obviating the whole point of crypto. And   where I've seen the investment in decentralized  technology be lately, it's been on speculative   uses of crypto because that's what the market  is demanding today. But there are still a lot   of cypherpunks out there working on it. So that's  what gives me hope that it will be an option. I   hope that market incentives bring down the cost  for people who want to exercise that option,   but at the moment, there's always going to be  relatively a higher cost to using a technology.  

Naomi: And I'll also mention as this is an  international conference, it's really important   to dive into privacy technology, decentralized  currencies, all of this stuff will empower your   organization. I was chatting with a gentleman in  this room who was donating to organizations and   he had a bank account in another country, and  then they shut it down and they said to him,   you have to prove where the funds came from. And  he said, oh, that's easy. The funds came from   me. They're my funds, and I would like to support  these libertarian organizations across the world.  

And they said, no, we need to know where the  funds came from before they got there. So all   of the people who donated to this foundation,  how did they make their money? And so he was   left with this situation where he would've had to  follow up with all of the people who donated to   this foundation to find out how they made their  money, which is outrageous or just shut down   the bank account. So that's the situation we're  dealing with, the ability to be able to support   these causes that we believe in across the world  without someone stepping in the middle and saying,   you are not allowed to support this cause.  Or we can opt for better options that a   censorship resistance and actually give us the  freedom of choice when it comes to money. So I   really encourage people to not sleep on these  technologies to start exploring them. They're   so empowering, and I think a lot of people just  don't realize how exciting the world is right   now. So let's open this up for questions! Audience Member 1: Yeah. I just wanted to  

ask regarding digital privacy or data privacy  and the technologies about digital identities,   which I mean I'm not well-versed on it, but  I understand it's like you can create digital   avatars, but they have been verified that  you exist in the real world. I was wondering,   what are your thoughts on this? Do you think this  is something realistic that could happen? And I   can imagine it would benefit in communications  in countries where censorship is quite tight.   And secondly, if I may, how you think AI  technologies are either maybe accelerating   the trends towards more decentralized finance  and data privacy, or do you see that just adds   more complexity that we have to kind of figure  out and it'll just take us longer to get there.  

Jerry: That's a great question because it's kind  of a sleeper feature of cryptocurrency. Technology   is identity. People focus of course on the primary  use of this technology, which is value exchange   and the like. But the same technology allows  for the creation of unique identities that you   can prove electronically that you control this  identity, right? And so when you do transactions   or you communicate, you can sign it with this  unique identity that can't be forged. And then   what you can do is you can have different persons,  so you said, verify that you are this person.   Well, typically when you say verified, there's  some third party that's doing the verifying. So  

if I have a driver's license, it's the state of  Virginia that is issuing that to me. And so how   do we do this in a world that's decentralized?  So what you do is that you have attestations,   right? You have certain parties that everybody  understands because they verify their identities.   So for example, I can have an attestation from  Atlas that I've attended this conference and I   can have an attestation from my college. I  have a degree and I can have an attestation   from the state of Virginia and I can prove these  attestations. And that can be done in a completely   decentralized fashion. So you don't need any one  central authority doing the verifying. You can  

have a decentralized network of people making  attestations about my identity. And by the way,   it could be a pseudonyms identity. It doesn't  have to be tied to my name or person. It could   just be a pseudonym that other folks have at  tested some fact about me. And if you trust   those people and I have their attestation,  then maybe that increases your trust in me,   et cetera. So that's how it could be built Eric: On the AI thing. I'll just say one quick   point to get your brains thinking a bit normal  finance, fiat currency, the banking system is   best understood as an analog world. Cryptocurrency  is obviously a digital world. AI can't open a bank  

account. It doesn't have identity documents,  it's not a person. And even if it did, these   systems are closed. AI systems can't interact  with analog finance. AI systems can interact with   Bitcoin digital blockchains. I think this point  isn't considered enough that the only form of   money that AI systems can utilize natively meaning  autonomously on their own is cryptocurrency. And  

that will lead to some very interesting behaviors  where ais can actually transact with each other,   could be dystopian, or it could be absolutely  incredible for value production on earth. And I   think just understanding this migration from an  analog world to a digital world and how fiat is   the former and cryptocurrencies is the latter, is  a good simple model for understanding how some of   these things will evolve. Audience Member 2:   Thank you. It's fascinating. Can  I buy an insurance policy that   will pay me off if the crypto depreciates? Eric: Yeah, I mean that sounds like a financial   instrument, right? Like a put option or something.  So depending on what you want to call it, yeah,   any kind of financial contract can be done in  a crypto world that would've been done in a   analog world. The main difference is that such a  policy can actually execute autonomously without  

any human involvement being there. So if you  think back to the global financial crisis,   markets are falling apart and people had all  sorts of insurance policies on all sorts of   different things. There were many humans in that  process who due to their own malfeasance or their   own ignorance or just mistakes, the thing that  you thought would be executed in the way that   you thought isn't right. Maybe your contract  is written in English and so someone needs  

to interpret that, right? There's all sorts of  squishy human rules that you don't get certainty   on in financial transactions, and we all live  with that as the status quo. In the crypto world,   you can actually have financial contracts which  execute without any single person in the world   being involved and which execute on objective  rules that you can know ahead of time and you   can prove mathematically. So in terms of building  a foundational infrastructure for society's money,   this stuff is way cooler. And yeah, you  can absolutely have insurance on these   things. There's no reason why not. Audience Member 3: Hello. Thank you  

very much for what you're explaining. Are we  moving towards sort of a Rothbarian world where   nobody has to pay taxes compulsory? Naomi: I don't think anyone on stage   should answer that question. It's a trap! Eric: I mean, we can dream, right? Probably from   the perspective of taxes. There's an important  point, which is most of society, the vast majority   of society thinks that taxes are necessary.  I don't, I find them abhorrent and unethical,   but most people think they're fine. So let's put  aside the question of whether taxes should exist.  

Governments currently fund themselves through  three mechanisms today, right? They take taxes,   they sell debt, which is just taxes in the future.  And that's where most people think it ends,   right? But there's actually a third little trick  that they like to play called monetary debasement   where they just print the money, which is a tax  on everyone, and no one actually understands that   it's happening. They see the price of milk  at the grocery store going up and they blame   it on the evil grocery store because somehow now  they're more greedy than they were a year ago. In   a cryptocurrency world where you have sound money  that can't be debased, it restrains the government   at least such that it can only exist in a more  honest way. By taxing and borrowing transparently,   it removes the ability to do that secret third  method of debasing currency. And I think anyone,  

regardless of how you feel about taxes, should be  able to support that idea that if the government   is going to exist and it's going to extract  money from its populace, it should be done in   a transparent way that everyone can see Naomi: This may be the last question,   depending on how short it is, Audience Member 4: It isn't. I'm   just throwing it in. Free Market Institute. I  wanted to elaborate a little bit more on CBDCs   and how cryptos are going to compete in this  unfair competition because at the same time,   at least in Europe, European Commission propose  more and more regulations called markets in crypto   assets regulation, which basically restricts  most of the cryptocurrencies to effectively   compete in our market. And at the same time,  we propose a draft which makes CBDCs a legal  

tender with mandatory acceptance in retail. So my  question is how financial innovations and crypto   competition would be possible in this future  if these regulations would be implemented?   Naomi: Technology exists that would allow you to  continue to use the financial tools of your choice   regardless of what comes down the pipeline. And  I think that a CBDC world is pretty dystopian. I   think that it is unfair competition because  on the one hand you have an abhorrent tool   that is surveilled and tracked and monitored  and censored, and on the other you have this   freedom enabling tool that isn't debased and  allows you to make financial transactions of   your own choosing. That's unfair competition  because I think the average rational person  

is going to go towards the better tool there. But  obviously governments have the tool on their side,   which is the monopoly on force. So it is a battle  that is coming. I think people will have to pick   lanes. I think the gray economy is going to become  larger as people start to realize that in their   local community they can embrace tools that are  not part of these centralized monitored systems.  

And I mean, I can see the future going in a  particular direction given those two choices, but   maybe other panelists have a different view. Eric: Probably the best check against that is that   we don't thankfully live in a world with just  one government and governments have to compete   economically with one another for their serfs. So  those governments I think, which try to violate   the laws of economics most fundamentally over time  will handicap themselves. And the drive for wealth  

creation that is a market-based process will cause  opportunistic governments in other places to not   follow that same path. And that's ultimately  what allows this stuff to emerge regardless of   how much abstinence there is in one jurisdiction. Audience Member 5: So one of the things that I've   been thinking about recently is where does the  value of money come from? And so there is the   fact that it is scarce, but also the fact  that more and more people have it. So maybe   the adoption of a digital currency could have a  component which has a universal basic income sort   of part to it. With more people having access to  a currency, you would actually have more adoption   and it could be beneficial in a way which is not  necessarily egalitarian. Has anybody share some   thoughts about the potential for having a social  welfare component built into digital currencies,   especially those that are expanding at  some consistent predetermined rate?   Jerry: In order to take advantage of a lot of  the benefits of digital currency that we've   been discussing, censorship resistant privacy,  et cetera, you don't have to have wide adoption   of digital currency. And as I said, from my  perspective, my standard of success does not  

require wide adoption. So that's just one thing  that I would say. And yes, there have been digital   currency projects that have been developed,  cryptocurrency projects I should say that do have   a UBI component. I'm not sure how successful  they've been. I don't know if you, well,   Eric: World coin's probably the one that is most  popular. They're going around scanning people's   eyeballs and then issue, it's very weird. The  scanning machines are actually quite cool,  

but they're doing that to get your id and  then they basically issue money out to   everyone that's on the network. I think the  important point is the ability to experiment   now with monetary systems has been broken  wide open. So any idea people can go build,   right? These are not gated systems. Anyone can  go build this stuff and that's very cool. So   we're going to see all sorts of experimentation  in the realm of money in a way that we have not   seen ever. And most of the ideas will be stupid.  Many of them will be scams, some of them will be   dystopian and scan your eyeballs, but through  that process, we will get monetary innovation   and we can all appreciate that. I think, Paul: Yeah, I would say that I've seen some  

of this emerge like World Coin, but something  that may be a little bit more digestible is a   new stable coin called Glo Dollar. That  rather than taking those yields from the   dollars that are the fiats that is put up for  these stable coins, they give it back as a basic   income to certain communities. So there's  a lot happening in that space and I think   that that's kind of an interesting project. Naomi: I think we have run out of time there,  

so if you wanted to put your hands together,  but it's wonderful panelists. Parting words,   I really implore you to go continue to learn  about this stuff. It really is some of the   most tremendous freedom empowering technology  that we've ever seen. And I think that you are   selling yourself short if you're not diving into  this and seeing how it can impact your life.

2023-12-10 07:07

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