From Cryptocurrencies to Cryptostates / Jarrad Hope

Transcript

foreign okay cool um yeah so hi my name is Jared I'm the founder of a project called status we aim to create uh basically a private decentralized peer-to-peer fully ended encrypted super application basically like WeChat without the state surveillance apparatus and we've certainly achieved many of those goals

but not the Super components of it just yet um this talk is going to be about the reasons why I'm in crypto uh I hope it doesn't come off too jaded I've been a little bit disillusioned um over the past sort of two years in the direction it's going in and I wanted to remind everybody the sort of political consequences of our movement and uh why I'm in it so I got into Bitcoin around so 2011. um I was really interested in like counter economics algorithm and crypto Anarchy and what I found really compelling about Bitcoin is it showed us that we could create a monetary policy and actually have it operate in a hostile environment and it works you know it's absolutely amazing that can is even possible to me at the time it still

is uh and was involved in ethereum in the early days as well and what was amazing about ethereum is that it's generalized this whole policy aspect So in theory you could use Smart contracts to build any kind of institution what was not clear to me at the time is that I started to recognize this as a new form of social order and that's kind of the topic of this talk so before if you decide to leave or um I end up rambling or I get cut off short because I've got 20 minutes this is usually now a long talk the key takeaway is applying liquid markets to social orders is by far the best thing we can do for Humanity so this is not like coda's law this is like looking at

consensus and people coming together to actually create a new social order that is not based on Monopoly of violence but on voluntary actions and enforcement of Rights through protocols so show of hands here who uses Fiat as their primary currency in daily life yeah okay that's not great who is familiar with debt slavery this concept okay fantastic um and I guess like who wants to live in a free and open Society okay fantastic well I'm talking to the right people uh so we have two problems debt slavery technological authoritarianism right this is for the developed countries we'll get to undeveloped countries later on or autonomous regions

um yeah so just in case you aren't familiar with death slavery uh here is a graph of the U.S dollar in relation to gold right the value of the US dollar against gold so in 1913 we created the Federal Reserve um this basically gave money lenders the ability to print money as much as they want and then lend it as much as they want which is unfortunate because prior to that money lenders had to look at their loan risk and weigh the pros and cons of that under this system the Fiat system we currently live in they socialize their losses onto the currency users right which basically has led to this point

now where the US dollar and the British pound sterling is like worth less than 95 percent of its value compared to Gold the other key sort of moment here was in 1971 when Nixon uh basically decoupled us entirely away from the gold standard so it's a huge problem and it's been a problem for a long time right so in the early 1800s you had the Rothschilds who invented modern Finance which is great it really connected the world allowed a capital to flow around but there was this tiny problem with this right they started to realize that lending to monarchs in nation states these sort of people

um was really profitable and also very secure and this is a quote from the Niles weekly register in 1835 saying the Rothschilds are the wonders of modern banking appearing above Kings Rising higher than Emperors and holding a whole continent in the hollow of their hands not a cabinet moves without their advice like that's an enormous amount of power to have and allows you to influence entire nations in fact they also invented the ability to lend to both sides of Wars right so that's kind of scary because now they can pick and choose winners and influence geopolics than more than anyone on the planet this is the seeds of a new social class

that arise that it was no longer beholden to their their countries which they're born they were truly Global Citizens and they may call themselves the global Elites today so Hayak Austrian economists saw this problem and basically says I don't believe we should ever have good money again and so we take the thing out of their hands of government that is we can't take it violently away um all we can do is use some Sly roundabout way to uh introduce something that they can't stop and Bitcoin is really a fundamental expression of this but I wanted to hold on to a concept here this concept of opting out right not trying to change things through Evolution but just

peacefully creating another parallel system in which you can enact um so this authoritarianism problem it's it's a thing it's slowly happening right now over the past decade and a half we're seeing the rise of authoritarian regimes right it is according to the Freedom House Index that's what's been happening um and they say China and Russia are exporting this so yeah um we might think well we lived in developed countries we live in Western liberal democracies we're in Europe we're in America these sort of things unfortunately the Bastion for Freedom the US is also experiencing the same problem right and we can look at a few reasons why that might be the case

right so this is about 10 years ago now like 2013 uh Edward Snowden had the Snowden Revelation showed that the NSA is doing Mass surveillance without any congressional oversight and in fact when it was taken to courts the courts couldn't even prove that this was happening and therefore couldn't do anything right um the ripple effect of that though was that Russia then introduced their big brother bill um China created their surveillance laws after the nsas and the U.S did so they couldn't be criticized uh and then what what's even worse is that the UK uh implemented implemented this under the uh investigory Powers bill I can't remember the name of it but um that

basically took everything that everyone was doing institutionalized it and expanded the reach of it right so we think that these things are like only beholden to authoritarian regimes but these tools exist within our own societies and this creates a massive power imbalance to anyone who's wielding this um we are living in a digital panopticon right so social media for example um we're now seeing these platforms censor more and more both due to government pressure but also to their own policies identity systems are actually Conformity systems because they try to attach material Awards and punishments to your identity which allows them to shave off aspect of your

personality if you're not behaving well then you're economically locked out of these systems um but even in these social media systems we're seeing that the recommendation algorithms the news feed that you see is catered by a quote-unquote algorithm that's proprietary we have no visibility into how this is happening uh and this creates this very ripe um environment or Empower imbalance that allows these platforms to now sway public opinion um so if you can get them on your site you can create a massive Echo chamber you can get a whole bunch of people believing in in your narratives um yeah

we've also seen this in mainstream media so this is the Sinclair events uh basically there's thousands of local news shows that all gave exactly the same script and it's kind of ironic because they were saying this is dangerous to our democracy um so yeah and this is a Charlotte Eisenberg she was a senior policy advisor in the United States Department of Education she was a whistleblower on the project best I think it was called um where basically U.N change agents were looking to decouple the children from their parents influence and in her words prepare these children for a socialist collectivist

um future world right and this was funded by the uh Rockefeller Foundation as well as the Andrew Carnegie super fascinating she goes into a lot of the details on the psychological methods and the chances are if you went through a public education system after 1970 you were exposed to some of these techniques population engineering right so now we're getting a bit more serious okay um so population engineering like I don't know if you're familiar with the uighur problem uh well I guess China CCP views as a problem um but genocide now is a lot softer we can do it on a slower pace and in the abstraction of doing that makes us less uh responsive to it right so we do this

through Mass sterilizations um this mass sterilizations is not unique to this particular problem China applies it to their entire policy population under the one child policy and this was informed uh from the United Nations there was a bunch of books that were going around basically the idea is very malthusian at its core but it's not unique to these authoritarian regimes either if you read um is it rockefeller's population Council no and Harry Kissinger's report you actually can read like how this is attempting to be applied uh by this upper social class globally um it's super fascinating stuff

and this is more prominent in the sort of public venue of this called the world economic Forum this is some tweets showing that this is a possibility of the future and this is their intentions uh these were all deleted because there was public outcry but there is this agenda pushing this forward where they will be able to provide for all of your needs which sounds very utopic to me um Claire Schwab is quoted saying the notion of to integrate young leaders has been part of the way for many years I have to say when I mentioned some of the names like Angela Merkel Vladimir Putin and so on they've all gone through this program we're very proud of them like same with true Ado so on and so forth uh

they also he also went on to say that half the cabinets in some of these countries have are influenced by the weft right and so this is a huge problem like we like to think that we're living in these democracies or these Democratic principles but there is an active effort to subvert them um it's just the case Davos 2022 right our industry is not immune to this they are viewing like what we currently have today as like Shadow crypto Finance right and what they hope to do is capture everything that we're doing and integrate it into the dominant banking industry um the master switch is actually a fantastic book on like how this pattern

constantly repeats itself in technology uh but it's not unique to that so there's it's been cut off there but um like our supernational organizations such as the IMF um and uh who was it IMF and um world bank and so on under the cop 26 uh trying to reorganize the Global Financial system and make it a cohesive whole right this means that you don't have these different systems in different nation states with independent jurisdictions but are now becoming part of a global regulatory framework uh which is also being defined um and will not be in line with at least my ideals

so what do we do right um Albert hirschman has come up with this ultimatum that we have with the state he was actually using it for Consumer Price uh consumer choice and it's called exit voice and loyalty and basically you have three options you can exit or opt out like you do with Bitcoin you can express your voice like protest or you can be loyal to the system right um and each of these have like a costs and reward associated with them right and so you want to be in an ideal Fair governing system or social order you want all of these to be as low as possible and the rewards to be as high as possible um under voice Mika white was one of the co-founders of the Occupy Wall Street

movement also protesting this debt slavery thing and basically wrote a book saying protest doesn't work you know um then it was revealed that the FBI with a DHS local police and the banks had worked together in coordination to take down Occupy Wall Streets and treat them like terrorists so FBI documents have just obtained partnership I'll skip these slides um yeah now interestingly enough another thing happened that isn't often talked about but at the end of 2012 that September is when Occupy Wall Street ended the New York Times activated a whole bunch of

propaganda basically turning this whole tension this class tension against the one percent into a racial tension and it just started using its clout and influence to start pushing all of these narratives these are Source from LexisNexis there's like hundreds of them that show this repeating pattern now we can't prove this is the case but I think that it was worth reading the gray lady wink to understand the influence of New York Times And how it's try to influence ideologies and public opinion so um this whole opting out idea right like so we have Bitcoin as an example uh but here in Czech Republic we'll check about the Slovakia

um there was Ivan Juris and uh vaslov Bender right the basically the forefathers of this idea of the parallel Society or parallel Palace right um their ideas were to essentially um escape from the Communist Regime by creating these parallel structures um so here's a quote from Ivan Juris if it proves impossible legally to compel the ruling power to change the ways that govern us and if for various reasons those who reject this power cannot do or do not wish to overthrow it by force I don't want to do that then the creation of an independent or alternative parallel Society is the only dignified solution uh the independent Society does not compete for power its aim is not not to

replace the powers that be with the power of another kind but rather creates this power beside it to create structures that respect other laws and in which the voice of the ruling power is heard only as an insignificant Echo from a world that is organized in an entirely different way and this ended up being the source of inspiration um for vassalov Havel to overthrow the Communist Regime um and I mean there's I'm bastardizing this because I'm short on time but you get the picture uh but this idea actually goes back further uh so um the Jewish diaspora in Poland and Lithuania had actually recreated uh

their own version of a state a Theocratic organization that was based on like ancient Israelite organizations uh because they were in host countries and they were they wanted to manage their own Affairs they created uh these kahals or healers um super fascinating stuff right like you now uh it's now showing that this idea of a state is possible without being bound to a territory in fact this idea has also been developed uh these like I remember reading crypto anarchies cyber States and pirate Utopias in my teens right it's like 20 years ago now um not only from crypto anarchists or cypherpunks in the past but also uh status or policy designers were also thinking about virtual States this

ability to create governing services that are fair and competitive that operates without this territory aspect of it um Barlow uh rest in peace said uh we'll live we'll create a civilization in the mind of cyberspace maybe more Humane and fair than the worlds your governments have made before Leslie lamports 1989 um uh published the paxos protocol paper right called the part-time Parliament he referenced a fictional legislative consensus system uh basically these Merchants that would come to this island recognize that they needed governing services for themselves but all of them

wanted to continue trading right so they didn't really want to get involved in politics and deal with Administration uh and so what they ended up doing is when they came back to the island to trade their goods they could also participate this system get the latest updates come to consensus and basically have a social order that was based on voluntary interactions and didn't require this Monopoly on violence um and this is really interesting when we come to this point of exit at costs as well when we talk about blockchains because you can Fork these systems so if you are no longer interested or ideologically aligned with the blockchain community that you're in you can literally just replicate everything

and just start anew and wherever it was Deployable before is instantly Deployable in the new instance it'll change markup value there'll be some disruption but the point is that the exit cost isn't is much cheaper right now your ability to exit from the governing services that you have requires you to literally physically move yourself into another country right and people don't live in the places they live in purely for their governing Services they have families and their lives basically they might even be born there so I've been talking about our societies the ones we're very privileged to be in but actually this our technology doesn't really apply to developed countries in my view because we have functioning

legal systems we have functioning Financial systems we have good institutions um comparably speaking but kutchen is a proto-state that has been fighting for Independence since the 50s right um they can't have buildings that are have paper-based systems in them they can't have real property Registries because um they get bombed by the Burmese right and they suffer from What's called the natural resource curse the Kurds in rajava also have a similar problem they're trying to establish a democracy in the caliphate of Isis they get bombed by the Turkish and they have a terrorists on the other side of them the ability to create a resistance system as

long as you can maintain like some infrastructure like mesh networks for example we would allow you to coordinate these systems and even back them up globally and we can do this a fundamental good in the world just by using the technology as it is today if we can only secure property rights we're going to be helping 4 billion people um right now they're locked entirely out of our white economies right they live in the shadow economies predominantly now there are some issues that we have to solve right like energy and some countries already have smartphones um even for uh very undeveloped countries

the world the other reason this is like actually worth doing is because the World Bank themselves had identified the value of Institutions as being the largest share of wealth in virtually all countries right that means it's more it creates more value and more wealth to do this than it does to extract resources out of the ground like it's absolutely phenomenal how much this is uh actually worth um and even if we don't do that even if we just make forms a little bit easier to solve right we're reducing this idea called transaction costs in the abstract sense um like you don't want to be like waiting in a line all the time every time you're doing that like time is

money you're like burning it um and the Copenhagen consensus had actually realized that a mere reduction of 0.1 percent in transaction costs quadruples a country's wealth which is the difference between Argentina and Switzerland it's absolutely insane to me right so we can actually distill the best practices we've learned in history for provisioning governance Services into essentially six items right the respect for consents how am I doing for time okay so um so the respect for I mean yeah these are all very large topics um but the respect for consent is super

interesting when you start thinking about it in terms of the nation state because the nation state actually has a terrible argument for its consent over you you probably haven't actually signed the Constitution and certainly not in some kind of mandatory binding way um at best they have this sort of implicit consent over you um whereas in a blockchain social order uh you are quite literally explicitly transacting with it you could explicitly signed a constitution that's associated with it to even access these networks um and this is like so fundamentally important because you're now proving that you are beholden to I don't want to say that

necessarily the coercive rules but you're buying you're voluntarily entering into these agreements and uh respecting their outcomes right currently I'm just born into a country and I'm just like I have a whole bunch of like Roars that I'm beholden to you're beholden to I bet you don't even know what they are and that's actually this point here clear and fair interpretive rules right like I have no idea what laws I'm actually under right now um so the American law institutes had implemented um a thing called the restatements of common law which is super fascinating they basically took all this case-based law they distilled it down to these single black letter rules and it's still quite large but it's manageable like if

you as a citizen wanted to understand exactly what the laws are you can read these things and go oh okay that makes sense now I get it the issue is is that it's under copyright right and they will enforce their copyrights so we need to emancipate that in some way and I have a project for that um this idea of independent adjudication is also really important we're all kind of used to like this monocentric law we have a court system that's like based based out basically our state we might have some small centers of arbitration but fundamentally we're stuck with this monocentric law

um under a polycentric or autocentric system or smart contracts you can actually independently choose who is going to be your arbitrator and what system of rules you're going to be under um yeah but what we build and how we build it also matters right we need to build a sovereign stack which means it can't be done by a VC backed company it needs to be public it needs to be done by a a collective or a Dao I don't really like to use that term as much it needs to have disintermediate access like right now we're using Json RPC interfaces from our wallets into this system

particularly in ethereum which completely defeats the purpose uh and like if you have a nation-state adversary that's coming after you um all the citizens of this social order that's like a fundamental uh it's just it's fundamental need um same with network level privacy if you if you are transacting on these networks and you're using say tornado cash or something that's private on there it doesn't really matter to a passive adversary because they can see exactly where you've transacted from in fact if you're doing it through a Json RPC metamask knows exactly what they're doing uh what you're doing um we need to separate the data

availability problem into decentralized file storage we need to have a heterogeneous multi-chain networks so these State systems or these uh these Network States or crypto States we want to have local communities with their own set of rules right or their own social orders we also want them to be able to split off if they need to the other aspect of this is we need private smart contracts this doesn't really exist yet I mean Geordie berliner's project under polygon either ZK evm is probably like the best one that actually exists today and I think will hopefully come out this year and it needs to work on resource restricted devices right like any incentive system or infrastructure that ends up

reinforcing centralization again creates a massive problem unless we create our own territories um but when I talk about a crypto State um it's not a monolithic Concept in the same way that the internet does not exist the internet is a relationship of nodes and edges um and when we talk about crypto States or these Network States we're talking about stateless Societies or at least the thing that we can get closest to in our generation the institutions live within this network so from my perspective I think we need a movement to create a self-sovereign crypto Network a decentralized technology stack that maximizes the cost of surveillance and coercion while

minimizing the cost of exit voice and loyalty we need to create a template for self-determining communities that follows best practices in providing governing Services Distributing non-coercive justice to all together we can construct a network state I've been working on this concept with a small group of people for a while now if you are interested in these ideas please hit me up on my on my status and I would love to chat with you thank you very much [Applause] foreign