Everything old is new again: decentralization is back

Transcript

good afternoon good afternoon uh i don't quite know how to follow the last talk it was really impressive thank you um it's really exciting to see zero knowledge proves he's getting a standing ovation um in the wild finally in many forms i'm here to talk about kind of a bit of philosophy a bit of motivation a bit of like quite asking the question of why do we do what we do here um so please stay and uh it's also it's not a talk about nfts even though i've got a crypto punk on my t-shirt um happy to talk about nfts later but it's really talking about

the kind of the reasons behind crypto at least for myself and asking some questions about um why do we do this thing and what are some guiding principles we've been through a pretty wild couple of years and i'm sure we're all shaking off the recent drama in the markets and um suddenly crypto's not cool anymore which is my favorite place to be um i've been doing crypto in in february next year it'll be my 10th year in crypto um i guess why am i still standing here but i am very passionate about this space i was a co-founder at pantera capital and then i started this company orchid labs which is focused on decentralized vpns

currently i'm also a partner at fabric ventures and i do a lot of angel investing and advising companies in space based in lisbon if you have a in my neighborhood so this is the word of the day iconoclasm so iconoclasm is it's really a um it's a destruction of symbols the destruction of things that we worship things that are symbols of power symbols of you name it kind of like the sort of destruction of idols like so what does it mean to be iconoclastic well iconoclasm was really very much the inspiration for the punk

movement in the mid 70s um i grew up in england and uh even though i caught the tail end of that by the time i was a teenager it was the mid 80s and i still remember going down to kings road and seeing the guys in their crazy haircuts and cool outfits and the safety pins and but what were they what were they protesting what were they what was this movement about other than like really loud music and then there's all sorts of different versions of punks nowadays um well it was very much an anti-authoritarian kind of do-it-yourself rebelling against social norms and yes we've had many of these times before but if we think through the early internet the the cipher punk

what was really happening there and how did we get to this world now where the concept that the internet is some revolutionary thing is um is like a bit weird right so but the internet in its journey through through the web through social media was revolutionary was incredibly disruptive to many many industries it's easy to forget with the the current landscape of the internet that industries such as music industry uh journalism um you know obviously brick and mortar stores were just completely revolutionized and changed in this very kind of uh disruptive very rapid movement but the early internet very much from

the cyberpunk era message boards bulletin boards um the uh the group's building um so like i read a list of the kind of common cypherpunks you got like phil zimmerman you've got andreessen you've got uh you know obviously satoshi you've got these people who are building crypt cryptographic technology in order to communicate and do this in a way which is outside the purview of normal society but the internet was also there for if you are from a particular belief or something that is really isn't supported uh you know the way you are um your lifestyle or your orientation this idea that you could communicate instantly with anybody anywhere in the

world and find a community um be reading balaji's new book uh nation states and the idea is really that we're forming communities and i think we're all quite familiar with this in crypto forming communities outside of the the bounds of a normal physical state it's not like you move to paris because you have a certain belief system or you move to lisbon or san francisco et cetera we're now forming these connections and building and i think crypto is probably one of the largest communities around this is that these belief systems so what are our beliefs and why do we even have this phrase web 3 i prefer to call it crypto but um the idea of web 2 web 3 what what's wrong like what what's going on like how did this happen well

we can talk for a long time about the evils of facebook twitter of like you know the social addiction the kind of the um this idea that you just uh you're being owned by these corporations and we can do that all day but there's many movies about that i don't think that it's really that andre zuckerberg or any of these guys were necessarily evil people i don't think they sat down and said i'm gonna build this system to control the world um there's a there's a book called the circle and also the every uh by dave eggers which talks about this sort of this in a very sort of fictional format and if you really look at the architecture of the the systems these are in the simplest form a server

with a bunch of clients connected to it and advertising systems that run in that centralized architecture now if you want to have good advertising you need to collect more data so the person who has the most data and has the best engines for analyzing things is gonna win so it's not like we have some evil plan by maybe to get evil later but the evil plan by these overlords to build these systems is just a really a function of the architectures these centralized architectures are going to lead to these systems that we tend not to like nowadays and it's not a search for profit it's really a function of how these systems designs from the beginning and then the question comes is can we do something different

because as i'll talk about in a minute if we keep going down the road that we're on and if our space gets co-opted by the same kind of ideas we may end up with something worse than we think we're going to start it from right it's like this crypto decentralized systems may not actually give us this utopia that we hope for it may be actually worse um i have a crypto punch on my t-shirt um but uh as i said this is not nft talk um the the concept of crypto i first became exposed to distributed decentralized systems in the early 2000s i was part of a startup that was building on top of nutella or like inspired by nutella to build decentralized search

i then ended up with sun i worked with bill joy and worked on a lot of the the early peer-to-peer decentralized systems and at the time it just made a lot of sense to me and when i found bitcoin in 2013 it i just i tried to understand the existing financial system almost income in the context of bitcoin and it didn't make a lot of sense i was like this other system seems much more logical the the decentralized architecture it makes a lot of sense this current system seems really unwieldy and so on um i'm sure many of you have your own you all have your own story as to how you found the space and and what was interesting about it the sort of radical decentralized architecture was the thing that got me the most from a computer science perspective i was just like wow

this is fascinating how would we even architect these systems how do we build these systems that scale and do interesting things because it seemed like the advantage of us above it um were obvious if you go all the way back to the beginning of the internet and look at the design points was can a system for communication and sharing information with standard nuclear attack that's why we had these decentralized architectures rather than just something sitting in a mountain in denver so this kind of radical style of thinking really attracted i believe many people from many different walks of life people who wanted to make a difference and do something that was that was really counter to the existing status quo hence the idea that we're all punks and i think that

decentralization can really be the basis for a better future and if i if i'm not appealing to your uh to your hearts and your minds maybe it can appeal to your to your wallet so if we take a look at the last six months of carnage and yes with one noticeable exception which i guess was just a bad algorithm the the decentralized systems have actually won out in comparison centralized systems and why is that well if you look back to satoshi's initial vision and when he started this well they started this um the the inspiration was very much around looking at what the central banks were doing looking at the way that the banks were getting bailed out this complete opaque system

we can now look back in hindsight and look at credit derivative swaps and say well now that we know the data we can see how these things failed but given that we had no data it was all extremely opaque as is the case for the lending platforms that have recently fallen over in our space it becomes obvious well if you take a look now at i'm gonna call one out but celsius um with the uh the paid they had to recently pay back all of the defy liabilities before they could even enter bankruptcy and so they did that the sequence was paid out all the default debt and then far for bankruptcy that system if it was if it had been even more opaque we may never have understood what was happening but if it had been more transparent as we'd seen with the d5 protocols that carried on

working and we see with the decentralized layer ones that carry on working and all the systems that are really well designed and designed to be decentralized we can see these systems actually just keep working but there's also another component here and this talks a little bit to the systems we've been building at my project orchid i also believe that decentralization is extremely important for things like um anti-surveillance the ability to speak without censorship and if we build great crypto cryptography and great vpns like we've been working on but they're not decentralized ultimately someone can just take that down and if we take a look at uh

some of the systems that we're now seeing if you've looked at china and the bsn this is a system which is essentially a permissioned set of blockchains and it's being built out now they're actually there's permission blockchains without without cryptocurrency but they're moving very fast into this concept first with that and also with cdbcs and that's where i'm talking about we may end up with a worse system than we started from if we allow these systems and we don't fight for the decentralized nature of them if we allow them to become co-opted not just corporations which we're used to talking about and the facebook are movies and so on but also institutions governments these are

really coming for us we've got mica in the in europe right now new regulation which is attempting to outlaw stable coins you can only have stable coins made in america to work in europe you can't have european stable coins and these kind of moves are precursors for then setting up i believe central bank digital currencies and if you want to know what's wrong with central bank digital currencies just imagine this um you go to the doctor and you get diagnosed with i don't know say high blood pressure you're you you just you're just too much sugar in your diet so doctor says you just gotta stop eating sugar from now on no sugar like maybe cut back on the gluten just a healthy life and so

off you go and you do your thing but your daughter wants an ice cream one day so you go in with your central bank digital currency credit card and do the transaction and you attempt to do the transaction but it says sorry you can't have ice cream today because the government's now said and it's going to your health providing your insurance provider that these things are now banned for you you can take this idea to extremes because once you have programmable money which we've all been developing and then you put in centralized add in censorship and really we can do anything we want so that's what i mean by these things can get worse before they get better or may just get worse

i i mean i read a lot of dystopian sci-fi so that's maybe why i think these weird thoughts but but i also i also think that that as we build systems it's really important to think about and i mentioned this is also not financial revive but could be construed as such is that if you focus on building these systems and try to explain to people you know hopefully from this talk or maybe from just more reading why these decentralized architectures are important because on the road to the the next big ramp in in in crypto like adoption usage whatever it's going to be there'll be moments where you say well if we just do this centralized thing we'll be fine we'll just do this thing and it'll be all good it's going to be a little bit harder to do the

decentralized play so like why not just take a shortcut because you know the money's there the user's there let's just make it happen that move and those design choices if you're really successful one of the things i do when i'm investing or building companies i say well what if we're really successful what's the like what's not like the the worst case study what's the best case outcome and then what's the worst outcome from that best case outcome like what's the worst thing that could happen if we make this choice and i think you know with i don't mean the old dog here but with 10 years in the space what i've seen is is that these decentralized systems and the people who are in this space for the long term and are the most successful and also the most influential are really focusing on this

decentralized ideas i'm probably going to run a little bit short on this one but we'll do more questions at the end um so i had on this at one point was like you could buy a crypto punk which i guess is talking about my bags but but being a punk being a sort of a radical in the space like check yourself like what are your motivations for doing these things why are you here and there's many ways to make money um so hopefully that's not just it but i think that this um one of the phrases in silicon valley where i spent many years like you know are you doing this is it a missionary or a mercenary kind of project right why you do this hopefully there's some balance between

the two because you know if you you may not make any money which doesn't make you invest any money or your team and maybe they won't do it at the end but the the reason behind why you do things i think is really important um as i mentioned we've been building architectures at orchid um it's a decentralized vpn architecture runs on all evm compatible chains we have a high speed payments architecture based on probabilistic payments and we started off with initially decentralized vpn architecture so you can build multiple hops similar to a tour like architecture it's available on apple devices and android

recently we started working on a new architecture which extends this idea to fully programmable services so you can upload a piece of code um in wasm compatible wasm and have that executed on different devices and pay for its execution as you go so we're focusing on this idea of let's focus on surveillance let's focus on these these censorship things but less beyond this let's focus on trying to decentralize existing systems such as amazon lambda and web services so that's some of the direction we're going in and i'm happy to take questions on that after this these are my coordinates my talk seems to get shorter each time so i've got i've got a few minutes for either for the organizers to get another speaker in or any questions if you have them thank you

[Applause] young ones so you mentioned about central bank digital currencies and there's a likelihood that we'll be seeing ubi with central bank digital currencies what do you suggest that people do about it or what alternatives can we also offer to normies who are like ooh that bitcoin thing it's crazy like how do you see that panning out see the question is kind of like

what do we do about central bank currencies or just like what happens when they happen um resist form the underground um i don't know i think i think there's i hope this is the third time i've given this talk i hope by giving these kind of talks and by trying to educate more of us do this we can influence you know i do a lot of work in lobbying in the united states and europe but trying to educate people and try to educate um legislative uh regulatory i think also like literally doing what this this group of incredible people um this is my favorite conference i've been here five times now it's just just keep doing what we're doing but as the punks would say don't sell out hello thank you very much for the

present presentation again with the cbdcs i think that with the employment crisis that we are about to have the cbdc's and the universal income will uh shatter the work that we are trying to do by educating people to the new monetary monetary system and the comfortable lives provided by the governments and the universal income will get our mission really hard so [Music] have you any advice how to best educate people on this matter yeah i agree i think

uh one quote was it's like the ultimate air drop right if you you just dropped like that's great and and um yeah same advice i think we've just got to fight and we've gotta we've gotta try to try to push we've gotta um you know look look for candidates to represent us in politics you know we don't always talk about politics a lot but it's incredibly important given the scale of what we're building um uh lobbying efforts we've got to build we've got to write we've got to push these things and and just try and educate your friends these things are not i don't think i think the initial airdrop will be benign and probably fun and then people just like start getting more and more into this

uh this world if you look at the chinese credit score and the systems that are built there and then even just you know our own world we see people get air drop things and apn and then it's actually not that great but great question thank you okay thanks very much oh one more sorry sorry okay sorry yes sorry um i didn't realize the questions the question is about politics i i think you mentioned that you do a lot of lobbying right and you focus on politics my question is why i think that if you're building a decentralized system you don't need to you can just completely ignore politics and just

build something that works and politics will be relevant so what's your opinion on this um yeah i i get your point but there's a there's a space from where we are to where we want to be and during that in that space there's various things you can do you can call things securities you can ban stable coins you can shut down off-ramps you can um outlaw many many things about what we do you can say this whole thing is gambling you can just do things so most people i mean i think maybe we know this but but most people outside of what we do think we're crazy especially now they just think we're nuts right and they think most of i mean

most computer science people i know and even um you know some of the communities that some of our tech at orchid is is addressing think that this is just a scam and it's going to go away soon and they've been saying that for a long time but as we get bigger there's more people who think it and so on so that's an education problem and and if they think it's a scam then the people who are representing them in politics also i think it's a scam and then the minute that something happens and crashes and people do some money they're coming for you right they're like okay well there's a problem here we're going to regulate it and if you look at um like the fda after thalidomide that slowed down drug development in the united states drastically the europeans followed it so

that over regulation can really shut down innovation and yes theoretically maybe we get there but maybe it takes a really long time and maybe during that really long time we have other things that can take us out okay thanks last question i'll be here today all day today and tomorrow so thank you so much [Applause] you