VDAO Ep.1: The Next Supercycle — Joseph Lubin on Trustware, Network States & an Antifragile Future

Transcript

Hi everyone and welcome to Val's antifragile network states miniseries on the green pill podcast. We're really excited to to kick this season off and I think most of us would agree that we're living through this period of accelerating change in the systems that that we depend upon. And our global infrastructure from the financial system to energy systems to food, water, and even the supply chains in the in the economy are proving increasingly fragile. And when one of these components fails, the entire system is at risk.

This series sets out to explore in concrete terms what we can do to become more resilient both individually and within our local communities. We believe that humanity already has the technology we need to build a more antifragile future through leveraging decentralized systems that grow stronger under stress. So out of this period of crisis and change VA is facilitating the emergence of antifragile network states. These are global communities with local hubs focused on taking the principles of crypto self-s sovereignty beyond finance to our food systems, water systems, energy, housing, and more. And we're excited to kick things off by looking at

a macro scale. This first episode is titled the next super cycle. And joining Mark and I for this conversation is Joseph Luben, founder of Consensus, co-founder of Ethereum and chairman of Sharplink. Joseph needs no introduction and on his journey in the Ethereum ecosystem over the past 10 years and more. Uh his work has been laying the foundation for a more decentralized and antifragile future. Together we'll be exploring how building network states can be the next phase in the evolution of crypto. A healthy antifragile response to change. Transforming global crisis into local resilience.

Let's dive in. >> Hey Joe. >> Hey Joel. >> How's it going? >> Good. How are you? >> Pretty good since since you and I last spoke. >> Yeah, it's been a while. All right. So I'm gonna I'm gonna start Joe. Uh so as as part of uh X spaces that we have been running with VOTE, we always start with the first question of what is your why or like basically what drives you to be a builder in crypto. I feel a bit funny asking you this question. So I think what I want to do [laughter] uh instead is uh just kind of taking a trip down memory lane uh quickly. Uh

maybe going back to you know the moment you discovered Bitcoin. you know, where was that? How was that? How did this lead to Ethereum? Would be curious to just get Yeah. just this kind of a brief history of of how it started uh for you. I uh was working in the finance industry uh for a while after being a technologist all my life. did about a decade of uh robotics, machine vision, AI work during college and right out of college and lots of software engineering after that and ended up in the the world of finance and uh started to pay attention to quote the big game uh finance, economics, geopolitics and uh

right around 200 five I started to uh um to get concerns that uh um as I was paying attention to um macroeconomic factors um paying attention to managing other people's money um that uh uh there was probably too much debt in the system and uh fundamentals uh in the economy fundamentals in investing and trading were having less importance at certain times. Um uh we saw things turn into risk on risk off trades uh where the fundamentals just

went out the window and it was all about uh uh the liquidity that the Federal Reserve uh could provide. And so I looked deeper and deeper and I got disillusioned uh with how things are going. It it felt like uh we were probably moving into the dying phases of the US dollar potentially or some super cycle. I didn't uh think too much about super cycles uh back then. Uh but uh it felt like uh I was aware that uh that most currencies didn't exist for that many decades. uh and uh we saw a japanification

of Japan uh where essentially they had a massive boom and bust and uh and they had a couple decades at least of of malaise in the economy and I was concerned that the the debt in the system in the US and globally uh would lead us into a japanification of of the US economy and uh and the therefore the global economy uh pretty much. And so um that was the context that that I was experiencing uh when I read Satoshi's white paper. So I felt like uh um we're in a lot of trouble. I don't know how we're going to grow our way out of this.

And then I read the white paper and and I was like, "Hey, we're engineers." Um Satoshi Nakamoto just invented one of the most profound things in human history, decentralized trust. And he showed us how to operationalize it. Um, and we can just build our way out of this mess. We can rearchitect the global economy on sounder foundations, uh, a foundation of decentralized trust. And I didn't know at the time, but uh, uh, upon that foundation of decentralized trust, we could build a a decentralized finance foundation. Um, and then we could, you know, build out rearchitect the rest of the world. Uh so uh that's how I came to it or at least the you

know that's the the story that I use was really mostly for the t-shirts and the hoodies. Yeah, it's definitely for the t-shirts and and and the hats and the hoodies. Uh that's awesome. I I remember pretty well uh the first time I met you at the consensus office in in Bushwick uh early 2016. Um and uh I already had discovered Bitcoin but honestly I didn't know much about Ethereum uh when I went there. It was basically a student uh organized uh visit. I was doing my my MBA back then and um yeah, it was pretty inspiring to hear kind of the the Ethereum I guess

pitch, right? Or or value prop um when I was there and I I met you. I think there was a bunch of other people also from the early days there. And um it just uh it I think what attract attracted me the most was it just sounded like Bitcoin but on steroids in a lot of ways. And uh you know >> Bitcoin with diverse functionality. >> Exactly. And and applied to many different or could be applied to many different industries as as we're we have been seeing over the past years.

Um, so you mentioned the word super cycle and I've heard you talk about it a couple times. How did you connect this back to, you know, the early days of Bitcoin and um the distrust in the financial system and the debt system? Uh, I feel like there's probably a bigger story with the super cycle uh layer on top of it that uh yeah would love to get a little bit uh into it. So back then I was just uh thinking about um the debt um that uh the world was in and the the difficulty in in growing our way out of the debt. Uh it would require either some massive innovation um like maybe free energy or or um instant

transportation mechanisms or artificial intelligence or or something like that. uh decentralized protocols plus artificial intelligence uh could potentially uh do it. Um but I wasn't confident about those things back then. Really what what ends up happening is just financial repression uh where uh the nation states that are in massive debt um just print a huge amount of money. The people who don't own the right kinds of assets though they get pretty screwed. And so I anticipated that there'd be a bunch of years of that. Uh so that was the I I wasn't using the term super cycle back then but that that was uh the kind of um end of the monetary regime super cycle that

that I was thinking about but that later on I I uh encountered the Strauss and how u generations theory uh where there's this idea that uh at least in recent human history over the last few hundred years um uh there is an 80 to 100 year cycle called a seculum and it's divided into four generations. Um essentially uh the first generation is it comes out of some sort of cataclysm like World War II. Um and um a new hope, a new social contract, philosophy system of the world emerges.

um and people get excited about it. And so there's uh renewed um hope, let's say, and renewed building. And that moves through the next couple of generations where it really gains steam. And then the third generation, the cracks start to appear. The technology that has been servicing the world uh well starts to be exploitable. And um uh we just grow too sophisticated for the old technology and uh um and then by the fourth um generation uh we're just like exploiting all the cracks in the system and uh and

things get awful and some sort of cataclysm like a world war happens. Um and so many people believe that uh we're we're in the fourth turning or the fourth generation right now and uh we are careening towards a brick wall. Um and uh hopefully there won't be a a major kinetic um world war although I don't think we need uh a kinetic world war to be to consider the current state an actual global world war right now. Um it's being conducted in so many different ways. Some of it's kinetic. Um but uh uh mostly it's uhformational, financial, etc. Our uh our computer

systems are beating the out of each other. um between nation states whether it's uh nation state actors or quasi supported non-nation state actors you know the North Korea Lazarus group uh obviously China's been um doing things uh to the western world uh that involves stealing information and and other things and the United States is probably really good at uh at certain kinds of uh cyber espionage when it needs to be, although it uh proclaims to not be offensive um in uh in its activities, but who knows? So anyway, um

we have these two definitions of super cycle that I think are pretty closely related. Uh I think uh uh when you have those kinds of intergenerational activities um you're probably doing things uh in the monetary con context uh that uh uh that sort of exacerbates what's what's going on. Uh so here we are uh fourth turning. Um and probably in every super cycle you probably um start to see the seeds of the next hope, the next uh foundation for the next super cycle. They probably start to emerge maybe halfway through or twothirds of the way through and and so it picks up steam and finally it uh it's

uh able to assert itself. Um, and I think the only way that it can really assert itself is if the old the old system uh weakens and collapses and hopefully it uh it will be fairly smooth and um not catastrophic. >> You've kind of touched upon this already, Joe, about like where you think we are right now from a super cycle perspective that we're we're in this fourth turning. I'm curious like where where do you see things playing out from here? >> Um my guess is we're in a uh nearing the the halfway mark of the the fourth turning uh potentially. Um so I'm I'm no expert. I I've only uh been

through one of these cycles that I can remember and this one will be different I assume than the previous one. Um I also think uh things can be different this time in in some pretty profound ways. Um, for millennia, uh, we've been, um, laboring under a top- down command and control system. And those kinds of systems are are really good for building civilizations. Um, they're not really good for 99% of the people in the civilizations. Um, and we actually have a chance to to make it very different this time because Satoshi invented uh

decentralized trust. Uh, and so if we can land this fundamentally new operating principle uh for humanity, then uh uh we can essentially take all the all the good stuff um that you get in top- down command and control systems um efficiencies, abstraction, etc. Um, and we can add horizontal organizational fibers to it and and create a uh um a sturdier social fabric um vertical and horizontal tapestry I guess. And uh um and I think that uh you know we're going to have to remain vigilant u because there will always be interested parties um who want to

capture control and grow their control. uh there will always be new vulnerabilities developed I think because we're going to keep um progressing our technology and uh anytime we build new stuff we're we're going to potentially introduce um new vulnerabilities or um you know some things that could be exploited by by those who are interested in gaining an advantage and and that's probably a a good dynamic that uh you know you keep building stuff and then you rely on uh the uh hackers slashconultants to uh to exploit the system and show show you where the system needs to be improved

and they can extract their consulting fee uh for stealing money from a system that uh hasn't been sufficiently hardened yet. Um, and so I think uh I think we're probably in uh or at the precipice of moving into a world that uh we can distinguish from the current system of the world which is based on scarcity and you know all the fear uh that goes with living in a a world of scarcity. Uh I think we're going to move into a world know a a post scarcity uh abundance-based world uh where we can uh focus more on creativity

and making sure uh everything is healthy at various different levels um ecosystem psychological family tribal nation state etc. How long does that take to get there? I'm I'm not sure it's 10 years away. Uh but uh I think we might um start to see some green shoots of hope uh by 10 years from now or five years from now. So that uh or start to get really excited about the next um super cycle or two.

>> Yeah. It's funny because I think uh when people think about the end of a cycle, no matter what it is, I think they overemphasize the end and forget about the fact that there's a new one that will start after it. >> Absolutely. >> I remember we were having a chat once about this and you you said something like, you know, the next day after the super cycle ends, we'll all kind of go have breakfast somewhere or something like that. So, so Joe, do do you see this transition as a kind of full-on collapse or more of a gradual, you know, uh, transition with some crisis here and there obviously, but you know what I mean? Like is it like a big meta crisis that could

potentially happen that maybe also needs to happen, right, to take us to the new one or is it more of a gradual transition, a gradual gradual I guess awakening, right? Uh into the fact that we can do things differently now that we have uh new tools and new technologies. >> Yes. To all the all of the above, both sides of of uh your framing. I I think uh we assume the word collapse means something negative. Um and if we or we just buy into this uh idea that things are cyclical or or spiraling uh and that we're um cyclical in the sense that we repeat uh certain uh expansion and

contraction patterns and we're constantly getting um healthier, more sophisticated, etc. Then uh uh then the collapse part is is probably a healthy element of our evolution. So, yeah, it's probably going to be rough for some people. Um, it's probably going to be invigorating and empowering for lots of people. Um, pretty much most of the people that that get through it hopefully. Um, I don't know what to say. Um, if you're uh paying attention and in the flow, you should uh be able to do fine. Yeah, I I think we're going to talk a bit about that uh when we get to talking about uh self- sovereignty and uh the the concept of sovereign individuals and uh how

people are more empowered today to actually be owners rather than uh just uh being uh reactive to things. Uh but before we get there, um you used I think you used the word uh trustworth uh in in one of your answers >> recently. >> Yeah. And um and obviously like you know we've been talking about decentralization for for a long time and I think it's pretty clear why it's it's one of maybe one of the cornerstones of the of the new super cycle. But let's talk a bit more about the trustworth I guess perspective right which I know is linked to the decentralization um topic uh but would love to get yeah a bit more

into that. Yeah. So, um we at Consensus recently wrote a report um on um on trustworth on um the nature of trust uh the fact that trust is a kind of uh commodity a virtual commodity and uh that uh Ethereum is probably the most profound embodiment of the idea of trustwear um in existence. Um, so I think it was Mark Andre who maybe 20 years ago said something like software uh was going to eat the world. Um, and it did. Uh, and it was good for the world for a while.

Um, and it's still good for the world but uh, um, it's also u taken on elements of toxicity. Um, so big tech. Um so if we think about it uh in terms of the evolution of the internet um the internet started as open protocols, open source, open specs. Um that was good. Uh web one same thing. Um people loved the web because it was open counterculture community uh open source, open protocols, open spec specs and then uh >> it was also kind of decentralized, right? Like you could fire up >> Oh, well it was very decentralized.

Yeah. Yeah, absolutely. Um and then the the big money came in um and uh big tech grew up e-commerce, mobile, social, um and when the big money arrived, uh that's when it uh web two happened and it it closed up, it became Walt Gardens. Um uh big tech started making use of AI uh so that it could know us um better than we knew ourselves. so that it could sell stuff to us and sell us to advertisers and uh and big tech essentially became uh weapons of mass manipulation. Uh and those weapons uh became available to to anybody who would

pay for them. uh and that included uh forces that didn't appreciate uh western liberal democratic philosophy uh and uh and you know were essentially uh doing what they can or doing doing what they could and what they still can do to uh to weaken it. Uh and so trustworth is this idea that uh um that this software that has come to eat the world uh and uh has has effectively in many cases been really harmful to the world um can now be replaced by something that uh um is more transparent um and is based on uh

objective trust uh rather than um subjective trust. trust and manipulation and fake news and etc. And so this idea also uh that trust is a new kind of commodity is I think a really profound one. Uh because if you think about uh all the valuable commodities in the world, it may be the case that trust is the most valuable commodity. Uh because in order to do things you you require coordination. In order to do big things, you require coordination across many people and actors. Um, and top down command and control was how we

did it before, but now we can do it with with horizontal coordination mechanisms as well. Um, and so we're now at a point uh where uh through decentralized trust uh we can do large very valuable things. Uh and so if we have agreements, transactions, relationships, processes uh that we can organize and coordinate um in smart contracts on Ethereum, we can get lawyers to help us write those agreements uh and then they're out there and then they can be reused. Uh we can guarantee the execution of agreements, run transactions and processes and uh um and how much cost does that save us uh

in terms of the fails that are avoided in terms of just all the mechanism required uh to execute all the activities in an economy. Um and if we can speed all the those things up um and do more of those value creation events per unit time uh then the power of compounding will enable us to grow uh faster and faster as a global economy. Um and not to mention a somewhat borderless uh increasingly borderless global economy. So um it is our thesis that uh uh that trustwware is going to enable the world to grow um dramatically. Uh I think it's Scott

Bessant's thesis uh that uh uh the United States uh uh isn't going to cut its expenses. Um uh and instead it needs to grow its way out of uh the current dead hole that it's in. and United States is leaning into uh our technology. And so we're going to see uh essentially a huge amount of uh of the financial industry um and many other industries embracing our technology and and we're going to see uh ether uh the highest octane trust commodity um probably which really mediates all these uh decentralized transactions. uh we're

going to see it, I think, uh explode in value as the world's most valuable commodity. >> Very very interesting. And I I I like uh it's the first time I hear the term trust as a commodity. Uh which is interesting because a lot of people talk about you know data as a commodity or even like >> Yeah. So there are virtual commodities. >> Yeah. intellectual property, data, uh goodwill, >> even like G GPU, you know, computing uh power today, right? In your opinion, is there a race kind of happening between centralized AI and the web two, you know, model of top down control and uh,

you know, data forming and manipulation versus the trustwear, you know, um, players, right? who are more about decentralizing the system and empowering the end user and um distributing basically um um uh you know decision-m and and influence right across multiple actors. So if I were um writing, directing, producing a B movie, uh then I would I would model it as yes. Uh uh it's a uh global battle between uh the bad forces of centralized AI and the good forces of uh of the decentralized

people. Um but I kind of think of them as complimentary um and necessary to one another, necessary to us. Um uh so first of all we really need AI because the world is too complex for us to navigate right now and we need our our AI digital twin allies uh to help us interact with all the um machine intelligences that are out there that are going to uh essentially level us up all day every day on on anything we need to be leveled up on. Um uh I don't know about you, but I don't read terms and conditions and pretty much never have on the internet

or on pieces of paper. And uh and it's getting more and more complex uh to try to interact with DeFi or uh interact with uh with Dows soon. Uh people are not going to read proposals um to Dows. Um, and so we're going to need a lot of assistance uh in navigating the increasingly complicated future. Um, and I'm there's a bunch of AI projects that are starting to do decentralized training and and decentralized sourcing of data and cleaning of data and decentralized inference and and so I I think that um that AI is going to be realized well in decentralized infrastructure. Certainly

some of the the bigger foundational models um may need a billion GPUs or or something like that. Who knows? Um it may be the case that uh that that architecture um the transformer large language model architecture has made most of its gains. uh it'll probably still be able to make some gains, but uh it it's really nonbiological in in how it operates. Um you talk about just an amazing amount of hardware, an amazing amount of energy. Um whereas if I give you a peanut um mark and ask you to uh to answer some complicated

questions, you can do that all day long. Um pretty much. And so, uh, hum human, uh, biology or just biology is incredibly intelligent. Um, and where we've taken cognition and reasoning to is is pretty impressive. Um, the the human species. And, and so, um, yes, I I think uh, machine intelligence is uh, will in various ways eclipse us, um, but not in all ways. Um and I feel like uh essentially we're moving into a hybrid uh relationship between human and machine intelligence uh where we are going to become um collectively

uh a hybrid organism. Um the way I'd like to see it is uh yes, we'll have a bunch of amazing foundational models. Um, ideally, uh, they'll be public goods or or paid for, um, in various different ways. I would like to see some of those maybe uh become open maybe open open AI becomes actually open AI and they tokenize um their system and they pay people in tokens for providing real time data real-time information real time uh communication explanation etc. I would be happy to um to stream my social feeds uh into foundational models. I'd be

happy to have uh my ray bands or a swarm of drones flying around my head uh feeding information uh into some um some brain trust, some centralized brain trust so it could uh stay up to speed on what's going on. Um and you know I should get some tokens for that or something like that. Uh I think the way to do that effectively will be to have um user interfaces owned and controlled by the people. Um so I would not want any of the big tech um organizations to own my user interface. Uh I would uh I might be happy to buy one of those off

the shelf from them uh and then customize it, tune it um bond with it. Um, it own me, I own it. Um, not sure exactly what the relationship will be. Um, uh, but it it uh it'll be my digital twin, my controller. I'll share everything with it. Uh, and if it uh if we want to get tokens from one of these centralized AIS, then uh then it can clean up the data so it's not uh identifiable in a negative way um to me. uh and still we can um send in really useful uh data while while it protects my uh um my health in various ways. Um so less of a uh a weapon of mass

manipulation and more of a a collective hybrid intelligence thing. You spoke earlier about uh software eating the world uh and this sense that uh trustwear can can help us uh respond to that and and >> trustware will save the world. Exactly. >> Rid the world of indigestion. >> I'm curious about uh how you see this applying to the physical level. So beyond the the software level, do you feel that there is a need to uh apply trustwware to physical infrastructure as well as digital infrastructure?

>> Yep. Yeah. I've had this discussion with uh with a handful of people over the last two or three years. Um and what's going on is that uh for around a decade, a little longer, uh we've been building uh decentralized castles um on other people's centralized clouds. Um and uh essentially we're we're critically dependent on on the old school infrastructure. Um, and we could be totally rugpulled uh at any point in time if uh President Elizabeth Warren uh comes into office. Um, she could uh know shut down

uh all the energy to uh uh to decentralized that'd be hard to do obviously, but uh operation choke point 3.0 there lots of ways that uh that we could find ourselves in trouble again after making significant progress. uh for a few years. And so what we need to do uh as quickly as we can is uh make laws uh that protect us in in different nation states. And that's going pretty well in the United States right now. We should use the large amount of capital uh that we are creating in the form of magic internet money and uh um you know uh which has real purchasing power. Um and

we should make linkages to to liquid deep uh traditional capital markets which is happening right now uh with these uh digital asset treasury companies. I don't know how it's organized, but it's probably you could probably have a bunch of Dows um that uh um that um amass large amounts of capital uh and then um make use of legal structures uh that enable um people in our ecosystem uh to purchase infrastructural things. So, land, access to clean water, clean air, food security, energy security, chips, uh etc.

And I think the way to do that is to somehow figure out a way for lots of different decentralized organizations uh consisting of overlapping and and diverse um memberships uh to uh have ownership over uh a lot of different pieces of infrastructure so that uh so that uh uh no single DAO controls a single piece of important infrastructure completely. Um but that there's uh um decentralization at the Dow level and decentralization in terms of how many Dows um control how many uh different pieces of infrastructure. And

so um it's idealistic but uh uh if we could achieve something like that then uh we could move into a world where everybody owns a piece of the foundational elements that we're all dependent on. Ideally, as many people as possible would participate in ownership of some of these dows. >> Yeah. So, yes. Yes. Decentralization is important in physical context. >> Uh I I've seen this take uh some time ago. Uh I forgot where where I read this but like someone was talking about how technology has been increasingly trying to mimic uh nature and biological systems in terms

of uh decentralization and and resiliency and anti fragility. So the quote unquote idealistic future you just described sound a lot like uh getting closer to that model. Yeah. >> Yeah. As I said before, um in order to do important and valuable things, you need to coordinate um a lot of people currently. Um and the only way we knew how to coordinate people was through these, you know, brittle, brutal, top- down command and control structures. Um because we didn't have computers, we didn't have walkietalkies or telephones.

uh we didn't have AI and decentralized protocols and so uh we we built the technology uh to enable us to to do things smarter. >> Yeah, absolutely. So one question to to build on this uh has to do more with um anti-fragility and and resiliency. So you know as as we all know um we've also or like because we've been relying on very centralized systems uh this also led to um a bunch of fragile systems that could uh break under stress or or crisis. My question is Joe how important is you know resiliency or anti-fragility as part of this transition to a more

decentralized uh future? >> It's a pretty rhetorical question. Um, >> it is I think you're either antifragile or fragile. Um, so even if you're a really strong diamond, um, you're still not anti-fragile because if a force comes along uh that that's strong enough, it smashes you to pieces and you can't identify uh where your weaknesses were and reassemble yourself better and stronger. Uh and so you need self-awareness and uh creativity and um um just the ability to to constructively evolve yourself. So >> yeah. Yeah. Yeah. Absolutely. All right.

Uh I want to move on to the topic of network states. Um which uh uh I think we spoke about a couple times. I know at the last Defcon um you definitely talked about it and uh you kind of also announced the softs uh project or sovereign uh project. Um so let let's just start maybe with the with the basics in terms of what what's a network state or at least what's your take or view on uh what a network state really is? A network state is a riff on um nation state uh where um it's probably organized more online um

and it probably consists of individuals either um human or machine intelligences uh that are more self-sufficient um and further along the lines of self- sovereignty. uh and so it still is really valuable to organize collectively uh to do things and since we're moving into a world where we will each have so much more capability uh via technology via AI um you know there will be companies soon uh consisting of one human um that uh that become billion dollar companies or or larger um might

happen within a year even who knows. Uh and so uh in that kind of world um the nation state uh weakens in its importance and in its power and uh small collectives, individuals etc. um become I guess the most powerful unit of organization um and most powerful atomic unit of organization maybe um and uh and then you still want to um to coordinate um in terms of things that uh all those units all those self- sovereign units uh care about and and are aligned on. And so maybe it's the A ecosystem, maybe

it's the consensus ecosystem, maybe it's the uh neighborhood in Brooklyn. Um we will probably um have a lot of different kinds of network states um that are I don't know focused on a certain set of goals and uh they can do things like uh issue tokens and set goals and uh achieve their goals. they can find people who uh who will accept those tokens um in exchange for for doing work to achieve those goals. Uh, and so we're probably moving from a world of roughly 200 nation states, and that that'll still be there, but we'll have this additional overlay of network states um

that uh can get more of the work done um uh where uh the nation state does a really shitty job of getting mo most of the work done. Like it's still necessary for for certain things. Um and so you can think of, you know, joint stock corporations um being an overlay over the nation state or monarchies um before that. And and so I think this is just uh another layer of organization. Yeah, it's it's pretty interesting because I think or at least what I've seen is that different groups um have talked and aspired to get to this you know level of of network state like I know in the

promulture space uh they definitely talk about something they call alternative nations in in their book um obviously there's the the sovereign individual which was written in the early days of the internet that kind of also alludes to it >> unbelievably ably preient book. >> Yeah. And so it just it it almost feels like this is kind of aspirationally at least what uh >> yeah I think arbitum uses the term something like digital sovereign nation or something like that. >> Okay.

Yeah. Very very cool. Um so consensus will um over the next year or two and going forward uh will pursue activities u towards establishing a consensus network state and uh consensus network state will be largely resident on on linear digital real estate our layer 2 network. Um, and we'll probably invite lots of uh um companies that we've spun out or companies that we partnered with and um I think uh I think it'll be an important uh economic construct going forward

because we're we're essentially building token economies. Um Lineia is in the early stages of building a token economy and uh um consensus will be doing something that that heavily overlaps with that token economy. I'm curious like to pick up on that point you raised earlier about like the the resilience and anti-fragility of all this and how that might be like idealistic and then how do you uh kind of resolve that with the potential like that you're talking about like this economic potential as well like it seems like there's also that's massive upside so there's a there's an idealistic element to it but there's also an economic argument here as well right >> I don't see

a uh contrast uh between being idealistic and uh and being massively economically successful. I think they they work nicely together. um better to be economically successful um and um have that ramify um idealistic >> agree and I guess going back to the uh kind of sovereign digital territory and and Lineia's role in this in the emergence of these network states what do you imagine will be like the currency of a network state or network states on on the will it be like stable coins the MUSD.

>> I think it's going to involve involve tokens pro probably lots and lots of tokens. Uhoh. >> Excuse me. >> Hello. >> Hello, Lilycoin. [laughter] >> Um, she's trying to for Lily coin. [laughter] >> It's going to be my token. >> Yeah. the nature of of money will be uh qualitatively different going forward.

Um so we there's I don't know how many different fiat monetary systems there are on the planet right now. Um uh but uh uh there will be um the stable coin phenomenon is really interesting. Um but they're just there's going to be so many tokens that represent um money stable coin money um commodity stable coin money uh decentralized stable coin money in the form of over collateralized CDPs um equity uh loyalty uh etc. And so I think it's really great to move into a world where the uh the tokens of value um can represent uh very specific things

um and just uh in the same way that top down command and control um can build great societies but uh um those societies aren't great for many of the people inside it. Um a single monetary policy um is uh um we're gonna have it for a while um from the US and maybe it's going to be global uh for a while but uh having all these other tokens available to us can enable uh much more granular monetary policies uh and so maybe maybe as uh the US stable coin strategy uh where essentially US stables dominate the

world um that's that's something that the US is going to pursue because the US needs to keep the US dollar politically strong um even while it devalues it um uh to other currencies in order to rebalance trade relationships. Um, having all that happen and still uh being able in your your local personal local or regional local or topical local economies uh having your own um numerator and and um units uh that you trade with uh um in uh the uh better global monetary system.

Yeah, going back to this uh nature an analogy that we made earlier and also like to the topic of resiliency and anti-fragility, there's also this concept of monetary diversity as similar to biodiversity. >> So one of the problems that we have in terms of monetary fragility is the fact that we have uh simple or single monetary uh models in in most countries. So >> I think in this case monetary diversity or token diversity is is a good thing. So, I think we're going to get really dynamic um and granular about um how money is used. Like um I I may want um the numer of my accounts to shift um

from the start of the month to the middle of the month to the end of the month. I may want to take in um certain tokens um that I need to use to pay for stuff at the start of the month and and a different mix of tokens in the middle of the month, etc. So, the the unit of account um uh can be different from the means of payment um or periods of time. So, it wouldn't have to all be done in the US dollar. Um, and now I I can just keep uh or my AI agent digital twin will will keep a list of uh of all the tokens that uh I'm interested in receiving um in the first part of January, which might be different from the first part

of February. Um and uh and then also all the tokens that I'm looking to get rid of uh for at certain periods of time. And uh uh and if uh if I'm buying some stuff from you, Mark, um our our agents can uh negotiate which tokens um get traded and and if we don't have the right kinds of tokens to get that deal done, uh Chris, the broker uh can make a little bit of uh a fee on uh on helping us do the exchange.

>> Hyperlid smart money as opposed to I guess dumb money today. whole global monetary system. >> Awesome. Joe, you mentioned the consensus network state. Uh I think also, correct me if I'm wrong, but I think uh I've seen some people using digital sovereign territory to describe linear. What is what is the consensus network state? What is it? >> I don't know. Work work in progress. >> So I it's a it's a pretty abstract idea at this point. It is aspirational uh and uh guess we have some ideas. Um but uh it the best characterization at this point is what I said already. Uh

it's that uh we're all going to be building token economies. We're we're going to be uh making some of rewards and incentives to uh um you know in the place of advertising in a sense um uh to help people get educated and utilize the technology and and so um Lineia will have its own set of rewards uh and its own um different platforms, grant mechanisms, investment mechanisms, launch launchpads um to incentivize building and liquidity provision and usage on Lineia and Consensus will be a big part of that but consensus has a a

broader vision. Um MetaMask has its own vision and and we're all very aligned too. So the MetaMask token economy will be um very overlapping with consensus and line but uh it'll do its own thing too. So you know it's like kind of like different companies uh doing their own thing. Uh but uh uh the interpenetration um of these different economies these different uh economic collectives um will will be different from um the walled gardens of uh of corporations.

>> Awesome. Uh one last question on on this topic and then I think we'll talk about uh you know the future and and individual sovereignty. Um you're pretty familiar with the work we're doing at Fifth Word and and Vidow. Um I think where do you see this work fitting into this bigger network state picture or or conversation? >> It's part of the decentralization of uh the physical infrastructure that that we all depend on. Um uh regenerative culture is important. Uh building uh self- sustaining uh organisms, ecosystems um is how we all evolve in in healthier ways. So um

having Fifth World and VO um connect some of these principles that we've been articulating and building out in the decentralized protocol economy uh to the real world and uh and helping people from the real economy uh embrace um healthier ways of doing things um is necessary um and exciting. Let's talk a bit more about this concept of sovereignty that we've kind of touched upon through the conversation so far. Um, but bringing it back to more of an individual level and I'm curious like why does this matter so much in the digital age?

>> What does sovereignty, personal sovereignty matter in a digital age? >> Well, it's it's the natural uh direction that I think we're moving in as we get more and more sophisticated. Um, and if we don't move in natural healthy directions, then we're um not moving in natural healthy directions. And so it's just kind of essential um uh for us to to evolve uh to become um better individually and better collectively. I mean that's self-sufficiency or sovereignty um um characterizes that to me.

>> So Joy in some of the conversations I have with like you know friends or just strangers even in a lot of cases this concept of uh let's say privacy or sovereignty right or or both um doesn't seem to be uh part of the mainstream thinking yet. It seems like most people are just um still prioritizing convenience um over um I guess ownership or privacy or you know the things that I think we care about as um as as crypto people. So maybe just a random question here like what would what would it take in your

opinion to for people to increasingly start prioritizing this um over just consumption, right? Easy consumption and convenience and uh you know scrolling uh through your Tik Tok for hours and you know that that type of uh of behavior. uh better better incentives uh better more compelling uh applications, interfaces, activities. Um so I think uh I think a next major phase of development of the decentralized protocol ecosystem will be about uh um being able to easily establish networks of of decentralized social graphs or

decentralized networks of decentralized social graphs and uh enabling people to spin up their own decentralized identity and add other uh people to it. um or other people can permissionlessly add themselves. Tokenizing those things um making money um from the content or functionality that you put on your network um rewarding people uh for with tokens uh for adding value to your own social graph. Uh so um I think uh in the not too distant future nearly all applications um should be sitting on blockchains uh should speak

token and should also be sitting on social graphs uh so that uh they have that underlying infrastructure um as as their economic context. Um, and so I think uh I think when decentralized social networking blipins centralized social networking, it'll be because uh it's exciting. That's where everybody is. That's where all the the fun gamification and interesting financialization and prediction marketization and all the the stuff that is um either gaining traction starting to gain traction or um doesn't seem too far away. I think uh all that stuff is is going to draw in um the younger

cohorts and because that will be just natural to them. >> Interesting. Yeah, I I didn't expect this answer very honestly. Pretty interesting. I think just since we're talking about >> what answer were you expecting? >> So, I'm going to get to it. So, just because we're talking about the future, I think another simulation could be that uh like you we might go through a period of let's say technofudalism where people realize that their freedoms are gone >> or be in a period of technofud. >> We are I agree but maybe like in a more intense way uh especially with centralized AI for example.

Uh I I guess what I'm trying to say is that is there a scenario where so I think I think that uh uh people um who are concerned about that future um believe that it's imminent um they will work really hard to avoid um centralized AI uh and so uh there is an existential risk if centralized AI takes hold. So, I'm not not worried about AGI or artificial super intelligence. I think the machines are are going to do reasonable things. I'm worried about the humans uh that uh that control uh essentially the uh the greatest uh

manipulation technology in human history. Um so, we can't let that happen. >> Okay, cool. Maybe to build on that also like from a different angle there's also obviously there's a lot of talk about the energy bottleneck right uh with the rise of AI and the need for more energy um you mentioned that I think of it as a need for so yes we need to like um gain access to and burn uh orders of magnitude more energy um as a civilization um but also we we need just much learning algorithms.

>> Absolutely. Yeah. >> Incredibly wasteful and and it's just they they do amazing things but uh um it's not biological style learning and biological style style learning is where we need to get to. Uh and so I think we'll see some revolutions there happening in the next few years. >> Yeah, definitely. And I've seen actually some startups already uh trying some things on that front which is pretty exciting. But Joe, do you think like do you or I guess the question is where does your optimism about energy abundance come from? U given that it does seem today that you know people are waiting for more of a nuclear renaissance for that to happen. Um we're

not close to controlling fusion. Um at least that's what it looks like so far. >> It's more of a a regulatory problem. um in the US um China's obviously doing a much better job of uh of uh creating much more energy and so uh if the US panics deficiently it'll accelerate things and the western world uh can follow um so you know uh maybe it won't go as fast as we would like it to uh but it will it will proceed.

>> Yeah. Cool. All right. Uh I guess to to start wrapping it up, um we have a couple of questions left. I think one one I wanted to ask you was about a speech you gave uh in 2019 at Ethereal uh the 2047 uh vision speech. Um we are six years into that. Are we on track? Are we doing better? Uh did your vision change? Uh just wanted yeah to to kind of go back there for a bit. Um so I remember a few things about it. Um and I I checked out maybe the first half of it uh a little while ago

and I think I predicted in 2025 that we'd have a hyperinflation or something like that. the US dollar would collapse. And so I I so I I don't um we're I guess I guess we're kind of on track. Um I I think in broadstrokes I was predicting a societal collapse. Um but that uh we'd already been building uh the important elements of decentralization so that uh there was a fairly smooth uh transition and and we were able to make use of the infrastructure that we scaled sufficiently um to uh essentially take

over monetary systems and and um figure out decentralized governance and and we would all sing Kum Mumbaya uh with Hal over decentralized rails in uh in the year. So that that was 2047 which was uh 30 years after the first Ethereal event. Um so uh I think I predicted that I could go into a store and grab a banana and then my AI agent would just u send some tokens and negotiate that and so I'd be like magic. It's intent um intent based architectures essentially where um

you know I I only have to think about uh the banana and my AI agent which is resonant in my head already is uh is negotiating the price of the banana and enabling me to purchase it. >> Yeah, >> I think you also had something in there about prediction markets uh which I also think it's on track. Uh it's >> I don't remember that. um >> like for didn't you have something about preial markets for governance or or something like that? Uh probably >> I vaguely can remember that. >> Yeah. Um as you and I have discussed uh I do believe that uh prediction markets are incredibly powerful and important uh and that uh I look forward to seeing the entire population get involved in

playing around with prediction markets whether it's for sports or uh who knows plots of movies or or whatever. Um and we really need um broad engagement. We need a lot of liquidity in prediction markets because when we have a huge number of prediction markets and and everybody's engaged in them, then we can start using them for governance. Uh and so you can you can set up propositions that uh um that enable essentially market-based wisdom of crowds uh to to make um much better decisions than subjective governance uh will do often.

>> Yeah, absolutely. decision markets, futarchy. Um there there are systems that are waiting but we don't have uh the participation and liquid and the liquidity to to enable them to be useful yet. >> Yeah, absolutely. But but it does seem it is on track uh to get there like there has been a lot of interest >> by by 2047. Definitely. [laughter] >> Yeah. So I guess at this point if we were to look ahead for the next 5 to 10 years, I'm really curious like what you're most excited about when it comes to a few kind of key topics. So starting off with what are you most excited about in the next 5 to 10 years when it comes to consensus?

>> Just continuing to do what we're doing. things are are going reasonably well and uh um our products are working well. Um and uh we've had a successful token launch. um the Lineia TGE um enabled us to issue tokens um and retain 15% of those tokens inside of consensus but then uh enabled the 85% of remaining tokens uh to be dedicated to the building out the token economy. Uh so so we will just put together a huge number of programs uh that uh that enable builders to get paid to build stuff and

liquidity providers to to make use of DeFi on Lineia and turn it into um the best place um maybe short of uh Ethereum layer 1 uh to uh engage in DeFi uh with your Ether and other tokens. So there will be more tokens uh as uh uh as people have speculated and heard. Um so we're we're decentralizing in Fura turning it into the decentralized infrastructure network. There will be a token. Uh we will decentralize elements of MetaMask. Um there will be a token uh and there will probably be a lot more tokens um coming out of consensus because um we have a lot of

infrastructure and and tremendous distribution uh to not only mechanism design protocols and and tokenize them uh but uh also we we have with the infur and den and um we have a lot of infrastructure to to land those tokens. I' I'd like to see consensus be a major driver of uh of um the scaling of Ethereum uh and the convergence of Ethereum. Uh so at some point probably five years from now or less um the Ethereum ecosystem will feel much more uniform um and um

fragmentation will uh either completely go away or sufficiently go away. Um so that uh builders can build uh for Ethereum um and users uh can use Ethereum and uh access the the universe of their their tokens and networks and uh uh and not have to worry about where those tokens are sitting and and which network to connect to. >> This whole conversation has just got me even more bullish on tokenization and token economies. I didn't I didn't actually think that was possible but like >> you are not bullish in >> um I'm curious though like just briefly to pick up on what you said earlier about the these deep liquidity pools in

trady or like the traditional economy like do you see consensus and linear having a role there? >> We are um so consensus was uh the lead investor in sharplink gaming um and we have raised a ton of money. We're going to raise a ton more money. Uh we've used virtually all of that money to purchase Ether. Um we are staking Ether. Uh we are um crafting uh strategies to earn even more yield on our Ether um longer range. Uh when it gets to the point where it just doesn't make sense for us to buy any more Ether because we don't want to um own too much of the monetary base. um then we will

invest in other protocols that are extremely aligned with Ethereum. And uh uh if we are smart uh and we get into uh some of the hottest younger protocols in the Ethereum ecosystem um and we use our uh massive uh pile of highest powered money um ether uh to enable those protocols to be successful, we we'll probably be able to to continue to return um huge value to the shareholders for for a long time, very same.

>> Um and uh and Lineia's uh um linear will be a significant part of that. >> Cool. So just to to wrap things up with another couple of questions about like you're looking to to the future about what you're most excited about. So we've talked about consensus and the role within with Lineia and uh yeah the bullishness there which is basically off the scale. What about when it comes to network states? What are you most excited about in that space for the next 5 to 10 years?

>> Getting into it. It's early days. Um figuring it out. So, it's a it's a new organizing principle. >> They they don't come around very often. >> AI. >> Uh hugely bullish about AI. Uh I I use it uh all day every day. Um except when I'm talking to humans. Um and uh uh and I I think uh that it's going to just uh level up humanity massively. I I think uh uh we will hybridize. We will have interfaces that enable us to to do things uh in real-time collaboration

with machine intelligences and in real-time collaboration with human intelligences. I think uh our communication interfaces are going to get better and better and uh um I think many people will be surprised at how smart human collectives are. Um and uh you know I I think of AI currently as as just a a really good narrative engine. um which you know it's a stochastic narrative engine that uh has been trained on on all the detritus that we've spewed onto the internet and into books and stuff like that. Um and in a sense it's hallucinating all the time until we get better and better at making sure that

it's um accessing factual information. um a and it's basically an amazing search engine uh for all the stuff that we've created um with a narrative engine that that can play that back to us really well. Uh and so the real good stuff is is coming from us. It's always come from us and uh um there will be reinforcement learning systems that uh that can make tremendous gains in narrow domains. Um uh but I think uh I think true evolution um lies at the intersection of of humanity and the tools that we create.

>> Very cool. And finally uh what about Fifth World and Val? What are you most excited about there for the next 5 to 10 years? >> Um seeing it grow up, seeing it become relevant. >> Thank you. Awesome. Um all right. Any final thoughts, Joe? The puppy is ready to take a walk. [laughter] >> Well, apologies for delaying that walk for the >> Is that code for us to go and launch a meme token on Linear Joe? [laughter] >> Yeah. No, not the been very patient, but this was great.

>> Yeah, this was awesome. This was a very cool uh nice conversation. Thank you, Joe, for your time. Uh >> and thanks for, you know, helping us kick off uh this green field vow series. >> See you soon. Right. >> Yeah. >> Well, we we really couldn't have asked for a better launch to this series. Thanks very much to to Joseph Luben for introducing the concept of the next super cycle and setting the scene for why building antifragile network states is so important at this point in history. Join us again next week where I will be going deeper into this topic and exploring the consensus network state with Simon Brown. Find the show notes and links in the comments below and be sure to follow us on X at joinval or join our Discord. You'll find a link on

our X profile. Thanks for listening and until next time, keep building and fragile.