Money Without Boundaries, How Blockchain Will Facilitate the Denationalisation of Money with...
Stay, hungry stay, foolish. This. Show was brought to you with thanks to Microsoft for startups, today's, episode is about the creation of a new global currency, unlike. Traditional currencies. Such as the dollar yen or euro this, currency strives, to be a risk-free store, of value and unlike. Bitcoin, and unlike, Bitcoin, which, tenders, to a finite, number of units this, store of value headers to zero risk as, a result it is it is constrained, not by an arbitrary, number of units, but by market forces of supply and demand the. Foundational, ideas are not new and not new unique. These. Foundational. Ideas are not new nor unique, a privately. Controlled, market based currency striving. For zero risk is, arguably, the holy grail of multi blue and multiple. Influential. Thinkers, and Nobel. Laureate who said again a. Privately. Controlled market-based, currency, striving. For zero risk is arguably, the holy grail of multiple. Influential, thinkers, and Nobel, laureates, on the basis for many monetary. And investment, theories, what. Is new is that advancements. In capital markets when combined, with new technologies, make, it possible for society. To facilitate. Old ideas, in new ways, we. Welcome author of money, without boat band we. Welcome author of money. With a boundaries, how blockchain, will facilitate the D nationalization. Of money Thomas. Anderson, welcome, to the show hey. Really. Appreciate it Tom let's dive straight into, it the way you do in the book and you. Talk about the paradox, of money where you share the concept, that money has three different. Roles in society one, a unit, of value to a medium, of exchange and, three, a store, of value yeah. Those, are the rules that money is supposed to have and I think that we're at a crossroads where, we're trying to figure out what. It is and I think at this time that we're in right now is just kind of an interesting time. To reflect on each one, those so let's. Start with money is like a way. To buy something, have, you used cash recently, not, for a very long time when it's interesting about cash actually now, that covert, hit they banned. Cash essentially, it's, been used to kind of go well you shouldn't pass money around because it could be infected, as well I thought, of that when I was reading your book right, so, I mean we've already kind, of taken a step as a society, to recognize that, that, money is not physical. Paper that's, not necessary, for transaction, we can be just fine using our credit, cards or debit cards, are you know Apple pay Google pay whatever the. Method, is so that. Method, though of money, was, historically. An important, one that I think is no longer you, know really a piece.
Of It so and, so. Then I think when we come into the next pillar what. Country, are you sitting in today I'm, sitting in Dublin Ireland, I love, Dublin it's it's great I actually had a wonderful time the woman that I love we decided, to get engaged in, Dublin it's it's far much I want to spend more time there so you're in Dublin and I'm in Chicago if you. Opt on a plane which I know it's difficult to do right now but you hopped on a plane and you came over here and we wanted to head out to a pub, grab, a pint or I wanted. To hop on a plane and fire in Dublin and you know either take my wife out for dinner take you out I'm. Not worried, about my. Ability, to walk, into a restaurant there and order. Something and you're probably not worried, about your ability to walk in to here and buy something is that is that pretty fair that's, absolutely, fair yeah so I think then if, we're, not using money. In this, aspect of we don't need the paper bills and I. Can fly to you. Know China or India or Timbuktu and I can buy, things then. The, question. Really has not with money it's not about the. Transactional. Methods it's about the piece that you talked about which, is the. Store of value and. That's. What I think is the most that's. What fascinates me so what. Is it. That, makes money. Valuable. And so I basically when I came into this book I started with a study. Of the, history of money and then, I kind of looked at the the major changes. That took place throughout, the you know 20th century because that was a major movement. In defining what is money and. Now I think we're at a generational, change in terms of this concept, of store, of value and, so I basically, isolate. The other two and my focus really is this what, is money as a store of value like what is it anymore you, mentioned there by traveling, and in. The book you talk about a trip you took to a rural tea, farm in China, and merchants. There were, literally crabby with you for trying to pay with cash and, I'd, love you shared this story just to put it in context because I'd really, like to double down on the, history because the history is absolutely fascinating. Because so, many of us are unaware of it yeah I think so so we'll look at where we are today, and then I think we'll kind of do a little bit of a backtrack but I'll tell you that story about China so I have, this good. Friend his, name is Kevin and we. Went to a city called Hangzhou. Which is kind. Of the the Silicon, Valley of China.
It's It's a it's an amazing, city and it's beautiful as this gorgeous giant. Lake and. And these beautiful. Historic. Monuments, with, also this kind of juxtaposition. Of this modern city and just outside of it are these really cool, tea, villages, and, they they harvest, a special form of tea they're long gene tea, is I believe how it is pronounced, and so Kevin. Takes me out and we go to this rural, place. And we he, knows this woman because he lives in this area and and it's, like she's like a grandmother, and and he's like we're having this very special, tea that she's making on her patio for us that was it. Was very, very special in this and I'd love to buy some of this and this is some, of the most special teeth that, is in China and I. Don't. Have a leap egg which is the electronic, payment form and I, could not pay her in cash she didn't want my cash and so. Kevin, had to alley pay her and then I asked Kevin, I think what can I pay you in my caption he said I don't like your cash either and so. But. Really I, could, not pay. In cash, Street. Beggars, mmm, actually have these QR. Codes where they would rather that you essentially, it's like venmo if you're familiar with that but you just they'd, rather receive, payments, electronically, then then cash it's amazing. How cashless society is moving today I share, that too just give it a little bit of a context of where we are today and everybody think about this listening because think. About this, period of lockdown, nobody's. Really exchanged. Cash this, has all been electronic. Pay paying, for your groceries, everything's, been delivered, everything's, happening in a digital world but let's as you, say there jump into the DeLorean and get the flux capacitor boot, boot it up and go back and have a little journey. Back to the past because, you, share the history of money people, have used everything from shells, to glass beads to soul to stores of value and for, centuries humans, have relied on gold, as their store of value yeah. So let's, I love that we'll jump in the DeLorean with the flux capacitor and, take a trip through time and I'll tell, you a little bit of my, version of kind of the history, of money people. Did you, know barter, and trade but, it, was you know quickly and efficient, for me to say hey, I have an ox and you have grain you, know how do I trade you an ox to make a loaf of bread and so so people started using different, you, know methods. Beads, and so forth as we're talking, about it and something that became a very accepted. Store value, was. Gold and. So that that kind of covers this time up to zero, but I think starting at zero is interesting, because if you were hanging out with you, know Julius, Caesar Mark, Antony, or Cleopatra. And you. Wanted to pay your soldiers, you, paid them in in gold gold, was the. The store of value during. That time. Fast-forward. To 1492, you know Christopher Columbus, when he head out to Americas, he, was really proud than saying coming back to Spain saying hey I discovered.
Gold. A lot of this was a quest. For gold and on. That land essentially. That he discovered, you, know the British, had this as a colony, and then, then you know Americans. Kind of said hey we don't like this rule, anymore so they kind of said hey let's kick out British. And and, we'll make our own country, and we're gonna call it the United States and so they we need to form a currency. And they, chose to form that currency as the dollar which was backed of course by, gold so if you're hanging out with George Washington, and Ben Franklin, or. Hanging. Out with monarchs, of England during, this point in time everybody, considered, gold, to. Be a stored value fast. Forward, and we had the civil war in the United States Abe Lincoln broke the gold standard, and, England. Similarly, had. A couple of times that it went off the, gold standard without, Dorking. Out on it too much but, essentially, that was put back together and when we came in to the early 1900's. Everybody. Really. Reunited. On a gold, standard up. Until, about the the, late 1920s. In the 1930s. Was a really strong, inflection point but that's about. 2,000. Years of history with whether or not you're hanging out with Julius. Caesar Ferdinand. And Isabella Christopher. Columbus George, Washington. Pick, your favorite monarch. Gold is what was the store value, through that 2000 year period of history and then you, go on to say in the nineteen hundreds the definition. Of money in the United States began to change let's share this next so. It's. Part of the United States and it's also a very, interesting story. With, respect to to England, in. The. 1900s, a have you seen the show Mary, Poppins yeah yeah, I'm showing my age there, yet the original original original original, so, it kicks off with this guy named you know George and he's like singing a song at the beginning kind, of taps. His kids on the head and has his brandy, and he's like saying you know it's a great time to be living, in London and if you think about it like England. Started. The. This, that's the century, the past century with, the world's greatest Navy, and and the Sun never set on their empire and and then, you look at where they are today and they're. Things. Have clearly changed, right they had this huge first mover advantage and, century that created arguably more, wealth than the other century and so you have to say well what what. Happened, there and I, think a lot of the stories is a money story, and after World War one. England. Was unable to essentially. Maintain. They're their gold standard, and, so. They started to break, from, away from the gold standard and the United States was able to hold it for a little bit but. Then in the 1930s. FDR. Actually. Ended up making, it illegal, for US. Citizens to own gold he confiscated. All of the gold he put, it into Fort Knox and he reset, the, price of gold and he, established the. Dollar as, a. Currency. Backed by gold, but. It wasn't convertible, in the United States so it's only convertible, in international.
Markets And essentially, that's, where the world sat, until. You came into the. 1950s. In, a period late 40s a period following World War two but but, that was a big break. In what was happening with countries, during that you know 1930s. To 50s but, then we start to get into the kind of much more interesting, things when, you zoom out right and you look at how, events, every. Event in history has, a huge, consequence, somehow, and oftentimes, we. Don't know how it's gonna play out it's just in a consequence, that will play out over many years and, often. Crises. Like the, one we're going through now this global, pandemic, will, have a major impact that, we don't know yet how it's gonna play out and I thought about how, when. You were talking about money and you talked about this in the book world. War two had. A huge, impact on the strength of the dollar for example, a huge, impact, into your point in action. Has these kind of counter. Reactions, and you have to think about these macro themes which will become, understanding. This history I think I'm gonna showed, you I think is important, and predicting. The future down the exact, path that you said so you. Know after World. War two a bunch, of people got together. From. Many countries around the world it's something called Bretton, Woods and they, established, that there was going to be a global, reserve currency at, the US dollar which was going to be backed by gold, we. Reset, the price of gold and other. Currencies, then, pegged themselves. To the dollar and, it's at that moment in, time that. The dollar really, became the, world's global. Reserve currency, England. Had a period. In there that they were they were also kind of a part of that system but essentially that fell, out which left really the United States is the last. Man standing as, a gold-backed, currency and. That continued, until the 1970s, following. On from that, World, War two impact, and the the pegging of against. The dollar a key, event took place when. Richard Nixon interrupted. Another show that I remember, which. Is the most popular. TV show of the era which, was Bonanza, and Nixon. Interrupted, this because he knew most Americans, would be watching it to make a major announcement yeah. So. What. Happened in, 1971. It was August of 1971. Is so. The United States has this role of. Maintaining. A gold standard. And. Essentially. Pressure. Had had, built up where we could no longer maintain. It we did not have enough gold to. Back-to-back. These dollars. And. So. Once. Nixon. Came, on the air and interrupted bonanza and said hey world, don't. Don't, worry about this gold standard. We're. Just we're good for it man we're the United States and we're, just gonna back, this money, with. Our work. And. This was a pivotal. Pivotal change for. Society, because as. We just kind of done we did the 2,000, years of history we'd had this gold standard and now now, there's this question, stars, of what is money and. A couple, of famous economists, along the way have been asking. Questions but, this. Gold, standard kept that Bretton Woods was was was this quasi. Gold standard, that Milton Friedman said, was destined, to fail and here, he was right it, did fail just a short. Relatively, short 25. To 30 years later, but. At that point in time another, economist, Friedrich, Hayek said. Look. Man if this money isn't backed by anything, then, what is money so you started to get a lot of questions, about what. Is money what is banking, what, are these things that people have and questions, really started, through those 50s and 70s, once Nixon broke that tie, nobody. Knew what money was at that point anymore yeah, and I when I was reading this it reminded me of an, incident, well many incidents, when I was a kid I was one of these kids always asking, questions to. Myself mainly, because nobody people, got bored or listened, to my questions, but, I lived. In a I lived in a beautiful part of doom and we had a beautiful garden and had a rockery and the rockery had these. Volcanic. Rocks. And the in the volcanic rocks there was you know those kind of fake crystals, yeah yeah yeah, and I, was. Frustrated to think why. Is that worth, nothing. While a diamond. Is worth something and all. The all, the values attributed, assignments which were in turn more valuable because of a perceived scarcity, and. Some genius social programming, I have to add but, I share all that to say that a currency, has an underlying economic, value itself but, it holds no value if there's, unlimited supply, so if a government can keep printing it what's, the value that's. The exact question and that's what that's, what brings us to this this show.
This. Concept, of scarcity, is is really. Important, so. Let's. Look, so we're at this point in the 70s, but let's just kind of back. Up a little. Bit here for one second, when. I had. A paper, dollar, bill in, 1928. If you looked at it it. Said, that, it could be you could take that to the bank actually to the Treasury, and you, could convert, it for gold and so, kind of like how you. Know trading an ox for grain was, difficult. What, people said is look walking around with gold and the right amount, is difficult, what, we're gonna do is we're gonna hold your gold for you so it's gonna be safer and we're gonna give you paper bills, in each. Paper bill is backed by gold. People. Are like wow that makes sense you've got an army. And stuff like that you keep my gold safe and I get a piece of paper and I can redeem it for the gold good trade for everybody, so. Then along come banks and banks say well look you don't want all those pieces of paper just at your house they're, not safe why. Don't you put your pieces of paper into. My, bank. And so, then you say well wait a second, how, do I know that it's safe and the bank says well the government's, got my back and the government's got your back so then if everyone if the government has everybody's, back then. Obviously the banks are safe for people are safe and, so you can come in get. A piece of paper from the bank take it over to the government, redeem it for a piece of gold and that's, why we had this scarcity, system, and, an aspect of trust, to. Your exact, point, people, started. Violating. That trust, I don't need to keep as much gold I can lend out more money I can do a lot of things and so, once that tie, was broken, then. There was a question, well. Will people be a good steward of this money and will we see scarcity. Or not and I think what we can see is that over. The past 50 years we. Do not have scarcity we've created a lot, of money and there's. No end in sight - and. There's no fiscal restraint. Anywhere. So there's a real question what, is this money you remind me of a quote I love by Robin, Sharma and he, said every, genius was first ridiculed, before, they were revered. And it's. An underlying, principle of this show where this change makers and often times change makers are ostracized but, many older ideas, about, the exchange of value seemed preposterous, 40, years ago before, the rise of digital currencies, and more importanly before technology. Has. Made it possible to use those, theories and ideas from. Some of the greatest economic, thinkers in history and you mentioned some of these but. I'd love a few to tell us a little better some of these guys you mentioned Plato which some will heard of Adam Smith others, less. Familiar. Irving Fisher milton friedman on friedrich, hayek because. These guys were thinking, about this and exploring. It unforeseen, problems, well before, others what I try to do it in the book and in my research so I try to explore. This concept of, of, what, is money and when. You ask that question you actually can go back to, to. Plato and. You. Know not not Plato the thing that my kids play with Plato like you know the great. Lifesaver. During the lockdown. Absolutely. And. What's. What's, interesting is this question has been out there of why. Is gold, a store of value and, people have questioned, that throughout, its time. So well. Gold has was. Been a relatively, reasonable thing. People questioned, it M they. Questioned, it for a lot of reasons because its, value only was and that it had, scarcity. But, we constantly were discovering, new amounts and people said you know does that really make what do we don't know how much of its out there and it's, kinda like the story you talked, about with the geodes and so let's go back a long time people questioned, it and so people, started. To explore something called the the credit, theory, of money and that goes, back a long time basically, saying that. Money. And borrowing, are just opposite, sides of the same coin if. I lend you you. Know ten dollars and. You promise to pay that back to me then then you owe me ten dollars and, you're good for it and look if imagine I could secure it by your house, or your mic, that you're using right now or whatever the case is then. That. Can. Actually be a secure secured, money, as a form, of money is actually an old, old, concept. And in the. Early 1900's, a number of economists started, to build on this Irving, Fisher among them and. I refer, to a number of things we can go into more depth if we want but the concept. Here is then Milton Friedman really started to kind of focus.
On This this concept, of what is money and I. Think. That where this really got built, up to the most was was with him Frederick Hayek, essentially. Said look he. Wrote a book called the d nationalization. Of money and what it said is that simply this if. The government's, money is not going to be backed by anything then. I could, create a private, bank, the. Envisioned like a Swiss, bank issuing. A currency, that he called the ducat, and he, said I'm, going, to post every, day. What, is securing. This, currency and I, can create a private, currency. That, is a known, store, of value because. You'll know what, backing, it because, I'm going to print the. Audited reports, in the newspaper, essentially, and this. Currency, will be superior because, it will have more transparency. And. And things, backing. It than this false. Promise. Of, the government, and this, was a very influential. Book and I think a killer. Concept. Of a private, currency, backed. By something. That people can see on, any. Given day that. You. Can kind of see to where we are today and where I think some of these things might be going but I think that was incredibly. Visionary. And he of course won a nobel prize in economics not. Directly for that work. But it was just one of the greatest economic, thinkers of the, past century this brings us nicely to cryptocurrency, because, this. Is a movement and it touches millions. Of people and billions of dollars in investment market. Capitalization. And exchanged, value, cryptocurrencies. Are ahead melt. For some of, us and I, have a big ass for you here to share because. You, ask these questions in the books you pose these questions and, I'd love if you explore, them for our listeners because a lot, of people I talk to and me included, struggle. To get my head around crypto, currencies and why there's so many etc, but you do call this so you say here's, a couple of questions you posed what. Are coins versus, tokens, what. Are securities, versus utilities, and how, does this relate to being a currency, and a store of value that transcends, time because. As you say billions. Of dollars are riding on the answers, to these questions yeah. And, it's. So interesting everyone. Makes, the comment the topic always very, complicated, and so. I'm, gonna try to do kind of a simple, approach to it and then, we can go however deep you want but I'll kind of keep it on the outer layer of the of the onion I think, the best way to start, is to. Separate. What. Is blockchain. What. Is Bitcoin, and. What. Is cryptocurrency. And and then we'll be able to get into what are security, tokens and you know coins and all those things but these things are are different, from, and I like to start, by. Understanding, essentially. What blockchain. Is so. I have a daughter and she's. 12 years old and she. Likes, to keep a diary most. Twelve-year-old girls like to do that well, the, greatest fear. For her two, things what if she lost that diary because it has a lot of her secrets. In it and things that she'd like to keep and then. Number two is she, has two brothers and their, little mischievous. People. I love them but they're crazy and they, all they want is to read her, diary so. The, best diary. That my twelve-year-old, daughter could have would. Be one that could never be lost or destroyed and. One. That could be encrypted. Where. Only she. Could see it and that she would know what. The the contents, of it were but her brothers could not look, at that so imagine that it's completely, protected. Forever and nobody, can access that, information that. Conceptually. You can understand how that'd be a very valuable diary. To a twelve-year-old girl right, what, would be the worst thing if she needs to know that no one can tamper with her diary she needs to know that you, know she writes in there I like mic. The, mic isn't erased and Aiden, written in there so. She needs, to know her diary can't be tampered can't be read and it's safe and protected everywhere and so. That. Is what we actually need. As it, as a technology. In many. Applications. To create. Decentralized. Trust. And so what blockchain. Does is it solves this trust, gap, in society, that. We'll talk a little bit more but that's that's, really just what it does blockchain. Solves, the trust gap and well that sounds small it's. Potentially, more powerful, than you know like the internet was one cool thing the cloud took it to a new level. Solving. This trust gap takes things to an even deeper, level, of, what we can do with, decentralized. Full, trust. Communications. And interactions, and that's, what what blockchain, is -. What gave us blockchain, is this, concept, called Bitcoin. And and. What, Bitcoin, does. Is it, is a, limited. Number, of units. And. That's. It I don't think about it anything. More than that so all that.
We Know with Bitcoin is that it has a limited. Number of units there's nothing that backs those units it's, just a limited. Number of things and to. Some people. They. Say well that looks. To me like it, is nothing. Because. In some ways it is nothing into other people it's actually a Holy Grail because, it answers the question that. You, were thinking about in your rockery if well, why is this not valuable and why are diamonds valuable, in this question of scarcity because the world had never truly, had. Scarcity. Before that we don't actually know, how many diamonds are out there we don't what have we found an asteroid, with gold right if there's you know there this concept, of scarcity, didn't, exist and and what makes Bitcoin possible. Is, blockchain. Technology, and so. Now. That, you have this concept, of scarcity, a lot. Of people started saying look the, dollar is, not actually, backed, by anything the government doesn't owe you anything with that dollar it's, not inspire. Supply, and so, the Bitcoin. Enthusiasts. Say anyone. Who likes gold, and anyone who values scarcity. Should like this more because there's a limited supply and. So that technology, of blockchain. Let's this concept, of limited supply which is very, special and it never existed, before now. Exists. Well. The problem. With, that is that as you kind of said every action has is kind, of counter reactions, and maybe, these not unintended consequences, but once. You can now create that. Super, diary and you can, create this concept, of limited supply, well, then other. Coins. And tokens, started. To be, created. And what those are is, essentially, they if. You can make a Bitcoin, with a limited supply of 21 million tokens, actually. Kevin the. Guy we were talking about from. China from Hangzhou Kevin. And I made a Kevin. Coin and, you. Can use the same blockchain, technology, we could make an Aiden coin and we could say well bitcoin is valuable, because it has a limited supply of 21. Million units why. Don't we just make an Aiden coin with 10, million units let's, do it let's do it man let's, do it. And. And. This is an Achilles. Heel of the argument, that people say now. We. Actually can create limited, supply and we can know that it's limited supply but. If you can create an infinite number of items. With limited supply, then. Limited, supply is no, longer valuable, by itself, and so. These. Tokens, are, are. Then some, of them what they are doing, is they're saying my, token, is is valuable. Where bitcoin doesn't directly, do anything and some.
Bitcoin. People will get a little bit mad about that we'll come back to it but let's just kind of say conceptually, doesn't really do much of anything, so. These other tokens are saying no our tokens actually valuable because we. Create a blockchain as a use, in society, where we can help protect 12. Year old girl diaries or we could protect titles. To your car titles, to your house the. Implicate can. Tell you if your tomato actually, is organic, all, of those when they run through our blockchain. Use. Our token, and our token, is is essentially. Access, to our blockchain, so this, this concept of tokens, here yet people are overthinking it I use. When I get on the subway in Chicago, I use a token, that's in my wallet I run, it up against the turnstile, and that token, lets me in when, I use our bikes. We have these community bikes I just take a token, up and I can hop on a bike and I can ride, it around when I want to get into my gym, I use, a token, to get into it and I, scan to get into yoga I use, a token, to get in my office building. Tokens, are simply, access. What was really helpful for me was. Taking. The concept, of the. Federal Reserve where the gold was and I had essentially. An IOU which, was a piece of paper that went you have this much gold in there and if. You use that as a mental, and then, map on stuff, like I used the boss and I have a card, essentially, that, is essentially, the same thing it's a token. That. Represents, my. Gold essentially. In a new world in the digital world that that I found that really helpful way, to understand. At all I'm glad that is hopeful and what you said makes. You think we need to kind of even take it to the next layer you see what happened was when. You had that dollar bill and you had the government on the other side saying that they had the gold the government, had the incentive to be like, not keep as much gold and that's basically, what the constant, problem, was the. Cool thing about blockchain. Is we, can just create a club. It's the Tom and Aaden club and it'd be nice it would get like a few other people, but, I can look at the. Diary and I can audit, what the diary says every day now the diary isn't gibberish, right so you, know the. Part. Of the code to this call is d8 7cc. But. You and I can both agree, on. What. It says and then that makes it, immutable. And that creates trust. So sometimes I like to it. Works well in the United States I. Our. Constitution, starts out with the terms we, the people but. You can't change that to we the tomatoes. Like everybody knows that the Constitution, starts out like We the People that's. A form of a blockchain even if you destroyed, the United States Constitution there's, copies of it and we know what that word, is so, the. Way that relates to this concept of what. You were talking about with if the government is saying yeah I have gold here but you they're not a trusted, party these.
Decentralized. Ledger's, are create. Complete, trust where we know because, we have all independently. Verified, and you, can't change it because the block will reject, it and so, now if I can have a full. Decentralized. Audit of saying yep, Aden has X, in gold or whatever. Asset, that you actually own or whatever. Activity. You want to have happen we, can now manage that with decentralized. Trust and the only way that can happen is you have to have access to that trust and that access. Happens through tokens and that's why some people say well tokens, are valuable, because they facilitate. Blockchain. Activity, so we covered kind of what blockchain is it has to have some form of access that's what a token is and then, coins are things like Bitcoin which, have limited supply, Bitcoin. It does have some applications. To it because it is a strong blockchain, that, gets a little bit more advanced but conceptually I think we're in the right place right. So after you're took, everybody's gold and. Gave. Them tokens, for the gold which was cash which. Was bailed, dollar bills Trust. Was I love how you just said that and I need act that is what it is the cash was a token representing. The, gold and he, took the gold and said here's your token that's the right way of looking at it that's really good but, then. Fast. Forward to 2008. We. Had hiccups. Of trust until. Then and then, we. Had a major breakdown of trust a meltdown of trust where money. Was essentially, being, printed there was no gold representing, that money but there was actually it, was like monopoly money everywhere, the, tokens were monopoly, tokens, and they weren't real and it. Led to this massive, breakdown, of more. Than the economy, of trust, Anna it was a Sputnik, moment, for, crypto, currencies, for Bitcoin for. A blockchain and, that's, why we've heard about it so much since then in the last decade it was a Sputnik moment for trust and that's what you had with the you, know you had the Occupy. Movements. That were not just you, know as something, started with Occupy, Wall Street but that was a global. Phenomenon. There's a lot of people that feel that, they're. Working harder, and harder and they're not getting ahead and I. Think that a lot of the reason, for that is is, because we don't have a stable store value in. Our society and. People. Started to just hit the limit in in oh wait that's that's when. Bitcoin. Essentially, was was born and that's a that's when, shortly. Thereafter, that that, that's. That was the birth of blockchain, technology, and this movement, that. Truly, is a global, movement toward. Decentralization. Of people saying these. Central, authorities, banks. And. Governments I trusted. Them and they, let me down they. Let me down and and, I don't trust them anymore and I don't want to have to trust them and they have too much incentive, to violate, my trust and they keep doing it and so. When, you look at where we are now like. Now now that. Process just continues, every. Problem, that we see we just are solving, by creating. Trillions. And trillions of, dollars we're doing that in this crisis right now yeah it. I joked, about it in the book I said what if we just gave every American fifty thousand dollars that's not that. Far off from we're. Almost actually, doing in response, to, this crisis, it's crazy, we're just creating money out of thin air and that's. Not a risk, free trade - exactly, what you said before every, action that you take has a counter, action we have to start thinking what's the cost to society what's. The cost to the working person if we're just if, money is nothing and we're just creating it to solve problems, is that really something that we can do I don't I don't think so I don't believe again there's a beautiful passage. From the book that I'd love you to explain here and it goes as follows with. Blockchain, money. Can be fully commoditized, just. Like corn or wheat in a. Fully decentralized.
Self-regulating. Not-for-profit. Free-market system. Everyone. Not, just governments, and banks may have the opportunity to compete on full, faith in Credit, making. Secure anonymous, financial, transactions, with a any gaps in trust, blockchain. Will facilitate a new way a new approach to a decentralized. Safe, and secure store of value for. All doing. So will revolutionize. Banking, currency. And consumer. Lending as we know them there's. A lot there's, a lot there for you to unpack Tom and, I'd. Love if you would give. An overview of what you mean by that passage, thank you it's one of my favorite passages and I'm glad you came across that one it is kind of a mouthful when I hear it that way so I'll try to take. A more, simplified. Approach, to it with two things so. I was born and raised in Iowa, which is one of the smaller states in the country by population, in the middle, of the country and we. Have a bunch of farmers. There and. What. Those farmers. Do is they. Grow, corn. And then, they take that corn, to, market. And they sell it and then that becomes grain. That's used for things like you, know making cereal and and so. Forth and, that. Corn, is actually, very. Regulated. And measured, to adhere. To a certain quality. And. Any. Producer. Of corn young you and I could raise corn and we could sell it into the same system you, could have a large commercial operation, raising, it and selling it in the same system but everyone grades, the corn on the same quality, of the characteristics. That it that it gets that. Passage. What I'm essentially saying is look, ma'am. Well. Aidan have you ever seen the movie The Matrix yeah. Love what mom loved it okay. And so I know like not everybody, has seen it but the concept, of when. You think about that is is is that this, this world isn't what we actually think it is and it talks. About kind of this this. Role. Of, each. Individual, person, and what it is and so that kind of you know getting, into that I essentially, look at this and say what. If each of us, as, individuals. Was. An individual. Store of value. Kind. Of like what Frederick, Hayek was saying where what, if I created a bank and then I just posted that information what. Have you taken one step further what if instead of having you know 300 currencies in the world today you basically had a billion, of them we are each a store value you, eight and you make money you have assets, you have things in your life I make, money I have assets I have things in my life what, if I could see in a decentralized way of what those assets were what, your liabilities, were I could, rank and sort that and I could group it just, how a farmer does and I, could sort it by quality, and then I could say you know what Aidan alone. To you back by your car your cell phone is actually backed by something alone. To the government, is not backed by anything I'd rather lend Aidan the money at a lower rate than the government, I trust aid and more because I can see through. To what is held, on the other side and what.
You Can actually get, to in this world as a lower, cost. Of borrowing and a better more pure, store of value that. Is sorted. And grouped on, a global scale and you actually just create a system, that leapfrogs. Any government, that leapfrogs, any, digital. Currency, because. It's it's it's essentially saying the store, of value is. Things you're basically taking the credit theory of money and combining, it with high x version on. Steroids. Right like in 5g at a super. Decentralized. Level the individual, level and I think that that could. Be a really dope Ian view of a perfect. And stable constant, store, of value always, backed, by things. Thinking. About this on a, macro. Level across, society, and beyond the. Exchange, of value I thought. What's. Really happened, in. The last few. Decades is, we've. Heard scandal, after scandal in. Institutions. That had access. To power and they were the middleman, in so many ways and to. Bring, that to a very high level I thought about the Catholic Church and the scandals, of the Catholic Church and you. Know I believe in a higher power what. I've lost faith are in is the middleman which is actually, the church and the clergy and I. Hate to say that because I'm sure there's good ones out there as there are good institutions. And I. Want to say that because I don't want to tear everyone, with the same brush but. What, we've lost faith in is that middleman and the. Term decentralization. Means, getting rid of the middleman where I can deal, with Tom and we can be trusted. With each other and we have a transparent. Token. That we both can check in on to make sure nobody's, changed back to your diary analogy. That. We're on the same page literally, of the diary we can check in and I thought that that's. A really, helpful way to think of it from a societal. Level yeah. I think you just said it perfectly. When. We, when. The internet first came out I thought wow this internet is great. But then when the cloud came out I didn't understand, what it would actually do.
For Me now, this is coming from a guy I used to drive around in my car with a hundred, CDs and of, course my dream would have been if someone said hey what if you could play any song on the band anytime you want well that'd be great but he can get any movie anytime on demand I didn't, understand, what the cloud. Would do for me and how it would change my life and we use the cloud for everything reason the cloud to make this right now. Blockchain. Solves. Exactly, what you were talking about in it's this trust, gap, and, so much of our society has, been built around. Middle. People and governments, trying. To facilitate trust. In the middle yet, they're continuously. Violating. That trust, and violating. Their role and I. Think people are saying again not everybody and I like what you said you can't paint everything with a brush but there's. Enough bad apples, out there that if there's a better way that we can transact. Directly. With. Full trust that. Is very. Powerful for society, and that's what I get really excited about I think this is the opportunity for buying. Lots of people. Who work in financial, institutions listen, to this show and a lot of people who work in exchange. Of value, systems. As well and you know I have to send you we, had a beautiful. Opportunity. To have, an interview a seven-part, documentary, with, the founder of visiter Hawk he, had the exact same vision, man he wanted. To create this universal, exchange, of value but, for the right reasons, and one. Of the chinks. And the armor for him was the command and control and, trying to get. As much squeeze as much value out of it for the middleman and that conflicted, with his values, but. What. Is the opportunity, do you see because you talk deeply about this and I highly recommend I think this is a must read book for, anyone, who works in either. Future. Of exchange. Of value or current exchange of value or, old-school, exchange. Of value. What. Is the opportunity, for the bank of the future I think. The, opportunities. Are vast and, so you, know within the book what I try to lay. Is. I think that we need to appreciate and, respect the, history to, understand, the events that have brought us to where we are today and that. Today we. Are at an inflection point as, we look forward, and, so. How. Bankers. And policy makers respond. To, this decentralized, movement, I think you, kind of have two choices you could try to prevent. It which I think would only make it spread faster, or. You have to have a strategic view, on how you're going to embrace. It which is what I think is better and I, think that like, any other technology, the more that we collectively, embrace, it the, stronger, our system becomes the stronger our system becomes a stronger our society. Becomes and if. We. Can transact, with transparency. And trust but, also anonymity. That is, an incredible, utopia. And opportunity, for society, bankers, and everybody, but, you have to embrace it to be a part of it speaking. Of exchange of value I'd like to thank our partners Microsoft. For startups Tom, before. We finish up I think that's a beautiful way to finish. Today's, show with your vision for the future and, your vision for the, middle, amount of the future if there indeed is one where. Can people find out more about your book about. Your webinars, about your work etc well. Thanks, for asking I want, to share on that shout out to Microsoft, and think not only what they're doing for small businesses but in the blockchain space, to make blockchain. Accessible, and usable. To more people and facilitate, this decentralized, view, with. Respect to me, if you're interested in the book the, book is called money without boundaries, how blockchain, will facilitate the, denaturalization, of money it's. Available wherever books are, sold online and there's also money, without boundaries website, if, you're ever interested in my consulting, services, I do work with a lot of different financial institutions, you, can find our website at TJ.
A Global. Like, Thomas John Anderson, just TJ, a dot global and we'd love to speak with you author, of money without boundaries, how blockchain, will facilitate the, D nationalization. Of money Thomas. J Anderson thanks. For joining us thank, you for having me I really appreciated.