This panel is called Technologies of Freedom. My name is Naomi Brockwell and I make a lot of videos about this subject and have three amazing people on stage with me who are experts in this field. And basically the premise of this talk is how can we use technology to carve out more freedom in our daily lives? And it's great to have at a conference like this because I feel like there are a lot of panels here, a lot of people speaking about how to shift policy. It's
super important work and I think a lot of people miss how empowered they already are in their own lives and that we already have technology at our fingertips that can help us carve out more freedom. Now without having to beg for permission from politicians or kowtow to anyone, we can build a more free life now. And it could be hard to understand, there can be barriers to entry in terms of understanding. And so I have three people on the stage here who
are going to basically dive into this so that you could start to understand just how empowered we are, how exciting it is to live at this current time when we have all of these cool censorship resistant technologies that help give us back freedom of speech, freedom of financial choices, all of that good stuff. So let's dive into it. I wanted to introduce the people here on the stage. To my left, I've got Jerry Brito, he's the executive director of Coin Center, which is a fantastic think tank. They're focused on public policy issues facing cryptocurrency, doing some tremendous work that I'm sure he's going to talk about. Then I have Eric Voorhees, he's the founder and former CEO of shapeshift before it became a decentralized autonomous organization. And if your head's exploding because you have no idea what that means, I'm sure that Eric is going to explain it later on. And then we have Paul Briner, who's the host of a really
fantastic podcast if you're interested in policy around cryptocurrency. It's called Pretty Good Policy. Who understands the pun? No. Alright, go slow everyone. Go slow. So this is a fantastic podcast. Basically it focuses on all of the good things around regulation in crypto at the moment. When I say good things, there aren't many good things around regulation and crypto at the moment, but we'll dive into that. He's also the head of US public policy and strategic advocacy at the
Electric Coin Company. So let's get started. All three of you come from the crypto space. So let's start with cryptocurrency as one of the most empowering tools for freedom that we have seen in a generation. It's pretty phenomenal. I think a lot of people are still sleeping on it perhaps because they don't quite understand the implications. So do you want to start us off, Jerry, and just talk about why you think Bitcoin, why you think decentralized cryptocurrencies are important? Jerry: Sure. Well thank you Naomi, and thank you all for coming. The reason that I think cryptocurrency is so important, and indeed
I've dedicated my life to making sure that it's sustained, is that it is censorship resistant, which is a word, a term that I'm sure you've heard. But essentially it allows you to transact with a counterparty, right? Engage in trade for mutual benefit without the interference of anybody else. And as we move to an increasingly electronic digital world where we are engaging in commerce and trade globally with folks around the world, we are no longer using cash. And so when you move to a world that no longer has physical cash, before the invention of cryptocurrency, you had to rely on third party intermediaries, right? So if you and I meet and we engage in a trade and I give you a hundred dollars bill when I hand it over to you, you have it. And I don't. And we can verify this
by looking at our hands, right? You've got it. I don't. And there's nobody between us, right? No, it's just you and me and the transaction is completely private. Nobody can stop us from doing it. You can be punished after the fact if the transaction is illicit in some way, but the transaction itself cannot be prevented if you try to do that electronically. Before the invention of cryptocurrency, there always had to be a third party between you and me. There always had to be a
bank, a PayPal, somebody like that between you and me who can number one, know what transaction was happening. Number two, decide whether they wanted you to have a transaction or not or even let you have an account or not. And three can report to the government what transaction was, et cetera. And that is a big loss of freedom and autonomy and of dignity. With the invention of Bitcoin and cryptocurrency, we return to a world where you can have online transactions that are person to person without that intermediary and by nature they can be a lot more private and they're censorship resistant. So to me that's just foundational to why this technology is so important.
Naomi:Eric, do you want to go next? Also, Eric has a fantastic blog. He was one of the first people to get me into cryptocurrency like a decade ago that ties in Austrian economics into crypto. So if you are interested in that tie in, highly recommend you check that out. Eric: Yeah, I want everyone to maybe imagine if all of your written communications, like all your texts, all your emails, all your letters, if every time you wanted to write something to someone else, it had to go through a gatekeeper like the Bureau of Communication, the Federal Bureau of Communication and everything that you wrote to someone, whether like a romantic interest or a family member or a friend or a business colleague for any reason had to go through that filter. That would be a horrible infringement on your liberty and on your privacy, especially if that department could at whim decide not to convey the communication or tell you certain kinds of those communications couldn't happen. Hopefully Americans would not put up with such nonsense. And thankfully we don't have to deal with that. And yet Americans have put up with that exact nonsense
in the realm of money. All of your transactions at distance pre crypto had gatekeepers who could see what it was for and they could stop it if they wished. Cryptocurrency is the tool by which we get around that entirely, and that is incredibly empowering. We don't need the permission of a single politician to do this. We just built it out of open source software. Obviously the
government is not happy about that, but I think as a good American, it behooves everyone who cares about freedom to understand these systems and to try them out and to be familiar with them. Naomi: Paul? Paul: First I want to thank Atlas Network and Naomi and these panelists, amazing group here. I am so honored to be here among this group and talk about these issues with you. The company I work for is Electric
Coin Company and we are a developer, a software developer for a particular cryptocurrency that has privacy enhancing features. I would say we align very, very closely with the general Cypherpunk movement. I think we're probably one of the best examples of a company that you would look to say these are people that came from the earliest days of Bitcoin and are hardcore cypherpunks. Can't say that for myself. I wasn't along that full ride, but my colleagues have been. And what that means
is that we advocate for strong encryption and we advocate for the use of privacy enhancing technologies to promote positive social change. And we in particular are known for some of what I think are some of the most important developments in cryptography in the cryptocurrency space, which is something referred to as zero knowledge proof, cryptography. We might talk about that a little bit more. We're also known for the tagline, privacy is normal. And I think that we all probably think privacy is normal, but there's this straw man that's been put up to say that, well, if you need privacy, perhaps you're doing things that are unsavory or maybe you need to try to hide yourself because you, you're doing something illegal, perhaps even. Well,
we believe that privacy is actually not just normal, but it is fundamentally required for personal dignity and economic freedom. Our mission, a company in fact, is to empower economic freedom and to give everyone access to a fair and open currency. Our cryptocurrency is called Zcash. With Zcash, you can transact with full privacy at your option. It's up to you as an individual using it. You have consent and you have control. So with that, I'm very excited to talk about that more and all the implications of all that we've all just introduced Naomi: For sure. And we're going to dive into financial privacy and privacy as a principle as
well in a little bit. But first, before we move on from crypto, there's a lot to dive into here. And I specifically want to know, I mean we have this tool of freedom at our disposal. It's already been used in communities like New Hampshire, I know a lot of people who are living entirely off cryptocurrency, who are paying their bills in cryptocurrency, who are buying their meat in cryptocurrency. This is a functioning ecosystem, and it's not just New Hampshire. There are places all over the world where this is a reality that you can actually opt out of the traditional financial system, which is really cool to have a way to opt out. It's like the first time we've had a way to opt out, but I'm wondering what the future holds because you have this traditional financial system where surveillance gets worse and worse every year. I'm not just talking about
that $10,000 reporting requirement where as our purchasing power disappears, it's going to become like a $5 reporting requirement or something. But just the increased laws that are being passed, it's not just the Bank Secrecy Act. We've got the Patriot Act, we've got all of these laws that keep getting passed that say you do not have the right to make any financial transactions in private. So I want to know about this future where we have this option, we have this surveilled traditional financial system. Can these two things coexist? Are people going to be scared into just using the Tradify world people? Is the gray market with this cryptocurrency world just going to get larger and larger until it consumes the entire economy? What are your thoughts on that? Do you want to start, Jerry? Jerry: I think we have to keep in mind, so this is an international conference and we have to think globally. And so I think there are many parts
of the world where it's even worse than you can believe it, worse than it is the United States, all kidding aside, it's very, very bad. And that's I think where cryptocurrency is most in need and where it can really be a way to opt out of the existing regime, whatever it may be. So I think that's where it's most important in the developed world, in the free world, I think the traditional finance system and cryptocurrency can coexist. And to me, crypto succeeds basically
my standard for success for crypto is if it is an option that everyone has to exit and to exit, not necessarily. I mean, if you want to exit completely and pay everything with crypto and be completely surveilled, et cetera, that's an option. But to me it really succeeds when you have it as an option for particular transactions for when you find resistance, when you're doing something politically incorrect that otherwise you may not be able to do. As long
as that option is there, I think crypto succeeds and it is here right now. And I think that if we play our cards right, it can remain that way. Eric: I think fiat currency is going to have trouble coexisting when all it does is collapse and fall apart and diminishing value. You, the world has not been through a phase where a major global reserve currency has fallen apart when it was not just replaced with another fiat currency, like another centralized money, the dollar loses two to 10% of its value every year forever. It does not take too long. It
does not take too many generations before people will think maybe I should use a different form of savings than the dollar. There's a lot of inertia in that habit. But as that inertia disperses, I think you'll find that people will move at the margins to better forms of money and away from worse forms of money. And so I don't see coexistence because fiat is fundamentally unsound and I don't see a world in which people prefer to use that over the long term. Now that might be a 20 to 40 year horizon, so this doesn't happen too quickly. But yeah, I'm a little more skeptical
about them both existing at the same time. The trick will be to what degree states permit this process to unfold naturally. Certainly the market process would cause it to unfold. To what degree will the state try to interfere with the market process? I would say a high degree. And then the question is how successful will they be? And that remains to be seen. But everyone that's in the crypto world and trying to build this stuff, we are trying to build these systems in anticipation of fiat ultimately going away. At least the more radical of us. And hopefully enough people in various levels of government will understand that it's actually in the public interests to have sound money. And we'll realize that that's not something to be fought, but to be supported.
Paul: I do think that crypto is going to be much better than fiat. I don't know if we're going to get there in 20 to 40 years though. I think it's going to be a pretty long path for us to make a transition like that. So I would say that as I think about the issue that you've kind of
pointed out there about wanting to be able to perhaps move to a decentralized finance world, but having this tension with government and on the illicit finance front, well, it really comes down to this basic fact that the transmission of value and the transmission of information now are essentially indistinguishable. And that is just really difficult because that's never really been the case before the advent of Bitcoin and cryptocurrencies. You really didn't have that easy way to transmit value. So it creates this huge tension in trying to control the fundamental
rails of finance and stop illicit finance and to use that infrastructure to prevent very bad acts, and also to be able to empower a vibrant and free economy. And it's really frankly, I think a paradox, which there is no answer to. I don't think you can have both. I think you have to choose one. And I think from my perspective, I am going to be on the side of
choosing freedom and liberty in an economy that I think is required and we have to use other means, investigatory means and other means to stop this illicit activity, which is going to be very difficult. I agree. And I think that's going to be a huge challenge for society. Naomi: This idea that we have a decentralized currency was initially obsessed with it. I was like, this is uncensorable. Until I realized that a lot of cryptocurrencies are completely transparent, and if the government doesn't want you to use something and they can see that you're using it in broad daylight, then they can just target individuals rather than having to shut down a decentralized system. So I became obsessed with privacy and that understanding that in order to have freedom of choice with money, we need to be able to use the internet privately. Privacy is a fundamental pillar of a free society. Do you want to just
talk about the role of privacy in money? Paul: So the role of privacy, I would say is something that I think is fundamental here as well, because if you don't have private financial transactions, if you think about it for a moment, really all of your fundamental liberties are at risk, your freedom of association, the freedom of doing any really activity of your daily life is reliant on your ability to transact. So you have to have privacy there in order to have fundamental freedom. So I think we can't lose sight of that. We have to continue to focus on that basic fact, otherwise really all of our freedoms are at risk. Naomi: And on that note, it's a good segue to just talk a little bit about CBDC. Who in the audience has heard the term CBDC? There are a handful of
you. So this is a really important thing that you need to know about and it's coming down the pipeline and it's going to jeopardize all of your financial privacy completely. The idea of the Federal Reserve being at the center of every financial transaction of being able to track every financial transaction, the elimination of cash in society, that is all coming, every government in the world has a pilot program right now is exploring it. Biden has an executive order out where he says that this should be a top priority for the treasury to be exploring right now. This is a thing that's coming. Given that there are a
lot of people in the audience who don't quite understand the concept of programmable money, what this actually means, why this is a paradigm shift away from the current situation. Do you guys want to just fill in that? Jerry: Maybe just to start, explain that CBDC is a central bank digital currency, and basically what it is is today you all have dollars. Those dollars, some of them probably a small proportion of all the dollars that you own are going to be paper bills in your wallet. The vast majority of your dollars are going to be digits in a bank account somewhere, but there are many banks and eventually those banks bank with a federal reserve, et cetera. What if you could have an account yourself at the Federal Reserve?
We could eliminate banks and we all would just have accounts with the Federal Reserve, the government essentially, and we would have credits with them and basically transacting among different accounts would be done on one master ledger at the national level. That's essentially a CBDC. And it has a lot of efficiencies relative to what exists today, but it puts complete control over your transactions in one party at the national level and allows the government, I keep saying the federal government, I mean the national government because this is coming to every country to have complete visibility into how the entire population transacts and what they're doing and who they're paying and what. So pretty scary stuff. What I'll say is you don't have to design CBDC that way, right? We have the technology to build a central bank digital currency in a complete spectrum of ways. You could have something like a Chinese style system where your access is controlled based on your social credit score, and that's programmable, as you were saying, completely surveilled, et cetera, to you could in theory have a system where you had digital dollars that were bearer, that were completely private, but of course we probably won't choose that option. So I think it's a range. I think it can be from completely totalitarian to completely freedom preserving. And it's going to be interesting to see where in the
spectrum we, in the US land, if we land at all by the way, because I think in the US in particular, you're going to have a lot of resistance to a real CBDC from the financial industry who is competing with this ultimately. And there is already a grassroots movement against the most invasive kind of vision of this, but certainly in western Europe, in Asia, eastern Europe, we're beginning to see essentially the elimination of cash where you're no longer even going to have the option to pay with bills. So all transactions will have to be, there's not one single transaction you're going to be able to do that isn't going to be intermediated and isn't going to be surveilled.
And we're ready to beginning to see that. So Naomi: All right. I'll add something. So we've heard rhetoric from politicians about CBDC so far. We had some politician who works for the UK Central Bank who was salivating over the idea of how they'd be able to control where people can spend their money, where they'd be able to determine like, well, this is a welfare check and we don't want them spending that on alcohol, so we're going to dictate how you could spend the money that we're giving you. And they were really excited about this level of control. So that's the mindset that a lot of people are thinking of CBDC in terms of, and that's frightening to me that we're going to have governments literally controlling what they think are good choices and what they think are bad choices. The types of things that come along with programmable money include the ability to just make money in your account disappear if you don't spend it fast enough. We're all given stimulus checks during covid, and the whole
idea of this was let's get the economy pumping, let's get that money going through society so we can make inflation happen much quicker. And so they wanted that money to be spent, and if they had CBDC, well they could have just said, listen, if you spend it by this deadline, we're just going to make that money disappear because it's for that purpose. That's scary to me too that we no longer have control over our savings. So there are all kinds of things that come along with programmable money that I think people haven't quite thought of because it is a paradigm shift away from current digital money. And I think we need to start thinking about this, but Paul, I might go to you because you mentioned the phrase privacy is normal earlier. We have the potential to write two different futures, and one of them is completely surveilled and monitored and controlled, and there's more censorship on freedom of speech and financial transactions. But we have
the technology, as Jerry was saying, to create an entirely different future. We could have a CBDC that's privacy preserving. We could have CBDC, that's freedom enabling, and we could be using email providers that are privacy, preserving and freedom enabling. We could be doing all these things. And I think the main obstacle is culture. I feel like people really aren't standing up for privacy when it's taken away. They're not understanding the consequences of it being taken
away. And that culture shift is a big battle that I think we have to start fighting hard on. So talk to me about privacy is normal. Talk to me about that catchphrase and why you guys are drilling down hard on this culture shift. Paul: Sure. Well, privacy is normal just because that's the way all of humanity has basically worked up until recently, until the advent of digital technologies and then big tech and large data collections, and now we feel like we don't have any privacy. So for some reason people think it's not normal
anymore. So that's why we continue to push on that front just to remind people that it's normal and it can be normal if you're using the right kind of technologies. And as you point out, it would be nice to think we might have a CBDC that would be privacy protecting and that all the world governments would follow that path. I think the chances of that are zero, basically. I don't think that there's any chance that we would ever move in that direction just because of this thing that I mentioned earlier about the dilemma of government being so accustomed to using the rails of finance to implement not only controls over illicit finance, but try to flex foreign policy and to affect other realms all through the economic power and being able to control currency through fiat.
Paul: I am too extraordinarily concerned about anything to do with CBDC, no matter the fact that I think if it did have the right privacy productions, it could be something that would be workable. I don't think it's possible in our world for that to happen in any political environment that I'm aware of. Naomi: Eric, I want to switch to you because you have a really interesting history. So for those who don't know Eric's background, he had a company that was a vocal point for governments to target, and he decided to decentralize his company, and technology allows you to do that today. So I kind of want to talk about this power that's within our grasp to create entities that are uncensorable that can't be targeted and shut down because we're not just talking about cryptocurrency when we're talking about decentralized technologies. We're talking about encryption as a technology that gives us more freedom. We've got 3D printers,
which is a technology that gives us more freedom. We've got all of these tools that our disposal that I feel like the cat's kind of out of the bag and the tables of power have turned and we are just catching up and realizing that. So just talk to me, given your context about this shift that's happening, are we more empowered now than people realize? Eric: Yes. So as technology emerges, those who understand it gain the power of the new
technology. But of course, many people don't understand the technology and so they become increasingly in the dark. And this is really where personal responsibility comes down. If you're not staying on the cutting edge of what's possible for you to do with the technologies around you, then by definition you are falling behind the curve. So if you want a little sense of where some of this frontier stuff is. So yeah, we decentralized my company shapeshift. So to put this very simply, this is a little bit more of an advanced crypto topic, but a company has an entity, a legal entity in a specific jurisdiction. It generally has a bank account and it has shareholders. It turns out when you don't need to use banks, you don't actually need that structure
at all. And what we did was we essentially took a central company, we issued our own cryptographic token, and instead of shareholders in a central entity in a jurisdiction, we had token holders. They were all operating to govern the creation of an open source software project. This meant it's not an American thing, it's not based in any specific place. It doesn't follow HR laws because there are no employees. It doesn't need to submit to banking rules because it has no
bank and it is just individuals interacting with each other freely through mutual contract. It is completely market-based and it feels alien to people because society has moved so far away from being market-based unfortunately. But I'll leave it there certainly if you want to understand more about these things, they're called DAOs, DAO, decentralized autonomous corporation, and it's just one of the branches that people are exploring now that we have decentralized blockchains and those technologies. Naomi: Jerry, you wanted to add something?
Jerry: Yeah, I think one thing to keep in mind is that what these technologies do is that they raise the cost of governments to enforcement of their laws. It doesn't prevent the government from enforcing its laws, it just raises the cost, which I think is an important thing to keep in mind because we talk about censorship resistance and we talk about how this technology allows you to do stuff you couldn't do before. And that's true, but if the government ultimately wants to come after you, they will. It's just that the cost is going to be higher. So as a result, if there's a fixed budget, they're going to have to be choosy about who they enforce against. So that's the one I would keep in mind. And then the other thing I would say is going to what you were saying before,
I think it is cultural. This technology exists today. You can do uncensorable transactions, you can do private transactions, you can decentralize an organization, but most people don't bother to do any of that because it's hard. It's difficult to use these things. They're hard to understand, and the return on investment isn't there for most people. I think of Václav Havel’s shopkeeper who just puts the sign on the door just to be left alone. And I think that's where most people are at. And I think it's very difficult to try to convince people that they have a problem that
they don't realize they do. As we fragment into more and more niches, we no longer have a lowest common denominator society. A lot of folks find themselves on the fringe and find themselves to be on the other side of politically incorrect. And what they find is that when they're using a
centralized system to communicate with the rest of the world, oh, their messages aren't being allowed when they're trying to make a contribution to a cause or a payment to a particular type of, for particular type of commerce, they're finding they can't do that. And so they then begin to look for that escape hatch. But for the vast majority of people in the developed world, I think it took a frog being boiled. And I think our job and my job at least is to just
try as much as possible to have this escape hatch always remain an option for the day when somebody finds that they need to use it, that it's there. Paul: I just want to emphasize a point that Jerry made there and about the cost of enforcing our laws. I think that especially in an audience like this, what we should view that as is the cost of freedom and liberty. And we should not think of it as like this is an overhead because we're no longer willing to take advantage of technology or we're not moving forward. We actually are doing so, but we're doing so in a way that maintains our freedom and liberty. So it will be a difficult choice to make and it will be something that will
be expensive on society to do that, but in my view, it's very well worth it. It's something that we should not move forward without. Naomi: What are the steps forward? How do we fully embrace this technology so that we can leverage the freedom opportunities that it provides us with? Is it about education? And you mentioned something Jerry, which was interesting. You said you want this escape hatch so that we always have
that option. You want that option to always be there. And there are other people who would take the stance that if we're not using this today, if we're not building out the infrastructure today, if we're not giving signals to the market to say, build this technology because I value privacy today, then actually we're not really building that escape hatch. So what should we be encouraging people to do? Should they all be diving into this, starting to exploring it now? How do we build a better future? Eric: I suppose this take could be considered cynical, but I don't think it is really the reason this all unfolds and the reason it becomes adopted is because the price of Bitcoin goes up. And this is something I wouldn't have really appreciated when I was younger, but I can make arguments, logical, emotional, rational for hours with people and try to convince them that some of these things are important and try to convince them why Bitcoin is a better money. Teach them the history of Austrian economics and why fiat currencies are destined for decline. And some of them will think some of those arguments are interesting, some of them might even be convinced. But you know what really gets people is when they own something and
the price of it went up. It's like a reptile brain dopamine, serotonin phenomenon. And this actually gives me a lot of relief because I understand the economics of why Bitcoin over time will appreciate against the dollar if for no other reason than the dollar will just decline forever. And as the world sees this price of Bitcoin go up and up and up and up and up and up in a volatile way, but up over the long term, some portion of them just get intrigued. Some of them buy some and then their money went up and then their mind is open and they just start changing their behavior because of that. So what it means is we don't actually have to do too much. On some level, the laws of economics play out and the laws of economics are much stronger than any laws of any government. This gives me a lot of peace actually. And something that I stressed over when I was early on in this industry, it was like how do we convince everyone to believe it? And I don't think we do. We just let economics play out. And so anyone in the audience just learn
about this stuff, use it, understand it, and I think the rest will take care of itself. Paul: I'm really hopeful for that future. I love the fact that I think Bitcoin is going to go up too. I think that's very likely. So Naomi: This is not investment advice.
Paul: Not investment advice, this is not investment advice. But again, just my guess I would say that however, I think that Bitcoin has a very niche use case in my view, potentially as a store of value or digital gold. We might disagree on that, but I would say kind of a hot take here is that I don't think much of any cryptocurrency or decentralized finance has much societal utility for protecting liberty and freedom if it does not have privacy enhancing features involved. And I'm not saying it's Zcash. In fact, what I am saying is what I've seen over the past couple of years is a remarkable change in the whole cryptocurrency venture capital space where a lot of the investment is going into adding privacy enhancing features to cryptocurrency projects. That gives me a ton of hope. I think it's happening. I think we'll see the fruits of that over time. What I am deeply concerned about is what's happening with government agencies, one in particular that maybe Jerry's going to talk about for a moment with what we see happening at the Financial Crimes Enforcement Network. And there are some things there that are happening
that I think are seriously disincentivizing investment in these privacy enhancing technologies. So Jerry, can I pass it to you to say something about that put you on the spot? Jerry: I don't know if I'm going to go into the weeds about what's happening yet, maybe Paul: Too much for this group Jerry: At a government agency, but look, to answer the question you're asked directly, I think folks in this room should definitely be educating themselves, but this technology and how it might help what they're working on, I think you're right. If the price goes up, that's going to drive the market incentives to make the technology easier to use for more people who are going to be demanding it. But at the moment, unfortunately, for this stuff to really be a seamless option, it has to be as easy to use as Venmo. And it's not,
it's almost there. But certainly, and it's interesting, the more easier you make crypto to use, the more intermediaries you reintroduce. Thus obviating the whole point of crypto. And where I've seen the investment in decentralized technology be lately, it's been on speculative uses of crypto because that's what the market is demanding today. But there are still a lot of cypherpunks out there working on it. So that's what gives me hope that it will be an option. I hope that market incentives bring down the cost for people who want to exercise that option, but at the moment, there's always going to be relatively a higher cost to using a technology.
Naomi: And I'll also mention as this is an international conference, it's really important to dive into privacy technology, decentralized currencies, all of this stuff will empower your organization. I was chatting with a gentleman in this room who was donating to organizations and he had a bank account in another country, and then they shut it down and they said to him, you have to prove where the funds came from. And he said, oh, that's easy. The funds came from me. They're my funds, and I would like to support these libertarian organizations across the world.
And they said, no, we need to know where the funds came from before they got there. So all of the people who donated to this foundation, how did they make their money? And so he was left with this situation where he would've had to follow up with all of the people who donated to this foundation to find out how they made their money, which is outrageous or just shut down the bank account. So that's the situation we're dealing with, the ability to be able to support these causes that we believe in across the world without someone stepping in the middle and saying, you are not allowed to support this cause. Or we can opt for better options that a censorship resistance and actually give us the freedom of choice when it comes to money. So I really encourage people to not sleep on these technologies to start exploring them. They're so empowering, and I think a lot of people just don't realize how exciting the world is right now. So let's open this up for questions! Audience Member 1: Yeah. I just wanted to
ask regarding digital privacy or data privacy and the technologies about digital identities, which I mean I'm not well-versed on it, but I understand it's like you can create digital avatars, but they have been verified that you exist in the real world. I was wondering, what are your thoughts on this? Do you think this is something realistic that could happen? And I can imagine it would benefit in communications in countries where censorship is quite tight. And secondly, if I may, how you think AI technologies are either maybe accelerating the trends towards more decentralized finance and data privacy, or do you see that just adds more complexity that we have to kind of figure out and it'll just take us longer to get there.
Jerry: That's a great question because it's kind of a sleeper feature of cryptocurrency. Technology is identity. People focus of course on the primary use of this technology, which is value exchange and the like. But the same technology allows for the creation of unique identities that you can prove electronically that you control this identity, right? And so when you do transactions or you communicate, you can sign it with this unique identity that can't be forged. And then what you can do is you can have different persons, so you said, verify that you are this person. Well, typically when you say verified, there's some third party that's doing the verifying. So
if I have a driver's license, it's the state of Virginia that is issuing that to me. And so how do we do this in a world that's decentralized? So what you do is that you have attestations, right? You have certain parties that everybody understands because they verify their identities. So for example, I can have an attestation from Atlas that I've attended this conference and I can have an attestation from my college. I have a degree and I can have an attestation from the state of Virginia and I can prove these attestations. And that can be done in a completely decentralized fashion. So you don't need any one central authority doing the verifying. You can
have a decentralized network of people making attestations about my identity. And by the way, it could be a pseudonyms identity. It doesn't have to be tied to my name or person. It could just be a pseudonym that other folks have at tested some fact about me. And if you trust those people and I have their attestation, then maybe that increases your trust in me, et cetera. So that's how it could be built Eric: On the AI thing. I'll just say one quick point to get your brains thinking a bit normal finance, fiat currency, the banking system is best understood as an analog world. Cryptocurrency is obviously a digital world. AI can't open a bank
account. It doesn't have identity documents, it's not a person. And even if it did, these systems are closed. AI systems can't interact with analog finance. AI systems can interact with Bitcoin digital blockchains. I think this point isn't considered enough that the only form of money that AI systems can utilize natively meaning autonomously on their own is cryptocurrency. And
that will lead to some very interesting behaviors where ais can actually transact with each other, could be dystopian, or it could be absolutely incredible for value production on earth. And I think just understanding this migration from an analog world to a digital world and how fiat is the former and cryptocurrencies is the latter, is a good simple model for understanding how some of these things will evolve. Audience Member 2: Thank you. It's fascinating. Can I buy an insurance policy that will pay me off if the crypto depreciates? Eric: Yeah, I mean that sounds like a financial instrument, right? Like a put option or something. So depending on what you want to call it, yeah, any kind of financial contract can be done in a crypto world that would've been done in a analog world. The main difference is that such a policy can actually execute autonomously without
any human involvement being there. So if you think back to the global financial crisis, markets are falling apart and people had all sorts of insurance policies on all sorts of different things. There were many humans in that process who due to their own malfeasance or their own ignorance or just mistakes, the thing that you thought would be executed in the way that you thought isn't right. Maybe your contract is written in English and so someone needs
to interpret that, right? There's all sorts of squishy human rules that you don't get certainty on in financial transactions, and we all live with that as the status quo. In the crypto world, you can actually have financial contracts which execute without any single person in the world being involved and which execute on objective rules that you can know ahead of time and you can prove mathematically. So in terms of building a foundational infrastructure for society's money, this stuff is way cooler. And yeah, you can absolutely have insurance on these things. There's no reason why not. Audience Member 3: Hello. Thank you
very much for what you're explaining. Are we moving towards sort of a Rothbarian world where nobody has to pay taxes compulsory? Naomi: I don't think anyone on stage should answer that question. It's a trap! Eric: I mean, we can dream, right? Probably from the perspective of taxes. There's an important point, which is most of society, the vast majority of society thinks that taxes are necessary. I don't, I find them abhorrent and unethical, but most people think they're fine. So let's put aside the question of whether taxes should exist.
Governments currently fund themselves through three mechanisms today, right? They take taxes, they sell debt, which is just taxes in the future. And that's where most people think it ends, right? But there's actually a third little trick that they like to play called monetary debasement where they just print the money, which is a tax on everyone, and no one actually understands that it's happening. They see the price of milk at the grocery store going up and they blame it on the evil grocery store because somehow now they're more greedy than they were a year ago. In a cryptocurrency world where you have sound money that can't be debased, it restrains the government at least such that it can only exist in a more honest way. By taxing and borrowing transparently, it removes the ability to do that secret third method of debasing currency. And I think anyone,
regardless of how you feel about taxes, should be able to support that idea that if the government is going to exist and it's going to extract money from its populace, it should be done in a transparent way that everyone can see Naomi: This may be the last question, depending on how short it is, Audience Member 4: It isn't. I'm just throwing it in. Free Market Institute. I wanted to elaborate a little bit more on CBDCs and how cryptos are going to compete in this unfair competition because at the same time, at least in Europe, European Commission propose more and more regulations called markets in crypto assets regulation, which basically restricts most of the cryptocurrencies to effectively compete in our market. And at the same time, we propose a draft which makes CBDCs a legal
tender with mandatory acceptance in retail. So my question is how financial innovations and crypto competition would be possible in this future if these regulations would be implemented? Naomi: Technology exists that would allow you to continue to use the financial tools of your choice regardless of what comes down the pipeline. And I think that a CBDC world is pretty dystopian. I think that it is unfair competition because on the one hand you have an abhorrent tool that is surveilled and tracked and monitored and censored, and on the other you have this freedom enabling tool that isn't debased and allows you to make financial transactions of your own choosing. That's unfair competition because I think the average rational person
is going to go towards the better tool there. But obviously governments have the tool on their side, which is the monopoly on force. So it is a battle that is coming. I think people will have to pick lanes. I think the gray economy is going to become larger as people start to realize that in their local community they can embrace tools that are not part of these centralized monitored systems.
And I mean, I can see the future going in a particular direction given those two choices, but maybe other panelists have a different view. Eric: Probably the best check against that is that we don't thankfully live in a world with just one government and governments have to compete economically with one another for their serfs. So those governments I think, which try to violate the laws of economics most fundamentally over time will handicap themselves. And the drive for wealth
creation that is a market-based process will cause opportunistic governments in other places to not follow that same path. And that's ultimately what allows this stuff to emerge regardless of how much abstinence there is in one jurisdiction. Audience Member 5: So one of the things that I've been thinking about recently is where does the value of money come from? And so there is the fact that it is scarce, but also the fact that more and more people have it. So maybe the adoption of a digital currency could have a component which has a universal basic income sort of part to it. With more people having access to a currency, you would actually have more adoption and it could be beneficial in a way which is not necessarily egalitarian. Has anybody share some thoughts about the potential for having a social welfare component built into digital currencies, especially those that are expanding at some consistent predetermined rate? Jerry: In order to take advantage of a lot of the benefits of digital currency that we've been discussing, censorship resistant privacy, et cetera, you don't have to have wide adoption of digital currency. And as I said, from my perspective, my standard of success does not
require wide adoption. So that's just one thing that I would say. And yes, there have been digital currency projects that have been developed, cryptocurrency projects I should say that do have a UBI component. I'm not sure how successful they've been. I don't know if you, well, Eric: World coin's probably the one that is most popular. They're going around scanning people's eyeballs and then issue, it's very weird. The scanning machines are actually quite cool,
but they're doing that to get your id and then they basically issue money out to everyone that's on the network. I think the important point is the ability to experiment now with monetary systems has been broken wide open. So any idea people can go build, right? These are not gated systems. Anyone can go build this stuff and that's very cool. So we're going to see all sorts of experimentation in the realm of money in a way that we have not seen ever. And most of the ideas will be stupid. Many of them will be scams, some of them will be dystopian and scan your eyeballs, but through that process, we will get monetary innovation and we can all appreciate that. I think, Paul: Yeah, I would say that I've seen some
of this emerge like World Coin, but something that may be a little bit more digestible is a new stable coin called Glo Dollar. That rather than taking those yields from the dollars that are the fiats that is put up for these stable coins, they give it back as a basic income to certain communities. So there's a lot happening in that space and I think that that's kind of an interesting project. Naomi: I think we have run out of time there,
so if you wanted to put your hands together, but it's wonderful panelists. Parting words, I really implore you to go continue to learn about this stuff. It really is some of the most tremendous freedom empowering technology that we've ever seen. And I think that you are selling yourself short if you're not diving into this and seeing how it can impact your life.
2023-12-10