Balaji Srinivasan - Cryptoidentity - TOKEN2049 Singapore 2025

Everybody knows that fiat currency is going to zero. So that's why you need BTC. Uh I'm going to talk to you today about why fiat identity may also be going to zero. Why you may need to go Satoshi. Um so just to understand this, you know, cryptocurrency has many sequels.

There's many things you can do after cryptocurrency. One of them is cryp identity. You can do crypto community. You can do crypto real estate, crypto this, crypto that. Why?

But but let's focus on crypto identity. So fiat currency is going to zero. So you need BTC. One way of looking at this is the very first transaction uh that we know of where Bitcoin was bought for USD is Marty Malamy and he bought 5,50 Bitcoin for about uh five bucks. Pretty good.

Um so that was a,000 Bitcoin per US dollar. And now today it is much much less than that. And you work out the math, it's 100 millionx more expensive. It went from basically.1 cents per bitcoin to more than $100,000 per bitcoin.

So we know that since inception the price of BTC has appreciated by 100 millionx against USD. Um so that's why you need BTC because fiat currency is going to zero. But fiat identity is going to zero too. So that's why you'll need to go satoshi. So here's just one of several different things I'm going to point out.

For example, passports can now easily be faked at least online with AI, right? And uh other other things are happening as I'll get to. Social trends are making things like denaturalization that were very rare now more common. Just like unbanking was very rare, but it's going more common. And as I'll get to, basically crypto identity is becoming technologically desirable and necessary and socially necessary, but also desirable.

and you know things like decentralization and so on and so forth whether you agree with them or not because they're happening people are going to need crypto identities if their fiat identity goes away. So crypto identity is technologically desirable and necessary. Crypto entity is socially necessary and also desirable. Let's go through these four points starting with technologically desirable. So why is cryp identity technologically desirable?

Basically, if you take a bunch of different kinds of identity, uh, passwords, API keys, web login, your car keys, smart locks, or even presenting government identification, you know, all of those things basically become private keys whether on a hardware vault or not, very similar to the possession of NFTs. And in combination with, for example, biometrics like Face ID or, you know, social account reset like multi-IG, um, that's how you can kind of get access to things. Okay, so it's technologically desirable to basically take all that stuff and consolidate into something like the Ethereum name system or the Salana name system where you take all these different pieces of digital identity, you consolidate them and uh that's because all them really boil down to possessing a private key and on uh you know an Ethereum name or a Salana name you can actually attach a bunch of things. They're actually in many ways better than real names, right? crypto names, you know, I put real in quotes because like a social security uh number, uh a state name is like a social security name.

It's a something assigned to you by the state. But a network name is better than a state name. Why? Because with a state name, it gives both too much information and too little. It allows people to go and stalk you online, but it also doesn't tell them how they can pay you or send you a secure message or something like that.

And crypto names actually encompass all of that. They're in a sense usernames, they're like email addresses, their crypto addresses. And actually with custom records, oops, with a with the custom records, you can actually attach quite a lot of information to them. Okay, so that's why crypto names are better than state. It's technologically desirable to get there.

But why are they why is it technologically necessary to have crypto names, crypto identities? Well, you know, I mentioned the, you know, fake AI passports, but you've probably also seen, um, you could do real-time defakes and you can speak as one person and appear as somebody else. You know, 6 years ago, I thought this was going to come by 2030. It's coming even sooner than that. So, you can appear as Tom Cruz, you can appear as anybody on Zoom.

And it's very realistic. And so, the motion, you know, capture, all that stuff is going to get consumerized. It already is. There's tutorials. You can just do it online.

Okay? And so what that means is you're it'll be less and less possible to trust something online unless it's crypto. In a deep sense, AI makes everything fake. Crypto makes it real. Again, crypto is in a sense what AI can't do.

AI can solve partial differential equations, but it can't solve cryptographic equations. It can't, you know, uh invert hash functions, for example, or or, you know, figure out uh a digital signature. And so the the thing about this is this is one of the ways AI is really driving uh crypto entity. It's making it technologically necessary. And so we need something like cryptoames where you can add proof of human to a crypto name, but not in a centralized way, in a decentralized way.

And add not just proof of human, but proof of this membership, that membership. There's many other things beyond just somebody being a human. You know, that's just a 01. There's a lot more you can do. So all of these custom records that you can add to a crypto name, you can add all this metadata that you can sort of build something provable on the internet.

Again, that is a lot more robust than just a paper passport, right? Okay. So that's why it's becoming technologically desirable and technologically necessary. But why is it becoming socially necessary? So essentially, you know, for various reasons, if you're on X, you can't miss it.

Because of all the migration into the US into Western countries, there's a push for denaturalization. And without taking any stance on this, this is just happening. Okay? This something that was very uncommon is becoming common. And that's going to be something which is then turned around and weaponized and used by both sides and so and so forth.

And so what that means is denaturalization may be the next unbanking. Okay. In a sense, we're kind of moving towards this cancellation is like soft denaturalization. You're thrown out of a community and unpersoned without your papers actually being revoked. It's not quite as bad as the Soviet Union or, you know, like uh Mauist China, but the uh you're you're you're basically unpersoned, right?

And now that's becoming that was something that that happened on one side. Now that's happening on the other side. So we we're used to thinking about unbanking and debanking like losing your bank account. Losing your passport, losing your identity is actually also quite bad in some ways worse because often you need that to get a bank account. So these two things kind of go together and state checkpoints that were set up during COVID, passport issuance freezes, dennaturalization, cancellation, these are all things that are sort of throwing somebody out of the community, you know, cancelling them, canceling their passport, right?

And organized civil conflict is actually mutual denaturalization. There is no such thing as Korea. There's North Korea and South Korea. So there's that movie, you know, which says like what kind of American are you? in in the west in particular there's going to be this type of thing I think happening where just like you've got different economic spheres you start to get different social spheres it's already kind of there whereas a blue red territory red territory and they'll fragment further into tribes and even those that are outside regions of physical conflict may see digital conflict because this stuff is just on the angophone internet um and essentially these uh digital tribes don't correspond necessarily to offline paper tribes so there's going to a whole process of determining like what what group controls what territory online and offline.

And so there's two approaches to that kind of digital conflict. One is actually the Chinese approach which is the top down approach of the great firewall and the other is the blockchain which is a bottom-up approach of of basically uh you know like what Bitcoin has invented. And these are two totally different ways of establishing digital borders in a deep sense. only China and the internet or China and crypto take the internet seriously and establish digital borders there, right? And so one way of sort of insulating yourself from all the conflict in the angophone internet is just the great firewall.

Speak Chinese, be behind that great firewall and you don't have a problem on their side of it. Uh people can't script drones on a territory and so and so forth. It's got its downside, but that is an upside. Um the the other side the other possibility is in the angle phone in the in the you know uh the angle phone world English speaking world you establish digital borders with token gated communities that can scale to a very large size right you have some cryptographic identity crypto identity that lets you into a token gated community and this is how you can establish hard digital borders on the internet right on the angophone internet and so these are two different approaches to sort of establishing hard digital borders the top down and the bottom And because angle internet you know it has all of these different countries cheek by jou you have Americans with Indians with with anybody who speaks English in the world is on basically the same ax which is like a player versus player environment right um the angle internet doesn't have a natural sense of digital borders and so you'll have to restore those or implement those with something like crypto identity in a deep sense um when you when you start thinking about in terms of digital borders oops crypto identity is actually not just socially necessary, it's also desirable because you know how'd you get into this conference for example there's like a QR code that you scanned right so this is something where the network is above the state in the sense of you actually use a digital identity to get into this this group and the thing about that is identity is community is security is territory by proving that you belong to a group then you prove that you're supposed to be here versus not and that's actually how you gain control of a case whether it is temporary or or permanent. And uh the thing about this is you know a simple example ENS you know name can open a door okay so you can have a membersonly gated kind of thing in the digital world you're used to that like a discord but it can do the same thing offline you can have a smart lock which is gated by ENS you can have not just a smart lock you can have the lock to a community and the community can be of arbitrary size it could be the size of a city it could be like passport control of a city right so these concepts of token gating are not small things they're actually really big things that can be applied to more than just a little discord where you say when airdrop or whatever.

Okay. Um you could do it for much much larger kinds of things including large physical territories and that is also something that's very difficult to fake. You can't present a fake crypto identity at the border. You could present a fake passport but not a fake crypto identity or at least it' be much harder to fake. And so what that means is that with crypto identities we can actually rebundle communities.

So even as these 20th century western identities are fragmenting, these internet entities are getting booted up. And that token gating allows you to rebuild communities of friends on the other side, everybody's smiling, having fun, you know, at a conference or at a at a at a meetup. And you know, the people around you actually do share your values because, you know, you're hanging out with them. They'll know a lot of the same cultural references, a lot of the same memes. In a real sense, this kind of is your community.

um they're often probably closer to to you mentally than someone who's, you know, in the same apartment complex but but doesn't actually follow crypto or or understand the same things, right? And so in this way with crypto identity, we can kind of rebundle communities after this kind of fragmentation that's happening online. And so putting that all together, that's why I'd say we know fiat currencies is going to zero. That's bad in some ways, but we built BTC. Fiat entity is two.

may need to go Satoshi in the sense of you may need a crypto name to operate in the angophone world as the old fiat identities go to zero just like the fiat currencies in a sense for example Soviet passports didn't work the Soviet identity went to zero and everybody had to figure out what they were on the other side were they Russian were they Estonian were they this were they that were going to immigrate were they going to rebuild all this kind of stuff right something like that is going to come on to to to angophone political entities so um you know at school we think about this kind of stuff. So if you're interested in this kind of thing, interested in crypto identity, apply to network school. This is just like, you know, the very quick version, but if you're interested in the crypto, come by. All right, so thank you very much. That's it.