Crypto is Here to Set You Free - David Hoffman

[Applause] all right uh who here uh listened to my talk yesterday who here didn't listen to my talk yesterday all right we're we're running it back except last time i was like literally reading the article that's gonna go out and this time i'm going to freewheel it can i oh i can do this okay this talk is titled crypto's here to set us free and personally i'm obsessed with the relationship between the code that we write and the code that we ape into and how it impacts culture down the line there's a direct well not direct but eventually there's a connection between the ones and the zeros at the ground at the basal level and then like philosophy or how culture actually emerges and so while we design these systems just like charles was talking about like it's really really important to understand the code and how it impacts the people that use it little did i know when i signed up for facebook when i was in high school with that it'd be causing civil wars down the line so it's important to think about these things and so this is a talk about that this is the grayscale gbtc chart that trades on like the nasdaq or the end west nyse or whatever it's like got a lot of stuff missing like there's all the gaps and it's yeah it's ugly it's it's unexpressed there's there's things missing in there and that's because the the traditional stock markets are only open for six and a half hours a day for like 253 days out of the year and that's only like 19 of the year so 19 of the year bitcoin looks like that it's and it's but on coinbase it looks like that it's fully expressed it's holistic it's uh the the medium upon which bitcoin trades reflects what it does and it also impacts our fidelity in uh how we choose to value bitcoin the market value of something is determined by the collective uh prices that we all that we all ascribe to the assets that we trade and so when something like shows up on a on a candle it's because all the humans value that in a particular way it's supposed to be a reflection of human values but we're limited in the technologies that we have to actually express these things and so the nasdaq limits our ability to express how much we value bitcoin but coinbase doesn't because coinbase is 24 7 365 just like bitcoin is and so the technology is a medium for expressing a relationship that we have with these assets it's not bitcoin that tells us that it's valuable it's us that tell bitcoin that it's valuable to us it's us that values provable scarcity it's us that values peer-to-peer money and here's how much we value that that's how that's what it's showing here uh one second while i pull up my notes make sure i don't get lost and d5 is more or less like doing the same uh because d5 does exist it's not d but in traditional finance d phi is hidden behind the walled gardens of wall street uh and so like when you take your us dollars you put them into wells fargo and they go and yield farm with it inside of the closed doors of wall street that that's what they're doing uh and then they give you like the the pennies at the end of the day and so what defy is is unleashing the actual power of finance to the rest of us like defy didn't invent finance but for the majority of humans it might as well have because we've never been able to touch it before it's been gate kept by the the you know the tradify institutions that have been able to sell to toll our access to it and so the expressivity that finance allows us to have is kept away from us finance is a tool to just allow humans to express how much they value something and in the world of traditional finance we have bonds stocks and equities and those are like three categories of assets and then they trade on markets that are only online like 19 of the time free markets are way more than just what finance is about the concept of free markets when that lands on people's ears they usually think you know finance finance and money and not culture but free markets are much more than just finance and i think with the power of web 3 with defy whatever this movement is what finance can turn into is something that puts culture into money and then puts money into our culture and so the cool thing about d5 and ethereum and all this stuff we're doing is we're actually producing economic foundations for different and more viable cultures if a culture is viable because of web 3 and d5 we can actually find ways to monetize that and actually create that culture and uplift it and spread it around the world a lot of people don't like like crypto's like financializing everything it is but it's also culturalizing everything too it's culturalizing finance it's a meeting in the middle one moment oh yeah so like while we have like three categories of assets in in tradify like you know equities bonds stocks derivatives whatever in crypto we have the erc20 token and the erc721 token we have non-fungible tokens and fungible tokens those are all of the tokens and all a token really is is a blank slate for us to ascribe value to it we tell it that it has value and we use the evm we use smart contracts to etch in why this thing has value into the token uh the evm says this token is valuable because of this so instead of just like stocks bonds equity derivatives in the world of crypto we have dow tokens we have nft tokens we have one of ones we have membership nfts we have meme coins eventually we have the because there's only two types of tokens and we have both the standards non-functional and fundable tokens that's all of the tokens and so it's really just up to us to figure out how many tokens can the world actually sustain because ethereum kindness seems to be intent on minting every possible type of token if there's one thing that we know about cryptos people love tokens and they will find ways to make them valuable that's literally all of our experimentation is about making different types of tokens valuable we have like bitcoin it's the original token and it's valuable because of its properties but then we have andre cronie rac he has the ric token and he has a website that unlocks stuff if you have the token and instead of having stocks bonds and equities and derivatives which are you know those types of categories of assets again that only trade 19 of the time we have the infinite array of possible tokens that are traded on markets that never ever sleep and so the going back to this this is it's the same relationship where this is tradify with a very poorly expressed bitcoin and here's coinbase but also like d fire unit swap or whatever that is fully expressed but that's just a model that's like let's extrapolate that this is our culture when finance is just in wall street and this is our much more fully expressed culture when we have defy and all these tokens of an infinite array and also because of the phenomenon of private keys we have the the infinite number the maximum number of people that can express their values upon the maximum number of tokens the maximum number of people expressing their values to the maximum number of tokens that's really cool and that's what gets really me really excited about making fi a culture economically viable one moment oh yeah so this is a movie that's on netflix it's an okay movie um but there's it's a platform it's like a jail and it starts at like level one and then it goes all the way down to like it actually doesn't really tell you what the last level is i think the last one that's shown in the movie is like 250 or something and there's a platform with food on it and if you're on level one you're chilling because it's got all the food if you're on level two you're still chilling because it's got all the food but you get down to like level 50 and like people start to have eaten all the food and then a level 100 like oh there's not a lot of food left uh and then if you're down to like the 150 level like you're really starving because people ate all the food before it got to you this is a world with intermediaries in a world where we don't have private keys we don't have a way to push value towards the margins of society because all of our assets all of our money are held by like custodians banks brokerages and like even the nation state if you own something it's only because the nation say says that you do like the courts agree that you own it and so you actually have no way to truly own something if you have a dependency like even the courts are gameable so do you really own something if you have to trust that the courts that you agree with say that you do with private keys we actually have the ability to send money very granularly to anywhere in society because of private keys and so instead of a inside of this platform that has food at the top and if you're like you know floors one through 50 you're kind of chilling but if your floor is 50 to 200 you're kind of dead instead it much more equitably distributes all the value because we have a way to send the money granularly without having to go through the intermediaries intermediaries are just like these vultures that like exist around pockets of value and prevent the value from permeating out to the margins of society one of the really cool things about private keys is that we get this like route around the intermediaries so it just goes straight from the source of the value towards the create the the person that values that the most the person that owns the private keys sorry i have one mode and it's excited and it makes me lose my breath [Applause] [Music] [Applause] all right let's see what picture's next yeah okay so this is this is web2 and traffic because we don't have private keys wealth in web screen tradify is inwardly concentrating and our pro our protocols like twitter or facebook or goldman sachs are end up just being structures that allow billionaires to compete in billionaire games but in web 3 and defy because we have the the ability to send money to the margins all of a sudden that's a new vector for our protocols to compete on it's a new primitive like twitter but in web 3 has the ability to send its users money now all of these apps have to compete on how can they send their users the money the best which apps can create the most value and distribute it to the mo the people the most in the most sustainable fashion this is what kevin owaki calls regenerative crypto economics because we have the ability to send monies to our users now the social structures that we use have to compete on that vector that's the new status quo that's the new equilibrium and that equilibrium came from from private keys because we have the ability to send money to the margins and the cool thing about private keys is they disproportionately benefit the people that need it the most which are the people at the margins of society uh the the center gets cut out and then the the periphery gets enabled this is what what vitalik means when he talks about how uh like ethereum puts ceos out of a job but gives more money to the uber drivers it's about putting money at the margins and culture is at the margins artists are the margin are at the margins of society they're always at the frontier they're pushing the boundaries and the reason why like well you know covet happens we all go into our homes we make d5 summer happen all the finance people get a bunch of money because they're good at yield farming and then the nft revolution happens because the finance people want to fund the arts like this happened in the renaissance it's the same model we made double entry bookkeeping and all of a sudden our art got better because we injected money into the margins double entry bookkeeping is like d5 for the 1500s it's like instead of storing the the gold in the the church or the kingdom or whatever you have people that can manage their own value because double entry bookkeeping is a decentralized system of money one moment oh yeah okay so like uh because web3 pushes money to the margins it makes us to have to go to the margins and we've seen eras before where we have value elsewhere rather than rather than at the center like the first one that came to mind is like the 1400s to the 1750s the era of gold god and glory where all of a sudden there was this incentive to go outwards to go get the value and so we did and then we we explored the world and a lot of new value was created out of that uh never mind the whole uh conquering thing but it allowed us to expand the map it pushed society forward we explored new frontiers 1800s america where we had a couple depressions on the east coast in like 1819 and another year all of a sudden people wanted more freedom they wanted freedom from the east coast and they wanted to go explore the west because there was gold out there there was freedom out there and so people went out there because there was value out there and so we explored the frontier the space race we had this extrinsic thing the moon and we just wanted to go there and because we had this extrinsic thing of value because we perceived it to be valuable we went there so in contrast to web 2 where con or power concentrates in silicon valley and tradify concentrates wealth into wall street web3 takes a three a ten thousand dollar airdrop and it like chucks it into the metaverse and says it's like go fetch it's over there and so if you want to go get this value you have to get your private keys and you have to journey into the frontier and where is the frontier right now the frontier is the metaverse that's why every single company is obsessed with it for some reason like activision blizzard wasn't a metaverse company but then when microsoft bought them there was a metaverse play doesn't make any sense um okay so our relationships with the platforms we use are about to go from extraction to enablement because twitter doesn't have the way to to send us money it can't do that so we can only give it our attention it can only send us likes and hearts back and we can send them our attention which ends up being our money because of advertisements but with web3 because protocols have the ability to compete for how much money they want to send us this turns a relationship with our protocols on its head it's the new equilibrium where our protocols go from being extractive to being enabling and you guys have seen how many tokens get minted and every single token that has value only has value because it has a community behind it and eventually i kind of think that there's going to be this mesh network of web3 protocols d5 protocols whatever these things are and there's no way to there they just will permeate our lives in the same way that like twitter or instagram or whatever protocols we use driving on the right side of the road uh these will all start to enable us better five minutes oh boy so this is center of web2 it sucks center of web 3 is an oil geezer it's like spitting out value i'm going to speedrun this because i am going to skip forward okay so yeah this is enablement versus extraction when we find resonance with the systems around us good things happen this is the agricultural revolution where we learn to harmonize with our plants and we use plants to grow food but plants used us to grow more of them it was a symbiotic relationship with the more the more plants that we grew the more food we had and so we could have more people who could grow more plants and then there's more plants to grow more food and all of a sudden the population of the humans explode uh i'm not gonna play that uh and like this is it's the same thing as how we domesticated wolves like right now the web 2 protocols are like wolves they're kind of vicious they bite in the same way that we learn to domesticate wolves we will learn to domesticate the protocols that dictate our lives all this experimentation that we're doing in web 3 and d5 it's iterations on how do we get these web 3 protocols to more closely align with our human values and now that we have the infinite array of tokens along with the infinite array of possible humans that can participate in evaluating these tokens with private keys we can actually iterate faster and faster and faster and so this is allowing people society to become the best versions of ourselves because we have finance that allows us to express our values and protocols that be can become to reflect those values all of a sudden society gets a clearer picture of who we are as a whole we are more enabled collectively but also like humans i i personally believe that humans are inherently good we everyone everyone thinks that they're a good person sometimes we look and uh outwards like oh that was a bad thing that they did they did but collectively we're good we're good people at the inner core of us but sometimes we get trapped and we accidentally make like the holocaust and even the nazis thought that they were good that was bad and so this isn't like a slam dunk we just don't get to say like oh web3 like utopia we actually have to work for this and that's why i respect people like charles who's trying to iterate on governance because that's what he's trying to do he's trying to iterate on how can we get our social structures to more closely resemble our human values but also nudge it in a good way and so i'm going to skip to the end no i'm going to do this meme this is us pondering who we are as a society uh this is what crypto you think crypto is that's what everyone else thinks crypto is like oh man my life would be just so much more complete if i had a million dollars it's helpful but this is actually way better because if you have social systems that empower us you don't need a million dollars you just exist in this web3 mesh network and you do this mesh network is competing to give you money and so our protocol is going from fighting to make us more angry so that we can give them more attention and our protocols go to fighting for our love fighting for our uh attention and heart and how well can we harmonize so this is how we build a better future um but up it up okay so there's two phases of crypto and we're still definitely in that first phase and that first phase is the one with all the scams the pump and dumps the get rich quick quick screams because money is really really fast right now we're at the very beginning stages of this whole thing crypto's like 15 years old but it's supposed to be a multi-hundred year long phenomenon maybe even a thousand years who knows but in this first phase the whole like greed is just the bootload loader for getting everyone here everyone's here because they want they want crypto to make them more money but everyone also knows that there's something real here and what's real here is that we can actually have more sovereignty and more enablement via our protocols because the if we want more money and more sustainable money it's going to come from the protocols that learn how to sustainably give out the value the most to the most amount of people and so that's phase two so like we're on this rocket ship there's a bunch of scams but also there's a kernel of truth here and we're blasting off out of the out of orbit into into uh what's it called when you're sure if that works once we're out of the out of the the atmosphere of the earth and we're actually sustainably in in space that's phase two where crypto is actually here to enable you so right now crypto is a bunch of get rich quick quick schemes but eventually crypto will be here to set us free thank you