Demetri Kofinas x Hasu

ready to move on to our next talk so i want to quickly um introduce our our next speakers uh we have dmitry kaffinas who is the host of the hidden forces podcast um and he'll be speaking with hassu who's a prominent ethereum researcher as they discuss and they'll be discussing just ethics uh restorative versus progressive ideologies and crypto and and honestly just a frank conversation about uh what it'll take um to truly make money great again so without further ado please welcome dimitri and [Music] i'll let them uh take it from here hey guys hey hello guys see the difference between me and joshua is you can tell when i turn my camera on that's fine yeah i would there's no change in the avatar i would keep it at this um so can we start i think's all right uh yeah as we just does uh yeah we're all set okay great um yeah for those who don't know me i'm a research collaborator at paradigm i'm also the editor of therapeutic research and i host the uncommon core podcast and dmitry i'm extremely excited to talk to you today i'm i'm a big fan of your podcast um likewise arso thank you in your episodes you are not afraid to tackle some of the most complex and important topics in the world and i feel like you approached them from a first principles um point of view and with a very open mind and that i think is very rare today so um why don't we start by um you telling us a bit about you know what you do at hidden forces and what your mission is um so i'm always bad at these questions but essentially the podcast is a as you know it's a long form conversation type podcast i try and find experts or really brilliant interesting people who are doing work in a particular area who can speak to some timely subject and or non-timely depending on whether it's interesting or not and then i do a lot of research before speaking with them and what comes out of these really well researched uh super interesting detailed conversations that really run the gamut um whether it's tim grover who was michael jordan's strength coach from 1989 until the end of his career or central bank people like the chief economist the bis or folks like this and the program is called hidden forces because the idea is that there are in order to understand the world in order to understand the epiphenomena that we encounter in our daily lives you're best suited to get as deep as possible down the vector of whatever it is that's driving that system or that behavior and that's what hiddenfor says is it's a deeply epistemic um approach and it takes an empirical and epistemic approach and a critical thinking approach to understanding the world which i think is desperately needed today yeah spot on um and we today we wanted to talk a bit about sort of also some of the hidden forces of the crypto space um timely enough um sort of the ethics and values and also some of the excesses that we see in markets today and i want to start by talking about a phenomenon that i think everyone is aware of at some level but maybe not under the same name some call it post-modernism others you know the casino vacation of markets and in a recent podcast with grant williams you call that financial nihilism so dimitri what is financial nihilism and you know why should we care about it so i define financial nihilism or market nihilism as an investment philosophy that treats the objects of speculation as though they were intrinsically worthless and it not only conflates price with value but it synonymizes the two and i think this explains partly why narrative so-called narrative investing to the extent that this is even like a term that anyone uses has become so popular because i think that people i mean people have always made money by investing in things that ahead of before everyone else thinks to invest in them right but we've in my experience we've never really had a philosophy that's so nihilistic and cynical which says that it's all [ __ ] value is effectively what you are able to uh bootstrap bootstrapping a narrative getting people to believe in something even if they believe in many instances things like scam like a scam coin or something or uh or some of these other things the the idea is that everyone's saying well let's all just close our eyes tap our heels three times and the thing will go up that to me is very new and it's very nihilistic and i think that derives from that same type of thing that same type of phenomenon right and i think it's important sort of to delineate between when we sort of when we look at bitcoin for example ethereum those are also things that are bootstrapped from nothing but you know and they are big um and they have a lot of network effect then they will be valuable because of that right right well i think that's a great point right because bitcoin in a sense sort of pioneered this but it pioneered it and it's at a point now where it has millions and millions of millions of adopters people that are invested in its success and i think that's a and that's a phenomenon that we see across the board everywhere in life people try to imitate you try to fast follow and so everyone wants to be the next bitcoin because everyone wants to be rich so that drives so much of of whether it is in crypto or meme stocks or anywhere there's this desire to be the next bitcoin the next uber the next google you know but now it's just everything's been tokenized so the capacity to generate the returns that a google can generate or a new can generate are actually possible because the dividend has gone away the cash flow's gone all you need is asset price appreciation so there's actually an a way to get there if you can get enough people to believe in the ponzi and to buy in early enough so that you can exit at a sufficient multiple that's the game right and it seems sort of where for me the nihilism comes in in contrast to something like bitcoin would be that a lot of people will like straight up tell you that they don't believe in it for the long term they just want to get out you know they want to get in and get out before you know others do and that's how they plan on making money with that right yeah and that raises the question of whether whether a whether utility is important first and foremost and then also whether or not having a sort of um a long-term vision is important or is it simply important is price really all that matters you know right yeah i mean you raised a very interesting point when you compared this sort of to the rest rise of growth companies in growth investing um like when we look back 40 years or 50 years like the way that someone like warren buffett you know made their uh made their start was you know with a sort of cigar but strategy right sort of look at you know companies and only look at that tangible value and completely discard sort of the any potential of future growth and now we seem to have the opposite almost right all only looking at future growth it's a very momentum driven um investing environment and that's not entirely surprising when you consider that the ultimate driver of that momentum has been and that sort of equilibrium of steady increases in price over time has been have been monetary policy makers they've created an environment sort of sauce for the goose if everyone sort of invests in the in the uh in the giant tidal wave that the fed has created through the massive amounts of liquidity that it's generated and in that way particularly bitcoin but crypto as a category isn't a is an ex is it really a deep pure expression of the chaos that that has created so you would say financial nihilism is primarily a result of you know bad policy and i think it's bank failure i think it's partly a result of of of central bank policy specifically what i've talked about is the moment of clarity that normally comes every so often through through the the contraction of a business cycle the the the absence of that moment of clarity um and the sort of promise of perpetual mean reversion that has developed both through forward guidance of monetary officials but subsequently every market participant simply believing that things will just go up that is very nihilistic because it'll it it it it provides no room for the discretionary investor whose job it is to actually tie price back to value right to tie perception to reality if we are operating with an idea that there is some ontological base reality um and incidentally i think this is also why theories of simulation simulation theories have gotten so popular in the culture because there is this feeling that uh reality is less and less relevant or even absent entirely or empirically non non-uh obtainable i think that also speaks to something else which is that we just can't appreciate how much our experiential universe has changed over the last in particular i'd say 10 years i think that's where the big change happened because that's when 10 or a few more years when ubiquitous connectivity through mobile and social media and networked applications became a huge thing and so i think there is a real sense that the world is less tangible we spend more time and and as a result of that we spend more time in the digital world and because we spend more time in the digital world we end up running into a problem that has always existed but that we never really were aware of because when we live in the world when i meet you hasu i know i if some if i say that there's hasu and someone else will say that's not him but it's so obviously you because you're in the world i can see that that's you the onus of proof is on the person who's making the statement that it's not you but in the digital world it's very difficult to distinguish truth from fiction fact from falsehood yeah and so we run up into another problem that crypto um that one of the central problems that crypto is meant to address which has to do with trust um and how do we trust the world that we can't sort of verify through our bare sensorium as we know it to be true putting aside legitimate arguments of whether the world as it is based reality as we perceive it is actually based reality and to what degree it has in your relationship to reality those are fair arguments but regardless we were evolved to live in the world and i think this transition to a digital world the challenges of making that transition work are deeply underappreciated because of how quickly we've sort of been sucked into it made a very interesting point there regarding our inability you know to verify things and you know tell true from fiction um would you say that this motivates maybe to a degree the entire you know strive for having a decentralized financial system and you know the web 3 narrative you know let's let's build new social media platforms new internet giants but this time decentralized and where everybody can you know verify the state and and so on you cut out for a second did you say does it validate the need for quote decentralized applications yeah yeah yeah pretty much in the decentralized financial system because this is yeah this is such a high value right both in bitcoin and ethereum the ability for anyone to be an actual node in the system and you know validate that the rules of the system are being followed so would you say this is a an attempt to reclaim that power that i do yeah i do i think the general answer to that is yes i do that's sort of the short and succinct answer i do think so i think it's i again you and i know we've talked about this often times there's you know there is the philosophy there is the virtue signaling within the community um with there's a lot of virtue signaling along certain values of sort of enlightenment or american enlightenment and um and things like this but and truth etc and we all you know the community falls very far in certain sectors falls far short of that but i actually i absolutely do think that this is the correct goal to strive for yes in an age where people only seem to care about the price of things um it feels more important than ever to take a moment and reflect on the values that you know the crypto community wants to have um what what values and ethical codes do you think crypto should represent and maybe where does it currently fall short of that um well uh i think that it i think those the again the virtues that the or the values that the community um sort of developed early on or had uh sort of again enlightenment type values um a culture of openness these are important values i think the community fulfills i think in the bitcoin community the bitcoin community a lot of the spokespeople for the community fall vastly short of that um that standard there's a lot of self-policing that happens there's a lot of um sort of ideological cultish worship worshiping um and that i think is does not serve the community well i think when and i'm not impartial to either bitcoin or ethereum to be clear but what i like about the ethereum community is that there is more of a focus on building and by the way i think these are again culture is something that changes over time you you know this isn't something that has to be permanent i just think it's a it's a phenomenon at present i i think you know to that point the bitcoin culture as an example is more restorative uh and the the ethereum culture is more so to speak progressive and what i find more appealing in in the present time because of all the problems that the world faces and because of the incredible opportunities that this technology can support i find that progressive ethos far more attractive and i also think incidentally that it is far more aligned with the current zeitgeist and i think we've seen this in the conversations around the energy problem or to the you could disagree with there's an energy problem or not but let's just put mining and the incred the enormous policy focus and focus through esg and other other areas of the economy on green energy green you deal stuff like this so that's sort of how i see that if that answers your question yeah sure um regarding sort of the progressive versus restorative so um you said one fits the current zeitgeist better than the other um where do you stand on the question if you know the same person can sometimes favor restorative ideals and at other times progressive or versus um is it like always two different camps and you know sometimes one is more powerful versus the other yeah no i i don't i don't i i think that you can favor both um because again to bring it to bitcoin because the tangible example bitcoin's value isn't its restorative quality so you invest in bitcoin you want to hold bitcoin because you don't want too much change so the same people that can you know be working in ethereum many of those people or people that own eth or and or btc they own both interchangeably um and people can support both and these are actually the entire i mean one of the things that people outside the crypto community may not understand as much is that it benefits everyone um when bitcoin goes up in price uh or at least it certainly benefits ethereum these the the the industry moves in tandem and that's not necessarily a good thing but it is what it is for now um so i i think that you can support both uh if you can be an in fact to my point one of the these strong progressive values today in the zeitgeist is environmental conservationism well what is that other than not restorative um and uh can you can you restore restorative for our audience real quick can i what can you define what restorative restorative i mean kind of make america great again uh make money great again so to speak putting out all the pejoratives associated with it um and you know there are a lot of things about uh society that were great uh that maybe that that that the the current culture is very quick to uh throw throw out you know the baby with the bathwater there are a lot of really really great things that we shouldn't we shouldn't forget so maybe it's a bit of a jumbled answer but that's why i would describe it restorative i probably should have thought of a better answer than that but it's it's kind of like a way of talking about being conservative yeah you know yeah i think we're like conservative is about you know not fav like favoring keeping things the way they are unless we are really sure that they must be changed right and restorative to me means returning to a better time also like you said with make america great again right we store something that has once been and i think the idea that the bitcoin community is striving for in a lot of ways is returning to like i mean some sometimes they talk about sort of the gold standard um but also just about the you know maybe uh a glorified or romanticized version you know of america that may not have ever existed right um the wealth gap is often you know mentioned when you know their grandparents were able to work for a few years out of college and buy their first house right and then get two or three kids you know and and and have two cars and whatnot right and they look at themselves and they are burdened with student loan debt um ever being able to afford their own home seems completely out of reach for them uh what what do you tell them like is it realistic that this time can even be restored or do we need to find completely new solutions to these problems so these are totally fair observations and you know the wealth gap and part of in the wealth gap is partly driven by the type of financial repression that we've described yeah um the same phenomenon that favors asset prices over dividends and income flows and fixed fixed income flows i i think this is a really tough you know tough question it's a fair question it's a tough question no one really has the answer to this i find it difficult to see how this trend can continue indefinitely because in practical terms what it simply means is that america moves from a a more market-oriented commercial capitalist so to speak um free market economy towards one that is increasingly feudalistic where a smaller and smaller percentage of people in society control the vast majority of all the wealth and whether that's whether that's uh represented in treasury securities or stocks or anything else um that doesn't work it creates political volatility in place of these interest rate volatility or financial market volatility that you would normally see right so the central banks create this sort of steady upward movement in prices and in return you get increasingly uh political instability that can't go on forever which is why i think the the central banks whether they acknowledge it whether they even understand it entirely consciously or subconsciously are trying to uh devalue fiat currencies because it is that is a way of achieving a self-default and the self-default is i think people view it as the only way that we can redistribute well somehow i don't even know if that works it's actually very concerning we all have trouble sleeping at night as a result of this whoever all of us who deal with this issue no one really knows how it's going to work out i mean you can say it's going to work out really badly and you'll have some kind of political revolution or you will have a a form of international because that's we live in a world of nation states international conflict because rather than implode countries will seek to explode onto the international stage that's what we've seen in the past it stands to reason that that will is what will happen again uh things can always change maybe also we are reluctant to believe this because it seems so out of scope but i think it every year it becomes easier to believe with some of the things that we've been seeing and how much the global order has changed in the last 10 years it's sort of unrecognizable especially in the last 20 since the first year of the the first administration of the bush administration yeah indeed um i'd say you drew a very beautiful picture there of you know volatility can't be contained right it can only be moved around and just when you thought you had it content and it breaks out somewhere else right and um yeah 100 so that the thing is that and this is something i talked about uh on the grant williams podcast which is that in a market in a free market economy people have economic value and they have political value if the market becomes increasingly socialized and corrupt people still have political value they may not have economic value uh especially to a further point with the move towards automation people increasingly maybe feel like their lives are meaningless they don't have opportunities to engage in the power process and actually exert their will onto the world and feel like their lives matter but they their lives do matter at the ballot box so that's a dangerous cocktail when you've and this is why the founders are very one of the reasons why one of the reasons why the founders are very concerned about and some pushed for people like jefferson pushed for suffrage to be directly attached to property ownership which was they were very concerned about people having being landless they saw what happened in france yeah they were concerned about landless revolts and inner city riots of people who didn't care and we see that in cities when we see rioting and stores being broken and looted why is that happening because people don't feel invested in their local communities so you know i i think yeah i kind of i don't know if i strove off there no no that's when i was speaking to me i really like this tangent i mean this is this is a i think uh an underappreciated insight right like who is the man who becomes you know a criminal it's it's not the guy who has property and has you know a wife and a family and whatnot right it's it's those that feel sort of left behind by a society in a sense right um yeah completely exactly left i think it's a powerful framing right feeling left behind though even if you're not um even if you're not even if you have plenty of money in other words enough money to be able to live comfortably and exert and not have other people determine your life lots of people i know lots of people who are in that position who are a lot older who are angry because they feel like the world is leaving them behind and that i think is just a normal intergenerational transition it just so happens to be that the world is way more different uh today than it was 10 years ago versus 1980 from 1970 and so people who who you know came of age in an earlier time find the world even less relatable 10 years 20 years 30 years later and that's and that's another problem how do we integrate these different conscious experiences into one coherent workable society some people take the view that it's not relevant our current uh nation state political structure isn't relevant in this new world i don't i don't buy that argument i haven't been convinced of it because i think that ultimately we do live in the physical world that's not changing anytime soon i know there are a lot of people that want to upload their consciousness to the cloud which is holy scientific a wholly unscientific endeavor but um that's not that's neither here nor there and so security matters and if there is a an outgrowth of political terrorism in the united states as a result of some of the forces that we're describing here that's going to impact all of us regardless of whether we work remotely or not yeah you know they say history doesn't repeat but it often rhymes and um what i appreciate about your show so much is that you often bring you know this you have you have this grand view you know about not just our current times but also knowing a lot of parallels right zooming out um and seeing that you know nothing ever happens for the first time do you think there are any parallels in history to be found um you know to what we are seeing right yes i do i mean i think one parallel is the the first industrial revolution in the 19th century we saw america move from a primarily agrarian and somewhat merchant economy to a a a largely industrial one and i think that coincided uh not coincidentally with the civil war because while the civil war was fought over the question of slavery the means by which the war could be fought and most certainly won by the north resulted from the industrialization of the north relative to the south and the power that accumulated politically to the north and that was a sort of uh a changing of the guard for the elite in society so that that part i think is relevant as is the the the industrialization right because you've got a new class of elites that exist today who um who formed their wealth as a result of primarily a completely new revolution in technology i think similarly the second industrial revolution really kind of the light late 19th early 20th century is another example what was interesting about that was one just the enormous growth in wealth and much of which accumulated in the hands of a small group of of people of elites and then subsequently the transfer of that wealth to their children um and that resulted in a very different type of culture in america because while the carnegies and the rockefellers john d andrew these folks or cornelius vanderbilt who actually came into the fold even earlier than those guys these folks still worked their way up from the ground once the wealth transferred to their children to their children you had this new institutionalized class of elites who increasingly didn't see themselves as americans in the case of the united states they saw them as internationalists and so their loyalty was more to this sort of to their identity as international elites i think we're seeing that today as well and i think the danger at that time was expressed in the form of you know these cults like eugenics the popularity of eugenics i think there's some similarities there in the uh in in the sort of transhumanist movement and other such um such ideas that really kind of i don't wanna i don't i don't mean to i don't mean to conflate transhumanists with eugenicists and i also think it's important to point out that not every new genesis was a nazi right so there was this was a larger philosophy but it had to do with a sense of superiority and and similarly there was a huge interest in fascism at the time because fascism was such a or seemed to be such a um such a a a perfect ideology for business and so i think there's something similar that we see today with people that are attracted to the chinese authoritarian model people that saw let's say how quickly the chinese built factories built hospitals during the the covid uh pandemic and and therefore there's a sort of there's a a strain of the culture that seeks expediency over what i think is stability long-term and this brings us back also to the point about automation which is that automation makes people obsolete and while it is a political liability in the fact that obsolete voters are very dangerous you do kind of get uh to what people like ted kaczynski the unabomber and people like bill joy uh co-founder of sun microsystems wrote about in the 90s and that's where we talked when we bring us back to eugenicism and things like this do we get a paragraph at some point by people who have enormous power who are in positions to manipulate our minds and our conceptions of reality not just through intermediation digital interfaces etc but the the algorithms that tell us what we want not just give us what we want but inform increasingly what we desire in the world um i think that's a real danger the sort of dystopian future that is a lot closer than i think most of us realize i think we have painted a pretty dire picture it is of the world as it is today um i would like to explore a bit how you know as a young person today um as i assume most of our audience is going to be uh how you can navigate this world and how you can make your own path um and not become nihilist yourself you know but be strong principled and um you know and and learn to stick to those maybe yeah uh that's a tough question um i guess i don't know why it strikes me as tough immediately maybe the transition from doom and gloom to and i'm not i'm not a doom and gloom guy yeah you're not yeah i'm not actually and you know when i when i spoke about the point about social media and uh these companies really having a pipeline into our brain and being able to manipulate our wants and desires i'm also inspired by the work of people like shoshana zubov and others that i've had on my show who have really done a lot of work to inform people about this and i think there's been a an awakening of the zeitgeist around regulation um of of these companies can you rephrase that question again sorry yeah um is there anything that you would tell like a young person who right you know wants to live in this world um well i actually looked i looked at people uh it's funny that i you know you're old when you no longer refer you no longer think of yourself as a young person but um i i think that i actually look at people who are in their early 20s or late teens for inspiration on this i feel like it's hard for me to imagine how uh how to make it in this world i i think i think it's important to uh to make allies and to make allies with people who have lived for some period of time before you and maybe are in positions of power um i you know yeah i i guess i'm sorry i don't have a better answer no it's it's uh fun i mean maybe we can take it from here like to me some our answers would come to mind based on what you said earlier for example if we try to if you realize that maybe you know the the the family model pro like where you have a have a property you have a family at 25 you have kids like you it's almost like you work the same job like your entire life how we can try to recreate some of the same benefits in a completely digitized and international world yeah and you know what it struck me what you said about you know you need allies um i think it's it's very important in this day and age to um have like invest in relationships right because it can feel like due to the constant connectivity it can feel like you're connected to many people all the time but the relationships can be very superficial and ultimately not fulfilling when sometimes it might be better to you know disconnect and invest strongly into fewer but deeper relationships i totally agree and actually that does raise something which is i think there is that we've talked about the nihilism and the cynicism i don't think these are um i don't think people should be engaging in this type of thinking um i think and i also think that one of the one of the problems that we have today is that there's not these social media platforms which are effectively the public squares of the age are not are adversarial environments they are not open town halls for discussion and that's a big problem and that wasn't always true it wasn't always true on social media and it just wasn't always true period and we need that and i think ultimately that comes a lot of that not all of it but a lot of that stems from a lack of self-policing of oneself not of others because i think we do a lot of that there's a lot of throwing bricks through glass houses and i think we what we need to do is to and there are people that do that do work in this area in fact my guest who i just interviewed um and whose episode comes out on monday uh andy norman wrote a book called mental immunity where much of it is about how do we find a way to reason together to be able to establish and hold ground rules for conversation so that every environment every conversation doesn't devolve into a zero-sum game conversation should be a positive sum game so that we all get something out of it just the same way that training ahead of a ahead of a competition ahead of a fight you train you don't train to kill your your sparring partner you train in order to make both of you better so that you can then meet a challenge in the real world and be and be that much better for it so i think maybe developing a less cynical attitude towards towards conversation um and moving away from argument and more towards constructive conversation and not assuming the worst in other people so i if i were have any advice i would say we kind of need to change the there's a again this this speaks something we haven't talked about which is narcissism people are so narcissistic they're so self-involved and they don't even realize how self-involved they are because they're so self-involved but people who aren't that self-involved can see that in their twitter feeds can see that in their interviews and we should and there are and i a great example of someone like this is grant williams i mentioned him before i was on his podcast and i thanked him at the end and i told him that for me grant is really a sort of idol that i look at and i look towards for inspiration and guidance on how to behave in the world because it's very easy in the world that we live in to focus very much on oneself and what i can get uh whether it's money or whether it's a claim and not understanding that we are part of a whole and our actions especially if we're in the public in the public world have an impact and they they impact other people and people look towards that younger people will look towards that for inspiration so i think that's very important for sure yeah we keep circling back to the social media companies right but they they are designed intricately in a way to bring out these negative traits in you right yeah um i saw a really good meme almost like a few months ago where someone mapped um the seven large tech companies to the you know the seven deadly sins and i think you know instagram was vain and facebook was narcissism and you know that it was something around these lines right and i feel like it's really true how how they bring that out in you yeah well you know they're they're meant to um amplify engagement and there are aspects of of the human animal that favor sensationalism favor controversy favor conflict over peace um and you know getting along so i think a lot of those things get exploited and that's where i think we do need regulation um i there was a strong push for it interestingly enough in under the trump administration i've i hear less of it now um regulation of what regulation of social media companies social media companies are not normal companies they are utilities they should be treated as such and i say they are utilities they're not treated as utilities they are they are performing a public service they're very much like the news division of a corporation but even more important because they are where we communicate they're where we share ideas they're where we come to consensus about ideas as a culture and the idea that those should be controlled by a commercial entity whose business model is based on advertising is so obviously a bad idea it's one of the worst ideas ever the only reason it hasn't been reformed is because the commercial interests in control of it have employed massive amounts of money in the form of lobbyists in washington to ensure that nothing will get in their way so i i think this is one of the big battles of the next few years the next however many years i don't know we have i can't say the next 10 years because waiting 10 years even waiting five years feels like crazy to me um so you know this is this is a huge a huge issue it's a we can't have a functioning dem functioning um liberal democracy without a public square that is that at the very least leans towards objectivity and we are far from that right now what are the kinds of regulations that you would like to see for social media companies um there are people i'm blanking on the name now um jessica something i think is her name but there there are and you know someone who writes about this and is in touch with a lot of these folks is uh uh i'm blanking on i had him on my show matt i'm forgetting his name now uh he writes the blog big um and so i i can't tell you exactly what regulations i think for example uh the spirit of um of uh net neutrality that needs to carry over to the fact that the censoring is not just happening on at the at the information layer it's actually now happening on the software layer it's not it's not on the hardware it's not just the hardware it's not just uh uh cable companies censoring content and packets of information this is now happening on the platform level uh with companies like google facebook twitter tick tock whatever yeah so that that type of um that attempt to kind of l uh level the playing field has to happen there as well and i think i i think and this is without having studied it very carefully and i would love to hear what other people have to say about it is it seems to me that this entire business model of allowing of traff of trafficking uh people's attention and clicks for ad dollars is toxic it should shouldn't exist and it would i would favor in the in light of not there be there not being anything better i would be fair i would be in favor of banning it entirely because i think it's it's one of those things that's clearly horrible for everyone except for very few people who can profit from it and even they even they will protect their kids i was just in kauai this is a great example i was in hawaii and there's an island hawaii called kauai where they filmed jurassic park tropic thunder in fact i passed by ben stiller's house but more importantly who was the director of tropic thunder i wish i wish i was be i didn't pass in his house because i don't know ben stiller but if ben stiller's an eth head and if he's listening right now he's listening love you love you but i also passed by from a great distance mark zuckerberg's house mark zuckerberg has purchased through uh um you know all sorts of covert processes a huge area of land in kauai and he employs a huge security detail to ensure that no one can get close to it and why do i bring this up mark zuckerberg has told us that privacy is a sort of bygone thing it's not important we're over it move past that but he wants privacy he wants privacy for himself he buys all the houses around his house in on the west coast why because he wants privacy so um i think you said something that made me bring that up i wasn't just ripping ripping on on mark zuckerberg i think it was it had to do with the right that was my point in the seventh sentence and yeah my point is the only reason that it's not important to mark zuckerberg is because he has the money to be able to create that privacy and to be able to protect his own children yeah you know uh so it's the same but steve jobs didn't let his kids use certain products some of his own products i doubt mark zuckerberg lets his kids open up a facebook account you know unless it's like a private intranet account or something yeah i am i read a book um last year now i'm blanking on the name but the gist of the book was it laid out how the super rich can buy all kinds of benefits like privacy like immunity from law um and you know that you know they are like not that difficult ways you can buy everything with money and everything has a price and this is the hallmark of a corrupt society in a banana republic maybe yeah but it's it it it wasn't local in nature this phenomenon but it was deeply global it had to do with regulatory arbitrage because there was always a place where you can get exactly what you want if you're willing to you know expand your reach and this actually deeply reaffirmed my belief in the value proposition of crypto because if you can buy everything with money then maybe the right way like maybe those holes can't be closed maybe that's the wrong approach maybe the approach is to make it you know just as cheap as possible and that's easy to get you know just democratize access to these things like financial privacy right so the question is how would you do that would you do that um through government regulation i don't know um because then you have the problem of the sort of who will guard the guardians which is that you have to you have to overcome these enormous blocks to regulatory change the sort of progressive regulatory change which are the companies and the individuals who have captured the government and this is why it's difficult you kind of run into the problem of like how do we get from here to there you know um and is it going to be violent and is it going to be difficult and it's certainly going to be difficult you know i mean i see crypto as a bottom bottom-up experiment almost you know in competing with things that can only be done via top-down policy otherwise because for the for the private market it's not possible to bring up you know a solution that grants financial privacy from the state it's not never going to be tolerated but if it's a cryptocurrency maybe right if it's a cryptocurrency what then maybe it has a chance to what has a chance it has a chance to grow you know into existence where it can be used by a lot of people and be accessible is that a cryptocurrency or a platform you're talking about sorry i must have missed that you're talking about a decentralized social media platform oh no just you know financial privacy oh some kind of financial decentralized applications um like store of value that kind of stuff i mean it's it's it's not great privacy but it's some privacy right it's not it's not the kind of privacy that mark zuckerberg can afford for himself but i think there are certain areas where you can create yeah i mean but i don't know i think there are certain areas where you can create privacy um in in the in the commercial realm by using a different uh you know incentive and wealth redistribution model essentially having an open source you know disco decentralized platform with with token issuance i think there are places that you can do that i maybe i need to graduate from the realm of skepticism in general in crypto because of so many of the things that do make people skeptical again long-term believer uh short term there's a lot of noise to sift through but sure i think in principle yes let's talk about that actually like your skeptical position on crypto you say you are a long-term believer what does it take for you to become a short to medium-term believer as well uh good question um for example for defy one of the things that's been disappointing a little bit a little disappointing but more simply uninspiring i would say is that d5 as i see it is primarily used as a tool for regular financial regulatory arbitrage and gambling and so it's it's no different in my view than if anything it's just it's just more uh it offers more opportunities to gamble than traditional financial markets um at least in terms of you know for the size of the market the the kind of opportunities to gamble um i would like to see whether it's indeed fire anywhere else i would like to see a major launch of a really widely used application so if it were in d5 you know a lending protocol that was that that let's say in in the developed world really made huge changes in economic opportunity for people but also again because this is financial services i think there are huge risks in defy uh as this as the as the network grows because not just because it's unregulated but because these systems aren't don't just have you know complexity and code they also have the complexity of the financial layer and you basically have these two forces working together and they can create a lot of volatility and a lot of instability and you know the traditional financial system prior to central banking was obviously much more volatile and you had instances of bank runs and firms going under because of the nature of how banking works and leverage works but you didn't have those forces combined with with the complexity of actually writing software and all all the sort of unintended consequences that come with that so i think there's still a lot to work through i think it's interesting but you and i have talked about this before i actually think i was early on i was optimistic about how the the tokenization of software would drive capital into a space and allow the market to effectively crowdsource interesting projects and that this was i thought i found this to be a superior model to government grants and things like this which i found to be you know full of corruption but when i've actually studied if you actually look at how some of the foundational open source protocols were developed in the united states they were developed through close collaboration between the government academia the government academia and ultimately passing that off to the commercial sector and commercialization and well and the military exactly right so the government i throw the military in together um that model worked very well and i think one of the reasons why i worked so well is because you know when you're a creative and you're an innovator you need a space to be free to think without constraints and to create without any particular objective um vanivar bush created an outfit like this during world war ii and a lot of things like microwave radar uh that was put onto bombers in the atlantic that actually took out all the submarines the nazi submarines that allowed american vessels to cross the atlantic and to refuel this is before the united states entered the war and to refu and to uh rearm and provide supplies to the british and to the allies that was possible because of the ability to separate the military which needed stringent very much like a commercial operation and the academic the academic sector uh academia think tanks etc so i think there's a real benefit there that's lost in the current model because there's so much focus on the token and the price how do we get the price up um and i think that is that's a that's a real cost you know some people might quibble or argue well it's okay it's a cost but it's not the benefits are greater i don't know if the benefits are greater to be honest i think a lot of money has been wasted in this space um and scammed et cetera because of this i think i have a practical question for you um some defy clients choose to launch a token immediately have a trade on secondary markets because they see this as part of the feedback loop right it keeps it it creates an aligned community of early investors sometimes like some of them even become contributors they use it to incentivize you know liquidity provision and adoption but others um sort of keep the token on the back burner they don't even launch a day they you know eventually they will right because this for for um the way that i like to think about it is this is sort of the equivalent of going public like the going public movement of a new company and um and some like to take years to launch a talk right is a sort of a derivatives exchange that that does is has been live for like three or four years now and still doesn't have a token um but sort of where do you stand on this and maybe also in the light of private like if you look at regular companies they take longer and longer to go public where for the like then you know public markets investors can buy them for the first time and this at least it seems to contribute to the rising wealth gap right because a lot of wealth is now created and captured exclusively in the private markets um compared to like for example when microsoft went public and all of that wealth was subsequently created in the public markets yeah where do you stand on this with regards to defy that's a really great question um i think one there's an incentive for people to launch a token earlier and earlier because not just to raise capital but this you mention it build a community and i think this it so it's uh it's one of those things where i understand why people do it even if they aren't necessarily interested in raising more capital and in le but i i would have to say that those again the benefits of community are enormous i mean it's something that i i have to acknowledge it's something that i under-appreciated i mean i appreciated it but i really i didn't appreciate it as much as i have now because i think people want a need community and it speaks to the to the sense of loneliness and being left behind in nihilism that we talked about earlier but i don't i don't i think it's be i think on par it's always better to wait i think it's it's it's a lot of times projects you know this will launch tokens that aren't necessary at all so um and there's so much noise in the channel when it comes to this so on average i i would prefer not to see another token launched you know i would prefer companies and teams work in a more traditional way and i don't know that it's necessary to launch a token you can find ways to incentivize people the way uh early startups have done that before with uh you know early equity okay so let me actually challenge you on that if the token is the equity then i feel like every project has a token it just may not be well that's different it's not publicly right yes excellent i think that's my point i think that's well that's that that's where i think it's problematic launching something so early going public as a startup i think that's problematic that's right i see yes i think that is exactly the right framing um and surprisingly nobody uses that right um indeed if i sort of thinking about launching the token as the going public moment and you know really evaluating the pros and cons of that so yeah it only yeah i only thought about that in this discussion yeah are we getting signal to go off stage um we can wrap it up sometime in the next three minutes maybe not to wrap it up i just i just want to make sure yeah this is very complicated for me these sort of digital stages i i have it under control yeah okay we have um we have one or two more audience questions we could we could um [Music] take one more so someone asked them why why do you think current money is not great what defines great money for you it's a bit of a topic yeah so this is a uh i i uh this is a really tough question i used to be fundamentally a sound money guy i also recognize i mean the gold center is a great example over time i mean alan greenspan made this argument and he made the argument again alan greenspan went through a long transition some might say opportunistic self-serving transition from being a gold bug randian to a to the center to the head of the central bank and really in some ways a transformative uh central bank chief but he made the argument that really the the gold standard is irrelevant because in order to have a functioning gold standard you need to have an honest government and if you don't have an honest government well i guess he was talking about the bretton woods standard i don't know i'm sort of torn on this um i i've seen i think the way our understanding of the gold standard and sound money is is is uh we idealize it but it came with a lot of problems so in place of an institutional elite we had a commercial elite who was what the people called the banking trust there's a reason why bankers are so impossible uh unpopular in the 19th and and early 20th centuries and why progressive populist movements grew up against the trust um so the issue for me tends to be power and the accumulation of power i think i think it's a it's a if i had if i had to um to pick one i would pick sound money but that also is very self-serving because i would benefit from such a model and i don't know ultimately in the long term if it is sustainable you know and i wonder to that point you know what i should say i think one of the challenges we have with these types of conversations is everyone's always looking for the perfect model you know but i tend to find that what happens in history is people are very clever and they always find ways to upend any existing framework or model and that always leads to revolution and renewal so you know the fiat model is clearly broken the sound money the the sound money model whether it's in bitcoin or gold creates lots of inequities this is where politics comes into the picture and why you can never really get rid of of people unless you have a world of machines but if people have power you need politics because politics is what causes that renewal process where people can work things out and war is politics by other means so sometimes politics breaks down and you have open conflict and that's just human so i think i don't think there's an ideal model i prefer i prefer a sound money model where i can save my money but that model also comes with other costs so okay um man i'm so sad that we're out of time because i was good so i also have a take on on fiat money but this is the end for us dmitri thank you so much for the discussion my pleasure my pleasure please everyone check out hidden forces great podcast hiddenforces.io you can check out our episode library and go and geek out it's a great program thank you hashu thanks everyone bye bye some demonstrate thanks again and uh i also want to make sure that all of you also check out house's podcast on common core um there's a lot of great insights in there and uh i i wish we we had more time because there's so many things we can dig into but that just means uh we're gonna definitely invite you back and continue the conversation so all right guys thanks again and uh thank you on to the next talk