The Future of Value by Sep Kamvar (Devcon5)

my name is Sepp and I work on the cellar protocol and today I'm going to be talking about the future of value and what I'm gonna start with what hold on guys guys I want to start off by talking about painting in the 1800's there was in the mid 1800s there was a real big explosion in technology innovation in painting in about 80 in 1841 there was the invention of the paint tube and the paint tube we don't think of much about it now but it was a real technology innovation because before the paint tube the technology to hold paint was a pig's bladder and you can imagine that a pig's bladder wasn't very portable there's a reason why you didn't see a lot of people painting outside of paintings are the outdoors it's because people were pretty confined to their studio where they could hold their paints and mix their pants another invention around this time was the metal ferule the fur Yule is the piece between the handle and the brush itself and prior to the metal ferial people use string or wire as the ferule and the problem with this is that it only allowed for round brushes with the metal funeral you all of a sudden could have flat brushes and so that in turn allowed for the impasto effect and effect where people put paint heavily on top of the of the brush and very quickly paint and so together these two technologies along with a third technology which is which was the collapsible easel led to a style of painting that we now call Impressionism and this is both amazing and the story of the world there were these new technological innovations and these technical in it for an expressive medium and the technological innovations increase the expressive rein of the of the medium and that allowed then lots of things but including this these works of unspeakable beauty and this talk is is not about painting it's about money but I wanted to start with this because money is also an expressive medium it can express its expressive range is very narrow it can only express one thing which is value but it does a reasonable job at that and as we are now in a place where we're thinking about what we're in a place of technological innovation in the technology behind this expressive medium it's useful to think about what are the features of money that would lead to more beauty what are the futures that would lead to a more beautiful world and I would posit five none of these are new ideas all of these are all idea old ideas but I believe they're ideas whose time has come the first is a universal basic income or a universal basic dividend that is tied directly into the money system so that doesn't need to be implemented on top of the money system but it's native to the money system a basic income or a basic dividend we see this a lot in natures like sunlight or rain they're a consistent source of energy that's reasonably evenly distributed in a region and we see in nature in places where there's lots of sunlight and lots of rain we have biodiversity and buyer prosperity and so that's the first feature is a universal basic income or a universal basic dividend the second feature is demurrage and demerant is an idea by the economist Silvio Gesell who is active in the late 19th and early 20th century and he observed that you know during times of recession people tend to hoard money and that hoarding of money ends up intensifying the recession and so he said well what's what's the path out of this and what he proposed was a small fee on the holding of money he called this negative interest or damage and the way that he implemented it was he had these dollar bills he proposed these dollar bills but in order for the dollar bills to be valid you'd have to fix a stamp each month to the dollar bill and the stamped cost one cent and during the Great Depression there were lots of experiments with Demarest charge currencies most notably in most notably in virgle Austria and this is actually the for gold shilling of the DeMars charts chillin you can see the stamps on the right hand side when it was issued in burgle burgle became this oasis of prosperity in the midst of the Great Depression people called it the miracle of Orgel and he saw these interesting things like people started paying their taxes early because in the demarest arts world it actually makes sense to pay your taxes early so that's the second feature is damage and Emeric if you think about a ubi as rain dem rage can be seen as evaporation so it it it helps to circulate the energy and avoid stagnation the third features is an idea by a philosopher I love named Charles Eisenstein called natural capital back currencies and he basically observed he says you know whatever backs money people tend to make more of because it's like printing money so when gold back money there was this intense incentive to mine gold and so what Charles said is he said well why don't we back money with things that we like like pristine forests and clean rivers and I think that's a lovely idea so that's the third feature is called natural capital back currencies the fourth feature for lack of a better term I'll call an ecology of value and I think the best way I can describe it is to give an analogy to the early days of the internet I remember in the early internet there was this excitement around like wow like we could use this to put the Encyclopedia Britannica online and yes we could and yes that was useful but what it did was it actually borrowed an earlier metaphor where information was an R jekt rather than in ecology we had a monoculture information and what we thought about was to make that monoculture more efficient but in practice what the internet allowed was a poly culture of information it allowed an ecosystem of information and I can imagine the same thing for value I can imagine that we will have a diversity of local currencies of regional currencies of national fiat currencies of global reference parenthesis of utility currencies of store of value currencies medium of exchange currencies all filling niches that it doesn't make sense for the others to fill and creating a poly culture with all of the resilience that that that entails and finally the fifth feature is the creation of money in a manner that's not concomitant with the creation of new debt so right now all money is created through debt and the consequence of that is that there's always more debt than there is money we can never pay off our debts and I'd argue that at the beginning of the Industrial Age that was actually a feature it impels growth it incentivizes growth and growth has been good to us but I think now as we start to reach the carrying capacity of the earth it's not clear to me that growth and mean consumption is the way to solve our problems and it certainly is not clear to me that we should tie the medium of exchange to the incentive for that growth so those are the five features they're universal basic income damage natural capital back currencies an ecology of value and creating money in a manner that's not concomitant with the creation of new debt those of you here will probably recognize that a lot of the technologies that the crypto community has been building addresses some of these so for example block rewards are a way to create new money without creating without creating new debt tokens are a technology by which we can create an ecology of value smart contracts will allow for dem rich although Ford Emirates really work we'd also want stability of value and the ubi and natural capital back currencies are the hardest because the technologies that were that we're building are the most nascent they are technologies around identity and stability so what I want to do today is I want to just take a little dive into the idea of natural capital capital back currencies and proposals sketches of an implementation for it I I'm interested in the proposal and the sketch but I'm more interested in the kind of thinking that it all it will provoke so let's start with stable value coin a decentralized cryptokey lobby solo has a reserve of other coins and it's over collateralized it also has transaction fees and mining rewards go to the reserve variable so that based on the reserve ratios so that we can mitigate volatility but kind of add base we can think about it as an over collateralized crypto backed coin the key insight here is that the more the demand for the stable coin the more algorithmic purchases of the reserve assets so the because it's fully back so the the greater the demand for the stable coin the greater the demand for the reserve assets and so that gives us a lot of flexibility when we think about making it back that makes it interesting when we think about reserve asset composition so I mean right now there's not a lot of assets that we could imagine putting into the reserve but over time there will be you could imagine tokenization of real assets you can't imagine tokenization of commodities that get put into reserve you can also imagine that over time people will start tokenizing pristine forests and so then if we if the community through governance says something like 10 percent of the reserve is allocated to tokenized forestland what it does is it gives an immediate demand for tokenized forests and as the monetize realm and the stable coin grows so does the demand for natural capital it's lovely so the only challenge is that well how do we know that this tokenized forest land is actually for real one way we could do it is we can have somebody like the World Wildlife Fund sign sign the coin basically a testing saying this is legitimately a tokenized forest but what what if we don't know enough about the World Wildlife Fund or what if it's local NGO or a local municipality well we really need is we need a trust score for the a tester and so I'll talk a little bit about I gave a talk on a protocol that I worked on several years ago called eigen trust earlier this week and I'll give like the two slides summary of it of it in in this context so we take that a tester and we say okay we want to find some way to trust how much should we trust that a tester a naive way to is to say well how many people know that a tester and trust that a tester and so we can just sum over all the people who trust that a tester the problem is that that the tester could create a thousand civils and those thousand civils could all say that they trust this a tester and so what we'll do is we'll just make a little tweak on it where we will say you know we're going to sum all of the people who trust the ax tester but wait their trust by their global trust scores and then and so what you do what we do is we define a recursive algorithm in which somebody's trust is defined by a global trust score is defined by how many people trust them weighted by their global trust scores which is in turn defined by how many people trust them weighted by their global trust goes and so on and so forth there's a ton of there's a ton of detail in the paper on how to address adversarial collect collectives or how to do this in a decentralized way but I'm going to be I'm not going to talk about it in this talk mostly what I wanted to do in this talk is briefly introduce three high-level ideas from narrow to broad the first high-level idea is that I think as a community we can have a really big impact on the environment through the introduction of things like natural capital back currencies and even more specifically in the idea of having stable coins with forest reserves of forest forest tokens in the reserve the second the second idea that I wanted to bring out bring up is there are a lot of things that we want to both incentivize and reward through through certain protocols that are not done through machines and because they're not done through machines they're difficult to have cryptographic proofs around for example we may want to incentivize an award planting trees or putting solar panels on your roof or even more basically we may want to incentivize an award being a person and well these are very difficult to do through cryptographic proofs I can trust weighted attestations are great step a great initial step forward in thinking about how to evaluate clans that can't be done through the cryptographic loops and then the third and this comes very much at the beginning of the talk is that I think as we're in this space of rapid innovation around this expressive medium I think beauty is really important like I think if we can envision in detail a more beautiful world it'll help to guide the kinds of technologies that we've built so I want to conclude with a story and this is the story of a city in Brazil called Curitiba and in early 90s they had a really thoughtful mayor and the mayor noticed well he had observed that basically in the favelas around Curitiba the roads were too narrow for the garbage trucks and so garbage was collecting in the favelas and spilling over into the river so what he did was was amazing it was fascinating he started a program in which there was also an underutilized bus service so he started a program in which people were given bus tokens in exchange for garbage and so what happened was people started collecting garbage getting bus tokens and using them to go downtown to find work and what happened next was even more amazing at a certain point those tokens started circulating in the favelas as currency and that currency ended up being making it possible for people to collect more garbage than they needed bus tokens and so what we had is we had this this is token that was really a stable value token backed by public transportation earned into existence through environmental remediation and it gave dignity and meaningful work and environmental remediation to a community that needed it I can imagine thousands of these so that's this is the kind of story that I think I'd love for us as a community to enable just to finish up as I said I work on the cellar protocol in the solar community we're thinking about problems like this all the time so if you're interested in these kinds of problems we'd love to have you join us you can follow us at sell away to you or seller org thank you very much [Applause] you