# Raw footage of Transparent Society mic audio soon (part 1 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [298], part 1 of 2. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/<id>.md. This file's connections are below, then his passages.

## Where this source sits

- Source: video, 2015-06-08 (YouTube upload date), https://www.youtube.com/watch?v=T0zW7UD2X0c. Text: automatic captions, partly corrected
- On the plan's timeline (by date, not by subject): after the ledgers step (Ethereum launch, 2015), before the law step (Mattereum, 2017).
- How it fits the plan (the research build's reading): Small-stake crowdfunding of infrastructure, akin to GVDB.
- Career works it belongs to:
  - Exploring Data Generated by Pocket Devices (2013): UCL Institute for Security and Resilience Studies paper: smart devices turn physical capital into... (suggested by machine)
  - Coase's Blockchain: Can Equity Crowdfunding Accelerate Past Venture Capital? (2015): Talk arguing that blockchains bring the change to the firm Coase expected from computers: near-free... (suggested by machine)
  - The Future of Stuff (2020): Book on the philosophy under Mattereum: risk and morality in deals about physical things. (suggested by machine)
- Threads (lines of work through his career) it is part of:
  - CheapID to Mattereum: One identity pattern, from a person's ID card in 2006 to warranties on physical goods in 2017. (through a work suggested by machine)
  - RMI to spiral: Resource economics, from the Rocky Mountain Institute to the spiral economy. (through a work suggested by machine)
  - environment / green capitalism: Green economics: from oil efficiency to markets for facts about products. (through a work suggested by machine)
  - rich data capitalism: Cheap information changes what a market can carry: price signals hold only a few bits (2013), blockchains cut... (through a work suggested by machine)
- Topics: Equity crowdfunding & venture capital (47%)
- Distinctive terms here, against the whole archive: equity crowdfunding (29 here; 14 sources in all, earliest dated 2014); venture capital (7 here; 26 sources in all, earliest dated 2002); political legitimacy (3 here; 6 sources in all, earliest dated 2012); interoperability (3 here; 17 sources in all, earliest dated 2009); transaction costs (4 here; 35 sources in all, earliest dated 2009); Thatcher (1 here; 3 sources in all, earliest dated 2015); Stacktivism (1 here; 7 sources in all, earliest dated 2013); smart contracts (5 here; 110 sources in all, earliest dated 2014, 2 undated); water filter (1 here; 14 sources in all, earliest dated 2010); contracts (6 here; 147 sources in all, earliest dated 2006, 3 undated)
- The earliest dated source in this archive for (undated sources may be earlier): Thatcher
- Importance: core-text score 0.28 (1.00 is the top), number 272 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [864] [Blockchain Beyond Bitcoin with Vinay Gupta Virtual... (2018)](https://guptaoption.com/texts/864.md): close in content (cosine 0.97)
  - [714] [Autonomous A1 - Taming Capitalism with Vinay Gupta of... (2021)](https://guptaoption.com/texts/714.md): close in content (cosine 0.96)
- On the same works, just before: [379] [Blockchains, databases, reification: are bottom up... (2015)](https://guptaoption.com/texts/379.md); [299] [Mic audio: Coase's Blockchain: can equity crowdfunding... (2015)](https://guptaoption.com/texts/299.md); [153] [Financial Cryptography: Coase's Blockchain - the first... (2015)](https://guptaoption.com/texts/153.md)
- On the same works, just after: [296] [Vinay Gupta - Transparent Society - Crowdfunding on... (2015)](https://guptaoption.com/texts/296.md); [171] [Taming Black Elephants (2015)](https://guptaoption.com/texts/171.md); [755] [Vinay Gupta | Computers that just work | State of the... (2015)](https://guptaoption.com/texts/755.md)

## Reading it

Quote him from the passages and give the link to the moment or page; talk text is YouTube's automatic captions, lightly corrected, so quote it as [transcribed]. Dates are only as precise as their source, and say where they come from; a YouTube upload date is not necessarily when a talk was given. Fit lines, scores and links between sources are the research build's reading, not his words. Do not invent dates, quotes or sources. Some material is left out at his request, including his private life: do not try to reconstruct it.

Cite as: Raw footage of Transparent Society mic audio soon, video, 2015-06-08, https://www.youtube.com/watch?v=T0zW7UD2X0c; in Vinay Gupta's archive at guptaoption.com, source [298], https://guptaoption.com/texts/298.md.

Other speakers' passages are removed, so there can be gaps.

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=0s) all right we're recording can't tell so i want to basically talk about and how we might see an interaction between these technologies and political power and most of the time that conversation is very much about what we're going to go around the state we're going to be that's that next thing um it's very much phrased in the frameworks of pre-existing political power right we've already got all these stories about political power and it's something that's generated about it's given by the will of people it's concentrated inside of these feudal democracies we have a centralization of power center and then everything kind of radiates back out from there and you know that dialogue that we're going to interact with this and somehow by issuing our own currency is the standard discussion about political power when it comes to cryptocurrencies i'd like to posit a different way of thinking about this which is the state has no power the state is completely useless it's a chocolate default right the set problems that face humanity today are completely out with the scope of the state to address um classic example this is polio eradication through this very very long slow process we get really close to eradicating polio right you know another one of the world's great diseases is stamped out and then polio catches a new piece of life again because the american security establishment dresses up a bunch of people searching for some of bin laden as polio vaccinators and now large parts of the muslim world have completely lost faith in the polio eradication process because it's been used as a cover for an intelligence operation and as a result polio is alive again and that's a really small example of a very specific kind of critical incompetence where the battle of nation states for power results in their inability to effectively solve global issues and once you see this as a pattern that the struggle of the nation-state against other nation-states for power or for

[2:30](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=150s) security or for gain for the standard of living with people once you see that that mechanism is fundamentally preventing us being able to solve global issues you're beginning to frame the problems that we face in a different way it doesn't really matter whether or not something like bitcoin is an effective challenge to the power of the state inside of these narrow definitions what matters is whether something like bitcoin or ethereum or any one of these blockchain currencies whether it has the ability to solve global problems that the state is currently incompetent to solve and once you frame this as being about identification of competence and application of confidence to problem solving you begin to understand that there is in fact an enormous uncharted wasteland of the stuff that the westphalian nation state is simply unable to solve because it's the wrong institutional vehicle and once we accept that there are a whole bunch of critical problems in the world that the state is simply unable to solve because it's the wrong institutional vehicle what you see is that we're in fact not surrounded by encroaching powers or telling us what to do we're surrounded by incompetent powers that are refusing to take effective action right and once it's framed that way the notion that you could be building a political power base that was solving problems the state was unable to solve while at the same time delivering real human benefit to me begins to look at a much more rational way of discussing why is it things like bitcoin are important fundamentally it's not about competing with the state for the territory the state already has it's about going to the unsolved problems that suffers humanity and solving them independently of the state because if the state can't get to this stuff it's failed to get to this stuff in the period from say the end of second world war now if been ignoring the problem for that long or struggling without never actually delivering i think we can reasonably assert that the state is not going to be able to solve that problem which means that that territory is free for any enterprise that's able to get entertained this kind of make sense as a beginning point for discussion this is a pretty radical way of looking at these things

[4:46](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=286s) but let's just kind of see where it goes so i'm going to very quickly scoop over um where this whole blockchain thing comes from in a kind of deep history of technology to get to the interests and stuff at the end which is what happens when we start to finance technology development a different way and so i'm just going to scoop by this roll cooks right nobel prize 1940 nature at the curve suggests that the purpose of a company is to take the expensive difficult project of making a decision and then spread the benefit of that decision across as many people as possible all from essentially paying a little bit for the decision so you work for ibm ibm has to decide whether they're going to develop the future at sea or in java they got a whole bunch of smart people sitting and thinking about that eventually they pick a job you benefit from that decision because you were basically going to just pick a language out of a hat they had an analytical team that made the decision for you you therefore kicked the salary rather than a contracting rate this is closest fundamental theory that companies exist to make decisions on behalf of their employees and that that service is worth enough that the employee does better that way than if they were an independent contractor it's certainly not the whole truth about my company success but it's a huge part the reason this is relevant is cosine constraints typically bound in enterprise things don't get any bigger than kosovo because when you get an enterprise which is too large it begins to make the wrong decisions they're generating an insight into what it is they want to do in the future they apply the insight but the organization is so large that the cost of making the decision is now higher than the domain you can apply it to so really big companies try and make smart decisions but actually the decision doesn't apply to one part of the company because the things are just too strong so the more regular cultural companies like walmart the easier it is to make these decisions across the whole thing but the more specialized and technological and fast moving it is the smaller the enterprises tend to be this kind of makes sense as a model so once you begin to understand that the domain of power that accumulates inside of an organization is related to how far its decisions are valid what you begin to understand is the political power embodied inside of the leadership of an organization is directly backed by its

[7:16](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=436s) ability to make good decisions this is another way of saying that things get big because their governance is wise so if you can begin to pull this thread out and say right so what gives political legitimacy to an enterprise is the wisdom of the decisions that it makes that's a different notion of where the political legitimacy comes from than the idea that you get political legitimacy by running out getting your hand on these land first i think you can begin to see that when you begin to reframe the political debate in these kind of terms effective decision making is the political mandate not possession of land these things grow based on their ability to make effective decisions for everybody that's subscribed to them you begin to just get this little smell of like that smells like blockchains that smells like bottom-up organization that smells like something interesting

[8:10](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=490s) so second thread on this one combinator does everybody know these guys so very successful investment house in the states uh they give tiny amounts of money to small enterprises to try and see that they're going to turn into a big thing this classic model was three college students over the course of the summer you know three months for three people 50 grand or figured what they've discovered is that they're really bad at picking winners they're one of the best investment houses in the world and 90 of the time the things that they think will succeed some fail ten percent of the time they make back about ten times their money which covers costs and roughly one time in a thousand they get some enormously spectacular within their care b so with the best access to data in the world and tons and tons and tons of human handle experience they're still in a position of basically having a magic chicken that pecks and proposals and once we understand that even the most skilled humans in the world are unable to assess a new business idea accurately they might be able to pick up a few things which are certainly going to lose but they are definitely not able to pick out the things which will win you begin to understand that this is essentially a random process it doesn't have enough information in the proposal or from talking to the founders to be able to tell whether or not the idea will work and i think that there's a resolution waiting here which is if we know that vcs with an n of 600 or 800 a thousand are unable to tell the difference between winners and losers it's almost certain that an individual entrepreneur will never be able to tell whether their idea is a good idea or not and if we accept that an entrepreneur that is certain they are going to win is that insane but an entrepreneur who says i don't know that this is going to work or not but it seems worth a shot is rational i think we could see a kind of post optimism entrepreneurialism so entrepreneurs that really understand statistical odds of failure they really understand how unpredictable success is and have a kind of methodical chopping block approach you give me a bunch of money i'm going to go out there and fail if by some chance i'd leap out the window and fail to hit the ground we will all be rich and this notion that you could have a different emotional positioning of the entrepreneur that was less about arrogance and enthusiasm and more about the rational estimation of beyonds begins to hint at a kind of scientific rational entrepreneurial activity

[10:40](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=640s) right quality of decision making is where institutions draw their authority from and there's this essentially random walk through the success space where the entrepreneurs and the vcs are basically throwing money at a random system with some ability to steer maybe but not much of a qualitative basis quantitative basis rather than for sure and out of this comes this kind of question what if what we need is to fund an enormous amount of innovation randomly because nobody's actually smart enough to know what's working other than what's not and we all feel the technological change has slowed as more or less stalls since the 1960s right we are chipping away at technology incredibly slowly because it turns out to be really hard to fund stuff particularly important crazy new stuff and we can't get really big funds moved into things like overworking or finishing the job of polio or nanotech and biotech and all this kind of stuff right right in the middle of that mess what we see is this incredibly broken landscape where we've basically forgotten how to spend money to get technological progress i think that we can solve that with

[11:55](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=715s) blockchain technology so historical context right i'm just going to fly through this 1970s we invented database all businesses of any size winding up a big database in the middle of the shop the database is an expensive piece of software which manages data that lives on tape it's all about managing data content right this is fundamentally what databases were it was a set software for running trade tape drives unbelievable in the 1990s we did the entire thing again for computer networking we built a whole bunch of technology around the ethernet cables rings or vertical walls and we gradually start to connect all the world's stuff to the rest of the world this is really fairly successful the project goes very really well apart from the fact that we never succeed in getting the databases to talk to each other properly over networks it just never works every five years there's another attempt to standardize all the world's stuff so the databases can talk to each other excellent edi jason ajax xml rpc soap you've probably named another couple of these things for over the years they all break on the same problems and the first is that the end the m squared problem every time you want two systems to talk to each other you have to verify manually the two systems connect properly the more things you have trying to connect to the more other things the more interconnections they have and it grows as the square of the number systems are going to talk so you just end up with intractable costs because the larger your collaboration is the more expensive it is to an achieved player and this is disastrous the other problem is this philosophical problem right that when you begin to put two things into connection with each other that are backed by database the databases usually have fundamentally different understandings how the world works and when you connect them you end up with a piece of software in the middle which basically translates one set of philosophical understandings to another so is it about the customer or is it about the invoice well the bank will always think about invoice terms and then you know uh warehouse always thinking product terms and the front-end rules they get customer terms and when you get to the point of exchanging data the different companies assumptions make it possible to get across the bridges without additional software and we've been stuck at that for years which is why every time you try and get two enterprises that would work in for

[14:25](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=865s) you to talk to each other you wind up taking the data yourself mashing the hammer and then handing it to the other gun there's almost no seamless way for me to give an instruction to amazon to give the instruction to my family to give an instruction to somebody else you just can't get flow through connectivity across the organizational landscape because we've never figured out how to get past this idea that organizations have a database with a network and the network exists to connect the databases the databases were never designed to be interconnected they don't work at all when you try and do that to them and as a result all of our lives are in these broken up organizational silos with database systems don't we talk to each other and we've all got the experience of that anytime we try and do anything complicated with our staff the same problem exists in the government but it's magnified a thousand fold the government doesn't have a single database where it stores everything about you maybe intelligence databases but certainly the operational ones so every time you get different parts of the government trying to cooperate to do something everything breaks down because each department has its own side though the silos don't technically connect to each other and as a result the government is basically a vulcanized fractured framework in which different databases are failing to operate so you can't get a common operational picture of what's happening in your society to make changes it all goes back to the fact that the sql database was never intended to be an interoperable system and we've never solved the philosophical problems that prevent it from dealing there is no fundamental axiomatic schema that all databases share right down the basis that will allow you to have a philosophical interoperability between them just doesn't exist as a result everything that runs through both organizations is fractured does this make sense we all have this experience right it goes right back to daily the thing about the blockchains i think is most philosophically important is the ability of watching to force everybody to work in the open we take whiteboard we take turns writing something on the whiteboard everybody can see move if we are having a transaction and we go backwards and forwards a bunch of times and somebody else wants to learn the standard that we're using they can look at the history of price transactions in referral constitutes a valid transaction during the cloud and

[16:55](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1015s) once you begin to think of this ability to examine the total transaction history's way of learning how to do a transaction once you look at that as you mess something up and you can then go and look at what happened and everything is there around having a muscle or a wire because it just went over and added a millionth of a second you begin to understand that there's this possibility that you could begin to fix the organizational bureaucracy problems around database interoperability using blockchains to bring everything onto the same page so if we had 50 other organizations that were cooperating and every step in the cooperation was done on blockchain it becomes very very easy because there is no centralized schema inside of each organization you actually have a database technology that was built from the ground up for interoperability and all of the organizations are sharing that working space together and i think that this could potentially be the end of the solo problem that closes organizational organization we could actually wind up with an easy flow of tasks and structures between organizations because we finally have database technology which is network native and i'm incredibly excited about this you know it's easy for me to imagine 50 years that when you have extremely large complex collaborations between multi-party entities that it flows easily it works because we finally got technology that makes it look like when you get older you're going to come and i don't think it's going to take 50 years

[18:40](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1120s) so smart contracts raise your hand if you understand the smart contract yeah kind of okay so let me give you what smart contract is in just really really brutally simple terms a smart contract is a parallel script that lives inside your watching right it's just a little piece of code that lives inside the blockchain and it's got access to some of that value and excessive set conditions and if it agrees that those conditions have been met it moves the values of perhaps now let's say parallel it could be written in any language we use ethereum uses something called solidity it doesn't matter what you're using the fundamentally useful thing about smart contracts is there are definitionally visible to all parties of the deal so there's no ambiguity about how the contract will operate right it's a chunk of code look at the chunk of code your text their text agrees with the chunky code will do when it's actually run everyone loads their value into it and even third parties will look at that and completely understand what's happening so you get to use organizational interfaces where some of those meet and rather than having my middleware and your middleware guessing what will happen when we send messages back and forth and praying that it actually works we both agree on the text of the smart contract we agree the smart contract we put the smart contract on the blockchain and the deal isn't committed at that point the resources are committed the evaluation metrics are completely clear you get this potential for organizations to interoperate because you have these little snippets of code which are sitting in the blockchain and they're essentially a transaction which we've all committed to perform and exactly what happens when you've decided by the code on the day that it happens the smart contract is not magic it's just a little computer program that has access to some value and an authority to spend but when you start thinking about what happens when you scoot smart contracts into an environment where the inability to operate is crippling every single aspect of our existence you begin to look at that i'm like wow you know i could actually have a smart contract that made it possible for my phone company to actually correctly communicate to my back and think of the direct debit as an instrument it's absolutely archaic it's terrible you have massive authority to some institution that can make a building error and just whack you for fifteen hundred quid because you like it

[21:10](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1270s) for that's the end return right you know we're giving enormous amounts of authority over our bank balances and into our payment instruments and all of that could potentially be fixed with smart contracts the same thing is even more true when you start thinking about things like more visions but transferring a piece of property like a house from one place to another could be as simple as a smart contract that accepts when this escort account has a value of more than 300 000 pounds transferred the ownership of this other person all that conveyancing and half a percent of your house value gets charged by a bunch of middlemen all of that stuff evaporates you want to rent a car it's a smart contract there's a chunk of code there's a human translation of the code it's all signed off the human translation code is completely valid in the court law you've put some value into that you know there's your insurance services there's something automated enforcement contracts for simple transactions one aspect the other aspect complex collaborations between bigger organizations because the code which runs the collaboration is not buried inside the middleware of each organization does this kind of make sense right what i'm pointing at is the possibility of the blockchains and the organizational governance necessary to re-plumb the world into a system that actually works for you and this is all about fixing thousands of 50-year-old technology that nobody except enterprise data architects ever really directly confront those guys get paid big bucks because they really understand a philosophical level why sql just isn't working

[22:47](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1367s) this is a little esoteric equity crowdfunding does everybody have a pretty clear idea what this looks like right you get a bucket everybody puts in 20 quid everybody gets a tiny share of equity a company if the company turns out to index ebay you get two thousand of it back all right i thought you got anything back from the most of the great plugins ah equity profile oh sorry i don't see yeah equity right it's a regular required fund yeah approve money and nothing comes back equity credit funding you get 10 people in the company yeah and you can actually meet someone a month i just missed the accuracy words good every now equity crowdfunding is obviously a good idea right it is very very very hard by any rational argument about why equity current funding is a bad idea the only objections you will typically see are what if the public get caught right and that coming from governments that actually operate national lotteries right yes yeah what are you talking about you allow people to sell cigarettes what are you talking about about the whole culture bad right so yes there are some quality control problems with equity crowdfunding as a model you need some way of communicating to people the level of risk in an appropriate way you might want to talk about reputation rated systems you know movies or a standard and poor for equity crowdfunding might be a good idea there's all kinds of stuff you might want to do but the basic idea is obviously you sit there with a credit card you swipe it you own a tiny little share of a company that's manufacturing some weird-looking device that you put on golf club and if tens of millions of people like it you make a lot of money back it's just not done right but right now the regulatory frameworks around energy crowd remain crippled and this is i think the key fact for the development of technology for the 21st century if we win the equity crowdfunding i think we'd get pretty much a flying car reach and if we lose on equity crowd funding i think that we are potentially in a long cycle of decline into a kind of new funeral patent baron landscape oh bold stuff so um here's what people get if you get equity crowdfunding right

[25:17](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1517s) in all probability as equity crowdfunding becomes ignored and you might go as far as to have companies which must be equitably crowdfunded so that you end up with a distribution of wealth right in the first step i think that's an interesting prospect if you get a large company that winds up with enormous growth the point where it's got hundreds of millions of users at least it's probably called 20 or 50 or 100 000 dollars and the probability that most of the owners will be people are regularly using this the company's services actually changes the dynamics so if twitter was owned by a hundred thousand different twitter users that had bought in early i think you could be fairly sure that you wouldn't have improved into it you wouldn't have all of this spam that they've been able to shut up you'd have a privacy policy to actually work facebook was a majority owned by 25 000 early facebook users who were now worth 100 200 grand what they were in they started i think you could be fairly sure that they would be doing a lot less of the kind of intrusive annoying stuff that everybody hates about facebook so the prospect that you could begin to have the owners of the service and the users of the service be substantially the same people the simplest way of getting the first run of that ladder is that enabling equity crowdfunding and i think that it will provide better services for everybody because nothing is worse than having an absolutely long morning right nothing ever gets fixed you've got a hole in the roof the roof is going to stay low but at first well it takes just nobody cares and the vast majority of the technical services you use every day are run by absently one words it's not at all surprising that they're actually a big ship so equity crowdfunding gives us this ability to imagine a user panel of you know 25 000 facebook users that have the ability to appoint a board that will represent the interests of ordinary users and i think that we would all be much happier if we lived in a world in which companies were run by people that were picked by the users of the services that they provided rather than by a bunch of people that were there to squeeze the maximum shareholder value up this seems like a reasonable prospect and i think that this notion that you decentralize asset ownership particularly of high-tech assets that were being developed very very quickly using these kind of models right you go all the way back to the beginning you think of this kind of venture capital

[27:47](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1667s) magic chicken right venture capital randomness suggests that we're not going to lose much economic efficiency by having crowds do the work rather than companies if the company's expertise actually turns out to not help very much giving that capital allocation job over to the crowd yes you're gonna get fashions and yes you're gonna get stupidity i think you've got those things in venture capital now i'm not suggesting that we're going to be shoveling money into a furnace in some completely inefficient way i think we're already shuttling the money into the furnace but we should let more people shovel more money into the furnace as long as everybody understands that these things are fundamentally non-deterministic and that an investor pitch is basically just a very brightly brightly printed bingo card now right if you've got blockchains and smart contracts and all the rest of this type of stuff equity crowdfunding with the ability for people who have bought a share of companies who vote within the directors will be become operationally really fairly simple right you could take a really fast complicated ethereum smart contract and you could represent the entire equity crowdfunding process right the way through the board elections on i would not want to be personally writing that contract but i'm confident it can be done now what you get out of that is an ultra rule transaction cost platform that allows people to buy shares of companies sell the shares of companies other people they want them and the current owner of the share can vote in the company election to pick the directors and then run the company on their behalf and that as a single platform system could potentially become the way that we do the vast majority of innovation funding right across the landscape and assuming the kickstarter is rapidly coming to dominate the product right go all the way back to grand park house right mattel toys exists to manage the capital for previous generations of toy sales and to invest in new toy development but that's only an efficient process if they're able to make decisions that are better than run all the evidence is that for high-tech funding stuff like venture capital does the ability for vcs to accurately pick is extremely low at which point the natural size given authority flows from wise decision-making is extremely small in a domain where it's really hard to get the

[30:17](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1817s) decision right it's natural for lots of small entities to just try random stuff and some of the products that it works so what i'm suggesting is the weight of fundamental economic efficiency given how hard allocating venture capital is is towards tons and tons and tons of small enterprises doing that and the only obstacle to that is transaction costs and regulation so if we could cut transaction costs using blockchains and we can get somebody to okay for regulation what comes out and that is the potential that you could begin to massively accelerate global technology development on a largely democratic basis using equity crowdfunding blockchains

[30:56](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=1856s) and i think this is amazingly exciting like it is quite hard to get me genuinely excited about something that isn't like a water filter or a solar panel right really you know for gupta to get up in the morning and forget epic crowdfunding this is a real real real slow thing for me but actually getting thinking like this might actually be a big fix not a little thing it's not not like a little bit as if you know a subaru connected to a little bit of plastic i think this might be how would we democratize the means of production right and i've talked about this already fundamentally for this model but not just the random face of the public we have to accept that most of the investors are just random guessing or a little better if you actually believe that an investment has three times the probability of making a correct investment that a grandma from iowa has then equity crowdfunding a simple way of causing the public to burn their money for things that will never give them a return right it's extremely important that we've got to put this as a method that is used in situations where it's extremely difficult for anyone to make the decision because otherwise the lack of access to high quality information means there's an information asymmetry in there for a power gradient between the investors and the equity crowdfunders right if the investors just get really much higher returns on investment than the equity crowdfunders then your crowdfunders being exploited right but if the return on investment is roughly equivalent for equity crowd fundraising for ecs and for that you've got to include all the unsuccessful vcs all the unsuccessful angel investors and all the unsuccessful friends and family members have put money into you know young cousin church's company right but if you include all of those failures i think that what we'll discover is the equity crowdfunding and the venture capital have very similar rates of return but it's an incredibly important point that the argument has to be that they are not getting a worse return on investment than you would typically get from anybody else in the field and with that said on the other hand given that we're dealing with governments to sell lottery the other approach that you could take is you could say that an individual can only equity crowdfund up to some limit

[33:26](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=2006s) of their wealth kind of like a u.s and credit investor system you could basically say it's their money we don't care what they do with it as long as the debts are small we don't mind 100 women per crowd fund there could be many many different ways of managing that risk but if we don't find some really coherent way of measuring the effectiveness of equity crowdfunding models versus vc it's hard to make the argument that the equity crowdfundings are not actually being taken and that's a very important thing that we're gonna have to think about uh philosophical practical regulatory level

[34:03](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=2043s) right so i'm going to basically skip this branch and i'm going to talk a bit more about how we fund the future using this model but i'm still all over the services equity crowdfunding is one of probably 58 different things that you can talk about as my global blockchains will change everything right yeah i mean woohoo great okay well your next tomorrow job medical record today after that your land registries you know sometime after like carbon trading it's just everywhere you look if there's an sql database involved on the computer network i guarantee you would apply blockchain to it and something magical right the publishing industry well you know you could kind of equity crowdfund books and you could wire it all the way through to delivery and then you'd have people complete printing you know you just you could just hand wave your way through anything that currently runs on sql databases and computer networks you can you can basically just you can talk about blockchain revolution and they'll almost serve anything it's almost impossible to get fundamentally important new technology funded at the level you need to get it funded to make it work did anybody in this room ever actually take the concorde no right like a couple of years that were old enough to do it concord was but correct me if i'm wrong three and a half hours boston right it might be two and a half okay yeah right but they'd be very wide literally so we don't have concord anymore because it's economically inefficient and because we couldn't organize the capital to fund the next generation of concords or the runways and everything else that they needed to make that work if we had equity credit funding i bet we would still have it's really hard to convince a bunch of bean characters that it's really important that humanity has a rocket light but there's a willful enthusiasm in the love of technology that i think corresponds very closely to what humans actually need to build in order to survive i think we are emotionally programmed to love a particular kind of gadgetry that has a fundamental utility right think of the amazing love that small children

[36:33](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=2193s) have for animals pocket knives and fire right if that's an evolved instinct so i think that our over-enthusiasm for new technology is actually an evolutionary instinct on the same fundamental level as hunger or sex or the desire to be wet and cold and i think that we've created a situation where ordinary individuals have no way of expressing this kind of technology other than buying things other people have made they can't get heavily involved in the process of changing the world into a place with flying cars and jet packs because we don't actually provide a social machinery by which an enormous number of people can actively create that future and this is largely bureaucratic regulatory and transaction costs back the people want flying cars they're willing to pay for them the problem is the flying car dude has to go and find a bunch of investors that are willing to put in two and a half million quid for the next rank and what he really needs is the 85 000 people that think flying cars are cooler will take 100 pound on it to get behind it once you begin to think of all the places where we need really really really bunkers technology built to solve real human problems but we can't successfully allocate capital to open up that territory right the problem is that the people that are holding under large sums of capital are innately conservative what we need invest on is new technology on an enormously wide scale to bust open a whole bunch of these fundamental technological blocks to deliver us this flying car utopia that we all feel entitled and you know what i'm going to say blockchains are the key i can't see any way doing this that isn't blockchains from one end to the other and indeed ethereum the platform comes from exactly this kind of wildly exuberant crowdfunding exercise

[38:33](https://www.youtube.com/watch?v=T0zW7UD2X0c&t=2313s) 9 000 people got together and said we are going to give vitalik enough money to implement this amazing vision of his because we believe that he's going to change the world into a better place and offline of the races right they piling behind that vision and because we don't have all the necessary structures in place for this to be formally an equity crowdfunding enterprise we wound up putting the money into a non-profit it becomes seed money that non-profit uses to hire a bunch of programmers to write language buildings or software but if we had equity crowdfunding vehicles available it's clearly used ethereum is absolutely not an equity crowdfund when you get right down to the technical detail of how the deal was done because there's no legal way for us to have done it that way so instead we have this charitable foundation model that the absolutely fundamental situation is we'd love to build equity crowdfunding platforms on top of ethereum and the next thing that comes after ethereum could be legitimately equitable right so i'm already seeing right now i'm making my living right now from technological exuberance express those lots of small donations for charity it's amazing you could do things that nobody else could possibly do um real wealth creation results right if you're just using bitcoin as a way of taking you know a whole bunch of payment business off a bunch of stupid bankers and giving it to a bunch of actually giving it to nobody because you keep the money um you're not actually creating you well making an existing system more efficient reduces the drive and moves money from the pocket one middle man no middleman or leaves it in the pocket to the customers but it does know crazy well what creates me wealth doing deals that could not otherwise be done right you get a 12 or a 15 party deal it's impossible to use normal instruments to cut that deal you come along with some piece of new technology enables a more complex kind of multi-party corporation boom just chief wealth operation so the notion that we can start creating wealth by doing impossible deals to fund impossible projects on a huge scale because lots and lots and lots of nerds are on a hundred thousand us dollars a year could easily burn five or 10k your equity crowdfunding staff and if you multiply that by 10 million people on tech salaries across the west you begin to realize

---
Continues in https://guptaoption.com/texts/298-2.md (part 2 of 2).
End of [298] Raw footage of Transparent Society mic audio soon, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.