# Financial Services Club Jan 27 2015 - "What is Money?" - David Birch, Simon Taylor, Vinay Gupta (part 1 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [307], 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, 2015-01-28 (YouTube upload date), https://www.youtube.com/watch?v=UCb9VlZWFYY. Text: automatic captions, uncorrected
- 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): Ledger and money theory.
- Career works it belongs to:
  - The New Economy: out of money, out of time, but not out of ideas (2010): One-page paper: the richest fifth are eating the planet, so the next economy has to be at peace with other... (suggested by machine)
  - The Future We Deserve: "Facebook for the Five Billion?" (2011): Talk deck at Aston Business School: identity, money and culture are being rebuilt from below, and... (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)
- Topics: Property, NFTs & real-estate transactions (21%); blockchain / global / internet (15%)
- Distinctive terms here, against the whole archive: What is Money (4 here; 5 sources in all, earliest dated 2014); history of money (2 here; 2 sources in all, earliest dated 2015); feral database (1 here; 2 sources in all, earliest dated 2015); four billion poor (1 here; 3 sources in all, earliest dated 2012); wealth inequality (1 here; 4 sources in all, earliest dated 2015); Scotland (2 here; 29 sources in all, earliest dated 2010); digital gold (1 here; 8 sources in all, earliest dated 2015); life extension (1 here; 14 sources in all, earliest dated 2011); gold standard (1 here; 17 sources in all, earliest dated 2006); Wall Street (1 here; 24 sources in all, earliest dated 2011)
- The earliest dated source in this archive for (undated sources may be earlier): KYC; digital gold; wealth inequality; feral database; history of money
- Importance: core-text score 0.24 (1.00 is the top), number 322 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [768] [#03 - Vinay Gupta : History of Money, Foundations of... (2021)](https://guptaoption.com/texts/768.md): close in content (cosine 0.97)
  - [864] [Blockchain Beyond Bitcoin with Vinay Gupta Virtual... (2018)](https://guptaoption.com/texts/864.md): close in content (cosine 0.96)
- On the same works, just before: [711] [Vinay Gupta – Hexayurts, Distributed Infrastructure, and... (2014)](https://guptaoption.com/texts/711.md); [112] [‘Bitcoin Is Teaching Realism To Libertarians’: An... (2014)](https://guptaoption.com/texts/112.md); [311] [Vinay Gupta - Proof of Work / IAmSatoshi (2014)](https://guptaoption.com/texts/311.md)
- On the same works, just after: [305] [ChangeHow - rough camera video of Vinay Gupta's talk on... (2015)](https://guptaoption.com/texts/305.md); [756] [Change:HOW #17 Vinay Gupta (2015)](https://guptaoption.com/texts/756.md); [302] [Vinay Gupta - Protecting History (blockchains) Maker... (2015)](https://guptaoption.com/texts/302.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: Financial Services Club Jan 27 2015 - "What is Money?" - David Birch, Simon Taylor, Vinay Gupta, video, 2015-01-28, https://www.youtube.com/watch?v=UCb9VlZWFYY; in Vinay Gupta's archive at guptaoption.com, source [307], https://guptaoption.com/texts/307.md.

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

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=0s) um I remember many years ago round about the time of big bang it's one of the project um at the London Stock Exchange uh and as part of that we had to build a data model it doesn't matter what to computerize some element of you know the market I mean this is a market that's been running for over 300 years and everybody knew what was going when you sat down to draw up the data model you realized nobody actually completely understood what was going on and the whole thing rapidly became so complex it was it was useless and it made me sort of realize is that it's not until you come to digitize something that you have to sort of really understand it it's not until you've actually got to write a piece of computer code you know what I mean like it's all very well having sort of laws but if you try to write those into C++ is that what the kids use nowadays or it was Coral 66 in my day uh but when you come to write them into computer code it it doesn't really work um and it means you have to sort of rethink some things and then you begin to realize well actually we shouldn't be digitizing something by making a an electronic analog of it we should be creating something new that works better in the digital space and that's what I sort of think about money I mean I'm sure we going to disagree about this in the question and answer session and so I know that sounds a bit weasly but it means when you say what is money I'm like you know does it really matter right until you can show me it as a as a sub routin I used to say that as a joke by the way until the ethereum guys turned up with that t-shirt on how to create your own currency five lines of code it's to use

[2:30](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=150s) that so what I thought I'd do is in order to present a range of view I have some of my own ideas about this but I thought it would be more interesting for you to uh just go through quickly uh a range of a few different ideas um from people who all know far more about this than me um and then I'll explain to you why I think or as I go through I'll I'll explain why I think some of them are right picks out a particular direction which hopefully will take us into the wider conversation with be afterwards and there's lots of different ways to approach this none of them is a is a rule of physics um so what I thought I would do is um I F I found an article in a magazine from 198 from 1998 this is when the internet hasn't been around it's 20 years ago internet hasn't been around for very long and there was an article about the future of money where they interviewed some quite senior and important people around the world and so I thought I'd use that as the sort of starting point you you'll see why as we as we

[3:46](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=226s) move so I'm just going to quickly take you through a few different views on this Philip Davis Professor I've got all the titles written down so I won't Philip Davis Professor Ameritas of Applied Ma of Brown University I mean I'm only I'm only showing you the ones that support my arguments obviously you he talked about the psychological relationship between the possession of virtual money and the ownership of real property and spoke about the law of unanticipated consequences and I think that's true uh he said money is such a complex Nexus it's quite a good way of describe it uh a complex Nexus that is particularly vulnerable to that law of unintended consequences and so and the example I the example that I often use when I'm talking through this with clients because it's a London example is to talk about the story of the tally sticks in the London market and how you had I mean it's a very famous story around here about how you had the tally sticks which started off as a means for tax collection and they became a store of value and then they were traded and they became a means of exchange and they M you know they were used for all sorts of things that you could never have imagined they were originally going to be used for so I think that's one one point to be is the this law of unintended consequences Paul CER president of cryptography fact I think he still is the president of cryptography research certainly one of the smartest crypto people in the world observed that breaking a crypto system is far more difficult than robbing a physical bank but potentially far more profitable and I think that's an interesting reflection on it as well so if you're go if we're going to have something if we're going to make money electronically that's actually quite a high stakes Gap right because you're making something that is potentially far more secure but if it goes wrong uh we have very serious problems this is going to feed into one of the points I'm going to make later on about why I think what everybody else thinks about the future of money is

[6:16](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=376s) wrong he also said that this is 1998 he said he thought the world's first multi-billion dollar electronic Heist would occur by 2010 and I am desperate to know whether that happened or not because how would we know like you know what I mean like no one's going to boast about how they got ripped off for billions of dollars by some Chris Gregory professor of anthropology and archology Australian National University I have a particular affection for anthropologists and social anthropologists when I'm thinking about big picture stuff around money because I think their perspectives are w and I think for a technologist like me if you want to fit technological change into a wider context they're the right kind of people to listen to about this stuff so

[7:12](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=432s) I'll be quoting a couple of them he said gold would remain as The Sovereign form of money for as long as war between people remains a possibility which I thought was quite impressing comment but says something about the profound conservatism around money you know we hang on to money long after it's outlived its usefulness and then it takes a sort of seismic shift for it to change and the example i' think about in I mean I'm thinking of London examples again the example i' think about in London again would be the great recoinage of 1696 you know England had gone for 100 years without the circulating means of exchange the Industrial Revolution already started because nobody knew that there was an industrial revolution going on the only coin in circulation was the silver penny the silver pennies were clipped and mutilated to the point where essentially nobody would accept that we were moving from a to a moneyed economy but there was no money to pay wages I mean this is a terrible economic situation and it's years to fix that problem although interesting the route they chose to fix that problem is unimaginable nowaday what they did then in the 1690s the problem got so out of control that even people who didn't understand anything about economics politicians could see that the economy was being held back by this it was a play so what they did was they wrote to all of the smartest people in the country ask them what to do that's unimaginable nowaday there's a serious secet I know we'll ask some smart people as opposed to whoever W Celebrity Big Brother or Russell brown or something like that this is a Norful approach let's ask some smart people what to do and actually they chose the smartest person quite possibly who ever lived but certainly the smartest Englishman which was s of Newton they made him Master of the mint and he fixed the problem and by way put Britain on a gold stand as well 174 so in the beginning of the 1690s if you'd have said what's the future of money everybody would have

[9:42](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=582s) said oh it's probably silver penis that's slightly better than ones we've got now and less than a generation later we had the bank of England circulating paper noes gold standard and the great Rec coinage and none of those would have been predicted at all so we have a profound conservativism that makes us hold on to Notions of money until you get that seismic slip when it'll be changes and obviously I tend to think we're getting to that point

[10:14](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=614s) short now another Anthropologist uh I want to refer to is a guy called Jack Weatherford Jack Weatherford wrote a very very good book about the history of money called the history of money professor of anthropology and he said if we take the Long View of History money was not necessarily money was not necessary until very recently soon though not in our lifetime the money phase of History will pass and money as we know it will become one of those quaint Curiosities in the past so Weatherford said actually he also gave one of my other favorite quotes my he says cash has become the domain of poor people and poor Nations which is also although if you read the Ft today you'll see the story in the Ft today about how the circulating use of cash in the UK has gone up in order to Foster tax avoidance on a grand scale the bank of England is actually printing 50 notes solely so that people can avoid C they have no legitimate use no 50 y are ever used a legitimate transaction they're solely to avoid tax and I don't understand why they're not being prosecuted for this you know couple years there was that T I think it a Tory Minister who said people who paid their builders in cash should be prosecuted for tax and everybody had a going but he was right one of the reasons why I'm taking it up the rear end this weekend doing my hmrc form like the resue is because a quter the economy aren't paying any bloody taxes we're turning into a kind of upm Market Grease [Music] and no one complains about this I don't get obviously you know we have a big proportion of drugs and prostitution in our in our economy according to the government's official figures and you know maybe prepaid cards aren't ready for that [Music] space but anyway Weatherford who's a social Anthropologist said actually if you look at the big picture this money Fone is actually quite limited and he said um he said the electronic world of the future looks much more like the Neolithic World economy before the invention of money and what he meant by that was in what

[12:44](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=764s) he's talking about in the Neolithic world you're talking about essentially a clan structure and everybody inside the clan knows the wants and the future desires of everybody else inside the clan and they have a 100% fail prooof trust and relationship management system it's the clan everyone knows everybody else right so if you want me to I don't even know what they did in Clans if you want me to skin your Buffalo or something and in return I want you to help me build an extension on my house we don't need the intermediary of money to make that work because everybody can remember who owes everybody what inside that cloud and his point of course is in the future because of you know Facebook and Twitter and social networks and computations across the social graph we're all essentially living inside a clan again it's just a much bigger one but everybody will know everybody else's wants and desires you'll have a perfect trust relationship mechanism so you won't need the intermediary of money in the same

[13:53](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=833s) way Paul Krugman said um I wasn't sure whether they' leave this in because especially now they're filming it because I don't know disagreeing with a Nobel prize winning Economist on a subject he knows prob 1,000 times as much about as I do is the best way to kind of Advance an argument we'll give it we'll give it a sh so Paul kman said a few things about it Paul kman said there'll be a distinction between electronic cash and electronic money because of the need for small transactions where neither the buyer nor the seller want the buyer credit worthiness to be an issue I used to think that was true so this was round about the time I was working on mondex and I used to think that idea was true that actually you needed a separate system for managing small transactions where you could do everything offline you wouldn't need to do credit checking or whatever but in fact I think the advances in technology the the impending Internet of Things the fact that we have Universal connectivity has taken all of that away so the distinction between cash and money in my opinion is actually just evaporating everything is just money so I disagree that he said they will not be a universal currency for a long time there is a big advantage to separating currencies providing price stability I agree with him about that I don't think there'll be a universal currency ever I think it's a bizarre fact it doesn't work for Europe you know the idea that Germany and Greece can be in the same currency is plainly ridiculous why the Earth and Pluto could be in the same currency Zone I have absolutely no idea and come to that why London and Middlesboro is absolutely baffing to me if we want to save Sterling we've got to get London out of the Sterling Zone as soon as we possibly can London is absolutely distorting the is absolutely distorting the economy krin said corporations will not issue their own private currency and his reason for saying that was that um was that corporations don't last long enough to provide a reliable store of value so in other words if I'm if I'm saving for my pension uh I want something that's going to be worth something in 50 years time

[16:23](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=983s) or 100 years time and most corporations just don't last long enough to make that viable um but that doesn't mean you couldn't imagine traded instruments which are claims that could be inherited or moved onwards so I mean I I agree with his basic point there but and we'll get back to this with V's conversation I'm sure uh but actually I suspect that the idea of private assets being used um is probably stronger than was given at the time but thing I disagree with him most about is Krugman said everyone wants an anonymous reliable means of exchange and I think that is simply not true um I gave a Ted X talk if woken on

[17:11](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1031s) Frid and I wound people up a little bit there so I said well look imagine I mean let's use Bitcoin as example that's where I'm going talking about let's pretend for a moment that Bitcoin is anous it is let's pretend for a moment everyone's going to use it they're not but let's just imagine what that would be like and I said if you want to know what a world that is based holy on untraceable electronic money looks like it's Somalian if you want if you want to live in a world where everything is based on cash where nothing is traceable no one's held accountable where the rich can do whatever they like by mere possession of the money well I know what that looks like already that's a world of Warlords and I don't really want to live any the idea that people want Anonymous money is stupid and it's also stupid asking it's stupid asking people about a lot of things it's stupid asking people about that because they haven't really thought it through so if you go down the street and say to people oh you know should you have Anonymous money what they'll say yes because about it don't listen to it it's insane the idea that we want to build Anonymous money is absolutely crazy you could persuade me that we want pride in M but that's something different private money is a very different thing from Anonymous money and the cryptographers are easily capable of building money remember Stefan BR and the the work did all those years ago the cryptographers are perfectly capable of building money systems which preserve privacy as long as you behave but if you misbehave reveal your identity and that's too complicated for anybody in Parliament to understand well I think Wonder scientist one out of 650 MPS is a scientist but the truth is that's what we should be aiming [Music] Robert sski there a couple more Robert spolski the professor of neuroscience at Stanford

[19:41](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1181s) University the Perfection of the identification system will guarantee Urban myths about people bankrupted when some tech stole their fair and own signature but he's building to that same arum as weather about the Neolithic Clan which is if you know who all of the I mean let's set aside how and there but if you know who all of the counterparties to a transaction are then actually sorting out payments is really easy and whether you decide to do that through an intermediary of money or whether you do it by arranging some other Mutual cross obligation of future Clans actually is not such a big deal I mean it's a big deal if you have a monetary policy and you're trying to control money if you're trying to run the economy it isn't such a big deal and in actual fact I think there are arguments which say certainly made by economists that actually you might have more flexibility in some ways with with a system like this monetary policy being quite a plum instrument okay now let's talk a little

[20:53](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1253s) bit about what what technologists were talking about Marvin Minsky famous Professor of computer science at MIT he said now remember this is 20 years ago this is long before the blockchain long be Al those we all know Satoshi Moto was on board the glazing aine missing with fast computers and huge memories we could have a nonlinear database that would better understand what each person has was that's your Neolithic Clan again then by using complicated Game Theory computations it might turn out that everyone could get more in terms of their personal values for the goods they are willing to sell now that returns to this sort of weird Stone Age turbo b sounds crazy when you first think about it when you think about it in a world of blockchains and instant computation around the world it's not so stupid so like if you try and imagine it practically I go and get on the bus and somewhere out on the blockchain the bus company has to find something that it wants and I have to find something that somebody has got that the bus company it makes no sense in the physical world but virtually you could imagine computations across the social graph taking place in Nano that could resolve that and those claims would all be settled ago he also said which goes back to what I he also said taxes will be he he believes in the goodness of mankind as I do so Minsky also said because of this taxes would be lower because of the vast amount of uncollected tax today and I do I genuinely do believe that the government would uh use that tax revenue to lower taxes and they wouldn't just waste it on stupid things I mean why anyone would think that I have no idea but he also said remember he's a technology list he also said the system of electronic currency will never be acceptable unless the laws protecting privacy are greatly strengthened so you see what's going on here so you have people from the technical side saying you know what actually the future money possibly goes away when everybody knows

[23:23](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1403s) everybody else and this guy is saying that's absolutely right but you know privacy getting rid of cash must have mean getting rid of privacy and I subscribe to this view completely so knowing who everybody is in a transaction I mean knowing in the transactional sense I don't mean a full disclosure of everybody's identity at all stages that's a different thing right we were talking about the example before we walked in here there's a world of difference between proving your 18 to a pub to get a drink and telling the pub your name and address and where you live and all this sort of stuff they're completely different

[24:05](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1445s) things now I think um if we take that privacy point on board I think that gives us a little kind of inkling into where we're going so I'm going to say I'm I'm going to frame my part of discussion in this way Weatherford was talking about Neolithic Clans now obviously the Clans we're moving into aren't going to be that same kind of thing so let's use the word communities instead so we're all going to belong to multiple communities some of them Geographic but most of them not Geographic most of them they're going to be self-defined it's going to be identities that we choose to enter into different groups and within those communities there'll be no need for money because Mutual cross obligations within the community will serve instead of money you you might still need a kind of money in order to move between those communities and that sort of seems reasonable to me so I can I of course you know you'll argue that those currencies that you need will become sort of reserved currencies and that might or might not be true have to think that's true um think that through it bit more but in answer to the question uh sorry that that took away my big finish sorry I'm I'm going have to back up a sentence otherwise it spoils my Fe right so within those communities we operate without money and we use something else instead so that gives me my big finish what is money trust okay thanks very much [Music]

[26:17](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1577s) so I uh field of you look okay so I quite often talk at Tech conferences or Bitcoin events and have a dread tendency of leaving the audience uh horrified dismayed and Confused um so we could either kind of go all the way down into the really kind of esoteric far out stuff or we could be relatives take as small can I kind of rough show of hands who wants the crazy version yeah absolutely you want the crazy version right who wants something that they could potentially work on the next five years two okay so I want to start by talking about the nature of gray areas right I did a bit of reading around to see what people were saying about what money was before I came this even and uh I saw a remarkable argument made from somebody not so far from here that uh law defined money and I think that this is a very strong very practical argument in as much as law defines lots of Institutions like marriage or taxation or a whole bunch of other things but actually the the zone of things defines and the zone of things that actually happened are disjunct setx right there's a huge amount of stuff which happens that is either not legal or even more interestingly neither legal nor illegal because nobody's ever thought about it and there's an enormous amount of stuff that happens which is blatantly illegal and go on for years because nobody cares about enforcement so in a sense until a specific situation goes all the way up the court system and all the way back down the other side with an actual ruling and a decision and an enforcement all the rest of that stuff the whole thing exists in this kind of you know jellyish gray area it just kind of has this long flexible thing attach so if we start the question of what is money with this notion that we have a nice cream crisp accurate definition that we can then use to reason about what's happening in the environment we're always going to automatically be inside kind of government box legalism that gives you nice clean precise answers that have nothing at all to do with the real world right or we can take the other approach and we can say right well what money is is defined by common practice and there are a set of behaviors that we expect to see more of rest of the generic things like commonw

[28:47](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1727s) marriage or commonw man right well you know over here they seem to be doing a whole bunch of trade in cigarettes and taxi tokens over here the currency appears to be phone minutes you know it's that money kind of sort of money it's aot like money it's money with amage that seems to expire it's issued by Corporation you know we replaced by something else you so once you get into this notion that there are crisp concrete real things which age relatively well they're fairly protective they with durability like this state and on the other side you have this kind of ephemeral zone of cultural transformation where things going to come in and out of focus it becomes it's a lot easier to ask questions like what is M because the real answer is how far along this curve towards absolute solidity has a given kind of transaction or Commerce gone right what we're looking at here is essentially an adoption curve With Private Practice among small groups at one end all the way right up this ramp until the thing is not only established nationally ined International treaties does this kind of make sense as an initial frame right so it's not necessary anyone point to have this nice sharp black and white cut off now it is money now it is not money it's actually a series of decisions made by a bunch of different actors and different enies about whether something is money enough for them to regulate or adjudicate over or even accept me um has anybody in this room heard be okay couple of HS so I was part I was a heavy user of a digital currency that ran uh from mid90s to about 2005 2006 called e an eold at the height of its power was about $8 million worth of gold sitting in Vault in Dubai and Canada I think and it was tradeable as an account based currency with all the transactions being done in datas you know I think C five gold a month at the time gold price was pretty low well and you could either take that out with coins or you could have them out change it by saying a water transfer places and a community people grew up around that that treated gold as money because it required a lot of fundability but the eold company kept going back to the federal government asking for a banking license because as far as they were concerned they were

[31:17](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1877s) somebody a bank that operated in Gold please regulate us please please regulate right here and uh eventually in 2005 the federal government decided that it would be much AR them all the Dr and they were finally done assum for the exact charge was banking without license so this is a classic example of something that had widespread Community adoption that theoretically one administrative decision would drag that over the HP and it would have become a nice clean standard part of the financial system but somewhere in there a regulator looked at it and was like this is not for us this is not for us this is not for us ah kill it with fire and that reaction I've see all of that same psychology playing out around blockchain technology right you know what is it we don't know is it money well depends who you ask um um what should we do about that I don't know should we regulate it could do we understand it well enough to decide whether we should kill it or not but we ignore it and then later on in a rash Panic we can do something drastic and that is the standard approach right that is just how business is done Rel State regulation so

[32:31](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=1951s) um this kind of teeter totter of gradual acceptance followed by radical snap back is a fundamental cultural tra right if you look at the negotiations around say eia right that's going through all the same kind of creeping acceptance dramatic bash backlash stuff that you see around vcoin that us to see around equ any area of for society is not really sure what something is has a lot of kind of slow creeping progress and gradual acceptance followed by episodes of irrational panic and if it dies in one of the irrational Panic it's usually it's going for somewhere between generation and Century right things kind of creep in until eventually we've got a generation that has grown up with them kind of over here thing that people do and that generation assumes that the stuff normal and normative and after that it becomes and that Pro say I I don't think ever really happens faster than generation this I think is a key piece of analysis that what the uh Bitcoin guys missing is that until you've got a generation that have grown up using Bitcoin in high school to buy and sell I don't know whatever it happens to be baseball CS they're really never going to feel like the stuff is money because technology is anything that was invented after You' ear for that point is reality and then you begin to get this thing this stuff begins to feel like technology you know I mean I'm perfectly comfortable with parallel computers andry all the rest it's all just fine you get to talk to me about this you know nasty scary wet biological stuff where we're talking about 20 years of life expansion by you know injecting people with a goo which will you know stick B buckly into their Tes and that begins to feel like technology that really is a little intimida so everybody got a nice clear sense of this curve right and and you know social push forward backlash forward backlash forward backlash now um who is comfortable that they understand blockchain's reasonably well okay anybody want to come up here and explain them to the audience brave brave so um I am strongly of the opin that um the blockchain thing is best

[35:01](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=2101s) understood as being a kind of administrative upgrade to good old function SQL database righte it's a spreadsheet right the problem with SQL databases was always that you wound up with this enormous vicious priesthood that sat on top of them to protect them from people like you and the blockchain guys kind of eventually come up with a database which is so aggressive that it doesn't need any database administrators to protect it's like the Tyrannosaurus rights a databases you need enormous warehouses filled with buring Machinery that basically just sit there not just computational radiators but at the end of that you got get a database that everybody can write to nobody can edit nobody can hack and the bloody thing as permanent as the social construct pays for it and then any monkey can write a bunch of scripts which read and write stuff from that database and this we call the blockchain economy right when you put it in those kind of terms it becomes fairly obvious that it would be you know foolish and naive to regulate away of Technology like this what it it's a database it's a really resilient database fantastic what are people doing this really resilient database h mass moneyer organized crime oh against that well you were against that before they had a DAT right so this notion right that you have a relatively confined breakthrough in SS the happens St a bunch of software written against it by a bunch of people that are basically anti-state liberary and weird and that the result is that this piece of computer science technology becomes irrevocably welded to a set politics that most people find kind of aort you know the phrase um you can have uh Anonymous digital cash or welfare state pick one right most people if they understood the dialog those terms you know go for it and this also gets SC avian digital currency for they're attempting to figure out how you build taxation right into part of the digital currency systems so that you could potentially have a perfectly stable M state so to kind of round this off we

[37:10](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=2230s) have this very interesting technology it gives us a good clean you know kind of velociraptor database right it's a database that can take care of itself feral database and then around that people build applications that have a very different structure because database doesn't require a priesthood and you know kind of three-phase power to maintain it and what you see is this leakage of technology and power out of the institutions that have the technical infrastructure and the staff to maintain this kind of structure into the hands of people that previously had no access at all to resilient computation and I think this is the frame of analysis you know once you have a resilient computation layer out there anybody stuff on top of that and the stuff that get P gets piled on top of that is the stuff that you can't build anywhere else right and this is where you had to get started down the path right a technology that is genuinely durable in the face of resistance and censorship is always going to be used for things that other cheaper better technologies that are vulnerable can't be used for if only Outlaws really have enough spare cash to spending it on blockchains only Outlaws will have blockchains but who those outs are varies depending on where we are at this curve right if Wall Street really gets on top of Bitcoin government regulates it and they start basically kyc and new Bitcoin accounts you unless you've got a nice clean Federal certificate under key we're not going to believe the cash is still there not hard to do technically right that's a process whereby that particular thing now has the full status of money because it has been blessed by that most authorities right whereas if that doesn't happen and it gets pushed back down you wind up this kind of permanent stable Bitcoin PIR Utopia because it's been adopted so far in and that it can got big no rather than the big yes right welcome to society here your handcuffs or very sorry you're not coming in get back over there into your C now does this all kind of make sense as it frame I did promise you some fir so right now we exist in a profoundly unfair world right we all know this kind of power wall wealth distribution thing you know what was it on the order of uh 150 people about as much wealth as the bottom three and a half billion you know

[39:40](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=2380s) so if we disenfranchise about 3,000 people everybody in the world can double their wealth apart from those 3,000 people wow yeah clearly clearly clearly that's only 3,000 people they could each have a small Private Island can double the amount wealth with the average person that access it's not that unlikely that when you have a world with that kind of wealth inequality and you get this kind of extremely durable computational technology in widespread adoption particularly in places where you can't run regular services that you're going to get political change on the back of the ability to have uncensorable free speech and if you think about the amount of trouble in the sheer volume of mass Mur Marxism on the order of a quarter of a billion served um it really begins to worry me is how long do we have before the combination of enormous poverty p number is roughly 10 plus resilient computation results in the necessary preconditions for a very very very sudden shift in the go Li right as you know the the radical Ed people that are currently reedly excluded from reindeer games finally figure out how to break down the doors at which point it doesn't really matter what the western states say yes or no to about common practice and whether things will leg or not because they're not really going to be doing anything other than putting out fires at Borders right these Technologies don't exist in a static political Val right we only vote roughly as often as we did uh at the very beginning of English democracy right have fouryear electoral terms have been around for what something like 250 300 years right so everything else in society is accelerated by a factor of 50 100 voting is still happening the same place did 300 years ago as a result it's become increasing so this notion that resilient computation is just about some kind of you know poxy little digital currencies that a bunch of Libertarians are running around trying to prend the Messiah this is kind of ridiculous right there just is enough gradient there for very much to really have real gradients are massive pre-existing structural poverty in the world which is left over Colonial and on the other side of that you have populations that are going to get their

[42:10](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=2530s) first smartphones and their first accent access to resilient computation Platforms in the same generation and I think the question for us now whether it's money or whether it's not money it doesn't really matter right what matters is whether it's power and if it is and because it's free software it's the kind of power that anybody can have regardless of how little money they've got the possibility is that what we're going to encounter is super empowered poor people by number as 10 to one renegotiating the global balance of every in a time when the climate is breaking uh life extension is becoming practical virtual reality is everywhere and Robotics are beginning to get to the point where they're good enough to scare you all simultaneously inside of the next decade does this like it's going to be fun right I mean as members of largely very conservative industry uh if I was you right now I would be absolutely terrified but it's not Bitcoin currency they can be cooperate extremely easily it's the fact that the entire Global structure that led to these concentrations of wealth in the first place is under enormous pressure from the bottom up as they get their cell phones and this negotiation between um those with capital and those without income I think is going to be the defining moment internet as we go from a largely quite privileged internet to a largely poor and brown internet and the negotiations we going to have over these electronic platforms about the nature of the global system is really where the pain points be it's not about Finance it's about identity it's about access to education it's about censorship Danish cartoonists or French cartoonists being assassinated by Muslims who've imported their values and their GS at the same time as we're sending out fly schol their own countries all of that stuff is just a precursor of what happens when you wind up with four billion poor people resilient computation

[44:19](https://www.youtube.com/watch?v=UCb9VlZWFYY&t=2659s) cell so thank you gentlemen yes um if You' like to join here we like to facilitate fantastic really appreciate that guys get just thank you guys that was brilliant thank you I'll do my best to try and uh facilitate questions yeah and uh get get thoughts from the audience um but before I do that because I'm the guy that's standing up and speaking I'm going to be really cheeky and and ask a question myself and hopefully get the B road so I I like uh somebody recently described Bitcoin to me as being like digital gold except it's gold that can teleport because I can move it anywhere in the world near instantly and it still has the value that people everybody the market perceived it had when it moved initially when it when it disappeared so Dave you made a point I think in your conversation that you said there might need to be these sorts of Reserve currencies or ways of translating between different types of value and data can you see and V and Bitcoin playing a role in that or something like Bitcoin playing a role in that is is there value in that perhaps oh thanks very much well I mean I I agree quite strongly with you that the the real Revolution is the blockchain not Bitcoin and I think that was I think that was considered you know uh an unusual view a couple of years ago I'd say probably opinion now so I I'm much more interested in the blockchain Bitcoin um it's interesting the idea that currencies will be based purely on the cryptography I'm I'm unconvinced of so I think these currencies are much more likely to be related to see if they're rooted in communities they're going to be based on with Community Values or they going to be something to do with I mean corporations don't last forever but people will always need energy or people will always need calories or something I mean I don't know but I think they're more likely to be something like that you know Bitcoin I don't want to be me but you know Bitcoin is a way of keeping

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Continues in https://guptaoption.com/texts/307-2.md (part 2 of 2).
End of [307] Financial Services Club Jan 27 2015 - "What is Money?" - David Birch, Simon Taylor, Vinay Gupta, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.