# Coin Telegraph AMA with Mattereum's Vinay Gupta 14th August 2023 (part 1 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [565], 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, 2023-08-31 (YouTube upload date), https://www.youtube.com/watch?v=Xu5bFKPqLDg. Text: automatic captions, mostly corrected
- On the plan's timeline (by date, not by subject): after the law step (Mattereum, 2017), before the great powers step (Multipolar Realpolitik, 2024).
- How it fits the plan (the research build's reading): Explains how the contracting layer is sold and built.
- Career works it belongs to:
  - Asset Passport conceived (2006): First idea for the Asset Passport: digital identity for objects, conceived alongside CheapID.
  - The Ethereum Launch Process (2015): Ethereum Foundation blog post, written as the new release coordinator, setting out the launch in stages:...
  - William Shatner collectibles with Mattereum (2019): Mattereum partnership with William Shatner giving memorabilia legally backed digital twins against fraud,...
  - Swarm with Mattereum (2023): Mattereum partnership with Swarm, a regulated German exchange, to tokenize and fractionalize real-world...
  - Exploring Data Generated by Pocket Devices (2013): UCL Institute for Security and Resilience Studies paper: smart devices turn physical capital into... (suggested by machine)
  - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (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.
  - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum.
  - environment / green capitalism: Green economics: from oil efficiency to markets for facts about products.
  - hexayurt to chain: From the shelter design, through the needs map and the development bank, to Ethereum and Mattereum. (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: Property, NFTs & real-estate transactions (21%); Smart contracts, law & arbitration (21%); Crypto history, e-gold & digital money (13%)
- Distinctive terms here, against the whole archive: fractional ownership (11 here; 12 sources in all, earliest dated 2020); Swarm (17 here; 29 sources in all, earliest dated 2008); real estate (29 here; 106 sources in all, earliest dated 2013, 2 undated); Mattereum (34 here; 127 sources in all, earliest dated 2014, 2 undated); SIM cards (2 here; 2 sources in all, earliest dated 2017); real world assets (6 here; 24 sources in all, earliest dated 2017); DAO (5 here; 23 sources in all, earliest dated 2014); NFT (7 here; 45 sources in all, earliest dated 2019); The DAO (3 here; 13 sources in all, earliest dated 2016); proof of stake (3 here; 17 sources in all, earliest dated 2014)
- Importance: core-text score 0.43 (1.00 is the top), number 144 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [295] [Singapore talk (2015)](https://guptaoption.com/texts/295.md): same career work: The Ethereum Launch Process
  - [716] [How do we control the material world with smart... (2018)](https://guptaoption.com/texts/716.md): same career work: Asset Passport conceived
- On the same works, just before: [566] [Why Global Trade Will Inevitably Move To The Blockchain (2023)](https://guptaoption.com/texts/566.md); [712] [Compilation: Vinay Gupta (Mattereum / Ethereum) on Visa,... (2023)](https://guptaoption.com/texts/712.md); [44] [Announcing Swarm x Mattereum Partnership - Mattereum (2023)](https://guptaoption.com/texts/44.md)
- On the same works, just after: [783] [Vinay Gupta / DCxPrague (2023)](https://guptaoption.com/texts/783.md); [749] [Vinay Gupta: AI's Impact on Jobs and Society (2023)](https://guptaoption.com/texts/749.md); [564] [Vinay Gupta at 'A Decade of #Ethereum' (2024)](https://guptaoption.com/texts/564.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: Coin Telegraph AMA with Mattereum's Vinay Gupta 14th August 2023, video, 2023-08-31, https://www.youtube.com/watch?v=Xu5bFKPqLDg; in Vinay Gupta's archive at guptaoption.com, source [565], https://guptaoption.com/texts/565.md.

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

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=0s) so uh while we're waiting to get started um maybe I should talk a little about the prehistory of crypto in the 1990s which is where really all this stuff began

[0:12](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=12s) um so in the 1990s uh crypto was a very very different world um it was pre-blockchain uh it was um very much a world that was dominated by email even the web didn't have any cryptography there was no https um all that really hard was a program called pgp and the ability to encrypt emails one person wanted to send a message to another you did a key exchange you encrypted the email often at the command line on a Unix box and then you would send an email and that seems like pre-history but that's really 25 years ago and from that we've basically gone through probably three or four major stages of building out the crypto ecosystem that we have today uh getting crypto built into the web browsers and into the infrastructure of the internet was the thing that enabled e-commerce and that was probably the single largest transformation that we've ever seen in terms of mass consumer adoption of cryptography and then the other huge transformation was the creation of SIM cards so SIM cards and bank cards I have chip and pin and the rest of these kind of things were the first real large scale adoption of Hardware cryptography that was when we started having cryptographic algorithms embedded in chips which gave you a completely new kind of security uh and then the next Turning Point really after that is the Bitcoin white paper but you know we're coming into this story uh really with 25 years of History here and 25 years of accelerating momentum and it's easy to forget that the cryptography built into web browsers is the thing that created multiple trillions of dollars of value in the form of the entire e-commerce ecosystem and then the web to ecosystem that survives on Advertising largely driven by e-commerce uh all of that was cryptography and prior to the building of the crypto into the web browsers there was new e-commerce there were no credit card transactions online there's really nothing but documents um so you know we've already gone through one almost Industrial Revolution in your real world asset trading driven by crypto and we're now getting ready for the next

[2:27](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=147s) uh are we ready to start more firmly is everybody here that needs to be okay so just to continue a little um we've also seen waves of resistance um so in the 1990s the US government freaked out and reclassified cryptography as Munitions they literally said that encryption was armaments and it became illegal to export from America without a license this was called the itar regulations and itar drove a huge number of cryptographers out of America a lot of those folks wound up in a place called Baden guila and there was a kind of early crypto Island community there that's also where you began to see the hybridization of offshore finance and cryptography and some people would suggest that was sort of where you got the birth to some of the stuff that became cryptoeconomics where we started in the late 1990s uh 2005 there was the full vehicle the gold was a perfectly reasonable gold back digital currency system fully centralized no real use of crypto it's a very successful platform uh you could transfer a hundred thousand dollars from one cell phone to another cell phone in the late 1990s for 50 cents instantaneously and that was all gold backed it was essentially gold backed stablecoins uh and that system was shut down in 2005. and I would say that almost everybody thinks of the form of Eagle as being the thing that triggered Bitcoin because it was a case of like if there was going to be another Regal that was not going to get shut down by the government it was going to have to be decentralized and to me the fall of Eagle there's really the impetus for the creation of uh Bitcoin I think that was kind of the uh response from the crypto Community to e-gold was Bitcoin um so we are standing very much on the shoulders of giants and I was sort of an observer in those days you know I used the gold ecosystem but I wrote some cryptographic applications in the 1990s but I was by no means you know any kind of figure in the space I was very much a follower in those days and it wasn't really until the days of ethereum that I'd be unsure any kind of leadership and actually get more involved okay okay I reckon that's enough for the history lesson uh shall we get started here we already go I think we're ready

[4:53](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=293s) to Vinay thank you so much for um the background in history I think that was amazing Geo will just jump in whenever he can but before we unravel um developments uh I just wanted to thank everyone again for joining us today it's an amazing odd opportunity to have you here with us Vinay and just like learn more about what you're doing so without further Ado let's go ahead and get started um the concept of fractional ownership is still relatively new to many people can you briefly explain how it works and how it might redefine our future so fractional ownership is kind of how the real world works you know everything in the world that is big and I'm thinking you're a big like electrical grids Airlines you know large-scale real estate developments in many cases um these things don't just have a single owner you know there isn't just a single Monopoly of you know like this person owns the electrical grid not how it works what you have is publicly traded companies which in the UK they call publicly listed companies so that's your Facebooks and your apples and your Amazons and your ibms they have stock and just about anybody in the world can go buy that stock and they can buy it and they can sell it and they can trade it and those companies are massive they're very very heavily regulated and that's how things like electrical grids get built it's just normal that the big stuff you know the companies that make the Cancer drugs the companies that uh you know dig up the oil and the coal and the gasoline and all the rest of this stuff the car companies you just sort of natural we assume that these things you could go you can buy equity in them you could buy stock the world is built on fractional ownership because really these things are too important and too powerful to be owned by a single individual that could change their mind about how they're going to work overnight and you can see this a little bit of with the politics around Twitter itself where because it was something that could be bought and sold by a single individual once it was bought by Elon Musk everything changed publicly listed companies publicly traded companies don't work like that they have governance the change is much more slow it's much more moderated and that's why they tend to be trusted to do things like run electrical grids um so it's not that we're kind of inventing fractional ownership from scratch fractual ownership is how the world Works what we're doing is we're using the efficiency of the blockchain to apply this kind of fractional

[7:23](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=443s) ownership concept to much smaller things in a much more inexpensive and lightweight way and that brings the benefits of this kind of fractional ownership model and the associated governance right down to the point where you can begin to imagine doing it for individual cars individual houses individual works of art rather than thinking more at the scale of an airline or an electrical Grid or a utility that serves you know hundreds millions of users a day on the internet well that sounds amazing now like with fractional ownership I know you mentioned doing cars and potentially real estate and things like that so in

[8:00](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=480s) the future instead of having like let's say you know Millennials are now uh trying to visit the world and we don't want to have a single home we want to have multiple options so would this essentially be an opportunity to build some sort of model which allows you to own a fraction of an ownership in different various parts of the world when it comes to real estate or different assets um yes I think that's relatively easy to put together um so here I'm going to introduce a concept of granularity right we're going to probably come into this a couple more times so say that we're going to have a situation where you're sharing 10 homes in this kind of fractional way right one way that you could do that is you could put all of those homes into an enormous bag called something like a real estate investment trust and then everybody could take ten percent two percent five percent and they would equally own one part of each one of those 10 homes and it could be ten thousand homes so this one model that's the kind of trust model everything is kind of in a single bucket and you own little pieces of the bucket and that's a perfectly practical reasonable way of doing things and it has a lot of advantages but the other approach is you could dig these places individually and tokenize them and at that point you could own more of the places you spend a lot of time in and less of the places you don't spend very much time in and then instead of every person having the same strategy and the same uh portfolio and they just own different percentages of it you could absolutely decide you want to own more of the stuff in Bali and less of the stuff in Hong Kong and somebody else decides they want more of the stuff in Hong Kong and less of the stuff in Bali and so we would get this ability for each person to shape their own investment strategy and their own deployment of resources and then maybe at some point you decide you've had enough of the fractional ownership lifestyle you sell all of your equity and all of these assets to somebody else and then you take that and you buy 70 of a house that you're the majority owner in and that's your primary resident you were there from then on

[10:00](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=600s) wow I absolutely love this model and I think uh many of the caller the individuals in this Hall will probably enjoy uh something like that as well so um I know that you've played a pivotal role in ethereum's launch what lessons have you brought from that experience to shape the vision and strategy of nature so this is kind of a hard question for me because to be honest I'm really quite disappointed in the way that things have gone since ethereum was launched um you know there's a video from the early days of ethereum mid-2015 uh called ethereum the world computer and it really lays down Vision where ethereum is going to be used to do things like uh auction off the slots for air traffic control you know you want to land a plane you book a slot in two weeks you decide you're not going to Charter that plane you sell off the salt and it's a token um they talk about real estate electrical grids you know satellite infrastructure there's this whole notion of we're just going to tokenize the real world assets and what's going to happen is you're going to get these new efficient economies that will enable just a much better deployment of capital globally to get better goods and better services available for people with less waste and less inefficiency and that was the vision that I think everybody in the ethereum team shared 2013 2014 2015. there was no notion in the early days of ethereum that there was a digital world and a physical world and they played by two completely different sets of rules and they didn't really touch the idea was that we were going to roll out infrastructure directly into the physical world and it was going to touch everything and then it didn't happen and the way that I think about ethereum is that ethereum and the blockchain in general in fact is like an enormous engine and it's an enormous engine in an enormous vehicle and the problem is the engine is not connected to the wheels because there's no gearbox it doesn't matter how hard your rev the icos in 2018 how hard your red D5 and the D5 summer how hard your rev the nfts um the wheels don't turn right and you know I could see that problem happening really 2016 it became clear that we were having a real problem getting traction because the lawyers kept not approving the things that were going to be world changing and I realized that I had to go off and I had to fix the legal problem I had to go there and figure out how we were going to get the lawyers on board because until the lawyers started saying yes rather than known to the deals we

[12:30](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=750s) couldn't get access at the real world so when I started Mattereum what I said was our customer is the general counsel or chief legal officer Fortune 500 company that controls a bunch of real world assets right the people that actually have the yes or no legally when you want to talk to the real world these are our customers and we have to figure out how to get them to say yes the blockchain transactions in their asset classes and I figured it was going to take us a couple of years of research a couple years of prototyping the pandemic got in the middle of that and you know really slowed us down quite a lot uh it took us four years to get to the first live transactions and six years to get to the point where we could do securitization but we're now at a point where we have the adapter we have the connector which makes it possible to legally control pretty much any asset in pretty much any country in the world in a way that the lawyers will approve of right now there's a bunch of work to be done in sub-jurisdictions there are some countries that will simply never work in but the the kind of core commercial structure of the entire world is now accessible to the blockchain you have to bring lawyers there is always detail to be done but generally speaking we've got the Paradigm in place and we've got the worked examples and we've got the legal analysis and we can do this now so I think of this as being kind of Back to the Future we can go back to the 2013-1415 vision and now we can implement it fully and we've got the gearbox so now when you run the ethereum engine the wheels turn the vehicle will move and the real world will come with us

[14:12](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=852s) wow that's incredible now Mattereum's journey is one of technological transformation and Innovation could you share some of the most memorable Milestones you and your team have experienced along the way yes so um I'll tell you a funny little English story because we're a very English company in some ways um I get invited by a friend that I know through Mattereum to have a lunch with the judges of one of the highest courts in the UK to keep the judges in contact with the real world every day they have a luncheon they bring in some invited guests from all walks of life and they sit down they have a conversation with the judges over lunch and then the judges go back to hear the afternoon's cases and they do this to keep everybody kind of connected to the real world and aware of how the public thinks and so they served you a nice glass of wine while you're waiting and then the judges get finished with their mourning cases and they all come down and they walk in and these are some of the most powerful you know sort of adjudicators law in the world and they're all dressed as Santa Claus it's red robes with white fur trimming and it's literally just a wall of Santa's walks in and I very nearly completely lose it at that point and it this was kind of typical of the process of beginning to understand how the real world works because the real world particularly the legal aspects of the real world are filled with things that seem completely absurd to people that grew up on Star Trek and worked with technology for their whole careers you know law is old you know citing a case from 600 years ago happens semi routinely when you start dealing with things like real estate law 800 A Thousand Years even longer in some cases um and so what you have is this very very ancient world that you're suddenly plugged into and it's like bridging time so you know we've got sort of familiar with this ancient world law and then the first set of nfts that were bound to physical things by Mattereum was a collection for William Shatner the actor from Star Trek so it was kind of like Captain kirkswag for sale on upency and you can still find those things at opens either there um and it was just the sense of you know being kind of stretched across time so that was completely amazing um other big deals the first time we uh you know supported the sale of gold bars in nft thought was amazing I mean gold Boolean is just it's so tangible and it was such a throwback to e-gold you know the last

[16:42](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1002s) time that you had tokenized exchange digital gold any kind of real way was really the early 2000s so you know to see individual number and allocated bars in a vault change Hans as an nft was amazing uh because that that was the point where we knew that we could do this for like you know if you could do it for one gold bar you can do it for all gold bars a gold bar and a volk it's the same level of security whether it weighs 100 grams or you know 12 and a half kilos um so that was the opening of like okay now we can do gold this is this is it we're doing this for real uh and then real estate was the other big thing you know late last year we got the first real estate listing on train using you know all of our kind of legal and risk management approaches and that was you know it's like oh that's the biggest asset class in the world and it's coming along for the ride now and these things are very much you know to use this kind of gearbox well these are gears in the gearbox you know Collectibles gold Boolean and other vaulted assets like wine or fine art things that live in climate controlled storage uh and real estate those three asset classes together you know I mean real estate is 300 trillion of assets and it's 3 trillion of transactions a year gold bullion the numbers are staggering because of the stuff trades like FX uh but there's you know somewhere between 1 200 billion dollars of gold that comes out of the ground every year I mean this stuff is the sort of it's the backbone of the real world and every time we got a new asset class in one of those backbone areas it was like oh this is really happening you know we're moving away from ethereum as a thing that largely exists in the Ethereal realm you make up a new kind of property you document it in the form of a smart contract you then exchange this new form of property with other people that believe in that new form of property held in value very very very airy very very very esoteric very very ethereal right into you know gold bricks which are about as dense as a thing can get into real estate it's the stuff that you're literally standing on um so for us you know the Mattereum name has taken on more and more meaning as from the Ethereal to the material it's the bringing of the blockchain to Earth grounding it in the real world it's kind of blockchain touches grass

[19:05](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1145s) wow that's absolutely incredible and you know just to think of like all of the regulatory um moves and requirements that all of this took is just mind-boggling and to think that we've gotten so far in so few years um I think Geo is on the line now Geo do you have any questions or yeah can you hear me guys so apologies for the technical issues here I finally fixed the issue so yeah apology has been in for this um if Jessica you it's okay for you I can pick up the conversation from here yeah of course awesome okay um yeah so I would like to move on with the so I would like to move on with the following question um which is about your partnership with the Swarm for fractional ownership so Mattereum recently announced a partnership with the Swarm for fractional ownership tokens so could you tell us more about this collaboration sure absolutely um so swarm is a really really well established company in the crypto space I think they go back to maybe 2014. um they've gone through a lot of phases they've gone through a lot of changes but the the kind of core proposition is that they sat down in Germany and in Germany you know the way that crypto works is it's just regarded as being financial instruments pretty much you know I'm I'm not a German lawyer this is not legal advice but a lot of countries basically sort of decided that crypto was its own special thing that they were going to regulate it as a special thing in its own way the Germans were just like looks like a financial instrument smells like a financial instrument come back when you have a banking license come back when you're a regulated Financial Services institution they just put the same criteria around crypto as you would for any other class or financial instruments that were issued in the normal way the old-fashioned way the D they are trying to find way so swarm just buckled down and did the regulatory heavy lift and got their licenses and now they are just Real World Finance in Germany but they have a license that lets them do things with crypto and they've got the attitude they've got the experience they've got the instrument traditional knowledge so they're not really Trad fine they're not really D fine they're

[21:35](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1295s) just Finance they don't have the kind of wizzy kind of craziness of DeFi they also don't have the dullness of traditional Finance they use the blockchain to get things done and they're exactly the kind of institution that we thought the mainstream Banks were going to turn into in the sort of 2016 era all of the big Banks were coming to the table and looking at ethereum all of them were talking about use cases they had all the necessary licensing but what they kind of lacked was the vision the governments in America and in the UK gave them no confidence about what the position would be so they kind of back it away right the Germans generally might read not an expert generally May read is that the Germans just explained the rules of the game and said anybody that played by these rules is entitled to play welcome to the table and then it took years to get through the hoop jumping and the compliance issues until they were fully empowered and to me it's basically the critical feature of getting us back onto the track where we go into the real world in a big way because if the banks had said yes to a bunch of this stuff in 2016 we would all be far farther ahead than we are now and swarm is essentially akin to those Banks only instead of saying no they said yes and they're very heavily invested in making this stuff real um so I would say it's the first really serious way of joining together Trot find DeFi and then Mattereum comes in and says okay well so you want to do something like take you know uh a thousand acres rainforest you won't take an industrial facility you want to take a collection of Fine Art that's been accumulated over a few centuries you want to take these things and you want to split them into shares and allow people to buy them you'll just put them into tokens and a lot of people buy them you want to take revenue streams and allow people to buy into those you want to do governance all of these things you have to know for damn sure that the assets are real and there's no fraud in the assets you need insurance you need underwriting and you need machine readable definitions of the assets so you can do things like automated Investment Portfolio management all of these kinds of things those are not the natural functions of uh Stock Exchange the natural functions of a bank they're not the natural functions of swarm you need external entities that put together the deals and Mattereum is one of the kind of more audit-like entities that helps put together the deals right in the real

[24:05](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1445s) world Mattereum might be seen as being something a bit like KPMG or one of the other big four accounting firms it could have some overwhap with the kind of stuff that some of the more entrepreneurial Merchant functions can our are there but you know what we're sort of seeing here is the build out of Real World Finance neither trotify or DeFi but Real World Finance with many of the same kinds of business models that you get in the real world but all implemented on the new technological backbone and that this is really what we always thought ethereum was going to be this is this is back to the original Vision we can now Implement all the stuff that we talked about nearly 10 years ago awesome and uh yeah I noticed that you also made an interesting metaphor concerning Star Wars you said that if ethereum was a Jedi swarm is the lightsaber because it's going to cut right through the separation between the ethereum community and the real world yeah absolutely right because you know once we can get through that door right once you can buy and sell 20 of a house as ethereum tokens in a way that is government approved and the any lawyer Who's involved in the deal can read the paperwork and go sure that's fine that's just a transaction you know how different would it be if all the enthusiasm around nfts a couple of years ago had been instruments that had durable value like real estate or gold or fine art you wouldn't have a situation where there was this sudden popping of a bubble I mean real estate bubbles pop but when a real estate bubble pops people lose 20 of their value right when a token bubble pops people lose you know 99.9 of their value and so what's been happening is we've been getting this very kind of frothy very delicate kind of enthusiasm where the enthusiasm goes away and then suddenly all the money goes away but we could do real world stuff and then you buy something and it doesn't have this kind of inherent volatility because what you're not buying is does this asset class really exist or not which is where we are with nfts it's where we are with d fights where we are with Ico tokens you're not making a bet on whether the asset class turns into something you're taking an asset class that in some instances is tens of thousands of years old and you're making a bet on an individual thing inside of that asset class it's a completely

[26:35](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1595s) different kind of risk it's much lower risk in most cases it's certainly a much more easy to understand risk and it doesn't have the same kind of correlation because even if one piece of real estate turns out to be a bad deal somewhere in the world all the rest of the real estate is much the same as it ever was

[26:56](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1616s) yeah that's uh that's very fascinating the tokenization of assets is a very fascinating topic and uh yeah now I would like you to explain people that might not be so familiar with the use cases the real world use cases for these tokens what would those real world use cases be so basically right now the only way to buy things if you can't afford them yourself is credit right you want something the thing is expensive you need something the thing is expensive the only way that you're going to get that thing is if you can borrow money from one or more people and then you take all of that money you buy the thing outright and now there's your thing right and that is an approach involves paying interest right two percent three percent for a long time when interest rates were super low now interest rates are high high and they're probably going to go higher and you start thinking like 30 APR on credit cards and you know even higher instances in some instances but even the you know core borrowing from like Bank base rates the interest rate numbers going up and up and up it's getting more and more and more difficult and dangerous to use debt to finance things the other way of doing this thing is you get people together to buy things collectively Equity right hey I want to buy this thing I can't afford it how's about I take two-thirds of it you take one third of it right how would that be oh yeah that's fine sure absolutely right now if it does something like a you know riding lawnmower then you sort of divide this up in terms of who's going to use it when and you're sort of dividing these things up in time right that is a very very small set of use cases most of the time what people do is they divide things up in terms of value here is an enormous building four different companies each put money into that building one of the moons five percent one of the moons ten percent one of the moons 25 of the other one is the rest of the building right and then there are rules governance for how the entities are all own parts of the thing interact and if you get to the really big scale things like publicly traded companies you could have tens of thousands or hundreds of thousands of shareholders and the thing that they are sharing the thing that they own collectively together is something like a power grid or an airline right um these mechanisms are the alternatives to data right you know in the real world

[29:26](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1766s) in big Finance when you do these kinds of deals you know there'll be some equity in the deal there'll be some debt in the deal there'll be some things which are a little like equity and a little like debt there are lots of fine gradations in there but what you get out of it is a situation where most of the time you don't just have to borrow all the money you borrow some and you also split the purchase with some of the people and at the end of that you can do transactions at really huge scale you know if somebody's doing something like starting a new Airline they don't just go out there and borrow a hundred billion dollars and then go start a new Airline it's a complicated thing with lots of partial ownership and there's often a publicly traded company in there and that's how the real world works that's how we built the world that we live in so what tokenization does is it takes the transactional costs of doing those kind of deals down 10 100 a thousand times in time so rather than okay we want to do this thing where we've got a bunch of equity Partners a bunch of debt Partners rolling this thing together and it's going to cost us 350 000 in legal paperwork you get something like that but it's a set of operations done on DeFi and it costs you oh I don't know eighteen dollars worth of gas because you did it on one of the l2s and that jump right you have to template the legals you have to be working with a really well established ecosystem you know it's going to take us a few years before we can get those prices down to those kind of levels but when you can offer these kinds of things as Services okay you want to buy a house your grandparents and your parents and your cousins are going to put up 30 of the money for the house in exchange for so many shares of the house for this person not person the next person that's what you're going to do instead of taking this enormous loan from the bank you can get a smaller loan a much better interest rate and you can put together these kind of combined debt and Equity packages for the day-to-day business of staying alive as an ordinary person that works for all that it takes these super powerful tools from High Finance and it brings them down as a way of replacing massive mortgages and credit card debt it gets us out of a debt Paradigm and into a debt and Equity Paradigm or even a pure Equity Paradigm and that really really changes our relationships with each other because not everything is then mediated by an adversarial relationship who owns who who owns who money these things then become mediated by a

[31:56](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1916s) collaborative relationship which is that we own this thing together and that difference between whether things are kind of predatory and hostile and who's who money or whether they're collaborative and shared interest because we collectively own things we co-own together cooperate that changes the whole tone of your society that Society is hostile co-ownership societies much much more benign much friendlier

[32:27](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=1947s) of course and uh yeah as you also mentioned democratizing access to fractional ownership of assets is going to revolutionize the world much more than the than the credit card itself did yeah absolutely I mean the credit card was a huge deal because before that people only really had cash economies so the First Transformation was the ordinary people got access to debt you got mortgages then you got credit cards and you know that fueled this enormous burst of people making long-term plans I am going to buy this thing on credit I'm going to take out a loan or I'm going to put it on my credit cards and so people's lives speed it up enormously because they could bring money from the future into the present I will take out student loan I will go to China on my credit cards and I will spend six months learning Chinese so the access the debt and debt is the ability to move money across time the access to debt hugely sped up Society we can't even imagine how slow the world was before credit cards because if you were going to go to China and learn Chinese you're gonna have to save up for 10 years and then you could go now you go now and then you take 10 years to pay off the credit card some people would say that that has made our society worse rather than better but it sure has made it different right um now you see well what happens if we start replacing this debt-based society and debt-based economy that we have now with the debt and Equity based economy you know the transformation is already there the credit cards are 42 trillion dollars of transactions a year on credit cards the numbers are staggering right imagine a similar transformation where we give people access to equity as an instrument right it's a percentage of the entire mortgage Market it's a percentage of every car purchase it might be a percentage if every time somebody buys a resellable computer animatronics at laptops that are just staggering things that can happen once you put equity on the table and the level of social transformation I would expect to be larger than the social transformation caused by credit cards and the the debt Revolution

[34:35](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=2075s) okay um I think that we have been exploring the tokenization side of the conversation quite uh deeply now I would like you to move on with the next topic which is more related to Dao so um how basically your project is connected to the Dao form of governance so how do you see institutions like Dao's reshaping Collective ownership and governance of physical assets and what challenges and opportunities does this pose um so dowels are to me the best example of an ethereum technology which is poised to take over the world and it just needs one more step and then suddenly they're going to be everywhere I know a lot of people in the DAO Community had very high hopes for oh my God the house will change everything wow and then a bit like ethereum itself they've had this phenomena where you just keep stamping on the accelerator and the wheels don't move again it's the gearbox problem dowels also need a gearbox so the the sort of real world equivalent of the Dao is the publicly traded company right you buy a share of Facebook stock you know how some economic rights the Facebook board kind of just screw you over and disenfranchise you because you have legal protections and they have to consider your wishes when they make decisions now Facebook is kind of bad of a kind of a bad example because the way that Facebook is structured gives Zuckerberg enormous almost dictatorial Powers right Facebook is a tough place to be a shareholder because they set it up that way there are other companies which have very very very ordinary standard Fair terms of Engagement for shareholders and in those situations the shareholders have real economic rights they can do things like get together and elected board members and the board are basically like the uh Supreme Court of a company right if you think of the you know CEO of the company is kind of like the president the board are kind of like the Supreme Court they sit over the president they they enforce law right um so the shareholders in a company are then kind of like the citizens right the citizens elect the Supreme Court and the president and that's sort of how uh well every company's a little different they're not in the countries the shareholders pick the board the board then picks the CEO right it's kind of a slightly Democratic in practice it doesn't seem very Democratic because the people that run learned companies have

[37:05](https://www.youtube.com/watch?v=Xu5bFKPqLDg&t=2225s) gotten very good at fighting shared democracy but in principle shareholder democracy could work maybe one fine day so the dowels have the ability to automate this governance right you own some tokens in a project you have some rights there is some protection for your interest as a result of those economic rights there's some contract law there might be even be some uh you know a statute law but these things all together create a situation where we are collectively governing an asset that we co-own together here is a thousand acres of rainforest 50 000 people own some of that rainforest they collectively have voted that they're going to preserve that rainforest for the next 25 years and they will not even consider selling the land to any entity that isn't a better rainforest protector than the one they are currently themselves and those rules can be written into the process and then no future set of owners can change those rules because this stuff is immutable right all of that stuff if you try and do it with lawyers the time and the cost and the expense if you're trying to get the voting done and people have to turn up at shareholders meetings and they have to fill in proxy forms it's hard right that's why shareholder democracy is not so effective in large companies one of the reasons but if all of that stuff was bought online and it was all managed through Dows with properly set up legals and contract well and all the rest there's proper voting rights proper economic protection for minority token holders the rest of these necessary steps then what you get is an economic democracy Revolution where all of the technology that's been worked out by the Dows is suddenly applied to Collective ownership of the world's assets and the dolls suddenly have an enormous amount of work to do in the real world the software will get better and better and easier and easier and in 20 years you could see hundreds of millions of people participating in Dows in the same way that hundreds of millions of people participate in social media today right we never really thought that individuals were going to go out there and become one-person movie studios and now that's huge sectors of the economy in the same way you don't think that individuals are going to become like governance Geeks and they're going to wind up managing investment portfolios and they're going to wind up as sort of stewards of planetary resources um but I think that that transformation is necessary and inevitable because we know that we can't run the global

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Continues in https://guptaoption.com/texts/565-2.md (part 2 of 2).
End of [565] Coin Telegraph AMA with Mattereum's Vinay Gupta 14th August 2023, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.