# Why Global Trade Will Inevitably Move To The Blockchain > One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [566]. 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/.md. This file's connections are below, then his passages. ## Where this source sits - Source: video, 2023-03-01 (YouTube upload date), https://www.youtube.com/watch?v=zzVJg9lh4dM. Text: automatic captions, partly 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): Physical argument for why the ledger layer underlies world trade. - Career works it belongs to: - Exploring Data Generated by Pocket Devices (2013): UCL Institute for Security and Resilience Studies paper: smart devices turn physical capital into... (suggested by machine) - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (suggested by machine) - Internet of Agreements (2017): Paper at the World Government Summit in Dubai on producing legal agreements at industrial scale. (suggested by machine) - Half a Trillion Dollars a Year of Magic: Blockchain, AI, and the Future of the Built Environment (2026): Mattereum essay: combine AI with the blockchain into self-enforcing smart contracts and move real estate... (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) - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum. (through a work suggested by machine) - 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 (33%); blockchain / speed / light (33%); blockchain / global / internet (17%) - Distinctive terms here, against the whole archive: speed of light (11 here; 20 sources in all, earliest dated 2014); global GDP (3 here; 18 sources in all, earliest dated 2018); commodities (4 here; 38 sources in all, earliest dated 2009); world trade (1 here; 18 sources in all, earliest dated 2006); supply chain (3 here; 92 sources in all, earliest dated 2006, 4 undated); global trade (1 here; 30 sources in all, earliest dated 2013); digital identity (1 here; 35 sources in all, earliest dated 2006); Singapore (1 here; 39 sources in all, earliest dated 2009); smart contracts (1 here; 110 sources in all, earliest dated 2014, 2 undated); Mattereum (1 here; 127 sources in all, earliest dated 2014, 2 undated) - Importance: core-text score 0.46 (1.00 is the top), number 129 of the 729 sources it scored, the research build's measure of substance, importance and innovation - Related sources: - [682] [Ep. #641 - Vinay Gupta on China, Futurism, Government,... (2026)](https://guptaoption.com/texts/682.md): close in content (cosine 0.89) - [429] [The Great Leap Forwards (2026)](https://guptaoption.com/texts/429.md): close in content (cosine 0.86) - On the same works, just before: [568] [The Third Mattereum Physical Asset NFT Meetup, 30 Nov 2022 (2022)](https://guptaoption.com/texts/568.md); [780] [Vinay Gupta and Ian Grigg Speak On Arbitration and... (2023)](https://guptaoption.com/texts/780.md); [567] [The Fourth Mattereum Physical Asset NFT Meetup 8th Feb 2023 (2023)](https://guptaoption.com/texts/567.md) - On the same works, just after: [712] [Compilation: Vinay Gupta (Mattereum / Ethereum) on Visa,... (2023)](https://guptaoption.com/texts/712.md); [565] [Coin Telegraph AMA with Mattereum's Vinay Gupta 14th... (2023)](https://guptaoption.com/texts/565.md); [783] [Vinay Gupta / DCxPrague (2023)](https://guptaoption.com/texts/783.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: Why Global Trade Will Inevitably Move To The Blockchain, video, 2023-03-01, https://www.youtube.com/watch?v=zzVJg9lh4dM; in Vinay Gupta's archive at guptaoption.com, source [566], https://guptaoption.com/texts/566.md. Other speakers' passages are removed, so there can be gaps. ## Passages [0:00](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=0s) so the situation that we're in right now is almost all of the explanations for why the blockchain is interesting or necessary are total hogwash they're just nonsense right um because they refer to a bunch of cultural factors or technical factors but they don't refer to the underlying scientific and mathematical factors which are what all these bedrocks onto has everybody heard a thing called the speed of light okay raise your hand if you have any practical working relationship with the speed of light on a day-to-day basis you're all wrong do you ever use GPS right so it's a bunch of clocks floating in orbit around the Earth and the speed of light delay between you and that clock differs depending on where you are relative to those satellites and that delay is what creates the triangulation that makes GPS work GPS is based on speed of light signal delay and it's enough signal delay the 100 phone is capable of positioning you within a couple of meters so the speed of light is so slow relative to Modern Computing devices that it creates an easy way of manipulating time and space in completely Revolutionary Ways however it also means that it's impossible to make all the world's computers agree about what is real because they're all separated from each other by the speed of light delay and the speed of light delay between say London and Australia is roughly a million transactions delay relative to Modern transaction processing systems so the machines around the world are separated from each other by a million transaction delay and that fact of life is never going away physics does not permit any closer synchronization than we currently have you could tweak the engineering a little bit with you know fiber optic cables or microwave lens or whatever you like but we have no way of synchronizing the computers so if you want to use computers to figure out who owns halt unless you have some way of working around the speed of light delay you're going to wind up with no synchronization which means you're going to have continuous fighting about property rights well I say it belongs to me but he says that I sold it to him but I actually sold it this guy over here because I'm in London he's in France and he's in Australia and I can just continue to spend transactions millions of them while I'm waiting for the signal to propagate so for this reason you need something that figures out how to manage the speed of light delay now the model [2:30](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=150s) that we're currently using for this is called high frequency trading where you have a single exchange that moves the asset that you're trading and that single exchange measures out the cables with a ruler to the closest millimeter so that everybody has exactly the same speed of light delay and then the texts begin to argue about whether the cables are equally straight right and the bottom line is that that might have worked when you had an undisturbed American hegemony where they just ran the world their own way in the exchanges were in America but in a multi-polar world why would the Chinese trade all of their Commodities on American exchanges and if they trade them from China and they've got a China to American light speed delay how are they going to operate a million transactions behind the American systems you see how there's just no way this works yeah that's because there's no there's no way this works so in all probability the geopolitical equilibrium that we go into has a large exchange for China a large exchange for America a large exchange for Europe and maybe a few others right it could also turn into a couple of thousands exchanges which do individual Commodities or they're City by city but one way or another one exchange for trading 50 of the world's Commodities is not the way the future looks for political reasons and then you have a choice which is do you decentralize all the way or do partially decentralize and then use some way of synchronizing the exchanges the only way that we know of synchronizing the stuff in any kind of sense of a reliable way is to basically stop time you take all the transactions that are plausibly happening inside of a given window you then stop the clock clear all of those transactions and make sure they don't contract with each other and then you start the clock and you do the next match of transactions we call those batches blocks speed of light delay is maybe a quarter of a second after half a second depending on the Internet it's mood that day uh Bitcoin block time is 10 minutes ethereum is 15 seconds that 15 second batch gives you the ability to clear all the transactions and make sure that everything is exactly where you think it ought to be before you go on or do the next round of trade we're not going to do better than that with current physics it's just possible there'll be some kind of algorithmic breakthrough but in all probability we're not going to do better than that with current physics so there's going to be something that looks kind of sort of like the blockchain at the very least you're going to have transactions stop the clock clear the transactions start the clock again type systems [5:00](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=300s) maybe there are some refinements maybe you can get their delays down to a couple of seconds but in all probability this is the inevitable equilibrium because there is no other way to synchronize the world's computers now um let's then talk about how this Empire school will trade uh as we stand right now you've got on the order of a hundred trillion dollars a year of GDP globally and about half of that is physical Goods in the industrial supply chain right for size of scale e-commerce is about a trillion dollars a year so we're dealing with an industrial supply chain which is 50 times the size of e-commerce um about half of those Commodities are going over what they call high frequency trading which is the big exchanges in America 25 trillion a year ballpark now in that sort of setup um what percentage of the friction involved in doing international trade is just nonsense crappy paperwork has anybody dealt with International payments recently that weren't made using Bitcoin has anybody tried to ship anything remotely unusual across the world has anybody tried to buy Electronics from China huh it all sucks you things get stuck in customs the same thing ordered on three different days it's stuck in three different ways you have variable fees that get charged at random your stuff gets stuck for weeks if you're doing it with container shipping it's even worse you know your box is stuck in Singapore nobody seems to know where it is eventually somebody discovers that the paperwork was filled out in Cantonese rather than in uh you know English and you know as a result the thing is stalled etc etc etc right the physical world just this nightmare of Randomness and incompetence and all the randomness and incompetence in the physical world wods up against the paperwork and then sticks there so when we came to um container shipping where we got the monkeys out of the loop and we were no longer carrying huge bags when we wanted things offered on tracks when we automated all of that stuff with what looked like pocket switch networks it put best estimate seven percent on global GDP seven percent trillion a year by modern numbers so what can you do if you managed to kill all the crap around invoicing International payments and you know Supply Chain management of goods right it's at least two or three percent of global gep it could easily be five [7:30](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=450s) percent or even ten percent of global GDP right and that's before you begin to think about the efficiencies of getting rid of factors like trade gravity so that people start to trade with who it's more efficient to trade with rather than who it's easiest to trade with the more you bring down the non-tariff barriers the more you solve uh What uh they call the trial web of globalization the more you handle those problems the more it liquidizes Global trades you trade with the most efficient Partners rather than the most convenient partners all of that is a technology problem right we're not going to leave global trade unautivated in a pre-internet condition inevitably a hundred years from now there will not be paper bills of lading 20 years from now there will probably not Behavior bills of lading the question is six months or a year or two years or five years from now will there still be paper bills of lading and you know you have a curve if things go quickly we get rid of all that stuff very quickly if things go slowly it takes much longer to get rid of it but somewhere in the next decade to two decades all of that stuff is going to flip digital and it's going to inevitably wind up on something which is basically blockchain flavor and the result is going to be a multi-point bump in global GDP and this is going to step directly into the gap which is being left where the breakdown of the international political order so you take institutions like uh the European Union or NAFTA or the trans-pacific partnership or the World Trade Organization all of these things are coming under increasing amounts of pressure from populations that have basically just had enough of Industrial Age globalization diluting their democracies and gigantic corporations which have had enough of governments trying to tell them what to do in a one-size-fits-all way everybody wants more control with their lives and the only way that you can get efficient control of an enormous amount of diversity is with flexible and intelligent computer systems we've got no problem providing every individual on Earth with whatever it is they want to read on any given day for a very very reasonable price because we figured out how to provide completely flexible Mass customized access to information you just figure out what you want to look at on the web and it's there we could do the same thing for material Goods if we could just get the shipping right to move the things around and the bureaucracy right so that when you decide you want to buy something from New Zealand and you happen to be in Belize systems that are as good at the internet as it's routing information route the matter right you just connect the pieces together okay that tariff is over here [10:00](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=600s) and this Customs agent is over there and this goes over here and this goes over here and a bunch of computers talk to each other and then a bunch of magic happens and it tells you it's going to cost you a buck 80 for charges and ship the thing now we could get to that world from here and blockchain is the ideal way of coordinating all of these decentralized pieces of the global bureaucracy together into something that performs as well as a packet switch Network now getting that to work is going to be on one hand a sorting nightmare it's going to be really difficult because it's bureaucracy on the other hand once you begin to get the Knack of automating bureaucracy and using blockchains to automate bureaucracy and you go from Smart contract to Smart statue and you begin to represent things like Customs regulations and ports as a set of interlocking smart contracts rather than as a bunch of paper documents once all that stuff comes together what you get is potentially the single largest jump in global economic efficiency since industrialization right the internet has not even remotely begun to impact the global economy yet we are still at the point where we're basically just organizing the libraries and figuring out what to do inside of catalog shopping and magazine shopping if I want to get 100 kilowatt diesel generator delivered to Alaska tomorrow morning I'm still going to wind up on a telephone right so we haven't really begun to touch the real economy yet and this is also a part of why we're able to pay fast and loose with the law right um as we begin to get into the serious challenges of doing this kind of enormous heavy lifting which is required to move the world us the world's assets around right so that you change the status of objects using a smart contract and the legal ownership immediately changes the contractual status of an object changes once you get into a point where you have a point-and-click interface to the legal reference layer that defines ownership and property um the size of the jump in economic efficiency could be genuinely Titanic I mean I think probably 20 to 30 percent of the Assets in the world are sitting around underutilized because we can't officially get the things to efficiently get the things to Market right you just look at what's happened with Airbnb and with Uber to get a sense of the scale of those transformations um so within that big story there are some simple starting points right there must be 50 companies working on blockchain Bills leading they don't see any numbers of people who are working on poor automation there are lots of people that are working on things like digital identity um Mattereum my company my full-time [12:30](https://www.youtube.com/watch?v=zzVJg9lh4dM&t=750s) co-founder Rob Knights of their art or something here so you know we are sitting down there doing the dog work of trying to figure out exactly how to get control of physical assets and intellectual property from a blockchain so when you transfer the smart contract the core degrees it's transferred there are lots of people chipping away at different parts of that problem but the long-term impact of that is you know basically direct digital control of matter as a daily fact of life right and that's what we're building right information was only the first thing to get digitized now we're going to do the digitization matter will become searchable matter will become indexable matter will become something that you provision exactly as you need it will be delivered as quickly as information or Dom near it and that doesn't have to be a kind of one-size-fits-all Amazon rules the world approach because there's too much or in two diverse configurations for a single bureaucratic approach to tie the entire thing together what you need are these kind of decentralized backbones you need protocols but you also need decentralization of the software that influence the protocols and what comes out of that is this revolutionary almost unimaginable change which is 20 years from now matter will feel like information does today because information feels like it does today in this cheap super abundant liquidly accessible form because we managed to get it under proper digital control if you go back to the 1970s 1960s 1980s pre-internet um information was incredibly difficult to access it was just hard it was expansive it was difficult there were huge overheads it was hard to move it around right if you're young you think the information was always this kind of hyper liquid commodity that flew around the world like like air right that's not an inherent property of information the Machinery we built to revolutionize the world worked first on information it worked best on information but with the right kind of diligent effort and blockchain is a critical part of that we can drag the matter along with us into a similar state of hyper liquid accessibility uh and I can give you you know plenty of examples of how that might work but the basic story is first we did um information next we're going to do matter so that's what I had to say thank you [Applause] --- End of [566] Why Global Trade Will Inevitably Move To The Blockchain. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt. Read next: next on the same works, [712](https://guptaoption.com/texts/712.md) Compilation: Vinay Gupta (Mattereum / Ethereum) on Visa,... (2023); the most closely related, [682](https://guptaoption.com/texts/682.md) Ep. #641 - Vinay Gupta on China, Futurism, Government,... (2026); his whole career in one file, https://guptaoption.com/story.md.