# Autonomous A1 - Taming Capitalism with Vinay Gupta of Mattereum (part 1 of 3)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [714], part 1 of 3. 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, 2021-11-26 (YouTube upload date), https://www.youtube.com/watch?v=msGyd4vEg8s. 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): Contracting layer as a reform of capitalism.
- Career works it belongs to:
  - Three Rules for Designing the Social Enterprise (2009): Two-page paper defining a social enterprise by how it converts financial capital into social capital and...
  - Lean Green Mattereum: "We aren't just here to change the world, we're here to fix it" (2020): 162-page deck tying it together: poverty and climate are one problem, a lean green development path is...
  - Taking a crack at a practical system (introducing the ESCROWNYM) (2012): Blog essay proposing the escrownym: an identity lodged with escrow brokers under a legally binding... (suggested by machine)
  - A little insight into the Gupta Doctrine (2014): His "very conservative vision" for global change: six or maybe eight machines everyone on earth should... (suggested by machine)
  - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (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:
  - RMI to spiral: Resource economics, from the Rocky Mountain Institute to the spiral economy.
  - social enterprise: Enterprises that turn money into social capital and back: the capital conversion matrix from the Rocky Mountain...
  - 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)
  - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum. (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)
  - 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)
- Ideas developed here: 30-year plan (Hexayurt; target revised upward, now 300 million)
- Topics: Capitalism, consumption & resources (29%); Property, NFTs & real-estate transactions (12%)
- Distinctive terms here, against the whole archive: DigiGold (4 here; 4 sources in all, earliest dated 2021); circular economy (5 here; 17 sources in all, earliest dated 2019); second-hand (4 here; 15 sources in all, earliest dated 2019); Capital Conversion Matrix (2 here; 4 sources in all, earliest dated 2009); 30-year plan (2 here; 4 sources in all, earliest dated 2019); second hand (3 here; 12 sources in all, earliest dated 2011); recycling (3 here; 14 sources in all, earliest dated 2012); Mattereum (15 here; 127 sources in all, earliest dated 2014, 2 undated); dispute resolution (5 here; 48 sources in all, earliest dated 2013); LaunchPod (1 here; 2 sources in all, earliest dated 2021)
- The earliest dated source in this archive for (undated sources may be earlier): DigiGold
- Importance: core-text score 0.52 (1.00 is the top), number 70 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [723] ["Saving the Climate with Real World Asset NFTs" by Vinay... (2020)](https://guptaoption.com/texts/723.md): same career work: Lean Green Mattereum: "We aren't just here to change the world, we're here to fix it"
  - [236] [The Mattereum Top Down Deck Day 6 (Lean Green Mattereum) (2020)](https://guptaoption.com/texts/236.md): same career work: Lean Green Mattereum: "We aren't just here to change the world, we're here to fix it"
- On the same works, just before: [762] [MetaGame meets Vinay Gupta (2021)](https://guptaoption.com/texts/762.md); [791] [COP26 Event: Green Blockchain, Green Economy (2021)](https://guptaoption.com/texts/791.md); [793] [COP26 Event: The Circular Economy - Finance and Data for... (2021)](https://guptaoption.com/texts/793.md)
- On the same works, just after: [702] [Conversation With Pat Kane & Vinay Gupta (2021)](https://guptaoption.com/texts/702.md); [778] [Vinay Gupta on the Future of the Metaverse (2022)](https://guptaoption.com/texts/778.md); [678] [WNWB S01E08: Mattereum with Vinay Gupta (2022)](https://guptaoption.com/texts/678.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: Autonomous A1 - Taming Capitalism with Vinay Gupta of Mattereum, video, 2021-11-26, https://www.youtube.com/watch?v=msGyd4vEg8s; in Vinay Gupta's archive at guptaoption.com, source [714], https://guptaoption.com/texts/714.md.

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

## Passages, part 1 of 3
[0:00](https://www.youtube.com/watch?v=msGyd4vEg8s&t=0s) welcome to the autonomous podcast a podcast without a manager a podcast without a host a podcast that runs itself whoa how do you do that it's magic bro hope you [Music] enjoy welcome vinay long time no see

[0:30](https://www.youtube.com/watch?v=msGyd4vEg8s&t=30s) you want to tell us a bit about yourself or the people that might not know you sure um so Vinay gupta got started in software engineering in the late 1980s i was the product manager for the ethereum launch i spent about half of my career in defense think tanks and energy policy think tanks working on the big kind of save the world questions about food shelter housing clothing the real bottom of the pyramid stuff and also a lot of worst scale scenario worst case scenario planet i project managed the launch of ethereum in 2015 and i'm now ceo of a company called Mattereum which is basically doing digital identity for physical things so that you can make nfts which when you trade the nfc you'd also trade the legal right to the property that the nfc describes that

[1:25](https://www.youtube.com/watch?v=msGyd4vEg8s&t=85s) sounds good and you spent most of your life like in the in that sort of sector like the open source the crypto and then the humanitarian side yeah i mean my first year being paid in cryptocurrency was uh 1999. so i am og on this stuff and then you figure kind of like okay to really get done you need to take the elon musk way you want to share a bit about that yeah sure i mean i also have a very strong meditation practice so until i was 30 the vast majority of my output was meditation and hindu spiritual training that was most of what i did with my energy and then after 9 11 i kind of went out into the real world to try and do something about the mess that had been made and that's kind of what's propelled me since then so i operated under something kind of like a vow of poverty until 2014 which is i swore that i wouldn't do anything for money that i wasn't willing to do for free that made me homeless probably three or four times in that period but those are the rules of the game right that was what i had decided was going to be true and that was what i did and you pay some money and you takes your choice in 2014 i finally realized this was cutting my life span short you know i was 40 i was broke i did a whole bunch of world-changing work all of which was public domain but i wasn't making enough of a living to do things like save for retirement i've seen way too many of the kind of previous generation of cultural leaders just get nuked when they got old because they'd been kind of peddling really hard to stay still their entire lives and they hadn't built that kind of solid material platform so i'm like okay i'm gonna have to break my own principles here i'm gonna have to go and do like real work for money unfortunately i walked into the ethereum team and that's kind of what's become my fourth or fifth career here we are yeah it's been a weird adventure you know like my life changes very very rapidly in a way that is not usually true for people that are approaching 50. you know i'm going to be 49 in january and i still feel like i'm in the first quarter of my life like everything is just open horizons and unanswered questions i haven't kind of gotten into this position where it's like do you see this with a lot of people in their late 40s early 50s where they're just the master of a thing you ask them when you want to know about that thing and its implications and they

[3:55](https://www.youtube.com/watch?v=msGyd4vEg8s&t=235s) always talk about the past and their past experience and for me i found myself still talking two thirds of the time about i wonder what happens and i don't know what this is yet and you know i kind of feel like i have this weird kind of like perpetually 26 thing of like okay now what do we do okay which you know kind of gets a little tiring as you get older but i think it's also what's allowed me to innovate because you know this is the third or fourth field that i've made like fundamental innovations in and it's just like you know you keep the pedal to the metal and you keep the foot on the gas and things keep hopping and things keep changing

[4:29](https://www.youtube.com/watch?v=msGyd4vEg8s&t=269s) yeah i wanted to ask you like what actually got you on this path like do you think the meditation took part in your like realizing okay we need to get our together or what kind of things did i mean for me there was a very distinct point where it happened right so i'm meditating when i'm in high school i get into a really serious habit without any religious or spiritual beliefs i'm a scientific atheist at that point and i start meditating and i do an hour a day for eight years more than an hour a day for eight years and then my internal dialogue stops you know the kind of voice that a lot of people have in their head that describes reality to them it goes away i'm like oh what and nothing had changed like went to work i did my job i hung out with my friends everything was kind of working the way it was before but i was also in this position where the world seemed like this enormously huge rich mysterious experience like whoa um because all the attention that the internal dialogue normally soaked up all that attention was now wrapped around the world like oh and you really start paying attention to the world the world is a great and mysterious show so then i went to america to find a guru like i just had a feeling that i the path went to america so i went to america and in spring of 96 i get introduced to a little old lady in the new age bookstore and my friend who took me there kind of walked me over to her and she turned around looks at us the first words out of her mouth were oh it's you again like oh it was just like falling into an old pattern right it really seemed like we had known each other forever she was probably in her 70s at that point was in mid 70s and she was just traveling around america teaching people meditation and other spiritual stuff spent a lot of time just beating people over the head about moral issues like moral moral moral very strong moral trait so hang out with her for years alternate it'd be between traveling with her in usually spring to summer and writing flight simulators for a defense contractor for the rest of the year and i did a lot of traveling as well went to burning man in 1996 who doing my first burning man

[6:59](https://www.youtube.com/watch?v=msGyd4vEg8s&t=419s) at the end of the 90s i've gotten my life together all right i've got a really nice well-paying job in chicago working for some web design folks i'm spending a ton of time meditating i've got myself a nice girlfriend i love a nice little house and everything is kind of together like okay this is my wife i'm gonna settle down i'm gonna have some kids i'm gonna teach korea yoga and i'm just gonna be like a standard midwestern professional this is gonna be my story and then 911 happened and then it was very you know even before 9 11 i knew that something was wrong um spring of 2001 i had a very very strong sort of realization that i needed to go and do something about the state of the world so spring of 2001 i move across america move to colorado get a job working for a buddhist teacher doing basically web stuff and then after 9 11 i get a job with an energy policy think tank contract i go from being a web guy to being an energy policy guy and then a defense security and resilience analyst so you know that whole transition was very much triggered by the 911 process there was a very concrete sense of like okay you know i need to go and do something differently now and i guess that was probably i think back i think i probably knew where it was going at bruce versus gore that was the point where i really knew that we were on the you know we were on the hand car to hell now and then i invented the hexayurt in 2002 which kind of put me at the cutting edge of disaster relief stuff i made a 30-year plan to get the hexayurt into hundreds of millions of people's lives as a refugee shelter and we're now 20 years into the 30-year plan and making excellent progress so it's kind of i don't know if that really answers the question but at least think kind of gives you some vague notion of the pieces of an answer

[8:56](https://www.youtube.com/watch?v=msGyd4vEg8s&t=536s) right yeah it does yeah and the kickstarters keep poking popping up and new pods like what they called oh yeah these these new space yards some guys are brilliant in l.a space years here hexayurts for the homeless um la launchpod.org and it's going to be in the show notes it's good to know it's a really nice project very happy with that actual homeless americans living in actual hexagen los angeles of all places yeah people have been putting them into tents like the refugees and the homeless have been living in tents and this does seem like a such a great step forward it's much nicer than a tent that's for sure um and you know we've proven the design really well burning man i mean you know there are probably five thousand ten thousand people living in hexayurts every burning man kind of hard to count there's also something called a ShiftPod that is like a second generation hexayurt they're also have like 200 shift volts so you know when you've got hundreds of person days of exploring tens of thousands and five thousand people try to think of this in terms of person years when you've got you know many many person decades of people staying in hexayurts you eventually get to the point where you trust the design enough that you say okay we can use this for homeless people and we're not taking advantage of them people that have money and options voluntarily choose to do this rather than something else eventually you can say okay we've tested this and it works now let's try for the next uh demographic we need it

[10:36](https://www.youtube.com/watch?v=msGyd4vEg8s&t=636s) i found the whole uh conversation on not just this disaster relief stuff but also the enlightenment and psychedelics like this is how i got first introduced your work through that five-part interview series with the future thinkers which is like six hours of mind-bending talks awesome but uh we are kind of here to talk about materials so i would like to get more into the like how did you get from uh launching with launching ethereum to like feminist okay Mattereum is the next step so i mentioned that i got paid in cryptocurrency in the 1990s right so i spent a year getting paid in a digital currency called eagle that was a hundred percent asset-backed so it was 120 million 140 billion dollars worth of gold in vaults in canada and i want to say dubai and you just had an account that was demarcated in grams of gold and people could pay you in weight of gold and if you had enough gold you could pull out of the system in the form of bars and coins which i did one time so that system was account based it was you know sql databases it was a very very simple transactional frame on top of that ian grigg you know the and Grigg the famous Ian Grigg built a system called digigold and digigold was chomey and digital cache and so it's an older generation centralized digital cache system but it was chromium digital cache where every gram of digi gold that you owned gave you the right to a gram of eagle and the eagle gave you the right to take physical delivery of the gold this system is running with a hundred millions of dollars of value in it for the eagle player and i can't remember how much digi gold they minted but it was a bunch and i bought digigold from ian way back in the day so when we came around to ethereum it was like right so the obvious thing that we're going to do with this is we're going to issue asset-backed currencies how did that old digigold thing work so i get in contact with ian i'm running ian gold how do we build that for the blockchain and in gives you some pointers and gives you some direction so at the ethereum foundation i'm like hey we need to build this legal infrastructure so we can do like asset-backed digital currencies i remember nothing got done then i moved to consensus and

[13:06](https://www.youtube.com/watch?v=msGyd4vEg8s&t=786s) and all the other things i was doing at consensus i was also like hey us about digital currencies we should really do this nothing really got that we had some meetings there was no willingness to commit resources to do it so eventually i'm like look we need asset-backed digital currencies we need assets on the ethereum chain or you know we're not going to get into the real world we're not really going to achieve the change that we want to achieve so um we raise some money and go out and start building it and that's Mattereum um the first version of Mattereum we assume that a lot of the leg work on this is going to be done by our customers so they're going to be customers that are attempting to build things and we largely will be responsible for dispute resolution independent audit and they will do a lot of the legwork around actually onboarding assets and onboarding the kind of value and then it becomes apparent that we're actually kind of ahead of our market and we ourselves are going to have to do the legwork of putting the assets on chain so we build out all of that story and this is the Mattereum as it currently starts there's a layer that does kind of abstract arbitration audit and all the rest of those kind of structures and then on top of that we've built a layer that takes individual physical assets and puts them into the blockchain and we launched in february it's there's a very minimal but real working system with real assets on it ethereum main chain right now nice and that was with the star trek doors we got some star trek uh we got some star trek stuff we got some sculpture we got some wine it's basically just all that ends of things to show the possibility and then we would have spent our summer onboarding the first 20 30 40 million dollars worth of assets but covid screwed everything up for both us and our customers so everything is going way slower than it was

[15:00](https://www.youtube.com/watch?v=msGyd4vEg8s&t=900s) problems you've been trying to get things done during the coven period as well you know how much it's messed people up our world is uh mostly in the remote work so it was in some ways easier i guess that much weight physical objects handling is not the kind of thing that you want to specialize in during a pandemic but that's okay you know there's a vaccine on the way so i think by next middle or next summer we should be back in a world where everything works with the order what do you think was the trouble with people not understanding Mattereum i mean the ef or the consensus or the theory space in general um so i think the crux of it is that people think it's impossible they have an idea that there is a legal world which is ruled by idiots and controlled by broken systems and then there's a blockchain world where things work properly and if you can imagine it and code it you can build it and there's a strong sense of dualism that you have kind of the blockchain world and the real world and blockchain world works and the real world is broken and the objective is to build out more and more and more value in the blockchain universe you know i am a citizen of the real world right like i basically made many of the most important innovations by physically picking up things and sewing things so like the hexayurt which is the majority of the southern breakthrough work that i've done in the world so i made the hexayurt with my hands my grandfather was a carpenter and i'm very much a person who is you know an engineer where i think that the physical level is important like if we don't get into the real world we have not solved the problem so that's led me to is a very different model for ethereum fits into the world which is that i see ethereum as being a governance layer for the physical world abstract value not currencies that aren't backed by things you know i'm talking about carbon i'm talking about modern slavery i'm talking about efficient resource allocation in the world which has far too many people and far too little stuff that this fundamental core thing is what i want to get into i want to get into the real world i want to fix the real world

[17:19](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1039s) you're right yeah so let's get into the the main topic i've just read the the big deck of Mattereum and it's it's amazing it definitely like explains the whole problem with the world very well and propose a good solution and so yeah you want to get into that sure let me frame the problem in a very simple way actually i think it'd be helpful to talk about what Mattereum does just a practical level first and then we'll wait in how all that stuff fits so the practical level of Mattereum is that we take a physical object like a bar of gold or a star trek collectible or it could be a piece of real estate in future and we represent the thing that makes the object valuable as a series of legal claims about the object this is valuable because it was signed by william shatner or i say this is valuable because it is an apartment smack bang in the middle of paris then the statement that the thing is valuable you can represent online in a way that you cannot put the actual direct physical value of the object like i can tell you that this thing is available you know the statement is a digital thing whereas the thing itself is a physical thing and we don't have good ways of digitizing physical things here so we do is we take a physical object we wrap it in a series of statements about its valuable attributes and then we attach each one of those statements to some kind of ability to recover value if the statement isn't true so that's a very very simple primitive in the system that's our basic lego brick and that lego brick is you know it's a smart contract and attached to the smart contract there's an extendable array of things called claims and each one of those claims refers to a data structure stored in ipfs that has supporting evidence for the claim and there's also an amount of money attached to the claim you can pull down on that pool of money if you've paid into it i put some money into a claim uh to buy essentially a warranty or insurance depending on how it's legally implemented at that time at that point and then once i've done that if the object is not as described in the claim document i can pull money down from the system right that basic structure it could be escrow

[19:49](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1189s) which is expensive or it could be a real world court claim or it could be tokens in an asset-backed currency it could be one of 57 different things that absolutely allow you to retrieve the value but the critical thing is that every statement being made about an object is backed by retrievable value

[20:07](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1207s) that basic primitive is so far down the stack it's almost at the level of being like a cryptographic key you know it's like you have your crypto keys and then you have attributes that are attached to a crypto key so the material stuff is basically like attaching attributes to a crypto key in a way that binds that crypto key to physical world stuff it's really really really a very primal operation very much like signing somebody else's key would be in an x of x 509 system or any one of these like cryptographic primitives does that sort of make sense as a starting point so that's that's the that's the pitton right that's the metal spike that we're hammering into the granite wall that we're going to climb and everything then hangs off that metal spike because once we've got the ability to name physical matter in a cryptographically compelling way once you can name the animals the next thing that comes after that is you can start to organize them right and now you can bring in the whole kind of ethereum mindset with you know docks and dowels and smart contracts and decentralization and you know all the rest of the intellectual architecture of Mattereum shelling ethereum shelling points and you don't seem like there's a big kind of standard ethereum conceptual toolkit so you take the entire standard ethereum conceptual toolkit and then you add to it this one new primitive which is by the way you can apply that whole toolkit to physical things so i want to bound that so as we talk about how we're going to solve the world's problems this is the machine that we're going to use to solve the world's problems it's the entire ethereum conceptual toolkit plus a single new instrument which is the ability to apply that toolkit to assets in the real world in a way that real world governments and courts will regard as legitimate by default right so the hard work of Mattereum is building out an extraordinarily strong jetty like a pier which allows us to walk goods legally into the blockchain space move them around in the blockchain space walk them back out into the real world and then physically go and take control of the goods with full government support from institutions like police and courts right and that's the part that the

[22:37](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1357s) ethereum people are like what where it seems awesome code isn't law well i mean the the assumption they've made is that law is never going to support the smart contract as a fundamental operator the whole thing that they worked out when they were doing eagle back in the day was that if you're extremely precise in doing your approach to law law is perfectly happy to support your smart contract

[23:03](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1383s) you just have to represent the smart contract to the lawyers in a way that the smart contract is correctly represented by the legal contract and once you've done that the world's courts are suddenly your friends rather than your enemies it's just the thing has to fit perfectly into the legal frame and perfectly into the blockchain frame before you can get this fluid interoperability between legal systems and blockchain systems it was to say this has been really freaking hard which is why it's taken us years but we got to the point where we could do the first stuff successfully in february and by now we'd have tens of millions of assets in the system so that you could literally buy and sell star trek toys gold bars fine art bottles of wine buy the whole object tokenize the objects securitize the tokens buy and sell the tokens all of that machinery right would exist by now if kofit hadn't brought the world to a grinder freaking halt because in the real world things real slow so any more questions about that kind of tool kit level before we wade into the applications yeah i just wanted to ask you where are those items like can people actually browse them and buy them already yeah sure um so if you go to Mattereum.com about you can see the first i don't know i think nine items eight or nine items we have on there um you can buy a warranty that the item is real but if you want to take legal possession of it you need to contact the person that owns it so the selling part of it we have not built out everything you need to make the sale cleanly online it's not particularly difficult to do with reasonable security but with almost absolute security that requires us to do a little bit more legal engineering so it works well enough for now but before we wanted to have a point-and-click interface to buy the stuff we want to finish just a wee bit more we will work to make sure that that is properly airtight okay same thing with the self-purpose tool so there should be self-service tools so you can bring your assets and you can just put them on chain yourself we are not going to release the self-service tools uh until we figure out a good way of making sure that people don't blow their own leg off and create real legal liability for themselves by vouching for something stupid there's a little bit of care to be applied but we've got the object authentication stuff object transfer is then easy once you have the object authenticated but making sure that it's not challenged by things like local consumer protection law is

[25:33](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1533s) the tricky part so if you buy one of these things on the blockchain and then the physical item is in germany you're in germany and you make a claim under german consumer protection law now we're faced with attempting to roll back a blockchain transaction so we need a little bit more legal engineering to make sure that everybody understands exactly how they're going to interface with things like consumer protection law at that point it's full so if that's all clear let's go and then talk about what the big deck says about what the world's problems are that's good so

[26:06](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1566s) the the the meta problem i know you guys like your meta so the meta problem is the capitalism is extractive at one end and polluting at the other so if there was no violent extraction of resources that destroyed the future of nature in one end of capitalism if capital wasn't screwing over the planet and screwing over the people particularly the citizens of the future then we wouldn't really have any problems in capitalism at that end likewise at other end of capitalism where we've had the goods we've had the services we've had the experiences that end of capitalism if that process produces no pollution the waste you don't have any problem there either so if we can engineer out of capitalism the extraction at one end and the pollution at the other there's no reason that you can't continue to run this amazing economic machine long into the future so a capitalism without either extraction or waste is a sustainable capitalism we don't get sustainable capitalism we're going to destroy first the world's ecology then its economy then it's humans it's a bad ride to be on the current thing so we have to get out of this position as quickly as we can so then let's break that down a little further in terms of how we got into this enormous mess capitalism is a four-step process investment production consumption waste and most of the time when people are analyzing capitalism they only really look at investment consumption and production nobody really thinks about waste you know i invest some money it builds a factory the factory sells a bunch of stuff into the marketplace i get a return investment from that and i use that to build another factory that's usually all thinking that we do and the extraction involved in industrial consumption it's like hey we're pulling all this oil out of the ground we're pulling all this coal out of the ground we've got all these people that are working in our factory for 50 hours a week rather than going out and getting college indications part one and then part two all of these consumer goods wind up in landfills and all the energy winds up with carbon polluting the atmosphere so the investment system went through numerical optimization really in the 1980s that's when we got quantitative finance and we began to

[28:36](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1716s) apply massively top five engineering talent to designing mathematically optimal strategies for investing money yesterday's revolution acts like a charm off you go in the 1950s we did exactly the same thing for engineering of physical goods so that revolution happens in several stages some parts of it might goes back to the early days of the industrial revolution but the fundamental driver is we build statistical models of industrial production and we use those statistical models to engineer the goods for reliability so in the old days when you did industrial production five percent of the stuff that came off the end of the production line wouldn't work properly could be as high as 20 and then you would take those goods you'd examine them you'd figure out why they didn't work and you put them back into the production line at the place where they got broken and then they would do what they called rework or remanufacturing where they would repair them eventually to try and make them ready for sale again and the quality control guys got hold of this and like okay the objective is zero rework objective is to get every single step in the process correct so the end of it you put in the raw materials and you get the same amount of manufactured goods and that process is why you can buy a cell phone for forty dollars every component of the hundred thousand components that goes into a cell phone every transistor has to be perfect because if one of them isn't the rest of the components in the phone are junk and you have to throw it away you could put up with a couple of dead pixels but that's about as much slack as there is in that system so we got here because our manufacturing processes are essentially perfect in the areas where we care the areas that make money even not even there right if people stop caring soon enough the making money breaks down too so like you know boeing boeing's recently had this problem but boeing has gone from the safest aircraft in the world to a terrifying risk boeing planes kept falling out of the sky right you don't think oh you know i'm really afraid i'm getting on a boeing like that is the last thing that you want an aircraft manufacturer to develop a reputation for victory when it use aircraft manufacturer in the world right so that's an example of quality control gone wrong we stopped paying attention we stopped caring the goods became

[31:06](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1866s) unreliable numerical optimization of investment processes numerical optimization of manufacturing the production processes reasonable so far yeah okay so then numerical optimization of sales that's targeted advertising so the entire massive edifice of goal facebook amazon the entire pattern of activity rests on targeted advertising and the targeted advertising is the attempt to use statistical process control techniques to purchasing behavior get an enormous database predicts consumer preference show them adverts which you expect to make them buy it's the same mindset of massive data sets intensive numerical mashing the production of extremely high quality models and then investment of resources back in those models it's exactly the same thing that we did for investment for production and now we've done it for sales sales being the gap between production consumption then once you buy the stuff i mean you know look at a thing that i can see in your video right i can see right now you have a microphone and microphone sound do you have any idea where that stuff came from or is it just you bought it and then you kind of forgot where you got it and now it just lives there yeah ebay you came somewhere from china nobody knows where and at that point if you don't have any data about it how can we do any kind of statistical process control about you don't know whether that microphone has an expected service life of three months or three years

[32:48](https://www.youtube.com/watch?v=msGyd4vEg8s&t=1968s) i'm just guessing it could be 30 years even worse the manufacturer is just guessing because once they've taken these goods and thrown them out into the world there's no return path for data on the performance of the goods for all you know and for all they know they have a quality control problem and all the microphones stop working after 18 months they themselves can never find that out because there's no return path for the data there's an outgoing path which is the selling of it there's an incoming path for money but there's no income the path for data so as a result because we don't have high quality data coming back from consumers to manufacturers about the performance of the goods we don't have any kind of systematic ability to optimize the consumption processes a way that produces higher quality of life for the consumers lower waste for the producers and overall dramatic improvement in the relationship we have with the material world and there is one shining exception to this which is amazon reviews so i i don't know do you cook much not really so i you know back in back in the prime of the early days of ethereum when everybody was running around building the social networks that we now rely on i spent probably two years hosting a dinner for about a dozen people every two weeks things were semi-famous they were a ton of fun over the course of a couple years i got reasonably good at cooking i mean you know other people were much better than i was but you know like i could comfortably cook for 12 or 14 people with very little notice and just boom there's there so that process it required buying quite a lot of kitchen crap you know big metal pots and you know oven trays and you know just the battle rat over real kitchen what i discovered was anything that has about a thousand four and a half star reviews on amazon will be perfect will just be flawless everything will work and what i notice is that a lot of the kitchen companies that used to produce kind of not very reliable stuff that wasn't that great have upgraded their quality and upgraded their quality and upgraded their quality and upgraded their quality because the total pushback from amazon like if your stuff is even slightly dysfunctional you get a whole pile of three star and two star reviews your stuff drops off the amazon front

[35:18](https://www.youtube.com/watch?v=msGyd4vEg8s&t=2118s) page and at that point you might as well not exist so what we've got is this enormous pressure to improve the quality consumer foods based on the limited return path which is amazon reviews imagine rather than having a limited return path we had a truly excellent high bandwidth return path if we had that we could do this intensive optimization of the consumption factor in the same way that we did it for con production and for investment you're right massive optimization um and that optimization so like how are we gonna handle co2 for the world how are we going to get our environmental footprint under control when we've got a gigantic number of rich people already whose environmental footprints are titanic i'm surrounding more rich people every day because capitalism is pulling people out of poverty you know global middle class is growing really quickly how are we going to provide goods for all the people that now have purchasing power without destroying the planet you're right we have feeling that not many people are thinking about it this way like if you make many people rich that's actually kind of a problem oh i mean if it was a million people it'd be all right but like most of the citizens of europe are at four planets worth of environmental consumption right now three or four planets uh even the french with all their nuclear electric everything are still at more than twice the sustainable level carbon emissions americans average 17 tons of co2 per person per year and my estimate is the sustainable level is two tons of co2 per person per year

[37:01](https://www.youtube.com/watch?v=msGyd4vEg8s&t=2221s) so how are we going to do the necessary cleanup even if we go to a world where solar panels are incredibly cheap and we've just got tons of cheap solar electricity we still can't turn solar electricity into tables and chairs and laptops and light bulbs and roofs you know we still need to get factor 10 reduction in the amount of material stuff that we consume to maintain a roughly equivalent quality of life it's not impossible i mean if you think about how much material crap the cell phone has replaced it's probably 50 kilograms of stuff that you no longer need to manufacture because the cell phone does old so we could do this for a whole bunch of other systems and we could produce higher quality of life on a massively reduced environmental footprint but to get there we need data more data on all the products being sold right and that is exactly where Mattereum comes in data on the products being sold eat on the products being resold so for a secondhand market here we have i'm sorry if you're listening you can't see this i'm gonna wait this thing around and i just dropped it so um here i have a 10 gram piece gold right and this was produced by a company that takes gold out of catalytic converters it down and sells it on ebay weirdly enough so now that piece of gold is real because it's got a set of attributes which are only identified in gold else a hallmark has a certificate of authenticity it's gold and that is now a thing that i can resell because it has a data trail attached to it so some assets have a data trail and you can resell them with the data trail and those are the asset twitter actually assets everything else right if you try and resell your microphone probably it's almost as easy for somebody to buy a new one from ebay than it is to buy that one is the one from ebay comes with a set of data that describes the current performance and conditions of the microphone and it comes with some kind of warranty and it comes with distribute resolution so the first sale has a warranty it has an accurate description of the goods and it has dispute resolution so that second sale once you're making the

[39:31](https://www.youtube.com/watch?v=msGyd4vEg8s&t=2371s) as you're making the second sale you have to provide the warranty and usually you don't have any legal infrastructure for doing that you have to provide the description of the goods again usually that's going to be a screenshot of the page that you bought it from and you saying by the way it's in the same condition it was when i bought it some other kind of imprecise description and then the third thing is the dispute resolution which will usually be very much less effective for second-hand goods and from you goods so for new goods you typically go to the manufacturer and say hey this is broken and they just give you a new one and they take the old one back they figure out why it's broken then they try and modify their production process once you've got secondhand goods you know you take it back to the person that sold it to you and you say hey it's broken and they say i tested it before i gave it to you must have broken with you and now you have a dispute

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Continues in https://guptaoption.com/texts/714-2.md (part 2 of 3).
End of [714] Autonomous A1 - Taming Capitalism with Vinay Gupta of Mattereum, part 1 of 3. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.