# Vinay Gupta - Mattereum (part 1 of 3)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [735], 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, 2022-04-01 (YouTube upload date), https://www.youtube.com/watch?v=AirlEzDxjpI. 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 and insurance layer.
- Career works it belongs to:
  - The Future of Stuff (2020): Book on the philosophy under Mattereum: risk and morality in deals about physical things.
  - 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)
- 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.
  - environment / green capitalism: Green economics: from oil efficiency to markets for facts about products.
  - 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)
  - 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)
  - standard SKUs: A survival kit built only from standard, mass-produced parts. (through a work suggested by machine)
- Topics: Smart contracts, law & arbitration (28%); Crypto compliance & money laundering (16%)
- Distinctive terms here, against the whole archive: NFT (15 here; 45 sources in all, earliest dated 2019); Ricardian contract (6 here; 11 sources in all, earliest dated 2017); real estate (25 here; 106 sources in all, earliest dated 2013, 2 undated); Mattereum (30 here; 127 sources in all, earliest dated 2014, 2 undated); risk pools (3 here; 6 sources in all, earliest dated 2016, 2 undated); DigiGold (2 here; 4 sources in all, earliest dated 2021); wealth inequality (2 here; 4 sources in all, earliest dated 2015); vaccines (3 here; 21 sources in all, earliest dated 2006, 4 undated); contracts (15 here; 147 sources in all, earliest dated 2006, 3 undated); scams (2 here; 12 sources in all, earliest dated 2016)
- Importance: core-text score 0.46 (1.00 is the top), number 122 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [793] [COP26 Event: The Circular Economy - Finance and Data for... (2021)](https://guptaoption.com/texts/793.md): same career work: The Future of Stuff
  - [239] [The Future of Stuff (2020)](https://guptaoption.com/texts/239.md): same career work: The Future of Stuff
- On the same works, just before: [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); [790] ['Mattereum is Blockchain Cypherpunk' (2022)](https://guptaoption.com/texts/790.md)
- On the same works, just after: [800] [Lecture by Vinay Gupta at the opening event of Data in... (2022)](https://guptaoption.com/texts/800.md); [594] [Mattereum Physical Asset NFT Online Meet-Up 27 July 2022 (2022)](https://guptaoption.com/texts/594.md); [574] [Wealth Inequality (2022)](https://guptaoption.com/texts/574.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: Vinay Gupta - Mattereum, video, 2022-04-01, https://www.youtube.com/watch?v=AirlEzDxjpI; in Vinay Gupta's archive at guptaoption.com, source [735], https://guptaoption.com/texts/735.md.

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

## Passages, part 1 of 3
[0:00](https://www.youtube.com/watch?v=AirlEzDxjpI&t=0s) hello everyone um i'm with vinay and patrick for our first podcast um vinay has an extensive history with ethereum and currently he is the ceo of Mattereum Mattereum as we will discover is a market leader in you know innovations in the nft space and you know that is the main reason we're interviewing him on you know wanting to learn about what he's getting up to um so you know over to juvent like do you just want to go over your kind of background and how you got into crypto and then more specifically Mattereum sure i mean so probably the best place to start the story is when i joined the ethereum foundation 2014. uh i come out of academia um i've decided i'm gonna go back into industry i've been following uh crypto in one form or another for 20 years at that point um and so i join and to choose to join the comms team in london um and i wind up basically doing the project management for the ethereum launcher a lot of the early communications um and then i spent about a year working at consensus uh and then i decided to strike out in my own and i started this thing called Mattereum um and Mattereum is built on the work of a guy called ian grigg who is probably the world's leading expert in the bridge between cryptography and law um and we basically adapted ian's work from back in the day and and turned it into something that worked in the ethereum ecosystem and then we've built uh products on top of that i say product plural because we started out with a pretty clean idea of doing just physical things and now we're doing physical things but also some kinds of intellectual property licenses interesting and um could you talk a bit more about ian's work so way back in the day ian created a digital currency called digigold and digigold was um control of a physical gold reserve um using um a centralized digital currency so you had a kind of bank computer and you could do transactions from one person to another person but they'd have to clear through this kind of central banking machine so it wasn't decentralized um but it was very nicely anonymized and it meant you could trade literally grams of gold with other people using cryptography and that was running in 99 and 2000.

[2:30](https://www.youtube.com/watch?v=AirlEzDxjpI&t=150s) so he was a very very very early mover in this space um and the problem that you unsolved was how do you get a court to recognize that the gold is owned by the person that the software says the gold is owned by rather than some other random buzzer um and the solution to that problem ian

[2:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=168s) called the ricardian contract and he'd published about it he talked about it people were not paying a ton of attention to it and they didn't really have a good understanding of it um but i had recognized how important it was and basically said you're right we're going to build a ricardian court and it was like cool then you know interesting and um you know you mentioned regarding contracts in your white paper do you do you want to explain to the layman essentially what that is sure so there are a lot of different ways of explaining ricardian contracts um but the cleanest purest explanation that i know of is this a ricardian contract is a system which to a court looks like a legal contract but to a blockchain smart contract looks like a blockchain smart contract now how is that possible well it's a system that has kind of one you know it has like a tail in the legal world and it has a head in the crypto world but the thing itself is neither one nor the other so there is a paper contract there is a piece of software the software refers to the paper contract the paper contract refers to the software um and they can only be dealt with as an integrated system so whether you think of it as being software with a paper contract component or a paper contract with a software component just depends on whether you're addressing the thing through the legal address space or through the smart contract address space does that make sense interesting yeah yeah so it acts you know as a sort of layer that incorporates both smart contracts and actual paper contracts so you know for a Ricardian contract there will be a paper contract and there will be a smart contract but you can't say that you know the ricardian contract is the paper contract and the software is an afterthought and you can't say the required contract is the smart contract and the paper contract is an afterthought the ricardian contract is both things as an integrated you know whole um and you could think of this as being a little bit like carbon fiber you know if you're going to make something like a bicycle out of carbon fiber you can't really say that the carbon fiber is like well it's it's it's just carbon plus epoxy absolutely so really the epoxy is in charge well that's not how it works well maybe the carbon is in charge well

[5:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=318s) that's not really how that works either it's it's generally a laminate right it's it's a synthesis of two separate things into a thing which is stronger than you want to work um interesting cool so i mean it's it's it's a new type of technology is that right to say or originally invented in once in the mid 1990s and deployed to handle a gold reserve for a live currency in 1999 and 2000. so it is a long way from being new so i mean okay so is it i understand it's not like immediately you know new invented overnight but in in terms of its implementation you know would you say it's an innovation in the crypto space do you do you see this as a whole kind of new avenue so the um the Ricardian contract is not new right it's an old old old technology um it hasn't been deployed very much because you need to be in a very special place intellectually to be able to deploy um you know most lawyers will not see the need for a recovery contract because they don't see the leads for smart contracts um most programmers you know crypto people will not see the need for the legal contract because the smart contract does everything they wanted to do so for most people they're not trying to solve a problem that crosses this legal digital domain they're either on the digital side or on the legal side and that bridge building between those domains is a very very uncommon activity very very few people in the blockchain space are attempting to build that bridge which i think is crazy but on the other hand it's quite good for Mattereum because it means we have very very little competition so okay so there's two aspects of this right so like you you're trying to solve a problem well and the problem is you solve the problem right it's live running code with things you can buy it's it's a it's a running service but like um what what sort of larger problem are you trying to solve by enabling these things to talk to each other um so where this gets us is you know you will be able to buy a house as easily as you can buy a crypto kitty you know you want to buy a crypto punk or some ridiculous piece of NFTs you know it cost you 150 grand well you you're now the proud owner of three houses in slovenia

[7:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=468s) um and that ability to just get in and out of real estate cars furniture fine art wine um the ability to bring this kind of digital precision to the trade in those objects that is a massive game changer for the way that literally trillions of dollars of trade work every year and it's also how we solve the adoption problem because right now we've got maybe a hundred million actual crypto users in the world and at that point you know we are still very very small compared to facebook google there are individual companies which are larger than the entire crypto ecosystem apple for example so at that point we are still small enough that we can get pushed around by the state if we are in a position where there are two billion crypto users and it's being used for say 30 of all transactions because when you're buying engineering parts or a house or renting an apartment or buying a car or any of these kind of major purchases if all that stuff is being done in crypto um you know like the adoption problem is very very permanently solved and we get into a position where the crypto community is much harder to push around because now it's everybody uh you spoke on uh another podcast i believe i was listening to earlier today and um you had mentioned about um how the original bitcoin was sort of co-opted by this like libertarian movement it sort of stopped it from maybe getting uh a larger um user base and and like that that that use case was sort of uh almost destroyed by how everybody went against the banks and everything like that whereas if it was just like internet money it may have done better um can you elaborate how you know you you kind of uh is the way you can prevent that from happening again this is a really specific technical thing so in the beginning of bitcoin um bitcoin was always mined on people's laptops so if you owned a laptop you could mine bitcoin and you could mine bitcoin about as efficiently as everybody else could make bitcoin um and it very critically it was not economic to buy a second laptop to mainboard bitcoin because in the early days bitcoin mining was efficient enough on a laptop that you could do it for kind of fun or a

[10:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=618s) little bit of play money but it wasn't so efficient that it made sense to buy another laptop just to mine bitcoin so what that created in the very early days was a sort of basic income scheme where if you had a laptop and you left it over at night to run and mine bitcoin in the morning you would have a little bit bitcoin and that was like a sort of daily dividend that you were getting for having a computer um at that point there was no role for capital in the bitcoin ecosystem right you you couldn't just deploy capital efficiently to go and build a bunch of mining equipment because it wasn't economically efficient to do that so there was a brief window when you had a kind of anarchist basic income scheme that was running on all of these computers together and it wasn't really tied up in the kind of hyper ideological libertarian thing that happened much later on you know there's a long pre-libertarian period in bitcoin where you know yeah sure i'm sure there were some libertarians involved but it wasn't like a libertarian thing and that was a very very different era and then two things change that um the first is the uh there's the blockade of julian assange so wikileaks can't get paid because they're they're blockaded by the banks and visa and people that are supporters of wikileaks start buying bitcoin specifically to send it to us and that becomes the point where bitcoin you know is suddenly like oh that has real economic value this is like a thing price goes up at that point a lot of people get exposed to it for the first time through wikileaks and that sort of sets the initial demographic of the people that are using bitcoin um does that make sense for the first part and then i'll get to the mining yeah yeah yeah that makes sense so the mining is the second part of this process of transformation and what happens with mining is somebody figures out that you could design custom silicon to mine dramatically more you know um financially efficiently than binding on laptops but the thing about custom silicon is custom silicon is expensive right and the more of it you buy the cheaper it is per unit so now there is a role for capital somebody comes along with a chunk of money that is pre-existing outside of the bitcoin system and they inject it into the bitcoin system not because they want to make a payment but because they want to build infrastructure

[12:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=768s) and this is the arrival of capitalism inside of bitcoin prior to that point because the workers own the means of production everybody who has a laptop is able to mine bitcoin the system is pretty egalitarian once capital arrives the previous egalitarian system that is running you know mining on laptops is suddenly competing with hard capital where millions of dollars have been laid on the table to go and get of asics made and then those chips mined so efficiently that the people that were mining on laptops are suddenly no longer able to mine because you just leave your laptop running and you never ever ever ever win any bitcoin and all of a sudden there's an enormous catastrophic collapse in the diversity of the ecosystem and that's the point where bitcoin is run by miners and it's been run by miners from that point onwards like with regards to Mattereum what's going to stop the sort of um most connected most wealthy people are from sort of dominating that ecosystem i guess so Mattereum is not a particularly um ideological project in that sense right Mattereum serves to take pre-existing property rights where somebody says i own this sack of gold hammer villa in france whatever it happens to be it takes the property that you own and it turns the property that you own into an nft once the property has been turned into an nft what you do with that property is your job right we don't take responsibility for that we give you an nft that represents the legal deed to your property if you don't trade that nft to somebody else for you know a sack of beans you know your property your decision your choice um we are not going to fix the entire social distribution of wealth with nfts right i mean you know i'm an ambitious man but that is what i consider to be an achievable goal for this it's kind of just what it does so i have nothing against wealth inequality right and you make a war you're a poverty activist i am a poverty activist but i have nothing against wealth inequality if poor people have enough to eat education for their kids decent health healthcare warm houses to live in uh you know bicycles to ride or cars whatever it happens to be if they're

[15:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=918s) basically pretty well taken care of and basically happy i don't care whether the rich are taking vacations on mars or not if being poor is not a sort of automatic suffering and misery if being poor is a decent reasonable kind of existence i don't mind how many poor people there are because the poor people are not suffering because they're poor right what i object to is suffering and if i'm you know a poor person that still has access to like first-class dentistry and if i break my leg somebody will take an x-ray at that point if i am miserable because somebody else is going to mars that pain is largely inside of my head and i don't think we can get rid of all the pain inside of people's heads too ambitious right but i do think that we could see a world in which there isn't a single human being who if they break their leg they won't get access to a decent doctor an x-ray machine that's not too much to ask it's not particularly expensive to do and countries like cuba have shown that you can do pretty good health care on very very very little budget um and i can see a world ahead of us where we've largely eradicated poverty of the kind that you think oh my god those poor people that's awful and poverty is just like those people don't have a lot of money do they no they don't have a lot of money what do they do with their time well mostly they play video games and they make music and they raise their kids and they work their jobs and actually they have lives pretty much like anybody else's to be honest they just have less money and that means an achievable goal i think we could get that done globally without requiring some kind of you know authoritarian communist or socialist you know machinery right you know if you have a reasonably functional economy and you actually care about people you don't have to screw up everybody's lives in the name of taking care of the poor it's just not that kind of trade and the only reason it's been made into that kind of trade is because the people that have largely been trying to run those projects have been total bastards well like stalin stalin is not an advert for how you help people and i think that if you know we'd have the intention of helping people and we'd even know what were sensible and gentle and reasonable about it what Mattereum will do in the existing economy and you know there is a new economy that material will enable but inside of the existing economy what Mattereum does is it gets rid of friction right you know if i say i'm going to

[17:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1068s) sell you my car for two ether and you know you pay me the two ether uh into a smart contract which automatically releases the deed to the car is an nft and at that point you know you could literally just walk up to the car and you know walk into the car and drive away with it it's your car how much less work is this in the current faffing around that you have to do with something like a car purchased and that's probably i don't know two percent three percent five percent of global gdp just in getting rid of that friction yeah um one interesting analogy is um you know i'm currently in the process of buying a house and you know there's so much paperwork involved there's like so many different um you know parties there's my sister his list the bank mortgage provider and so on um so yeah like it's gonna take a couple of months just to you know make that transaction go on whereas in crypto uh you know once you make a transaction that's there on blockchain and you know it's just from our transaction speeds really you know that that there you know boom boom there's your use case in the Mattereum era you will be able to buy your house with a single crypto transaction just like buying nft so so what one one question i've had regarding um the legalities across borders so you know in in one in one country the legal paperwork that's required would be quite different to another countries or is that not a issue for you guys um so it depends what kind of class or property you're dealing with and it depends on what country the real estate is in um yeah real estate is a heck of a rabbit hole so if you take something relatively simple like gold um gold is what we call chattel property and chattel property is generally speaking like anything that you could throw into a truck and drive around with um so not intellectual property not trademarks not copyright not patent not real estate uh certain kinds of commodities like you know you wouldn't normally think of like a hundred tons of pork bellies as chattel properties um so for chathol property the law is a remarkably similar globally

[20:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1218s) if you're handling gold in china or you're handling gold in you know africa or you're handling gold in south america um you will discover that for the most part the law is pretty similar in terms of how we handle property you know like the world of physical things we're generally fairly agreed on how that works um this is not at all true for wand so we're um just reading the the white paper here one of your biggest arguments around the you know um the additional capital and stuff that you'll be able to unlock here is how much larger the pro the like uh land property market is compared to basically every other market in the world so what um what do you guys have sort of planned that will maybe make that easier or like what can you do to like make those different laws talk to each other so here there there's a lot of trickiness here right this is where we really get into the legal strategy so the top level understanding that you have to start with is the real estate law varies everywhere because real estate was in many places several thousand years old um the netherlands has a particularly recent reform where they went out and they digitized all their real estate records going back 700 800 years [Music] right that's that's gonna be fun for you guys well it was amazing right um the one with scanned parchments of like you know perfect is goat hide right so they wound up scanning goat hides in all the dutch into their spiffer system with translators notes about what kind of old dutch it was and who you needed to get as an academic to come and read it if there was ever a problem with the property and you know you sort of like you expect us to move this on a blockchain but here's the thing right um if you try and get the real estate directly every country has its own variation of totally messed up weird real estate law and it's a nightmare but if you put the real estate inside of a corporation corporation law is remarkably consistent all around the world because that was relatively modern compared to real estate law

[22:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1368s) and in a lot of countries a foreign corporation is allowed to own land in that country so you could have one corporation stashed away and no taker pick right azerbaijan and it could own real estate all over the world and it could then give licenses to use that real estate whoever it was that happened on the relevant nft see what i'm saying um so what we're attempting to do in all of these instances is basically just build the right kind of legal proxies such that you can move value around over the network without having to hit this constant maze of complicated local war and it's not that you're ignoring the local law you follow the local war very carefully to get the stuff into the proxy but once it's in the proxy you just move it around using the rules which are agreed by contract fall between the proxies do you at one point see a instance where Mattereum has actually changed the nature of you know real estate law for instance we have collaborated very closely with um the uk government's jurisdiction task force on the handling of crypto assets in the uk and we made a number of suggestions to that group which were i think also um well anyway we wound up with those suggestions being accepted and i don't see any reason why we couldn't work with jurisdictions to modify their walls but in most cases you don't have to have you spoken at all with um lawmakers in wyoming uh i've not talked to the folks in wyoming um i am and it just sounds terrible and perfect think of a less rough way of saying this i am a little wary of what's happening in wyoming okay do you want to expand on that a little bit same reason i'm a little wary of what's happening in el salvador um the jurisdictions that are doing very very radical very adventurous stuff i think stand a pretty good chance of having to roll that stuff back in a few years when people are just like no no no no no that's not how we're doing this um you know if i can get it to work in new york and london and you know big capital cities with conservative law and very very well established real estate markets these are the kind of places i would rather go um but you know i got stressed here that real estate is hard right i mean i'm aiming to do a parking space in london and q4 of this year uh q1 of next year we're gonna do probably an apartment or maybe it will

[25:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1518s) you know land this kind of stuff but you know i'm not attempting to eat the entire real estate problem in like a year and a half right what we're going to do is we're going to work out a few specific instances where it works here we can do commercial land in let's say vancouver right and you set up a market there where you've got it all smoothed out and then you get that test market up and running you're learning the lessons then you begin to scale the next market because you know nobody is going to just roll out a global real estate network that works everywhere in a single pass that's inhuman nobody is going to match that interesting so in in terms of asset classes because i've talked to quite a few nft you know real world asset platforms and and they're all seemingly taking a different kind of approach in terms of what asset class they're focusing on what would you say you are focusing on so we think that gold is a really good market uh alcohol is a really good market fine art is great collectibles are great um and there's the other one i always admit fine art collectibles gold oh luxury goods you know the kind of 35 000 dollar handbag market all that stuff um and i am not chasing those markets because those those are the markets that i really fundamentally am in this game to transform those are the markets i can reach with the technology and the legal structures that we have today what i'm after is a revolution in how we do the manufactured goods of the world such that we can start really seriously slashing people's co2 footprints so you know my goal here is you know a circular economy that works so that people can get access to physical things when they need them but those physical things will work way harder than they are right now um and that is an approach you know we're going to have to go through a phase where what we do is like massive financial engineering and we turn Mattereum into a really big serious powerful company to get that done um but on the far side of that you know the big goal for us is not like ooh we've managed to totally transform the world's real estate markets like if we're going to do that we're going to do it on the way to something bigger and something bigger is we're going to make the bloody circular economy work and we're going to take somewhere between 5 and 15 of the total environmental

[27:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1668s) footprint of the human race yeah that's quite an ambitious target not really because if we're going to survive that number needs to be more like 85 but i only have a solution for maybe somewhere between 5 and 15 so you better hope somebody else has the rest of this yeah i was going to say hopefully there's a few more of uh of you out there working on some different angles uh you know even if we get nuclear fusion that works we're still screwed right like we have so many problems beating down our doors that people are just ignoring right now um you know it's going to require a lot of very smart people who are also very hard working and very lucky to get us through this in one piece um this is a very very difficult century and the fun has really only just begun compared to what's coming down the pipe um i mean and now moving into um i suppose nfts in general do you how do you foresee nfts as and let's say an asset or a as a layer like changing the nature of ownership because you know one thing we i've kind of seen happen is you know there's a lot of fractionalization of ownership so it's a lot easier to own a part of something rather than a hole where about where do you kind of see that kind of trend going um so hard question right so if you own you know two percent of the mono visa nobody's ever going to sell the money right maybe you're gonna sell your two percent of it to somebody the whole thing is never going to be sold you know if you have fractional ownership of a jpeg you know does that does that matter or is it just that's what the technology supports and people are playing and playing games with that and i mean that's a genuine question i don't know whether it matters um so what we're about affectionate ownership of let's say real estate you know yeah you have to imagine like uh you know if there's a new apartment building going up in your town that you know you know the economics of it are really good and you want to buy into that but there's no way you're coming up with the you know 10 million you need to be a partner is is there a way that you know that that could be supported oh yeah yeah that sort of stuff is remarkably easy um

[30:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1818s) so here i you know we have to grind the gears a little um do you guys know the general outline of things like securities law and how he's how we test and all that stuff i i know a little bit about securities law i'm not so familiar with how we test same area there is in america this thing called the sec the securities exchange commission and their job is to stop fraudsters totally destroying america like they did in 1929. that's their mandate um and the way that it basically works is this capital requires constant constant care and feeding if you've got 25 million dollars in the bank because you know your wealthy grandfather handed out all the grandkids unless somebody's sitting on top of that money very carefully and protecting it for you you're going to be broke in 18 months right um money is narcotic it goes to people's heads it makes them crazy they do stupid things and there's an entire professional class of people that are very good at encouraging people to do crazy stupid things with their money and then keeping it right um i mean how many rug pools have there been in d5 too many yeah there's like one every week i think and people are still plowing their money into d5 on the hope that the thing that they're doing is not going to turn out to be a rug pool yeah oh yeah right and i mean it's not like you can't engineer smart contracts so that it's impossible to do a rug pull like you know come on the whole point of ethereum is that you can prove what the contract will and won't do you can make it impossible for people to do that and people aren't even doing that yeah no that's that that's very very interesting so um so we either have a world in which there is constant predatory activity by scammers who are selling people five percent of a building that doesn't exist or we find some way of driving the scams to zero in which point it becomes safe to make those kind of offers but if we don't manage this very carefully what happens is you open up this ability to buy two percent of the office building across the street and then what people actually wind up getting sold is two percent of the brooklyn bridge and you wind up with so

[32:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=1968s) much fraud in the system nobody will invest in anything all of the money is being wasted on yachts and lambos and then you wind up with another great depression is it um like you can see bits of that already uh already sort of happening in the nft market uh-huh right and you know you can also see bits of that happening in america because in case you haven't noticed america is bankrupt you know they're a bad state right and it's not just america most of the western powers got absolutely crippled by the 2008 financial collapse um and then they got re-crippled again by covet so you know we're not in the position we're just piling enormous amounts of very poorly managed risk into the global economy is good for the global economy it's the kind of thing that is super super toxic to the welfare of ordinary uh citizens so the dialogue with the state is basically like hey you know this crypto thing does seem to be massively packed with ripoff artists maybe we shouldn't scale this to the rest of the population you see what i'm saying yeah there it seems like the only um mechanism currently to address fraud in crypto is like the uh public shaming and calling out of people who sort of commit it which like works when the ecosystem is small but that doesn't really work when you start bringing in especially people that are not familiar with the space and don't know who maybe is trustworthy and who isn't so for like for a system that's being sold on being trustless that that is certainly a underlying issue that there's all these people that talk about it being trustless but then they don't even read the contracts they don't understand who they're actually putting their trust in yeah and i mean you know when we say trustless right i mean you know like there is no way that one person could look at another person with straight facing crypto right now and say that we have a trustless ecosystem we have an ecosystem in which you can't trust anybody but you know if we were collect correctly deploying these technologies there would be no rug pools they would be impossible so why are we not even deploying the tools that we have to make you know smart contracts which make red pooling

[35:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=2118s) impossible and then people don't put their money into any contract that doesn't work that way you see what i'm saying yeah i i definitely get your point but i think will happen over time is that the system will become let's say anti-fragile and it will adapt and i think we're kind of seeing that um on a large scale like you know certain protocols are definitely you know adapting to that kind of threat uh yeah that's not kind of what happens what happens is your 1929 style financial collapses and in crypto that looks like ether goes back down to like you know 85 dollars and everybody says crypto is dead for another three years right if you let the fraud spirit take over your environment you wind up with hard crashes absolutely disastrous so you know what i'm not going out there to do is export all of this scammy crypto rug pool into the physical world right that is 100 not what we're going to do what we're going to do is we're going to enable smooth title transfer for assets that we've got incredibly strong proofs of in terms of their existence and their honesty and then we're going to make it possible for people to buy and sell those assets in pretty regular ways if somebody comes along and they've got the licensing to take those assets and turn them into tiny little fractions and sell them to the general public and some jurisdictions allow that they can knock themselves out or maybe we'll get into that business but fractionalizing assets just generally speaking it's very very deep legal water and i don't think the people that are doing that stuff are remotely ready for the regulatory pushback that they're going to get from it um so you know with all of this like you know i apologize if i sound like a you know grumpy uh you know kind of thug on this stuff like for god's sakes but you know how is krypto going to shake its reputation as being the world's largest collection of scum artists in one roof it that is a tough one because i mean it is certainly an emerging uh sort of thought process right it's like if somebody it's like the years ago it was like the crypto traders but now it's like uh the you know the next guy who's got a 10 000 generative project it's like

[37:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=2268s) um how much of that is just grifting well where's how is the money being made right like if somebody's getting 10 000 returns on something whose money is being returned yeah i i think um you know it's you know that will that that is what people call a bubble you know you're just selling on to the next person um so yeah i definitely see that but um so yeah i definitely see that but like i don't know i i personally take more of a you know view from shunter um you know whereby you know crashes are in a sense good over a long period of time no no one likes crashes in you know in the short term but in the long run you know what they do is essentially they sort out the noise from the signal and i think you know my experience you know i think that's happening with crypto i don't think it's happening enough and i think um you know world runs are in a sense very bad for people that are actually you know building good projects um you know because it just distorts capital allocation um you know capital just going in the wrong places and you know like you said that there are like huge huge rug pools let's say well and what we have is an enormous amount of actual crime you know rug pools are frauds right if you do that stuff in the real world you go to jail for 20 years so the fact that we've gotten into a position where we're this tolerant of fraud you know when i went into the ethereum space my assumption was that we were going to build a completely airtight fraud free ecosystem right we were going to build something where you could inspect the smart contracts all the way down the chain of smart contracts that were handling your money you know you could hire somebody to go and audit those things even better you could do um you know actual like fear improvers and get actual mathematical proofs about the behavior of those contracts and at that point you could run a financial system that was a hundred percent airtight right something for the space station compared to the cobble together garbage that wall street provides and instead what we've created is something that looks like a clown car a circus only all the clowns are on meth d i mean do you do you feel as though

[40:18](https://www.youtube.com/watch?v=AirlEzDxjpI&t=2418s) that like you are taking a very like idealistic view because and the reason i say that is because when you hear some of the very early pioneers of like computer technology and you know internet protocols you know they had this kind of view that um you know the internet is going to liberate humanity in a sense and in many aspects i think it has but you know there are other aspects where you know it's very it's like there's facebook there's google that you know monitoring what you're saying um you know there's huge behemoths but like don't you think you know there is you know and like a huge effect of people's like incentive structures you know there are incentives to have these rope balls so people will do that well i mean people will do that as long as there's an incentive to do it if they can do it and get away with it they will do it but at that point what we've created is a criminal wild west and it will run until the fed's completely destroyed i'm just wondering like sort of from for the same reason that most people can't uh you know wouldn't wouldn't read their whole mortgage agreement uh most people aren't going to read the full smart contract of whatever asset that they're buying is it is it unreasonable to assume that people would be able to look out for these sort of things um somebody has to be looking right if nobody is looking then what you're going to get is titanic amounts of fraud and then what you're going to get is the federal government will come in and they'll start arresting people for those frauds and they'll start you know shutting down operations for securities violations and they will gradually dismantle the entire crypto ecosystem to protect american citizens bitcoin will be worth a dollar right if you don't clean up the ecosystem to the point where it becomes something that you can safely integrate into mainstream commerce the ecosystem will eventually get ground into submission by the feds what what would you say are the paths for that specifically in crypto for cleaning this mess up yes well i mean you know even look at the terminology right for rug fraud what you rule for rug pool what you really want to use is the term right malicious fraud yeah right yeah it's not it's not accidental it's accidental it's deliberate theft there are carefully elaborated plans that people lay with the explicit intention of stealing people's money

[42:48](https://www.youtube.com/watch?v=AirlEzDxjpI&t=2568s) and you know the approach that we kind of take to that is like yo well you know yeah yolo but like come on guys are we interested in actually integrating into the real world and changing the world for the better or i mean do you guys know about the albanian ponzi schemes in the 19th i've heard i i think i've heard some yeah right so

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