# Startup Societies Podcast - Episode 34 - Vinay Gupta (part 1 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [747], part 1 of 2. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/<id>.md. This file's connections are below, then his passages.

## Where this source sits

- Source: video, 2019-05-10 (YouTube upload date), https://www.youtube.com/watch?v=YB788hhEwqM. 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): Post-state governance forms relevant to camp self-governance.
- Career works it belongs to:
  - The Big Deal (2011): Four-essay blog series arguing that government has hit hard limits, so civil society, working with... (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. (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)
  - goat rodeo to warlords: The goat rodeo idea, from a 2010 blog post to a 2011 one-page paper to the opening chapter of Warlords, Inc. (2015). (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 (16%); Capitalism, consumption & resources (12%); Climate politics & democracy (12%)
- Distinctive terms here, against the whole archive: Mars (13 here; 34 sources in all, earliest dated 2014); carbon offset (2 here; 3 sources in all, earliest dated 2019); trade finance (2 here; 4 sources in all, earliest dated 2017); special economic zone (2 here; 4 sources in all, earliest dated 2018); economic zone (2 here; 5 sources in all, earliest dated 2013); cheap solar (3 here; 17 sources in all, earliest dated 2011, 1 undated); solar lights (2 here; 12 sources in all, earliest dated 2011, 1 undated); centralisation (1 here; 3 sources in all, earliest dated 2014); choice of law (1 here; 3 sources in all, earliest dated 2016); city state (1 here; 3 sources in all, earliest dated 2010)
- The earliest dated source in this archive for (undated sources may be earlier): carbon offset
- Importance: core-text score 0.32 (1.00 is the top), number 226 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [572] [How To Address Climate Change: Diplomacy, Politics,... (2022)](https://guptaoption.com/texts/572.md): close in content (cosine 0.97)
  - [735] [Vinay Gupta - Mattereum (2022)](https://guptaoption.com/texts/735.md): close in content (cosine 0.97)
- On the same works, just before: [692] [Vinay Gupta:From Global Resilience to Practical... (2019)](https://guptaoption.com/texts/692.md); [931] [Blockchain and the Future of Humanity | Malta AIBC... (2019)](https://guptaoption.com/texts/931.md); [257] [Vinay Gupta - Oslo Blockchain Day - Merging the Physical... (2019)](https://guptaoption.com/texts/257.md)
- On the same works, just after: [748] [CCForum and Malta AI & Blockchain Summit Malta... (2019)](https://guptaoption.com/texts/748.md); [750] [CCForum and Malta AI & Blockchain Summit / press... (2019)](https://guptaoption.com/texts/750.md); [255] [Global Fintech and Blockchain - Imperial College - Vinay... (2019)](https://guptaoption.com/texts/255.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: Startup Societies Podcast - Episode 34 - Vinay Gupta, video, 2019-05-10, https://www.youtube.com/watch?v=YB788hhEwqM; in Vinay Gupta's archive at guptaoption.com, source [747], https://guptaoption.com/texts/747.md.

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

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=YB788hhEwqM&t=0s) welcome back to the star society's foundation podcast I'm Jo McKinney and today I'm joined by Vinay Gupta CEO of Mattereum and founder of hexayurt capital Vinay how you doing today very well thank you well Vinay um you are kind of a legend in this space and you've been here in it in decentralisation even before crypto corrupt or currency proper through Bitcoin existed so I think the best place to start is what is your your background in the centralization and new communities so I mean I really get dug

[0:37](https://www.youtube.com/watch?v=YB788hhEwqM&t=37s) into the decentralization thing from energy policy I was the editor part of the editorial team for book called small was profitable in 2003 it was the Economist book of the year of 2001 about half dozen detected and that was entirely about the benefits of making energy systems decentralized specifically what it looked at was the accounting systems so how do we measure the value of an energy system and how does that impact our ability to invest so yeah I mean you meet decentralization is like it's a physical infrastructure thing it's only secondarily about all this newfangled tree a computer decentralization block trades stuff that's kind of a theme about your work I mean even the name of your company Mattereum it's all about the physical matter and he became really interested in infrastructure and energy and physical construction sort of after 9/11 he became very worried about catastrophic events can you sort of explain what was your thought process after 9/11 and what steps he took after that so prior to 9/11 I was basically your ANSI standard nerd with a massive meditation hobbit yeah I've done 15 years of daily practice by that I meant 11 rolled around started pretty young so I've already had a fairly philosophical view on life I had written software for the air force on flight simulators I'd written software that went on to become part of a medical imaging system and I've moved on to the web but you know I was a pretty standard guy after 9/11 something shifted in my head it became pretty clear that the world's problems were my problems there was a real sense of a breakdown in the separation between sort of my life and the fate of the world around me so I begun to dig in very hard to the worst-case-scenario stuff and and tried very hard to teach it kind of simple model of like look you know human civilization is like a fire and right now it's burning too much movements burning too many fingers right how do we create a situation in which human civilization keeps us all warm but it doesn't burn us out of house and home we destroy the planet and it also doesn't scorch so many individuals and this approach of kind of trying to you know rebuild civilization into a form where you could look at it with some pride roughly making excuses for it has kind of become the one current project the worst of that is rounding off the problems on the low end the lack of preparation around pandemics terrible economic systems all the rest of that um

[3:07](https://www.youtube.com/watch?v=YB788hhEwqM&t=187s) but there's also the need to create something new and something aspirational the the human race could kind of point itself to words as a way of getting away from our you know as stupidity and our legacy of stupidity what is a sort of

[3:22](https://www.youtube.com/watch?v=YB788hhEwqM&t=202s) example of sort of that ideal scenario that people can strive for and build well so I'm a big fan of Mars colonization I mean I think having I don't know half a million people on Mars doing crazy new things with a divergent culture and export and culture but to the earth in terms of you know music and fashion product and I think that there's an enormous need for that kind of differentiation because the world becomes more and more and more flattened out or more the same you know to find something genuinely alien and surprising is taking more and more effort like I think I think we almost have to make our own future place from which we can import new culture are you worried with Mars colonization that will transplant plant a lot of our existing political systems very similar to past colonies in the New World especially since supply chains at least initially will be extremely centralized when resupply and Mars so I don't think there's anything inherently magical about decentralization right right I mean you know decentralized Kaneko file an honor you just as easily see centralization can turn into a smooth functioning multiplayer economy no totally I that that's definitely case

[4:33](https://www.youtube.com/watch?v=YB788hhEwqM&t=273s) in fact in many instances centralization is is really is really efficient but that case of Mars how do we it's supposed to be a test bed for new societies and new ways of experimentation how do we make sure that it doesn't take all of the existing systems that we have here on earth and just put them on a red planet well so to be honest the most likely governance structure for Mars is that the entire place is going to be run more or less like a submarine you know I mean a submarine is probably the closest thing we've got as an analogy to Mars like if you've got a big nuclear submarine it's got I don't know how many crew I want to say a couple hundred crew um um you know everything needs to be handled extremely carefully right if we don't keep a very very close eye on everything on board you know terrible things are going to go wrong so I think that there's a real need for you know look at existing functioning systems and nobody's gonna say that a nuclear submarine is they're the best of all possible political systems but it's the one that we use for managing an environment where every single person's life is dependent and every other person on the boat you know if somebody's dumb enough to proper door open you know further convenience and then you hit a rock and the whole you know c-shaped floods and everybody dies you know that's what Marta's gonna be like everything is gonna be safety critical at least for the first few years interesting and I guess that's

[6:03](https://www.youtube.com/watch?v=YB788hhEwqM&t=363s) sort of where a lot of people's lives that maybe not the concept itself that aitana you between centralisation and decentralisation breaks down because of you could have like like you said in your example a submarine which to be honest is run by dictator a captain but there could be many submarines just like on Mars II we probably should have more authoritative figure or one leadership for each of the colonies you know when they're controlling the infrastructure which is absolutely vital but maybe you have many of these centralized colonies interacting with each other in a centralized way so again you know decentralization doesn't return into a you coat doesn't automatically produce utopia right of course um the bottom line is that anything that involves space is going to be all safety-critical all the time until we're casually good at running around or places like Mars right so we could have decentralized utopias on earth you could just pick some corner if you know some relatively poor country that really wants to take a leap forward in the world South Africa and Namibia and and you could basically just set up an area that was a special economic zone who you gave people really long wishes to do pretty much whatever the heck they like this was long as we're harming each other you know you could do that tomorrow morning and it's a heck of a lot easier to do it on Mars and you to some degree halfa already on things like yachts if you've got a bunch of people on yachts that decide they're going to be up on some abandoned island middle of the ocean there's no law there other than the people that are on board on the rule you know the law of the sea somebody has theoretical jurisdiction over the island practically speaking nobody has ever come so to me the challenges and things like marsh governments isn't so much about the autonomy of all the people that are there the challenge of Marja deference is the responsibility that goes with the autonomy we're all going to be interdependent if somebody does the wrong thing on the wrong day it's gonna echo all the way through that colony because if somebody loses a box of medical supplies because they drop them in the dirt and they get contaminated you know you're gonna feel that because everything will be so very very tightly bound so bill that living inside of a Swiss watch do you think there's a

[8:12](https://www.youtube.com/watch?v=YB788hhEwqM&t=492s) series of technological solutions or is there sort of a assault a social or cultural thing that needs to be constructed um I think that pops massively about technology I mean every single object on Mars is gonna have to be tracked everything's gonna have to trace the only provenance you'll need use history you know the ability to find your ten millimeter wrench in a hurry could be the difference with life and death if somebody's got a critical situation the ability to rapidly reconfigure the matter of the base to take care of new problems like oh you know we've just got a rover breakdown and there's a storm coming in and we need to immediately get another Rover out there to pick these people up you need to be able to fluidly the assigned property so you can go there do the job and get back home again you know it's that ability to have like fully into roofin cybernetic reflexive responsiveness that I think is going to be what the Mars governance experiment is really going to be about right it's it's not going to be like burning my mother it's going to be something which is like you know pure beautiful fluid integration between human needs and decentralized intelligence so I guess when talking

[9:18](https://www.youtube.com/watch?v=YB788hhEwqM&t=558s) about you know tracking you're obviously referring to something that's like a distributed ledger technology you've been involved in this space for a long time how did you get involved with DLT I know you got involved you know with bit cold and early iterations at Bitcoin but then he became one of the co launchers of Ethereum well this over the journey there yeah so I mean my background in crypto goes back to the 1990s I was involved in several little projects and then became quite heavily involved in the eagled ecosystem and eagled was a physical gold in a vault with claims on a LAN chair and it was running using pretty standard web technologists they didn't even give you like digital signatures from the major transaction it was very very trust based um but they did their jobs and they didn't screw up and they wound up with about a hundred million dollars worth of assets in the system and if he's honking twenty million and I thought that was amazing like you could do micro transactions down to like a SAN and it was economically efficient it was the fantastic fit um so after eagled you are for nine eleven oh two the Eagle finger pull like this doesn't have a future the government is gonna come and shut this out and sure enough they eventually did and then I basically stayed in the energy policy space right the way through the Bitcoin years because I knew from the eagled experience that currency wasn't enough all right yeah so that

[10:41](https://www.youtube.com/watch?v=YB788hhEwqM&t=641s) obviously leads into your work with Ethereum or is so interesting about Ethereum they eat in get from the other projects well it was smart contracts right because what I knew was that if you wanted to build new social structures you needed to be able to sort of assemble higher complexity objects and just payments and I've been watching the development of platforms like a rights for many years so waiting for something that would give us the ability to base it we you know write our own rules for a society or microclimate and just be able to write it down and make it hop and have the computers do the admin work and what I saw with the sea Ethereum was that possibility coming over that rice and so I quit my job and energy calls he just marched over there and said right we're doing this so one problem that your firm is addressing the problems of Ethereum that matter aaron has is sort of actually indicating the name of Ethereum itself when I told my my family initially about Ethereum on the first things they said is Ethereum like ethereal that doesn't really denote a lot of trust when it comes to a currency or financial system to be it ethereal in the air it it needs to be tied to something tangible can you sort of say how Mattereum is trying to move from the world of bits to the world of atoms yeah so I mean basically we just won't be able to have smart contracts that refer to physical things you know if I have a smart contract with you and it says I'm gonna you know deliver you a hammer at 7 o'clock this evening you're going to use it for two hours then you're gonna go back to me it's gonna cost you about 50 you know we've warned that to be on a smart contract because the real world is made of tons and tons and tons of these funny little transactions and if we can make it work for small stuff we could also make it much work for large stuff right and you know I want to be able to say you know I how safe is this plane and ask an AI to go and make an assessment of the planes safety records before I buy a particular like hey you know what's the safety record of this airline by the way did you check the maintenance loads of the airline before I buy a ticket like I want to be able to get that kind of information about with your world because we've got computers and they're amazing and you know it ought to just be possible to make this work but to get to that level of kind of integration of the physical and the digital you needed different way of thinking about how that works and you know I started this stuff right around the beginning like middle of 2015 I tried to get the filter at the

[13:11](https://www.youtube.com/watch?v=YB788hhEwqM&t=791s) Ethereum Foundation really interested in this problem not much joy that then I began to dig in when I was a consensus couldn't get very far with it and eventually had to go figure out how to do it myself like okay right we're gonna actually build this wouldn't build as a product and that it just connected directly to Ethereum it's just a way of deploying smart contracts in the context of some commercial infrastructure that causes this horrible conference to launch to matter and have legal control of it so

[13:40](https://www.youtube.com/watch?v=YB788hhEwqM&t=820s) there's obviously two big obstacles to connecting the digital world to the physical world one is technological and one is legal and political can you first go into sort of the technology behind connecting the two worlds so the technology question is what is it that we're talking about right if I look at an entry on a blockchain how do I know which physical object of the twenty trillion physical objects that are in the world how do I know which physical binding to so the you know the first challenge is object identification just tell me what it is it we're talking about um and then the second problem the kind of cultural problem is now that we've identified successfully called we're talking about how do I assert a legal right to that object only by using a blockchain transaction and that's a

[14:27](https://www.youtube.com/watch?v=YB788hhEwqM&t=867s) hard problem so it's one you wanna answer first how do you want to say how to do object identification or how do we get buy-in from an existing state or an international order for the trick of this is that all the tools are in the existing international system who don't need legislative changes for this to work right this is because our lawyers are excellent my gold we have some sworn people on T and Christopher ray who is our chief legal officer and the run judge Sivakumar or just outstandingly creative lawyers and them fantastic work on this so the crux of the model is we use insurance to recognize objects right somebody basically writes an insurance contract this is it at this car with the following VIN number is a you know four-wheeled you know Doge Cruiser with the following specification and it's in the following condition I hear a bunch of pictures of it and if this turns out not to be true I will pay you up to fifty thousand dollars of consequential Maus and as long as that person has insurance from a recognized provider and reinsurance from you know for thought provider then we can trace a chain of authority from that contract back up to people that we knew will pay and at that point if the car is there that's great and if the car isn't there we got paid and we'll live so basically

[15:47](https://www.youtube.com/watch?v=YB788hhEwqM&t=947s) you're outsourcing the burden of verifying an object's validity to an insurance company and they bear the cost if they fail to individuals who are bought by insurers and for almost any asset class that are a bunch of experts whose job it is to buy and sell this thing you know those people are really really you know smart clever in the sight of their car you know domain right if you're in the business of examining aren't telling yourself what's a Picasso and what doesn't you know those experts exist for almost everything that has value it's just a case of finding we have representing that expertise on the blockchain in a sensible way in in the

[16:28](https://www.youtube.com/watch?v=YB788hhEwqM&t=988s) Mattereum in white paper you mentioned that like in Bitcoin other cryptocurrencies you have to avoid the double spend problem in your model what technology or system do you use to avoid someone declaring a certain piece of property as collateral for multiple different transactions so in that kind of situation if somebody does stop the first thing is that we've got the insurance contracts in place so you can hit them neatly the second thing is that those claims will be valid on chain so the person that makes the second clean really ought to be able to check the blockchain to see whether there is a first claim and if they didn't between negligent right it's a it's a very straightforward approach um and you know this is one of those things where we're guessing how this ecosystem will work in future right move the best guess but best guess is that all of this is insurable risk right and the credit card system gives you this enormous with powerful international payment system and it largely works only because everything is insured if you use your credit card to buy something from you know other by Jean and they don't ship it to you you just call your credit card company and counsel the sale and that's only happening because the credit card company is basically packaging insurance and identity along with the payment Braille so you know Bitcoin has neither the insurance layer Northey identity layer makes it very hard to do transactions and if we're going to make a global transaction system which is you know I kind of smoother cleaner more globalized version of the current systems it has to include insurance at house include identity probably has to include a couple of things as well dispute resolution so you you use the insurance

[18:07](https://www.youtube.com/watch?v=YB788hhEwqM&t=1087s) layer in order to what you call on the paper to onboard the property but the next step on top of that or while you do it is to create a governance layer for any individual property or asset that you registered to this system you also have a particular governance system like the example you give is a very old very culturally significant violin and instead of simply just one owner or even simple distributed owners owning it there is a sort of board that monitors its use if you sort of go into the process of setting up a particular governance system for each individual asset sure so if you take the example of a violin right these things are three hundred and something years old for the Stradivari and if you were buying a minority or interest in a violin right you're buying a third of one or you're buying one percent of one where you're buying a ten thousand one true buying this kind of minority interest what do you do if an idiot with a lot of money buys 51% and violin and then decides that they're going to take it to Brazil and play it in the brain first you know like you really have a problem here because the value of your investment is going to be destroyed by somebody else's incompetence just because they spend more money that you did on the deal but 51 percent equivalent in the physical world exactly right because you know about 51% attack thing that's just the rules of the game for ownership in most situations right it's inherently problematic so instead what you want to buy is you want to buy the asset with governance so I will buy a share of this asset but I'm buying a share this I say on the basis that the following board of directors will manage the asset with my best interests in mind and if they don't we'll get rid of them getting you said um so for a violin that maybe people played the violin it might be previous owners of the violin we've got one hair taking care of it properly they might be musicians that curators big by people who maintain violins of the fears of my dealers historians and you know in some scenarios even composers and you bring together those people because the us at being under the governance of that bore greatly increases the value of the asset it lowers the risk when you buy it but also greatly increases the risk that intelligent and creative things would be done with the company excellent and

[20:28](https://www.youtube.com/watch?v=YB788hhEwqM&t=1228s) while you mentioned it makes sense because of as far as I can tell almost all jurisdictions recognize the claim of recognized insurance companies so that's the way to get buy-in from the traditional system but it still pays to have some sort of jurisdictional pilot project is there any type of jurisdiction or even a series of sub directions or special jurisdictions that you are planning to roll up your your project as pilot round yes so the the trick for us here is the international financial center system so in many places in the world so depay Singapore I think Bahrain couple others Hong Kong and they have international financial centers which operate under City of London law and once a year they take whatever the current structure is in the city they package it up and they re implement it in these places so that a contract which is signed in the Dubai into financial international financial center or the Singapore international financial center are on exactly the same legal footing as if they've been signed in London so you're not interacting with the Singaporean legal system you're not interacting with the Hong Kong legal system but you have a pool of the English jurisdiction inside of these countries so we think the easiest way of spreading globally is to work our way through the international financial centre systems because that gives us globalization down an existing standardized channel so would you be

[21:54](https://www.youtube.com/watch?v=YB788hhEwqM&t=1314s) making partnerships with with with the Dubai government or the City of London in order to facilitate this though it's straight up I mean we work super hard to just be a regular commercial enterprise that didn't need any variances or any special permission or any regulation beyond what anybody else would need for doing because it turns out that we were able to package a radical vision in a very ordinary skin

[22:21](https://www.youtube.com/watch?v=YB788hhEwqM&t=1341s) this is one thing I'm gonna plug right here I don't know if you're familiar with you Lexus is one of the initiatives that we run it takes the same concept the idea that there's sort of standardized legal systems usually based on British common law it takes a little step further the idea that there is an aggregated rulings of common law across all common law jurisdictions that are that are detailed in restatements of common law and that being the body of law to do decisions versus simply just British common law do you think there's room in your model for more you lexie approach versus relying on the common law precedent set by a single jurisdiction that just happens to be shared by other jurisdictions oh yeah absolutely I mean if we had real scale remember that we're operating a lot using binding arbitration so binding arbitration allows people their choice of law right in theory you could sign a contract in Paris this is we're going to use the Japanese legal systems existed in 1760 and you know the following three legal scholars you know that time period will be judges in any case that arises I mean you could really do that an international arbitration under the 1958 Europe Convention will fully support the party's right to make a decision like that so you can see exactly where you would drop the elects into that kind of scenario yeah it seems like there's

[23:43](https://www.youtube.com/watch?v=YB788hhEwqM&t=1423s) almost like a little legal hack that can be just put in any dispute resolution section of any contract so if that's the case what is sort of the reasoning behind the partnership or the MOU that Mattereum has with famosa which is an international organization for for special economic zones so the famosa folks came to us with a vision of the future which is that there was going to be a single rail for customs for trade finance for logistics on the blockchain and that what you do with this rail is that you would network together the special economic zones of the world into something that looks like a distributed edge cash for physical so you know I have a container full of diesel generators I want to sell them to people after hurricane and I just shipped them into the special economic zone which is just out the way of the hurricane and they just sit there and if the hurricane doesn't want damage we take the goods out of customs we cleared them and we sell them to locals and if the hurricane blows over an uncle's much time we just ship it to the next likely hurricane set and it never pays tax until you open the crate and unpack the goods and it doesn't go through we inspect and all the rest of that the whole thing is just a very very clean model for being able to not have to make decisions but where things will be sold until you know you actually have all the data it's like a late binding caching kind of strategy and I think that could be enormous ly useful there are so many places where you just won't be able to move the goods around to where you think they might be needed and not have to make those decisions um until you've got buyers and then once you've got buyers you can do immediate delivery because you're only you know a hundred miles away from where you're shipping to I think it's a really powerful vision so you've mentioned a couple of your videos with the possible economic impact in terms of numbers it would be what do you expect the autumn of the automation of supply chains through distribute electric technologies being on the global economy so there's two sides of this right there's optimizing what's already there and then there's doing the impossible and it's literally over in the last two weeks I've figured out how a phrase that's properly I'm very happy with this so the optimization anybody that's often blockchain will talk about optimization to your ears fall off right you know five percent eight percent 12 percent 15 percent you know cost of trade finance cost of bills of lading cost of transactional friction you know all the delays through customs and you know exactly what the number is depends

[26:13](https://www.youtube.com/watch?v=YB788hhEwqM&t=1573s) on who you ask but it's somewhere between five and fifteen percent of cost of goods in those people's estimations so there are say fifty trillion dollars a year of transactions that buy or sell stuff and that would be affected by the optimization so there's maybe ten trillion normal to earth ways to take out of the system and that's a big deal right that's a that's worth hard on the other hand there's also 20-ish these numbers are so large that there's no point being specific you just have to errorbar it you know there's maybe a hundred trillion dollars trillion of assets which are underutilized empty apartments empty factories empty warehouses vehicles aren't being driven farm one that isn't being cultivated and if we had really really efficient food markets it could be for example guided by our official intelligence we might be able to put all of our stuff back into use by finding buyers for it so there's an another huge pool of waste in my no ma'am but this is not weirdly enough the interesting part right that's the small beer the small beer trillions of those here and one hundred trillion dollars capital waiting to find uses and the real thing here is and what happened with the internet and machine translation right so we uploaded all of the information that we could find in the world including tons and tons and tons of books that have been translated in multiple languages and then then from that Google was able to squeeze an efficient machine translation system and nobody thought when we were going around like digitizing books or uploaded web loans or denying domain names of the web and all that stuff nobody ever thought that the outcome of the web was going to be large corpus machine translation it's the completely unexpected side effect of just pushing enormous quantities of data on one then letting people hakama and that's what I think will happen for the physical world when we've got enormous datasets about the physical world online so you can actually go there and bid for things and index things and search things you can look for a matter you can option matter or even all these things I think what will come out of that is fantastic new configurations modern discoveries about matter they're totally outside of our current understanding in much the same way that we couldn't do machine translation until we had the word purposes of text online so with any

[28:32](https://www.youtube.com/watch?v=YB788hhEwqM&t=1712s) large economic revolution there is usually a corresponding political revolution if not an evolution what are the expected outcomes of the pull of the economic impact that you dis a lead on our global political system okay so our global political system right now isn't even wrong right I mean modern and hyper capitalism is as relevant to the problems that the world has as the Catholic Church was to run in Europe like a hundred years after dinner asks you know execute Galileo right I mean it's just it's just irrelevant I mean I can't stress this strongly enough right and from my perspective democracy died after the Second World War from the nuclear bomb was invented right what really runs the country is the bureaucracies that contain nuclear weapons stockpiles and the nation-state is just an irrelevant appendage which is being dragged through time by those bureaucracies and the Department of Homeland Security refers to thing called the defense industrial base and the defense industrial base is all the companies and universities and you know military departments and so on the need to work together to maintain at the defence systems in America and to all intents and purposes that is the real country that's the thing that the Pentagon was defending the geographical land mass is an afterthought right you know really really really maybe he cares if anybody actually cared dude had done something but vopa epidemic before it totally gutted the heartland of America right national security doesn't refer to the territorial integrity of the state anymore and there are tons and tons and tons of states in the world that are just like little protectorates hiding buying somebody else's weaker weapons stockpile you know like the European Union is basically the French nuclear deterrent and the areas that the French care about enough to nuke you if you invade I almost I want to go down this

[30:29](https://www.youtube.com/watch?v=YB788hhEwqM&t=1829s) path because they've met distract from our other line of inquiry but I'm curiously here what is the alternative to nation-states centrally controlling the the supply of nuclear weapons one can say that there could be tracking organizations or technology for blockchain in the future but as the cost of creating clear weapons decreases in the availability increases the chances seemingly would go up that they would be used by by parties that wouldn't be able to in the past the cost of just drastically decrease you I mean this is the proliferation problem right so to be completely honest I think the best hope for Humanity is cartelization if the nuclear bureaucracies right they're all scientists that are rational they're generally speaking apolitical there are no true believers in anything after you see a nuclear bomb test right you know you're just left with like oh wow you know there is no gold there's just the ball and you know that's kind of where we are right we're in a position where the people that actually have the power of the world are almost certainly a political scientific atheist sitting on top of nuclear bombs trying them to get not to get system peated into using them by the lunatics that they work for so you're nursing your sort of a technocratic cartel I don't think that we've got any other realistic chance for managing the geostrategic mass right now at the same time if you imagine this kind of nuclear bomb makers cartel right if those people don't care about whether or not it's illegal to have sex with gay people in your jurisdiction they don't care whether it's illegal to smoke weed in your jurisdiction don't care about things like seasteading they probably don't really care very much about actors place exploration right they're really just there to make sure the people don't mute each other because that's bad for business right it's just not what they want and you could tell because they've successfully managed not to go to you who you're war just dissipates 70 years of politicians trying to force them to do that alright so I think that what we're looking at is a future in which power is fractal and I say power rather than politics because they really do mean power and by fractal I think what we're gonna have is hierarchies of interests right nuclear weapons biological warfare climate change nanotechnology maybe AI risk and a couple other things

[32:59](https://www.youtube.com/watch?v=YB788hhEwqM&t=1979s) are global scale concerns are vast amounts of life and death associated with them and if anybody screws with those concerns you can imagine that the big nuclear reactors might take an interest right and on the other hand at the other level you know really no entity that's taking care of business at that level has any interest in the dunes States don't have nuclear bombs you know if you're the government of let's say Chicago to all intensive purposes the bit of the federal government that runs the nuclear weapons stockpile has no interest in your existence at all there might be a couple of suppliers like Burley and gaskets or something that are like hey yeah we buy those from the guys in Chicago rather than that there is no relationship between these entities so we should basically stop pretending that there is right I think basically what we were going to go into a future which is largely and city states that manage trade and nuclear bureaucracies that manage defense and I think the rest of the state's been a whole while almost completely because it just makes no economic sense for to be there so this

[34:01](https://www.youtube.com/watch?v=YB788hhEwqM&t=2041s) is an interesting thing I just want delve into just a little bit more yeah so in terms of this bureaucracy I think you might be falsely assuming or maybe I'm missing something here that the that the actual agent will be the Bureau of the scientists the level-headed person but there's sort of a principal agent problem because of this cartel is not going to be financed by scientists it's gonna be financed by industry or capital or some sort of government or a city state and if that's the case couldn't that cartel be influenced or be used against certain city-states and uses that each of war so remember that from my perspective I'm telling you the nuclear part I'll already exists right from as far as I could tell thoughts what actually runs the world we have right now right I have I have no belief that the democratic systems are capable of electing somebody that dismantled the nuclear weapon cartel I don't think it's possible to bring up a candidate for election in America that strongly believes that America should get rid of nuclear weapons and you know at that point that tells you who's in charge of the show right the national security people basically took over civilization after World War two and at this point no politician that gets elected hasn't gone through national security vadik so if they don't like the guy he's not coming into the White House so what you

[35:25](https://www.youtube.com/watch?v=YB788hhEwqM&t=2125s) know everything is heard like the the detaching from the nation-state and just letting it be its own Florida long entity and being that checks and balances from the marketplace will keep in fact better than what we have right now no no even quite that right what I'm suggesting is that the nation-state was a machine for managing agricultural land as an economic base right the nation-state dates back to this idea that basically wand equals well if I have more farm one than you do I get more money than you do what we're having wars about is basically who gets to clock the tax that comes from the wild that's basically how it worked friend but you know agriculture is one percent of the UK economy I think it's about four or five percent of the American economy it's a tiny tiny tiny tiny part of what generates a wealth of civilization at this point and if you think of like you know large vast areas of agricultural land you would far rather have a small industrial city that was after making things that people wanted because it generates a vast tax base compared to the agricultural life so at this point abra cultural wound is still very large degree a drag on a nation state's economy rather than an asset whereas the cities or the things that actually generate wealth so I'm basically suggesting is that government follows the shape of the government's Falls the economy the city states will have more and more and more more power and the agricultural hinterland will have less and less and less and less power and eventually the systems of government will come to represent that because they have food because money is power so

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End of [747] Startup Societies Podcast - Episode 34 - Vinay Gupta, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.