# Cryptoeconomics Lab: 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: [761], 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, 2020-04-16 (YouTube upload date), https://www.youtube.com/watch?v=1p80tTXgdyM. 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): Secondary economies idea relevant to camp labour markets.
- Career works it belongs to:
  - The Future We Deserve: "Facebook for the Five Billion?" (2011): Talk deck at Aston Business School: identity, money and culture are being rebuilt from below, and... (suggested by machine)
  - 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)
  - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (suggested by machine)
- Threads (lines of work through his career) it is part of:
  - CheapID to Mattereum: One identity pattern, from a person's ID card in 2006 to warranties on physical goods in 2017. (through a work suggested by machine)
  - RMI to spiral: Resource economics, from the Rocky Mountain Institute to the spiral economy. (through a work suggested by machine)
  - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum. (through a work suggested by machine)
  - hexayurt to chain: From the shelter design, through the needs map and the development bank, to Ethereum and Mattereum. (through a work suggested by machine)
- Topics: Crypto compliance & money laundering (43%); Smart contracts, law & arbitration (14%)
- Distinctive terms here, against the whole archive: Bermuda (5 here; 5 sources in all, earliest dated 2007); scams (7 here; 12 sources in all, earliest dated 2016); masks (9 here; 20 sources in all, earliest dated 2006, 2 undated); ICO (6 here; 32 sources in all, earliest dated 2014); The DAO (2 here; 13 sources in all, earliest dated 2016); SEC (3 here; 28 sources in all, earliest dated 2009); Legalese (1 here; 5 sources in all, earliest dated 2015); basic income (2 here; 21 sources in all, earliest dated 2014); DAO (2 here; 23 sources in all, earliest dated 2014); IPO (1 here; 15 sources in all, earliest dated 2012)
- Importance: core-text score 0.34 (1.00 is the top), number 203 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [565] [Coin Telegraph AMA with Mattereum's Vinay Gupta 14th... (2023)](https://guptaoption.com/texts/565.md): close in content (cosine 0.97)
  - [567] [The Fourth Mattereum Physical Asset NFT Meetup 8th Feb 2023 (2023)](https://guptaoption.com/texts/567.md): close in content (cosine 0.96)
- On the same works, just before: [862] [Interview VINAY GUPTA about Ethereum, Decarbonizing by... (2019)](https://guptaoption.com/texts/862.md); [758] [#3 Vinay Gupta, Indexing the physical world (2019)](https://guptaoption.com/texts/758.md); [251] [ODM 6981 Oxford Technology and Media Network Climate Change (2020)](https://guptaoption.com/texts/251.md)
- On the same works, just after: [731] [Vinay Gupta l The Internet of Agreements l Meaning 2017 (2020)](https://guptaoption.com/texts/731.md); [120] [blockone - Sign In (2020)](https://guptaoption.com/texts/120.md); [233] [Quaddome (2020)](https://guptaoption.com/texts/233.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: Cryptoeconomics Lab: Vinay Gupta, video, 2020-04-16, https://www.youtube.com/watch?v=1p80tTXgdyM; in Vinay Gupta's archive at guptaoption.com, source [761], https://guptaoption.com/texts/761.md.

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

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=1p80tTXgdyM&t=0s) welcome everybody this is the Crypt economics track for non-content 20 we're here live with our first speaker of the day being a Gupta for the past weeks we've had to sort of imagine what this conference would look like and we're very happy to now have found the solution for it it's for everybody here it's probably a time of reimagining what it was like where is the remaining word went to organise conferences digitally over this way this track was organized as a collaboration between our little police the organizers of Hong Kong as well as token engineering global gathering and us the Research Institute for crypto economics in Vienna were having a bit of a packed schedule over the next two days and I'm very happy to have been a here today with his talk he's probably going to attract a lot of viewers I've heard of a lot of people who are very excited about you coming here and I think I don't need to give a big introduction to you you're the CEO and founder of Miriam you've been prominent in this space for a long time and I think that this I'm gonna hand it over to you great remind me how long I am talking for when we start with ha so we have available about 50 minutes of talk for you if you want if you want to go shorter that's fine but he would have said 50 minutes of talk then 10 minutes of Q&A and then we still have a transitional period if you want to go shorter that's fine yeah I mean more time for Q&A I think is probably a good idea because people are gonna get very bored watching a live stream and it's perfect

[1:48](https://www.youtube.com/watch?v=1p80tTXgdyM&t=108s) okay great so um welcome to the end of the world everybody you know we're here in global conditions which haven't really been seen ever you know we've had pandemics before we've had plagues before and but we've never had the comp the combination and extremely fragile high-tech society and a lot of advanced science and technology which puts us in a position were we have this thing happening and we also know far more about it than any of our ancestors would have been in the same position so on one hand that makes everything better because it boosts we understand what it is people are dying off and on the other hand it makes things worse because their society is so interwoven that things just potentially tear to pieces and we can already see this in terms of the strain on things like the medical supply chain lots and lots of problems so what I want to talk about is um the underperforming nature of crypto right and I don't mean performing in the simple sense of like you know number goes up into the right I mean performing in the sense of bursts of global change right we've had ten years of Bitcoin an unbelievable amount of money has been made lost on these technologies and we've had infinitely well-funded development teams crunching various problems for years and years and years particularly things that came out of the ICO market Cini Ethereum and where's the revolution but why have we not succeeded in producing a single widely used application which is directly transforming people's lives in any kind of significant meaningful way right a lot of people's lives have been transformed by the money and but you know to all intents and purposes every dollar made in these technologies was a dollar lost because trading is a zero-sum game right every penny that's major trading came out of somebody else's pockets so there's been an enormous wealth transfer but I'd like to argue that there's actually been very little absolute wealth creation and that I think is very important for us to observe because wealth creation is how you get a permanent seat in the global economy wealth transfer only lasts so long until people no longer believe the wealth creation is happening and you know wealth transfer as possible but once people lose faith in the idea that these things are fundamentally wealth creating numbers will stop moving and they'll stop moving permanently so what

[4:11](https://www.youtube.com/watch?v=1p80tTXgdyM&t=251s) I want to basically suggest is it we need a fundamentally different understanding of power if we're ever going to get a seat at the table now what do I mean by power right and power is not an easy thing to define the old definition of the state and I'll defined the state first then power comes from a guy called Matt's favor and vapors definition of the state is that it's a is a single entity with a monopoly on legitimate violence inside of judgment geography and vapors definition is well and good as far as it goes in the most healthy functioning nation states fit that description pretty much precisely what Vera's definition doesn't give us is any tooling to handle situations where you have a problem right in for example Civil War or a place like Gaza it doesn't appear that you have an absence of state right you you don't have a void right but you have multiple entities all of which are like the state and a reasonable degree oath which are the state and they're sharing a geography and the fact that you have multiple state like entities sharing a geography doesn't stop the application of violence by any of them they seem to overlap and vampers model doesn't really allow for this idea of overlapping sovereignties so I have a slightly different definition of the state which I think all libertarians will like which is the state is any entity that has the ability to pardon crimes either before or after the crime was committed and so after the crime is committed is pretty simple this is the cover-up somebody is killed somebody comes in and gets rid of the evidence it is as if nothing a criminal had ever happened the problem is vanishes and this obviously is ubiquitous right we all know that this kind of stuff happens all the time but that's you know case one case two is the situation where this stuff is done before the time right and in that situation you have a fundamentally different situation right and that situation is one in which if you pardon assault you get police if your pardon theft you a tax collectors and if you part of murder you get armies and that is a approach right it doesn't necessarily describe everything the states do it doesn't describe everything that states are but it certainly gives us a comprehensive way of imagining what the state is in a

[6:41](https://www.youtube.com/watch?v=1p80tTXgdyM&t=401s) way that explains what what happens in these kind of weird edge areas so you take an area like Chicago in the Golden Age of Al Capone and you can make a pretty compelling argument that the Mafia have become state like they do all kinds of criminal stuff nobody ever touches them if you get too close to touching them you discover you know whatever as a song or horse head and you're bad and that kind of persuades you that maybe you don't want to do this anymore um now why does this matter for crypto right the crypto has always had the dream of creating an environment which crime is impossible right that's crime by the state in terms of things like severe season assets its crime by other individuals because crypto stops on fishing in your bank account and that is a very radical model because what we're suggesting here is that by stopping crime we also stopped the functioning of the nation-state see how this works make a system that's perfectly secure the individuals are sovereign but if we focus a lot on sovereign to the individual we get into all kinds of weird questions about interdependency if we're all connected to the same electricity grid and the electricity grid is run by the nation-state in what sense is it that we have transcended the nation-state and become sovereign individuals not so much right never mind the fiber-optic cables but if you think of us in terms of creating zones in which crime is impossible in all of its forms then you begin to talk about the state being excluded by the virtue of crime being excluded and just because the state makes it legal doesn't mean it's not crime that's an important distinction um so is that our experience of crypto is

[8:17](https://www.youtube.com/watch?v=1p80tTXgdyM&t=497s) crypto a place where there is zero crime and the answer is no crypto is a place which is awash in crime right all manner of fraud all manner of theft something like what ten or fifteen thirty percent of the Bitcoin that ever came into existence has been lost or stolen right we have enormous problems with scams where incredible promises were made and then people just walked off with hundreds of millions of dollars we've got all manner of malfeasance at the top tier where we've got untrue projects that did multibillion-dollar I SEOs and have completely failed to return usable citizens and the general quality of software engineering is absolutely horrific right a lot of money has been taken and very little has been returned in result so my suggestion with all of this is it we need a fundamental rethink in terms of how crypto fits into the global system because we fail to deliver and most of the promises that were originally made and we have to modify our approach or we're gonna have some real problems so I'm just trying to get a second device tough talk and see whether there any questions as we go um so let us have a little think about what is the step forward for us right what would it mean to operate a zone with zero crime right well for one thing you'd have to make people accountable for what they do right we would have to know exactly who it was that had done some of these ico type scams and we'd have to stoke those people stealing anybody else's money again after that we'd have to just find a way of getting involved in those systems which just prevented people taking the money or if they'd taken the money we'd have to make sure that they spent it honestly and if not we'd have to hold them to account what does that mean right contracts it for swim to give the money back maybe right transfer of assets they go buy a big house off the back of an IC o---- how do we get that house back sell it and give that money back to their token holders right because if you have an environment which is simply we are sufferer and we can do whatever the hell we like and then what happens with that sovereignty is that the entire thing turns into a wasteland of Mad Max level fraud where you can't trust anybody to tell you the truth about anything and all of these amazingly powerful technologies for keeping systems honest and put into the hands of awful scammers that then successfully get away with the proceeds of their crimes how are we ever going to run something that looks like a

[10:47](https://www.youtube.com/watch?v=1p80tTXgdyM&t=647s) fair society right how can any of the promises that crypto have made work you know the libertarian say right no force no fraud well okay we managed to squeeze the force over the crypto economy pretty successfully there are only a handful of cases where somebody gets struck torture and whacked with a wrench until they hand over their keys but the fraud problem has been absolutely gigantic and we've done very very well work on driving out of existence now why is that the case why have we not done a better job getting on hold of the fraud a lot of it is because people have taken a can of well you know Kavi and poor kind of approach right enter at if you bought it you should be smart enough to take a look at the situation make your own decisions responsibility is on the buyer right um and that is true to a degree but the consequence of that approach has been a total wasteland so do we have to rethink them and if we had to rethink that what would it look like well you could say that this is digital identity problem right we need some ability to bind identities to actions so that when people commit fraud we can identify who they are and then we can in some way protect the people that they've defrauded from the consequences of their decisions maybe right and maybe it's a question of judicial process built into things like smart contracts so that you can go and get hold of fundamental information about um what has been done with the money and if it doesn't fit the original prospectus you can automatically call those funds back but all these approaches are relatively limited right they're relatively limited because their implementations of a principle without ever making the principle explicit so what is the

[12:31](https://www.youtube.com/watch?v=1p80tTXgdyM&t=751s) fundamental principle if we are serious about ah no fortune no fraud what does it mean to run a system with no fraud ideally and this is where we begin to get into the interesting territory ideally what that would mean is that you could see exactly what the long-term disposition of funds would be before the funds were committed now there's a lot of talk right now but things like distributed autonomous organizations and I think for the most part that work is nonsense I'll come back and explain why in a moment but the idea that you could do something like take a project management plan and a staffing roster bake that stuff into a smart contract and then show people when you put your money into this project this is the spending the money will be pushed down and these are the gates where input will be taken in from Oracle's to decide how the money is spent now this begins to sound a little more interesting because at that point if you're going to commit fraud it becomes quite slippery right it becomes very very difficult to arrange and structure fraud because we could actually see exactly where the money is and we can see how it's going to be bound to in future and how we'll be committed this is not so different from a structure that exists in the real world called a prospectus where investors are shown a detailed business pawn before funds are handed over and then once the funds are hunted over the directors of the company are responsible for managing the funds in accordance with the terms of the prospectus and it radically changes in something different happens they're then responsible for reconfiguring the company and letting everybody know exactly what they did and watch and this is a very very powerful construct and it's an enormous pain in the ass these things are fabulously expensive to produce after millions of dollars it's the documentation that you're forced to do by things like the SEC before you go to the public and take their money by doing something like an IC o---- sorry an IPO you're new you're one direction now in the other direction I'm just gonna interrupt you real quick yeah just if you are you aware that the screen sharing is off because I hear you're clicking through slides that no no that's probably just my arm bouncing on my keyboard okay okay yeah just won't work you know so idea is there are other questions coming up on the YouTube chat cuz I can't get to the YouTube chat or

[15:01](https://www.youtube.com/watch?v=1p80tTXgdyM&t=901s) is it all coming through as chat here this will all come through here and I will collect as well if you would like then it's nice to have comments as because we go because if I say something which people are curious about or the needs more explanation nice to know that in real time people can also raise their hand in this chat and then I can unmute them as well okay great it's not just okay so this notion of kind of prospectus right what I'm suggesting is that we could do much much more radical work on a book and fraud in crypto as a fundamental principle right because if it's about no force no fraud crypto as it currently stands it's gonna done a great job with no force it's a horrible job with no fraud what does it look like to have no fraud you use smart contracts to describe exactly how the funds which are raised by a project will be spent in the long run and then the funds will locked onto that agenda now that's interesting because now we've got a sort of actionable transparency right it becomes very close to what they call in some branches of academia a performative speech act you say what it is that you are gonna do and in the saying of it it is performed for example the phrase I do in wedding ceremony um actually is the doing a lot that's the part where it happens until that happens it's never said it's done so let's go back and rerun her in our heads what the whole ICO extravaganza would have looked like if every company had basically published a time line with a spending plan implemented as a smart contract the released funds on that vector and then we had insisted on spending receipts for all of that money being put on shape in theory right you could have gotten into a situation where every single one of these scams would either a fail for Walsh or very very very quickly been identified because where the funds were being spent wouldn't have correspond it to the spending on what trip into a smart contract they would say in this foreign contract that these funds will be used to rent an office and then you look and the receipt says that these funds were used to spend at a villa in the South of France but wait a minute that is not the office you said you were gonna open in Paris what is that so to me this is the kind of thinking which is required for crypto to get a seat at the global table right

[17:31](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1051s) if we're going to be in a position where we've actually got a really realistic grip on the environment that we've created right if we have a domain I don't need incense with domain name but in the sense of a zone that we control and that zone drill really is no fortune no fraud because every penny that goes in is carefully accounted for and you can see exactly what was done with the money at that point I think that we would discover that we were a very different kind of people right all of the idiotic foul scam artists that flooded into crypto after the idea was invented would never have gotten in and would shortly after we've there'd be far more emphasis on actually right and working software as a natural consequence of raising money and in the long run what you wouldn't see is a situation where it's now very very hard to raise capital in crypto because everybody expects that everything is a ripoff and instead you'd be in a position where it's you know well known the pre-quiz a place where you put your money on the table and the wheel spins and it's very much up to the markets to decide whether the product the people built is what they want it or not but the only way to find out was to build it and sell it so

[18:42](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1122s) this is the first principle I really want to walk in right if we are very serious about no fortune no fraud we've got to get serious or at the no fraud part of that we have half or a third of the technical capability to build those kind of systems and I think that the building of those kind of systems if it was done in a responsible fashion we would give us a much higher level of investor protection than you get if you do something like give your money to a calm right it's a it's a very direct approach because if we don't regulate ourselves we will be regulated right the SEC allegedly has something like 1,200 prosecutions of ICO is queued up and in an enormous stock and prior to Co vid they were hiring lawyers right left and center and it looked like they were planning on going on a massive litigation crusade against the frankly the Ethereum space and I don't know whether thought will ever happen I don't know whether the current administration is pushing that I don't think anybody's gonna start those litigations during the pandemic period but let's just be aware that if the SEC actually enforces the wall an enormous number of people are gonna have to give back all the money that they raised in these [ __ ] cos it's all gonna have to go back to original investors to go a disgorge run so it would be enormously harder for people to make the case that that kind of behavior was legitimate if we hadn't seen the vast majority of that money simply wasted right if there was a ton of working code if you could point out hundreds of engineers you could point out a bunch of innovation which had actually happened if you could point your projects which come to market and actually meet a decent attempt at selling themselves it would be great right but instead what happened is that we lost control of the funds the investors have no rights they had no protection a lot of an animal horrific legal paperwork was handed out alongside of that money in the form of things like simple agreements for future tokens and a real you know just you know where the gravity of this sink in right the reason the crypto is basically walled off a little corner of reality and we can't breach the fence into the real world is everybody assumes that if we breach the fence into the real world what's gonna happen is they're gonna lose all of their money right and I really want this to hit home like you know if you actually look at the performance of money going into crypto portfolios and and I'm not talking about in terms of the big projects like Ethereum and Bitcoin right Bitcoin in Ethereum and

[21:12](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1272s) but all of the smaller projects the things which are like the operational arms the things which were like okay we're gonna take these technologies and we're gonna build the following five or six things on them the overall performance of the money that went into building the ecosystem rather than just the platforms has been absolutely horrendous right token goes to go up fueled by hysteria market fixing tokens go down fueled by reality finally kicks in and there's no product so the final thing I want to say on this before we move on to the next part is this if we were going to actually become functioning parts of the global economy we had to not allow the space that we were rent to be overrun by fraud right because at that point you can't make any claim that we created a libertarian environment what we created unfortunately a very substantial degree was a criminal environment because we hand technologies which could blocked crime and we didn't use them that way an answer is an enormous number of people literally got ripped off from one end to the other and because all the numbers were going up you know a lot of that fraud was just buried in growth in the underlying platform tokens you know you lose a bunch of money on an IC o---- but you make it back up because your remaining ether is worth 40 times what it was the day before those are completely exceptional market conditions right and those market conditions let us not forget every penny that went in came from somebody else taking a loss right these numbers don't just appear from nowhere a lot of people lost a lot of money in crypto and that money is what fueled the ico scams so we have to think about this in terms of wealth transfer versus wealth creation crypto was an enormous ly effective bubble in terms of wealth transfer it was a terrible machinery in terms of wealth creation and I had bailed very very very early I haven't held tokens in anything no even Bitcoin or ether in years and because I was so unhappy with him on a market fixing and price ringing that was going on but I just didn't really want to be making money from those things when we had the DAO crisis way back in the day I've looked at the legal underpinnings of what we were standing on and said there's no way this is gonna work and I said at that point of remained tolkien clear since that no in this field that suns of insanity right but if you've got both feet planted in the real world you have to ask yourself what is it that is being accomplished that is producing this river of money and I wasn't willing to profit from the frauds that other

[23:42](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1422s) people were committing so I wasn't gonna hold their tokens see I'm saying can't make this point any quick right we did not run an honest show as a society and as a culture and there are inevitably consequences for that so first thing if we want to see in the global table if we want crypto to swap into the world as a fundamental part of the future it cannot be in a position where crypto equals fraud that has to stop now it has to stop permanently and we have to basically exile the people that did those kind of scams kick them out of the community and never let them back in again somebody didn't ice you and they have Munya nope wise in responsible way if they have agree stat amputated as hard as they're able to return value to their ambassadors by the hell are these people still regarded as being valid parts of the crypto ecosystem is the rule not no force no fraud and is that not what frog looks like we have to be consistent to our values and I'm by no means a textbook libertarian but no foreign rule fraud is a starting point for a conversation and anybody they can't even agree to those principles does not deserve a seat at the table so step one we have to clean up our gob demarked thing one so thing - age of

[24:57](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1497s) unprecedented global crisis right you know wave your hands in the air if you think there's a decent chance that the dollar sort of does not survive this year as the world's reserve currency right I would be completely unsurprised if the economic and cultural fallout from the pandemic doesn't break the us into multiple country like entities that are not really under close federal authority and I would be completely unsurprising if it breaks the EU right south of Europe has gotten hit so hard by the virus on top of you know really ten years of massive massive poverty and declining standards of living it would be completely unsurprised if you didn't see a fundamental break in the way the eurozone operates and I think that we are also in very serious danger of having American states simply seen from the Union yeah something else because my god getting kicked I'm sorry Ben eight yeah no sorry I couldn't quite hear what was happening should I continue or do you second no please continue I think Michael it accidentally unmuted himself oh okay hey so the Union right very strong possibility that you're going to see a breakdown and in America which will probably not be declared as you know Texas is seen in from the Union Oh probably simply be they still doing what the federal government tells them you see you know different transfers of funds you could see Walker government beginning to produce its own currency as we're dealing with their economic problems if the Fed will give the money the use of local currencies as we all know was very very common in for example Germany between World War one and World War two and it was one of the things that pulled the Germans back out of the depression also um but I don't need to phrase that more carefully but yeah certainly there was a lot of local economic development stimulated by local currencies in the late 1920s early 1930s before other forces kicked in similarly the Swiss have had low currency type systems running as basically trade currencies very successfully all of those kinds of approaches are likely to come back up because America's unemployment rate has

[27:27](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1647s) just gone through the roof for me the chart is unprecedented you know unemployment kind of doodles along that sort of you know three four percent I think I saw a number suggesting that it was fifteen twenty percent unemployment in the states all kinds of fundamental problems are you know maturing right we've been in a position where we've known the system was rotten we've known the system was wrong we've known the system was rotten and now it looks like the system is going to completely break in ways which are impossible to imagine right now you can just about look at the economic data and you know what you see is a total wasteland of people's lives in their dreams because the economy has gotten more and more fragile more and more fragile were more fragile forty million Americans were on food stamps of direct government subsidies so we can eat in the state before the crisis kicked in a point where you'd seen an unprecedented wealth transfer to the richest in society because as the economy goes down the people with capital have the ability to buy things on the way down for far less than they're actually worth and they're not been shy about doing that so what this comes to is an opportunity for total global reorganization of the economic order and I think a lot of people are going to get up and I think it's very very very possible that you will see large-scale deployment of central bank digital currency I'd be a little surprised but not that surprised if you see an organization like the International Monetary Fund spin up their own event equivalent of something like Facebook's in Libra in fact I think half of the reason that people came down so hard on Libra is it was probably pretty close to something which has been planned by central governments themselves as a backup strategy in case the global economy ceases and once though that the price of oil has become negative in some places because the oil is still coming out holes in the ground and then there's no place to store it so you're paying people to take off your hands that's actually a thing that's happening right now because nobody's going anywhere so nobody's burning oil right this is all completely unprecedented right if only there was some kind of technology for running a functional global market to hold all the pieces of this mess together as we go through the crisis and to keep global trade going through this incredibly dark and complicated period some kind of technology that doesn't

[29:57](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1797s) require you to try to do a bank transfer through a bank where 30 percent of the people that work for the bank are currently not able to do their jobs either because they're sick or because they're at home but they don't have the necessary crypto equipment to be able to log into the banks for every few transactions because that stuff can only really be done ahead office right can you imagine you know a month and a half from now trying to figure out what happened to a wire transfer that went missing somewhere you know through like Bank of America or are the odds you're ever going to be able to find that money with their customer service systems completely hacked to pieces and a whole bunch of their technical stuff stick because they thinned out the resilience of these systems layer by layer by layer by layer for years right remember what a while ago when Facebook assembly went crazy and started finding everybody's posts as spam yeah there was this you know so three-day period where everything will lock down on Facebook they basically haunted the drove over to an algorithm because everybody had been sent home the algorithm turned out to suck same thing in the banking sector so

[30:57](https://www.youtube.com/watch?v=1p80tTXgdyM&t=1857s) what I'm trying to frame here is that we have an unprecedented opportunity to clean up our act get our [ __ ] together and potentially start providing some useful public services now what kind of useful public services are we talking about answer is I'm not sure yet right we've really never examined what the intersection is between crypto technology and a society under unprecedented strain a globe under unprecedented strain global society is running into huge problems we have this amazing cryptography technology surely surely there's some intersection between these two things right um are we interested in things like masks right there are huge huge markets I've got so many pings from people or just like hey you know I'm part of this mask trading pool and we've got you know access to you know 250 million Mastan warehouses all over the world from you know hundreds of sellers and we're matching these people to be alike it sounds exactly like OTC but I would so TC mask trade I've never seen anything like it I don't know whether that's really fantastically useful to people or whether all the masks are fake so that's the thing I'm working on taking a bunch of my object authentication technology from Mattereum figuring out whether we can apply it all this mask business or for ventilators respirator and all this kind of equipment and I'll show you a demo of that stuff in a second but not the mask stuff of the underlying platform so there's that right keeping money moving right what does it look like to implement some kind of basic income system independently of the nations thing right if you had a system that gave a proven human individual you know a hundred coins a day right it should breathe we give you a hundred coins you prove to us you're an individual human being and not one of a hundred thousand machines you know run on a server right and you prove first you were actually a flesh-and-blood person we give you a hundred tokens a day where did it come from when it's burnt right the more people are involved in that economy the more tokens we print at you except the prices will change because you're constantly putting money into the system but it's going in a predictable rate to balance the system you might also then want to avoid a mirage so that every day the tokens would become less valuable they literally shrink you know your balance is and tokens on Monday but by Thursday it's only 995 and to keep the toll following with money in the system equal to the number of people in the system that is a thing that could be done right

[33:27](https://www.youtube.com/watch?v=1p80tTXgdyM&t=2007s) what are those tokens used for I don't know are people gonna continue to want to do work over the internet that they may not have cash dollars to pay for yeah definitely so the opportunities for spinning up secondary economy is fantastic um the reason I think it'd be worth looking at doing a basic income in tokens with Demerara is that those systems are well known a for getting economies back from the grave it in cold start so for a lot of people that are working from home because they're you know web designers or you know all third or wherever it is they're heading for a cold start right they're really really in a position where their markets have dried up I have a manuscript for a small book that I was commissioned to write and you know I just I'm not sure enough things ever gonna see the light at any you know the publisher say it's gonna be fine but I'm so looking at the world like you know somebody's gonna try to produce a physical object and distribute it to people in this environment in three months Oh harsh you know good luck to them what do I can to help but that just looks extremely challenging so what it means to get a seat of the global table by fundamental analysis is that you have to solve a problem that everybody is impacted by right or at least powerful people are impacted by and that nobody else other than you is able solve so your see at the table is if we get rid of those people a whole bunch of other people have their lives collapse in a way which is really really harmful and damaging and we would be responsible for harming those people if we shut this show down and over and over and over again you can see this in history groups will rise they will take over management problem they get so good at managing that problem nobody is going to displace them because if you displace them you wind up inheriting the problem it's one of the fundamental mechanisms by which groups get legitimacy even groups which you could argue very strongly have fundamental problems like Hamas right Hamas manages to get itself a seat at the table by running a very effective social care system so is there a seat at the table for Bitcoin or Syria right do we solve a global problem that nobody else wants to solve or has the ability to solve we've taken a crack at right there was a whole period which was all about we're gonna Bank the unbanked

[35:57](https://www.youtube.com/watch?v=1p80tTXgdyM&t=2157s) we're gonna do financial services for thought limb pyramid a lot of talk was talked and what the money was raised and fair number of projects give us a serious try I remember four years I keep running into people of conferences who had you know 50 Bitcoin ATMs in Kenya and this kind of stuff some of those projects almost certainly wound up being reused I don't think any of them scaled in the way that fins on campus had scaled but certainly the will was there and there was the beginnings of growth on those fronts then the tide shifted another direction tripped was for I SEOs and everybody went off in that direction not so clear that lot was solving a natural problem now because the underlying problem of getting risk capital into startups was fundamentally there but we didn't put the risk capital into startups who grew the risk capital into scams disastrous right poison the entire field will be remembered for decades and that's even if there aren't master prosecutions so and disgorge but do not forget the word disclosure right people being we required to get the money back to their investors is a real thing so

[37:00](https://www.youtube.com/watch?v=1p80tTXgdyM&t=2220s) what are the problems that we could potentially solve right um let me very quickly show you the material demo just so you got a sense of what we've been working on whoa no go away now what do we want to bet that this watch we work in the way we intend there we go so um we started material two and a half years ago and we spent about a year building out a very very overpowered system from essentially resolving legal disputes globally a on the blockchain and it was five years to our I'd been around crypto so long that I kind of lost the sense of how long things where we take in the real world so at that point we pivoted very hard and we took all of that kind of highfalutin technology and we narrowed it down to a single class of disputes which are disputes over the authenticity of physical things you go to Mattereum comm / about you can do this alongside me and actually have a play with our software so we've got here a pallet of objects I'm just gonna click one or two of these open so put them in other times and here is one that I opened earlier oh there we go so um you'll need meta masks installed for this as well metal mask window just the morgan here alright and we're connecting the app so now you can see we have a bold and handsome captain in party clothes looks like he's going to Burning Man um you can see here there's a number so you can see there's the serial number on the box and I actually have this physical object in my living room so now if we click on certificates what you get is a set of data about the object attached to a contract so if I click this here contract it brings me up a huge Ward legalese and this stuff is directly drawn from the work that we did on this kind of global air Court system so this contract is enforceable in a

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Continues in https://guptaoption.com/texts/761-2.md (part 2 of 2).
End of [761] Cryptoeconomics Lab: Vinay Gupta, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.