E170: Ethereum Co-Founder: How Big Tech Will Use AI To Control You (And How Crypto Stops It)

12:34Joseph Lubin:Before we run to this magical thing. Yeah, there are lots of magical things.

12:40Shift Happens:Tell me about some of them. Some of them, well, decentralized protocols, artificial intelligence, instant teleportation,

12:53Shift Happens:cheap high energy creation so there are lots of potential game changers that can transform an economy or drastically accelerate an economy so that that economy can grow its way out of a debt hole.

13:09Joseph Lubin:Okay, we need to talk about instant teletransportation because it's been my dream since forever. I've been telling so many people, man, if this existed, it would be so good. Exactly. Tell me more about that. We have an announcement to make, actually.

13:23Shift Happens:Just joking.

13:27Joseph Lubin:How close are we to that? Is this even possible? I don't know.

13:31Shift Happens:So we have a certain form of magic that was recently, not perfected, but accelerated. So growing machine intelligence exponentially is going to affect essentially all areas of society and especially science. So we can expect that the global economy and society will transform dramatically. And I think that's mostly because of the scientific advances, technological advances that we'll make because AI will be applied to everything.

14:12Joseph Lubin:How do you feel about that? Good. Excited or depressed? Because before you talked about... Extremely good. Yeah, absolutely.

14:22You were in New York on September 11th, 9-11.

14:30Joseph Lubin:This year? 2021. Okay. I know what day you're talking about. How did that date change your relationship with institutions and trust?

14:44Shift Happens:That date changed the world's relationship, I think, to institutions and trust. And I shifted my relationship, my trust relationship with institutions over the next few years as I learned more and researched more. But that date caused a giant document called the Patriot Act to be put in front of Congress and passed rapidly without, supposedly without too many people reading it. I think it was a thousand-something page document that was sort of sitting on a shelf somewhere just in case something came along. And that essentially changed the nature of privacy in the United States, where privacy was expected to a posture where privacy was unacceptable from a government perspective.

15:42Shift Happens:and it just enabled, I'm sure there was a surveillance state in place already, but enabled in the U.S. and certainly many other places to normalize the idea of a surveillance state. And that's one aspect of loss of trust in institutions at least. And I say that from Hong Kong.

16:10Shift Happens:apologies to our hosts

16:15Joseph Lubin:it's okay we're both living in a few days

16:18Shift Happens:you might want to delete that piece while we're here what does

16:29Joseph Lubin:post 9-11 2001 Joe believe in what changed before and after 9-11 in how you think and what you believe in

16:48Shift Happens:I've been lucky enough to just work on things that I enjoyed so early on it was things like machine vision and robotics and neural networks or AI and lots of different kinds of software engineering and some activity in the world of finance. And so I'm still doing what I'm doing. I'm still doing what I believe in, which is exploring my interests and being curious about many things. And I guess I'm more focused on the idea that society could go off in a very bad direction or is moving off in a concerning direction just because of the geopolitical and global macroeconomic state of the world. And I think we actually also have an opportunity to go off in a very positive direction.

17:50Shift Happens:So I guess that potential fork in the road is what focuses me these days.

18:01Shift Happens:what does it depend on we go one way or the other way it depends on whether we can land societal dependence on and benefit from decentralized protocols and also land healthy forms of artificial intelligence It probably depends on big tech not retaining control of the powerful forms of machine intelligence and some sort of evolution into a more decentralized architecture for how human intelligence and machine intelligence and human agency and machine agency all merge into what probably ends up looking like a hybrid human machine intelligent organism for the planet so that we would all be connected.

19:09Shift Happens:So if we do that sort of thing, then I think we won't have these centralized, extremely powerful surveillance machines that can control the behavior of many humans or all humans on the planet. If we don't figure out that architecture, then we'll probably see either governments or big technology organizations having access to too much machine intelligence power and being able to essentially control humans and all the systems of the world.

19:58Joseph Lubin:How optimistic are you that we end up in the right place? Of course we're going to end up in the right place. Because I'm thinking about how short-term so many people are. Sure. And this goes completely against the long-term thinking that we need to get there.

20:15Shift Happens:Yeah, it's constantly surprising to me that people just see slices, time slices of a situation, and they don't think so much about where that time slice came from, what the different motivations of the different actors are, and the natural potential trajectories. that these flows or people's agendas will result in. So I'm pretty good at developing mental models in real time of how situations can evolve. And so I guess for as long as there are lots of people who are optimistic and interested in building a healthier world, then we're very likely to get it right. and so those people have to have vision and they shouldn't, they're not likely to be the kind of people that freak out because they see something that concerns them.

21:29Shift Happens:They're likely to be the kind of people that understands why that situation happened and all the positive ways that it could evolve. How do you find them? How do I find them? I don't need to find them. they're doing the they're in their right place they're doing their right thing and we we bump into each other all the time at crypto conferences do you go to crypto conferences a lot yes yes i do why that's a good why do i go to current conferences a lot. Because so many people say it's... It's partly my job. It's important for us to

22:14Shift Happens:share with the world the valuable work that we're doing in the context of MetaMask and our other products, Infuro, Linea, etc. It's important to share with the world the evolution of the Ethereum protocol. It's important to go on podcasts like yours and

22:33Joseph Lubin:because I have different type of guests. There's like the big, big kind of heavyweights, right? Most of them don't go to these conferences. They're just like...

22:43Shift Happens:Yes, they do. Like what heavyweights don't go to crypto conferences?

22:47Joseph Lubin:I mean, I'm thinking... I mean, Brian Armstrong goes around but stays in the US mostly.

22:52Shift Happens:Of course he does.

22:53Joseph Lubin:Mike Novo goes to conferences?

22:54Shift Happens:Novo definitely goes to lots of conferences. Absolutely.

22:57Joseph Lubin:Maybe they stay more US-centric? I would think...

23:01Shift Happens:Could be, yeah. But both of them are definitely out there. They may both be more selective recently just because travel gets really heavy.

23:16Joseph Lubin:Talking about Novo, I read something, but I don't know if that's true. So I'm going to ask you. It's definitely true. Everything you read about Mike is true.

23:24Shift Happens:He's done it all.

23:25Joseph Lubin:Previous podcast guest, Novo, you went to university together. We did. Correct. I saw him say in an article, Joe was one of the brightest among us, a forward thinker, but by 45 hadn't done anything to stand out. I read that too. I don't think any of our gang would have guessed how things would turn out. Yep.

23:50Shift Happens:How did you react when you read that? Well, I think it's true. So I was happily doing things that were interesting for me. For example, writing lots of software spending time with my son baseball league etc.

24:12Joseph Lubin:Music? I read about music. A little bit but that was earlier. How did you get so fascinated by the world of cryptocurrencies and the blockchain? Good question.

24:25Shift Happens:I think it was just reading Satoshi's white paper. I regularly read a nerd news tech nerd website called SlashDot for many years and I'd seen one post on this thing called Bitcoin and I think it was either the second or third post that I came across and I finally decided to click on it and downloaded the white paper and I read the white paper and And at that point, I was disillusioned because I thought the economy was in a lot of trouble and I didn't see an obvious way out. But when I read Satoshi's white paper, I was like, hey, this decentralized trust thing can fix everything. The problem is that it's going to take a long time.

25:28Shift Happens:But, you know, hey, we're engineers. We can build this. We can build a trust foundation. And then my thinking in subsequent years evolved or what we ended up doing in subsequent years evolved. And so Bitcoin represented a new kind of trust foundation to me. And then we in our ecosystem built a new kind of finance, decentralized finance that was enabled by that trust layer. And with those two layers, maybe we need a decentralized social graph layer or some other things. But essentially, with those decentralized foundations, we could build all the systems of the world, rebuild them, re-architect them on sounder foundations.

26:15And so that's – I think I got it immediately.

26:22Shift Happens:And it changed my mood immediately. And so basically I fell down the Bitcoin rabbit hole and I read everything for a long time. And there just weren't many mature projects in the space in early 2011. So it was all about, it was pretty academic for me. And I also wasn't confident that Bitcoin would be allowed to survive. So BitTorrent is an interesting example. where BitTorrent was a revelation in terms of how decentralized protocols could work. It essentially used this computer science construct of distributed hash tables, and it turned that into something called Kdemli. And Kdemli was a peer-to-peer system where all these peers were talking to each other, and Skype ended up using something like that.

27:22Shift Happens:And so there were these early experiments that weren't decentralized digital money. And so that all evolved in a direction that ended up being Bitcoin. and then Bitcoin caught my attention and Ethereum captured me, I guess, in the sense that a lot of people in the Bitcoin space were thinking that decentralized trust is great and it's so great that we should figure out how to apply it to more than just some characteristics of money. And there were projects like NXT and MasterCoin and others that were doing new use cases on decentralized protocols, but they weren't doing it in a very general way.

28:31Shift Happens:And so Vitalik's articulation of Ethereum in his white paper essentially gave the full power of a decentralized protocol network to a software developer who could write code for a virtual machine. This virtual machine was a computationally complete virtual machine. And so that moved the potential from having to build up so much infrastructure to actually build something on Bitcoin. And even then, those things that you build on Bitcoin might not benefit from the full decentralization to being able to build anything you want in software tools that you're pretty comfortable with already. And understand that both the data and the state or the behavior of the program would all be decentralized and all subject to the decentralized trust of the system.

29:37Shift Happens:And so that was the big game changer. And when I read Vitalik's white paper and met him a little before I met the white paper,

29:51Shift Happens:that was the moment that I was very convinced that we could move this thing much faster. There was a period of time between when I read about Bitcoin and when I met Vitalik where I did become convinced that this thing was unstoppable, that Bitcoin was probably anti-fragile. and when you see it go up to, I forget,$21 and then down to$2 or whatever the numbers were, when you see it go up and down a few times and recover and it keeps getting more and more valuable, higher highs and higher lows, and you hear all the reasons why it should fail and it doesn't, then at least I grew convinced that Bitcoin was going to survive.

30:53Shift Happens:And that was probably in maybe 2012, 2013, closer to 2013 probably. And so I was already pretty certain that this whole endeavor was ultimately going to be successful by the time I read the Ethereum white paper.

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31:55Joseph Lubin:KYC, KYB, transaction monitoring, and even full travel rule compliance across 1 ,800 plus virtual asset service providers. Their AI flags suspicious behavior and account takeovers in real time before damage is done. Check the link in the description down below to learn more. You said before that reading the Bitcoin white paper and understanding Bitcoin changed your mood. It did. But it didn't. It changed your mood, but it didn't make you go and build in the space yet. Sure. Why did you decide to join Ethereum as a co-founder?

32:40Shift Happens:I decided to keep paying attention to the project, and the project was organized on Skype and different meetups. And about a month into my awareness of the project, I was invited to and showed up at the Miami Bitcoin Conference, North American Bitcoin Conference in Miami. Anthony DiOrio, a co-founder of Ethereum, had rented a house and invited a bunch of people to it. And I was invited and we sort of spontaneously reformatted who the co-founders were during that week together. I think there were five loosely defined co-founders before that. and then we declared that there were eight co-founders and two of those co-founders later dropped off and were replaced by two other co-founders.

33:51That's how the project started to really crystallize

33:58Shift Happens:and it had pretty good momentum right from the start, I think. So I think Vitalik wrote the white paper in November 2013, and I read it January 1st. And it was already moving pretty fast. And by the time the end of January rolled around for the North American Bitcoin Conference, a lot of people knew about Vitalik because he owned and wrote for Bitcoin magazine. And he was a really great, clear writer. even at 19 I'd read his articles for a while before I heard that he was 19 years old and I was pretty stunned that he was such a good communicator and so I think a lot of people felt the buzz already I know a lot of people felt the buzz already because it was a really big auditorium and it was packed five people deep standing room only at the back so it made a pretty big splash right away

35:02Joseph Lubin:decentralization is not just a technology it's an organizing principle for society who said that? that's pretty smart

35:12Joseph Lubin:I'm not sure anymore right if what I hear or read is true but it's all true tell me it's all true makes life simpler to think that way

35:26Shift Happens:yeah just believe it can you explain uh why decentralized or decentralized protocol technology is an organizing principle um while there are lots of ways to organize things if you're talking about societies um maybe the most important thing uh in a society um is to build cool things, civilization scale things. And in order to build civilization scale things, you need to organize people and resources. So you have to put collectives together and organize them in some way. So one way to organize them is top-down command and control. And that's a really effective and efficient way to get civilization-scale things done or any sort of project done.

36:22Shift Happens:And that's a perfectly reasonable organizing principle for a lot of things. And if you're talking about civilization-scale things or national-scale things, if you organize things top-down command and control, there are some potential problems. So if you have a hierarchy, the hierarchy can get brittle. It can get stagnant. And so people might, in some position in the hierarchy, they might try to consolidate power. They might hoard information. So there are incentives to be selfish, either at the top or all the way through. and those incentives or if people do act in a selfish way or a destructive way, you might want to damage one of your peers so your peer doesn't become your boss or something like that.

37:29Shift Happens:So those kinds of problems with hierarchy manifest in so much of what we do and have done for centuries. And ultimately, top-down command and control is great for building civilizations, but it's pretty bad for 99 % of the people living in those civilizations. And so we can take this organizing principle. It's also great for bottom-up coalescing of information. So we can take this top-down, bottom-up, top hierarchical vertical control system, and if we add horizontal elements to it, if we add elements where everybody is contributing to decision-making, if you have consensus mechanisms that can enable large groups of people or intelligences to make decisions in virtually real time in a few seconds, as we do with decentralized protocols.

38:42Shift Happens:If we have mechanisms that can take whatever value is created, say in a decentralized protocol, and distribute that value in real time to all the contributors to that project, then you have essentially this cross-cutting band of decentralized organization that makes the top-down command and control stuff. just much better.

39:14Joseph Lubin:You're the founder of a company called ConsenSys.

39:19Shift Happens:You're the founder.

39:20Joseph Lubin:You're the boss. Actually, two companies called ConsenSys. I'm trying to understand, because one criticism of decentralization is often can be lack of direction.

39:39Joseph Lubin:Because there is not someone who makes a decision and say we're going there there can be

39:48Shift Happens:well in a decentralized protocol often you have a way to elect a leader whether it's via proof of work or proof of stake and the leader in a blockchain system essentially defines what the order of transactions are and what the shape of a block is and how to connect the block into the previous block. So there is a leader in blockchain systems and the leader can change with each block or with each era of your protocol. So it doesn't have to be an amorphous decisionless mess. Can you explain consensus to your Uber driver? the company. So there are two consensus companies. One was the original consensus called Consensus Mesh.

40:46Shift Happens:It's the mothership company. It formed about a year into the Ethereum project essentially to continue the vision and the mission of the Ethereum project. And we didn't know that much about what we were doing at the time. we were trying to build little applications we were trying to get attention for this project that we think was going to be really powerful we didn't have any developer tools we didn't really have much of an ecosystem we didn't have much infrastructure and so we ended up building some things that we needed so we ended up building developer tools in the form of Truffle and a wallet in the form of MetaMask.

41:34Shift Happens:And MetaMask needed to speak to the Ethereum blockchain. We built something called Infura, which enabled MetaMask and then external developers to read from blockchains, which is not simple to do. And then to write transactions or write data to blockchains in the form of transactions. that was the core of ConsensusMesh. ConsensusMesh also incubated a lot more projects than those that I just described and spun out about 40 projects

42:14Shift Happens:and invested in a bunch more projects. Some of the projects that spun out of Consensus itself into a company called Consensus Software were MetaMask and Infera and our protocols group. So we built Ethereum clients for many years. And Ethereum client is the software that runs the Ethereum network. So a few different projects spun out because they wanted to be a tightly integrated software product company, which without some of the baggage that Consensus Mesh had because it developed organically.

42:56Joseph Lubin:what's your deepest and most fundamental belief about what cryptocurrencies and the blockchain represent today and what it should be? Deepest and most fundamental? There's kind of this battle of the soul for Web3 now, which is... The soul for Web3? Is it decentralizing everything, Web3, or is it financial services? And which direction are we going to?

43:24Shift Happens:Yeah, so Vitalik, so we had a few different narratives for what Ethereum was early on. So one was the internet value. The common one was world computer. And Vitalik recently commented that, hey, maybe we should not focus on world computer as a narrative for Ethereum, Maybe because so many of the initial use cases are financial, maybe we should think about it as a world ledger or a global digital asset settlement layer. And so I think that makes a lot of sense for now, where we have this new trust foundation and then decentralized finance. And we need a lot more maturing of the DeFi layer. and we need the addition of a decentralized social layer and probably some other stuff.

44:23Shift Happens:And then I do think that we will move the Ethereum technology, the modular layer one, layer two, layer three Ethereum ecosystem, which I like to call metropolitan Ethereum. I think that will become a fundamental aspect of the world computer. And you can think of our ecosystem as divided into three perspectives, three groups of people, three technology, three different interpretations of the crypto elephant. One is essentially blockchain decentralized protocols. Those can be private permissions. They can be public permissionless. The other is lots of applications, the Web3 space where you can have social applications, prediction markets, a whole bunch of things like that.

45:23Shift Happens:And the other is crypto. And I think crypto is the element that is necessary. It also gets a bit of a bad name because there's so much crypto in the world that thinks of decentralization as a marketing term rather than an organizing principle. and it's not in the blockchain space or the Web3 space necessarily that people get harmed. It's in some of the shallower, even exploitative crypto applications like exploitative ICOs, exploitative other kinds of protocols. And so that's the kind of or the aspect of our ecosystem that would be good to clean up in some way. But it's about cryptocurrency. Stablecoins may not really be crypto in the same sense.

46:31Shift Happens:Real-world assets might not really be crypto. Maybe they're part of a new category, Sort of a more trad-fi on DeFi kind of aspect. What do you think about that compared to the original vision and hope you had when you discovered Ethereum? I think that for every innovative technology, There are probably some side effects or edge cases that emerge and that aren't perfect and that you can identify and ideally fix. How would you fix stablecoins or RWA? Stablecoins are fine. RWA is fine. So those are just traditional finance constructs. At least Genius Act compliant stablecoins or effectively centralized stablecoins, those are not broken.

47:42Shift Happens:They sit at the intersection of traditional finance and DeFi. They also sit at the intersection of geopolitics with all of that. And so those are great constructs. I do believe that if our ecosystem gets too reliant on centralized stablecoins, that could be very problematic for our ecosystem. So I've always been a fan of decentralized stablecoins and I look forward to a lot of innovation in that space. What we need before that innovation can really take hold is what people have called decentralized financial bandwidth or decentralized economic bandwidth. And what that means is if you have Ether or Bitcoin serving as collateral for a stablecoin, those things effectively represent collateral and you can issue stablecoin against that collateral.

48:54Shift Happens:But there isn't enough Ether and Bitcoin in the world in order to mint enough stablecoins so that it's very broadly usable. And so we need growth in our ecosystem and validation from stablecoins. Centralized stablecoins is a great way to facilitate growth in our ecosystem. And so in the not too distant future, when our ecosystem is much more valuable, then I think decentralized stablecoins will gain traction. Quick one.

49:33Joseph Lubin:I want to thank our partners who help us make this show possible. Thank you, Treasurer. My favorite cold wallet to store my crypto and make sure I sleep well at night. If you want to order a Treasurer wallet and sleep well at night too, you can use my promo code WSH10 to get a 10 % discount. Big thanks to my friends at Bitwise Asset Management for backing today's conversation. Bitwise is a global crypto asset manager with$11 billion in clients' assets and more than 70 crypto solutions. And that includes ETFs, index funds, SMAs, custom option strategies, staking, vaults, and more. However you want to invest in crypto, the experts at Bitwise have you covered.

50:16Joseph Lubin:What's the most amazing thing that is tangible, concrete, and practical you think has come out of crypto so far?

50:28Shift Happens:Well, so many things. The most tangible is decentralized finance. It's not easily used by everybody. It is getting easier and easier to use. So different vault constructs. There are user interfaces that enable people to lend and borrow without really paying too much attention to the fact that this is all sitting on Ethereum in some form. and DeFi has been usable for people who understand the technology and it is, I believe, about to get usable if we get some clarity in the United States of America with respect to crypto legislation. I think it's going to become usable by many corporations. when that starts to happen then the floodgates will open and it will change the nature of finance quite dramatically both for retail and enterprises

51:41Joseph Lubin:we have two beautiful cards on the table I'm going to show this one Metamask card your company is the creator of Metamask can you explain what Metamask is without any jargon

52:02Shift Happens:no I cannot I'll do my best let's try our best so Metamask started life maybe I have to back up even in order to do something in the Ethereum protocol, you need to sign some sort of statement indicating that you want to do something on the blockchain. It could be that I want to send Ether or another token to you. I would have to sign a message. It's called signing a transaction. And that involves a whole bunch of cryptography. MetaMask and mathematics is very complicated. MetaMask made all of that mathematics invisible to the user and just enabled people to specify what they wanted to do on Ethereum.

53:05Shift Happens:Maybe I want to send you one Ether. I put one in a field and I put some address representing you. Maybe you have an ENS name so that it's easily readable. And then I can click go and the transaction happens. So the Metamask wallet sends the transaction into the blockchain and gets processed by some validators and block builders and validators and packed into a block and attached to this chain of blocks. And so it started life as this magic wand that enabled you to exercise your digital authority in this blockchain space. It soon evolved into a more fully featured wallet where you could look at your different tokens and evolved more sort of portfolio-like capabilities, tracking your tokens in different ways.

54:08Shift Happens:Instead of just looking at your accounts and how many tokens you have in each account, you could bring them all together into more of a portfolio-like view.

54:21Shift Happens:Now, MetaMask is really breaking out. It is becoming a new kind of fintech neobank, essentially. and it is essentially evolving into a fully featured financial platform, a bank effectively, although I probably shouldn't legally use the term bank. So a full service financial platform that you own and you can carry it around on your phone with you. You can see a version of it on your laptop and it puts you in control of your financial life. So you can have a debit card where you, instead of putting money into your bank account, so you can use your debit card. And so your bank earns yield, earns interest on your money.

55:25Shift Happens:You can put your salary into your account on the Linea blockchain and put it into DeFi and earn yield up to the minute that you make a purchase. So you can make a purchase on the global MasterCard network and your money is yours and under your control. You don't have to ask a bank teller for access to your money. You can do various other things in MetaMask. You can access perpetuals on Hyperliquid. You can access prediction markets on Polymarket. You can access equity perps and tokenized stocks on Ondo currently. There'll be other kinds of tokenized stock platforms on Superstate soon. and the DTCC in the US is building tokenized stock infrastructure.

56:32Shift Happens:And we have a rewards platform that enables us to either give away points or to work with projects that want access to the MetaMask users who are giving us tokens that we can give away to help direct people's attention to different things that either we offer in MetaMask or that different protocols offer. You talked about Neobank and banks,

57:04Joseph Lubin:and we're talking about this new financial system. I actually asked the same question to Gavin Wood last year.

57:18you probably

57:20Joseph Lubin:walked the talk so I want to understand from as much as you want to tell me obviously how much of your life do you live in this new financial system

57:31Shift Happens:a good amount I mean I I just work all the time so I don't I make investments I don't really make financial investments I make investments of a venture nature in our ecosystem. Our company makes consensus software, makes strategic investments. I do some DeFi things, not a lot. I read about a lot of DeFi things because I need to stay on top of what's going on. I do a lot of reading about AI, but for instance I'm not not installing OpenClaw or ClawedBot or MoldBot on my laptop or even on a different device because I can absorb a lot of what I need to absorb via reading and probably end up making use of the AI technology soon when some of the dangerous aspects get squeezed out of it.

58:44Shift Happens:So in terms of what do I do in crypto, I do use crypto quite a lot.

58:52Joseph Lubin:Financially too? So if you go to coffee or dinner, Metamaskar, Metamaskar nonstop, right?

58:58Shift Happens:Not nonstop, but yeah. I do that. For example, for me,

59:01Joseph Lubin:I just had a shift last year, actually. I was an early Revolut and Monzo user. 2015-16, I started my first company in London in 2015. And they came along at that time. And I realized, this is just so simple. Yeah, that's good. And I never had probably more than 500 bucks in a normal bank account after that. And I was using these. And now, since like a year, more or less, well, the entire business runs stable coins, right?

59:31Joseph Lubin:I don't want to off-ramp anymore. it's just so good it's like the next evolution of all these

59:37Shift Happens:stables are great of course I never spend ether but I do borrow against my ether and turn it into stables and use stables

59:49Joseph Lubin:I have a question on that borrowing against ether or bitcoin

59:56Joseph Lubin:I understand the whole concept of

1:00:02Joseph Lubin:people who do that they don't want to, you don't pay taxes, all that stuff, right? But these assets are so volatile. When you borrow against a volatile asset, this is something I really never understood personally because it's so volatile, you have all this liquidation, you're actually taking a huge risk. What's your answer to that?

1:00:21Shift Happens:If you squint your eyes and you look at a chart of Ether or a chart of Bitcoin on a semi-log graph, It kind of looks like a straight line up and to the right. So my perspective is very long term.

1:00:40Joseph Lubin:Self-sovereignty puts a lot of responsibility back on the individuals. Is this good or bad?

1:00:48Shift Happens:It is good. Why?

1:00:53Shift Happens:Yes, there are two options. One is to be told what to do, and one is to do what you choose to do based on being informed. And if you choose to accept being told what to do by governments or somebody else who wants something that may not be perfectly aligned with your interests, then you're potentially subject to some sort of outcome that you won't like and that you don't want. And so it is as we move into an era where people have the ability to have greater economic, social, political, financial agency in their lives, it will be complicated. It is a new way of living on the planet that hasn't been available to the 99%, essentially.

1:01:54Shift Happens:And most of those people don't have adequate financial literacy. Most of those people are easily fooled, are easily exploited. And that will remain true forever unless there are mechanisms that enable people to take more control of their lives, to be educated about potential dangers and potential opportunities. and so this is a pretty perfect moment with the advent of decentralized protocols with decentralized protocols getting scalable and going mainstream and I'm specifically referring to the Ethereum ecosystem. It's also really ideal that AI is emerging because all this stuff is pretty complicated.

1:02:52Shift Happens:Nobody reads terms and conditions on pieces of paper or on the internet. so it's going to be hard to imagine that people will understand how DeFi works or understand that a proposal in a DAO, a decentralized organization, is going to change the behavior of the DAO, change the person's relationship to the DAO. And so we're going to need assistance, not just to navigate the web, AI, please explain these terms and conditions to me in simple language that I can understand and point out how this impacts my situation. And you can do that same thing in the context of making more use of decentralized protocols.

1:03:49Shift Happens:So DeFi is getting safer, easier to use, and traditional financial systems are getting more dangerous. and I guess they're still pretty easy to use, but there have been situations like in Greece a bunch of years ago where people woke up and some significant percentage of their money was gone. That can happen in other places in the world with very large debt in the system, so there can be some runaway situations. And so the current global financial system is definitely not as safe as it used to be, even in the United States. And the crypto financial ecosystem is getting a lot safer. It's still not perfectly safe or sufficiently safe.

1:04:45Shift Happens:but given that they're sort of moving in the same direction in terms of safety and given that nation state currencies are debasing, their purchasing power is shrinking and shrinking faster and faster and given that the purchasing power of cryptocurrencies has been growing on this semi-log straight line for 10 or 15 years 15 in the case of Bitcoin where should people put their assets? I think that once it gets easier to use DeFi for people and corporations, people are going to realize that, hey, this money is appreciating and I can put my crypto in a vault and earn significant yield or I can stick it in a traditional bank account and earn pretty much nothing on this debasing currency.

1:05:45Shift Happens:And so when more and more people and organizations figure that out, there's going to be probably a stampede.

1:05:56Joseph Lubin:What's your response to someone, and I'm one of them, I have to be honest, who says that self-custody is kind of too risky or complicated for mainstream users?

1:06:10Shift Happens:It needs to get better. And lots of people are working on making it easier to understand and use and more powerful. And I would argue that ultimately, if you're not in custody of your assets, that will be more dangerous than if you are. So it's a question of timing, I guess.

1:06:36Joseph Lubin:What does easier self-custody look like? What could it look like?

1:06:44Shift Happens:So it could be that you have an intelligent agent that is either sitting inside your MetaMask or has delegated access to your MetaMask. And this intelligent agent is a machine intelligence that is your digital twin that knows very much about you so that it can represent you in the world, do things for you. And you can ask it any question about finances. You can express your intent. I want to send one Ether to Joe, or I want you to set me up in this Morpho vault and take these tokens and configure a portfolio for me and then potentially look at the portfolio every month and rebalance it according to certain criteria.

1:07:49Shift Happens:So it could just be the same sort of thinking about money that you do, thinking about investing or money management that you do, and you would have pretty soon an intelligent agent that can help you execute your intents or intentions. And so there are systems in our ecosystem, an intent-centric architecture where you can just express what you want to happen rather than going into your MetaMask and doing all the mechanical things necessary to move your money around and position it. As you'd like.

1:08:31Joseph Lubin:I promise the last Novogratz quote I read, it's the same article. He said about you.

1:08:40Shift Happens:I'm going to have to start saying stuff about him.

1:08:42Joseph Lubin:You can, you should. So I can take it in the next podcast with him and say, here is the revenge. People like me have a lot of houses. Joe doesn't do any of that.

1:08:59Joseph Lubin:He doesn't even own a car. What's your relationship with money?

1:09:05Shift Happens:Money is a tool. I'm focused on growing the impact that I and we, that I work with, the people I work with, growing the impact that we can have. And if it requires some money to do some things, then that's a great use of money.

1:09:27Joseph Lubin:If you look 10 years into the future, how do you think people will interact with money differently than they do today?

1:09:34Shift Happens:I think it's to be pretty similar 10 years into the future. I think probably a little further out. And it could be 10 years. I think Elon Musk would argue that in 10 years from now, we're probably not going to need money because so much will be automated and we'll each have a few robots that basically do everything for us and it'll be incredibly inexpensive to operate them. And so the cost of living our lives is going to get very inexpensive. So I do think there will be some things that are scarce. I think attention will be scarce.

1:10:23Shift Happens:and there's a book called Down and Out in the Magic Kingdom by Cory Doctorow, and it was a beautiful articulation of how attention, and Cory called it woofy in his book, that was the currency of this particular story. And so I do think, so we're primates. We're primates living in a jungle. We're very hierarchical social animals. And we don't necessarily need a monetary medium of exchange. But we do need to organize ourselves according to sort of different kinds of social status. And so that's going to take a different form if we do move past the need for money. And it could be that money as a lubricating medium of exchange, it could be that that mostly goes away and we tokenize everything and then we can just barter with tokens.

1:11:32Shift Happens:So if you have a carton of bananas and I have tickets to a basketball game, those might be represented as tokens. And so if you send me the token representing ownership of the carton, I can send you ownership or the tokens themselves. And we don't need any money in that situation. So it could be that fluid without money. And then if our digital twin agents are just taking care of all those transactions, I can just say, hey, I want a carton of bananas. Or you can say you want to go see the basketball game and we don't even need to know each other. And those tokens could swap.

1:12:27Joseph Lubin:thank you so much joe for doing this sure thank you for putting in the work since so many years to make this industry not only move forward but move towards the right direction i would certainly not be here today without people like you thank you so much thank you as you probably know by now, I host some of the biggest names in Bitcoin and crypto on my podcast. But a lot of the best stuff never makes it on air. The Shift newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else. If you want the real insight take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.

1:13:20Go. Go.