My Bitcoin Expo London talk – now with subtitles. Lucas Gonzalez and I did a transcript and subtitles.

Talk covers bitcoin, its competitors, governance, the future, resilience to change, the hexayurt project, and living in a nine billion person world.

Key section: the last question gets into whether bitcoin is an Anarchist or a Libertarian breakthrough, and the relationship between anarchist and libertarian aspects of the bitcoin governance problem. That starts at the 18m mark.

We hope you enjoy the talk.

Make sure the subtitles are on when you watch the talk, they help in a few places where the crowd noise is really loud! We’ll talk you through the process of doing a video this way some time!

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[00:00] WHAT WE MEAN BY “THE FUTURE”

If you’re 40, that’s by the time you’re 70. It’s the kind of horizon over which people plan their financial futures. It’s the kind of horizon over which people plan something like a mortgage.

So, let me give you an example of something that’s changing in a semi-predictable way right now, which is the price of solar panels. Solar panels have fallen in price by 7% a year, every year for the past 40 years. So, on the order of every decade, the price of solar panels halves.

30 years out you can rationally expect the price of solar panels to be less than a 10th of what it is now, and as a result the entire global energy landscape will change.

Energy relates to every single economic process we have. It gets deep inside of the structure of things like bitcoin because of the ratio of costs. It is an absolutely ubiquitous part of human life. So, when you hear people talking about 10-15-20-30 year projections forward and they don’t talk about the exponential fall in energy prices, they’re living in a fantasy land. There’s just no such place.

Let me show you a thing. This yellow cable that I have around my keys is a material called “spectra” [dyneema]. Everybody see that? So, spectra is a nanomaterial. The breaking strength of that piece of string is in excess of 400 kg. And sometimes I demonstrate this by having people pull on it in teams,

4-5 people on each side. This stuff will cut into wood half an inch. It’s 40p a meter on Amazon. It’s just dirt cheap; long chains of carbon atoms axially aligned with the forces. [on the cable]

So you look out 30 years this stuff is going to be everywhere. They’re spinning it into clothes. Levi’s is making jeans that are laced through with spectra today; you can buy them for about £80 a pair. Look forward 10 years, the ubiquotous use of clothing, construction. Look forward 20 years, solar substantially cheaper than any other kind of power available. Look forward 30 years, nanotechnology, biotechnology, replicator engineering are everyday parts of life.

If you are a big player, a hedge fund, if you’re a regulator, if youŕe the state, you’re responsible for making plans 30-40 years forward. If you’re an individual and you’re looking at this kind of world where you’re trying to plan your future, you’re responsible for thinking 30 years forwards. And in this context you then place bitcoin. Bitcoin is a ripple on an incredibly rapidly accelleration. It’s not a final solution. It’s going to have successors. the successors will solve other problems. It might become a standard that will last a really long time like the internet, or it might roll over very quickly. There’s no way to know.

But this is what we mean when we start talking about the future. It’s not 5 years out. It’s 15-20-30 forwards you have to be thinking.

[03:23] ADAPTATION

So, let’s assume that bitcoin continues to adapt, because it builds a governance structure that allows it to continue to change relative to the challenges it faces. That means that you continue to modify the standards, it means that you continue to modify the code base. That means that you try and not break the system of value that you’ve created, because that would be the equivalent of a violent revolution, because people’s property rights would get broken.

Inside of that structure, the only way that you survive into the future is by

constant adaptation to the circumstances. If you don’t adapt, you don’t get to be a part of the future, and we know that. Even theoretically stable standards like VISA are constantly mutating to handle the evolutionary enviroment in which they are embeded.

So, in the process of that adaptation, the primary reason for adapting is conflicts that you might lose.

Conflict number one, regulators.

Conflict number two, competitors.

Conflict number three, traditional vaults, stores of value which will not cooperate with the bitcoin system. For example, there might be laws which prevent you from buying land in bitcoins. There could be all kinds of structures which come into play to stop bitcoin from moving forwards. It’s the abiity to adapt to that on-rush of change that defines whether or not you survive.

Right now, Bitcoin is in a position where its mechanisms for adaptation are vastly weaker than it’s adoption curve. Far more people are coming on board with far more intensity, far more interest and far more money than the government structures that manage standards. And if you centralize the governance structures you’re going to get nuked like e-gold.

[05:01] GOVERNANCE

So, how do you decide how to move forward in a complex environment?

Given how difficult the structures are to navigate for above ground fully visible ordinary institutions [LUCAS DOESN’T UNDERSTAND THIS PREVIOUS SENTENCE]- given the time that you typically spend in the Fortune 1000 is

only 7 years – companies rise and they fall again

how do you build the adaptive capacity into the governance structures around bitcoin

such that it has a long term future?

the environment is complex

we are going through a period of unprecedented discontinous change

through that we have to take this enormous pool of value – what are we up to now, 12 or 15 billion dollars at spot? – larger than many large corporations

larger than many countries

how do you steer that, given that it’s by nature decentralised. And I don’t have an answer for that but I know that it’s absolutely critical that the bitcoin community begins to talk about governance and about

risk management in a completely proactive way because the first time you have a serious challenge if the system cannot turn relatively quickly to adapt you’re gonna get creamed in the same way that e-gold did.

Survival means adaptation, and adaptation means governance capacity.

[06:22] RICH ACTIVISTS

Other targets that might come up. Wealth transfer. For the first time in my life the people that I know that are doing radical politics are rich. That has never happened before. Whether it was the anarchists … whether it was the greens, whether it was the left, even the libertarians for the very most part were dirt poor.

You step right outside of the ordinary political economy and their values and you become rapidly unemployed and we all know this.

So for the first time I have seen an actual economic model for people that consider themselves to be activists, which is building out an alternative economy.

In the 1960s one of the most prescient criticisms of the new left, the revolutionary movement in America, was that they did not have an economic model. they put all of their energy into resisting the State, and as a result all they got was beaten up, and at the end of it they had no new institutions.

The need to build alternative institutions has always been seen as a core part of the revolutionary or the radical agenda and bitcoin has by far the most effective alternative institution (in terms of feeding the people that build it) that has ever come out of alternative political structures, possibly since the invention of communism (state communism).

So what we have is a genuine breakthrough in core structures.

so you wind up

GUYS, PEOPLE ARE HAVING A HARD TIME HEARING ME

COULD YOU HUSH IN THE BACK?

THANKS GUYS, SORRY ABOUT THAT

Sorry you were having a hard time hearing.

So what you have is the first time an orgnaizational structure has emerged which is capable of feeding the people who are activists within it. What we have is an alternative institution which is making the people that are actors within it wealthy. And that has never happened before. The last time that happened was State Communism where they made the communists wealthy by stealing other people’s land, by stealing their industrial production, by stealing their productive capacity. So we’re now in a position where we have an alternative institution which is successful in feeding the people who are working for it. It potentially has enormous legs. But what it means is that the holders of wealth in other forms, and the memerbs of other participatory structures which have that property, for example conventional State Capitalism, are going to become increasingly threatened as bitcoin scales. Because you have an alternative institution which is completely continous with the goals of the dim-and-distant now-forgotten 60s – the radical decentralization, the ability to bulid non-State structures that work – you’ll get identity management, you’ll get property rights managmment, you’ll get auction houses, you’ll get all the rest of these kinds of structures – escrow is already here – as that stuff builds out, what you have is a direct competitor with the State, which was always the Anarcho-Capitalist dream. It was always the Libetarian dream. But can you hold it?

As Ben Franklin said, “What do they have? They have a Republic – if they can hold it.” And the ability to hold it comes back to the ability to govern. It’s the ability to change and it’s the ability to adapt, even if the governance is completely decentralized swarm behavior, it’s still governance because the swarm acts as a whole. And this is the critical challenge. Every time you succeed, you come into a new type of people that are threatened by your existence, with a new set of techniques for shutting you down. So as you begin to be a substantial alternate way of storing value, all of the other stores of value become threatened. All of the people that are storing assets in those stores of value become threatened and this is how the pressure piles on.

[10:15] POWER AND RESPONSIBILITY

So, a final piece on this: with power comes responsibility. So as bitcoin begins to put a real pressure on the world, and on the way that things operate, comes with that the responsiblity of solving some of the problems that other actors are failing to solve. The two big problems that I worry about most are climate (and the associated impacts that are in the humanitarian sphere) and nanotechnology and biotechnology risk management, which is grey goo, designer plagues, it’s basement bioweapons and all of that stuff. So what I really want to see emerge from this new thing which is happening is not just a counter-economics. Counter-econmics is lovely, it’s a great way for a limited number of people to go out there and do their thing, great, fantastic, but counter-economics will not do anything at all to stop six degrees of planetary warming and a drop of two billion people in the human population because agriculture collapses. So with great power comes great responsibllity.

How is this community of people, that have built the first really successful alternative political institution since communism, actually going to find a way of making sure the planet that they’re living on continues to exist long enough for them to enjoy their success?

When we start talking about political conscoiusness, the State is just the last institution that had responsiblity for solving the real problem. As you begin to out-compete the State in certain areas, you become responsible for solving the real problem. It’s not just currency, it’s not just freedom, it’s survival. And until we begin to build a political rhetoric that absolutely the real stakes of the human game that we play the tactical and even the strategic success of bit coin will not turn into a better chance for the human race to survive. These risks are real and acute. We must not get into a position where we have a tactical or even a strategic success that fails to solve the real political problems that we face.

Thank you.

[12:30] HEXAYURT

I just realized I forgot to explain the slide. My main project is a thing called the Hexayurt Project which is an open hardware housing system. In a nutshell, the walls of these shelters are whole sheets of four-by-eight (or 1.2m x 2.4m material) and the roof pieces are half sheets. So you can just take this mateiral off a truck in huge quantities, cut half of it in half, screw or glue or tape it together, and produce emergency housing.

These pictures were taken at Burning Man, and last year they build about 1500 units. So this is kind of all the way at the other end of Maslow’s Hierarchy from Bitcoin. This is the basic mechanics for keeping people alive in inside of a Libre context, and there’s a whole bunch of other work.

Hexa… Yurt. Six sided yurt.

If I can get them to adjust the slide, other side of the slide, can you move that over so we can see the big dome?

I don’t think they’re listening. Anyway. Do we have time for questions?

[13:50] Jack Fresco.

Q: are you on the same page as Jack Fresco?

Jack Fresco? I don’t know Jack Fresco. So, I don’t know.

Other questions? Given that I don’t know who Jack Fresco is, I can’t help you.

Yell!

[14:00] HEXAYURT LONG TERM VISION

A: Could you talk us through your vision for the hexayurt outside of Black Rock City?

Sure! So the question is “can I talk about the vision for the hexayurts other than at Burning Man”.

Very basically, we’ve got to provide a decent standard of living for an additional four to six billion people over the next fifty years or we’re going to have endless resource wars. So the long term strategy for the hexayurt is to take two thin sheets of aluminium like you’d use for a Coke can and then a honeycomb of cardboard in between and fill the gap with shredded newspaper. Machine seal the edges, and that gets you a three kilogram insulated panel which costs on the order of ten euros and as long as you don’t pierce the surface with a nail the thing will last for on the order of fifty to a hundred years before the glue fails. When that happens, rip the aluminium off and recycle it, and mulch the cardboard. What that means is that we can do super-lightweight insulated housing out of enormously available materials for the entire world inside of a free market context. Very, very simple.

And you can go up to these kind of domes here. That’s all made with the same components as the little hexayurts, you just build a slightly larger version out of basically four of the roofs of the smaller units connected. So that gets you housing. Solar panels get you energy. Dirt cheap telecommunications devices are already ubiquitous, there’s no problem there. There are equivalent technological breakthroughs for water, for cooking, for sanitation, for agriculture. Safe Water Trust, One Acre Fund, the Biolite Stove guys, or any of the wood gasification stoves. What you wind up with is a system where you can buy everything that it takes for a family to live relatively well in a rural environment for on the order of three hundred dollars, which is roughly equivalent to one year’s income. And that system if you implement it properly will give people essentially first world lifespan because they will stop getting the vast majority of diseases which are water bourne, because they’ll have some access to basic medical information, because they’ll have decent infrastructure for the basics of staying alive. And the long term vision is to create a safety buffer for the probability that we are going to continue to have a power law distrubution on of wealth so we’ve got to figure out what we’re going to do for the bottom half of humanity. They’re not going to be able to get a foot on the ladder, they’re not going to the stars, they’re not going to get life extension treatment. So how exactly are we going to provide a decent standard of living for everybody without having to implement global Socialism. And the answer is that you make the essentials that people need to stay alive so cheap that everybody can afford them at which point you don’t need to regulate how these things are provided any more, they become as ubiquitous as pencils.

Does that answer your question?

Oh, and I should say, almost all of those technologies are fully public domain or the patents expired decades ago. This is all LIbre stuff, we are not going back into a patent regime with this.

Ok, any more questions?

[17:00] HOW DO WE CONTACT YOU?

Q: How do we contact you?

Basically, just find the hexayurt. Vinay Gupta, The Hexayurt Project, just look on the web site, there’s my twitter, my email and all the rest of that stuff. Easy to find.

Q: What about the water powered engine? They killed the bloke who invented it!

I’ve never seen anything like that actually function. Thank you.

[18:00] COIN VALIDATION

Q: Self regulation?

Self-education? Self-regulation!

Ok. Hard question. How much time do I have left for questrions? Two minutes.

Ok. Self-regulation.

Q: So the question is, what is your view on coin validation? What are your thoughts on coin validation?

Coin validation. God, talk about a hard question! So, ok nobody has really done the deep political-philosophical work on bitcoin. Everybody thinks that it slots neatly into an Anarcho-Capitalist or Libetarian framework but actually it’s much more complicated than that because there is no strong property right for management of the system as a whole. And this is an absolutley critical thing, right? If bitcoin was incorporated as a conventional company there would be a property right that was sold and traded for the people that owned that company and they would be responsible for making policy decisions and it would be operating inside of an ANCAP or Libertarian framework.

The problem is that at the top level Bitcoin is an anarchy. So you have a bunch of people that are working in an Anarcho-Capitalist trading structure that is administered as a non-State anarchy and the impedence mismatch between Anarcho-Capitalism and Stateless-style property rights and the actual anarchic nature of the bitcoin enterprise is shockingly undiscussed. So what comes out of that is that every time you get a question like coin validation, and what constitutes a failure of the system that requires central intervention to repair like a blockchain fork, you wind up with a whole bunch of people talking completely different languages about how to solve the problem because without a solid property right at the beginning, without an owner, it just doesn’t work inside of a standard Anarcho-Capitalist model. And very few of the people who work in Bitcoin have any of the necessary skills to govern this in an anarchy. Right?

Libertarians do not understand how governance works in anarchy. It’s a completely different model of how you get things done. So the real question about bitcoin is Libertarian or Anarchist? Because Anarcho-Capitalism is really just a subset of Libertarianism, or the other way round, it doesn’t matter which, it is not the same as non-State anarchy, it is not the same as Left Anarchy, it is certainly not the same as classical Anarchy. Rothbard be damned.

So you get into a position where the community as a whole has to decide whether they’re going to become Libertarians and establish a strong property right that controls Bitcoin, or they’re going to be Anarchists and they’re actually going to learn how to get good at decentralized governance. My assertion is this. if you go down the Libertarian route you’re going to wind up owned by Morgan Stanley. Eventually so much of the Bitcoin will be owned by hedge funds that they will wind up as the de facto masters of the universe and your system will wind up as just another commodity, and then there’ll be a sea of alt coins that just continue to foam in the background and they’re worth about fifty quid each. Or you could go down the Anarchist route, grab the system by its hair, and figure out how to do governance.

And I think – and I hate to say this – but I think that we’re either going to wind up having an identity architecture so you can do representative governance or you’re going to have to say One Coin One Vote. But if you go down the route of having One Coin One Vote (which is cryptographically pretty easily managed) you’re going to have huge problems if the hedge funds decide that they like Bitcoin. So this is really the challenge. I don’t have any answers, but I think that people really need to up the discussion about bitcoin in terms of political philosophy, really, really several times very quickly. Because right now you have a runaway success which has rapidly exceeded the capacity of the people using it to govern it and if you don’t solve that problem pretty damned quick then failures of governance are going to end the Utopia. So now is the time to go back to the Anarchists. Herbert Snorrason in Iceland (Anarchism.is) is a guy called Herbert Snorrason. Poke him until he tells you what to do. He’s very smart.

Thank you!

AHHHH the Venus Project. I just didn’t remember the name.