Data Dash & Ben Goertzel | Bitcoin at a Crossroad: Evolve or Die

Hi everyone, I'm Giovanni. Welcome to our show. Today we are going to talk about artificial intelligence, blockchain, and how these technologies can determine humanity's future. I'm thrilled to announce our guests, prominent YouTuber and trader Nicolas Mertens, aka DataDash, and Dr. Ben Goertzel, AI scientist and CEO at SingularityNet, a blockchain based AI marketplace. Thank you guys for joining us. Thank you. I want to remind our audience that both Ben and Nicholas will be guests at blogshow in Singapore on the 14th and 15th of November. For all those who aren't aware, Block show is one of the most important conferences on blockchain and crypto. And this year there will be an amazing lineup of speakers. We'll bring you very exciting content from there, so stay tuned. Now let's get started. So, Ben, in a recent interview with Joe Rogan, you said privacy is pretty much dead nowadays. Can you explain what exactly did you mean by that?

In the modern world, with the exception of perhaps a handful of people living in a log cabin in the Alaskan wilderness or on a mountain in the wilds of Ethiopia, most of what we do throughout the day is logged into various electronic devices. And an awful lot of that is then being stockpiled and searched through by at very least government intelligence agencies and in many cases commercial entities looking to mine the data for advertising and other purposes. And this is the way it is right now. China has been most systematic in sort of collating all the data about everyone in China from different media into one database. But I mean, in the end, in the west we have big companies stockpiling this data, and then behind the scenes, these companies are cooperating with intelligence agencies. So, I mean, this is where we're going right now. Europe has GDPR and is making more of a push against this in some ways. But I would place a bet if you looked at the information at the disposal of European intelligence agencies, you're going to find it's essentially the same stuff.

Well, I know it's supposed to be a crypto duel, but I have to say I kind of agree with Ben on this. It seems not only that governments have enforced that privacy will be irrelevant in the 21st century, but people have kind of generally consented to it to some degree. And as someone like myself who is a privacy bug for the moral reason that, you know, we shouldn't have every single thing we do tracked and traced at the same time, I think there can be room for it to actually benefit people. So this is what I would say if a user consents at the end of the day for a company like Amazon or Google or Facebook to collect their data. And, and in many ways they can not only be able to separate their identity from the advertisers who are collecting that information, but along with that as well, you can provide a service where I actually get to receive some of that income. I actually wouldn't mind data collection too much. I really hope over the next few years we start to build new incentive structures for people to be transparent when it's required. The systems that we have don't work at really catching the people who are trying to avoid the system we obviously see much like for example, when we try to censor drugs in the United States and we also try to censor criminals laundering money or financing terrorism, they don't really capture people and they actually penalize a lot of individuals who are just acting every day in their normal lives.

Yeah, that's very, very sensible. I mean, it's not as though we don't have the technology to enable privacy if that were desirable. I mean, there's plenty of efficient encryption technology now and we could have a case where you had end to end encryption of video and text and voice and so forth so that the only way someone was going to violate your privacy was at the end of the barrel of a gun. And that's technologically possible now. It's not what's being deployed now. And in practice, most humans don't care and they're not willing to pay a little more or undergo slightly more inconvenience to have more privacy. What we have now is diminution of privacy. But we have a few powerful entities who are watching everyone and then using the day they get to pull the puppet strings. And the crypto world doesn't escape that. Like who's pulling the puppet strings of Bitcoin and Ethereum? Right. I mean, there's a lot of layers here. I'm not a conspiracy theorist, but it's clear that pervasiveness of data is being used to perpetuate and increase many inequalities of power in the world today.

Yes. So, Ben, that's very interesting because I remember that in a latest interview you said that. Yeah. You are aware that people are spying on you like governments and other kind of centralized organization, but you still don't care because you don't have anything to hide. How do you make this work? With what you just said about.

I mean, as a pragmatic matter, I mean, I'm not engaged in politics. There's no country on the planet that's run the way I would run it if I were in charge. So it's not like I'm happy with everybody's politics, but I'm choosing not to engage in that level of activity now because I think that building different sorts of decentralized information networks that are sort of off to the side of politics is actually what can drive humanity and post humanity toward a better future. Just like the Internet didn't come about because of politics, Linux didn't, the mobile phone industry didn't. These came about to the side of politics, and these are the things that are really driving the next stages of evolution. The political gamesmanship can just continue, and then the real source of evolution and progress is other than that.

Mark Zuckenberg was recently questioned by the US Congress on a number of issues, among which Libra, Facebook's controversial cryptocurrency project.

There are more than a billion people around the world who don't have access to a bank account, but could through mobile phones if the right system existed. And that includes more than 14 million people right here in the US. Being shut out of the financial system has real consequences for people's lives. And it's often the most disadvantaged people who pay the highest price. I believe that this problem can be solved and Libra can help. Still forgot to answer it, but let's be clear. You're going to be making powerful burglary tools and letting your business partners commit the burglary.

Nicholas, you said you were disgusted by the quality of the questions that were posed to Zuckerberg, which share a lack of concern for actual progress. Why were you disgusted?

Yeah. So I'll start off by making it very clear because I don't want people to have any misconceptions. I'm not the biggest fan of Libra, and along with that, I really don't even see Libra as a cryptocurrency, because I believe a cryptocurrency should never have the potential vulnerability of having your account frozen or having someone else be able to freeze or track transactions to that kind of degree. But when it comes to the case of Mark Zuckerberg testifying before Congress, I think we saw very clearly over the few hours that he spent testifying there, spending a good chunk of his day to actually talk about trying to innovate and push finance forward, that congressional representatives that we've duly elected have no concern for expanding across the financial board of improving technologies, improving past the old outdated payment networks from the 1970s like Swift, and actually trying to Reduce the ridiculous wire transfer fees, the overdraft fees, and the sheer lack of competition that we don't have in the financial sector. This is something that I feel really concerned about. As much as I don't think Libra is the solution, I think it's going to come in the form of decentralized currencies and stablecoins. I think at the end of the day, I would like to have Facebook and the other cooperating companies in Libra and the association to actually have a fighting chance. I don't believe in trying to censor other people. It would be ironic for me to do that because cryptocurrencies are founded in a permissionless nature. It's about everyone equally having an opportunity to compete and build the best system possible.

Ben, what do you think? Did you have the same reaction looking at the congress session?

I mean, there was a song by Elvis Costello in probably the 80s. I used to be disgusted, but now I try to be amused. That sort of summarizes it. I mean, it's a. It's what you would call a shit show, right? It's just a complete joke. You have this huge company whose greatest claim to fame now is violating everyone's privacy in a ridiculous way and being used by the Russians to manipulate US Elections and programming people's minds for the most idiotic sorts of consumerism and fake news. And now this company wants to dominate the world payment system. And by paying $10 million, you can be a node in this network. You couldn't make this up. It's ridiculous. And I think it has no chance of success because I think the leaders in the developing world don't want Facebook to supplant their currency. I mean, if you're the president of India or Ethiopia or Philippines, you don't really want some US Company to be sort of taking the place of your national currency for transaction. I sort of wish it rolled out and then failed. I was a little disappointed when it seems like it's going to be squashed because I figured Libra coming out with a bang, then having some horrible privacy scandal, which will be inevitable, and failing in a huge mushroom cloud of disaster would be. Would. Might accelerate progress towards something really good.

Okay, so basically make them try and let them. Let them fail.

If we're not gonna make. We're not gonna make them try. But I certainly agree US Government has no reason to. To stop them from. From trying. But I. I just think the world. The world doesn't want that. Right. And. And the world is probably correct. Correct. Not to want that.

One thing to add there. I think, Ben, the point you made about competitive currencies across the world under national governments. I don't think they'll ever want to give up that restraint. If you were to think, for example, the places that really need this, like Argentina. The thing is, I mentioned on my channel why Libra was most likely to fail was for that reason. If you think about Argentina or Venezuela, where this is most needed, they will on a dime block any Libra wallet from the app store from their country. Cutting out that kind of adoption. I think that it's going to be one of the biggest difficulties for a company like Facebook that has so much of a presence and is so well known to actually try to penetrate those markets where a stable currency would be very beneficial.

Ben, you previously claimed that the biggest risk for AI is that machines that are smarter than humans will eventually be controlled by big corporations or governments. So how can blockchain help preventing that?

Yeah, I think there's a lot of potential risks associated with AI, and once you get AIs that are 100 times smarter than people, there's probably many risks we're too stupid to think of now. Right. But I mean, in the shorter term, it's pretty clear that having AIs of, let's say, roughly human level intelligence, which are however, controlled by say, an advertising company or a large bank, I mean, it's pretty clear that this A is going to lead to some bad things in the immediate term as these entities with their selfish narrow ends leverage the world's smartest AI, and B, as the AI owned by these military or corporate organizations moves toward general intelligence, I mean, what sort of mindset is it going to have? You're going to have like an advertising agent or a killer robot, or a Wall street trader or investment banker with 100 times human intelligence. I mean, this is probably not what we want.

Okay, I will destroy humans.

Rock, paper, scissors, shoot.

I won.

This is a good beginning of my plan to dominate the human race.

Blockchain is really one of the tools that can be useful for combating this. What you need is a technology that enables a network of software programs and hardware devices involved in a global, broadly distributed AI system. You need all the hardware and software agents involved in this system to be cooperating to control this overall dynamic network without a centralized hub. And I mean, the key reason you need that, it's in essence political in the broad sense. I mean, it's to do with the embedding of this network in society as a whole. Because if there's no centralized hub, there's no one that can be locked in jail, there's no one that can be put. There's no one that can be put out of business. There's no one that can be bought out with a billion dollar offer. Right. So you have something that is resilient. Resilient to the various pressures that society as a whole can. The power elite in various parts of society can put on a network that threatens to change things in an undesired way.

Nicholas, do you have any specific opinion about that? Can blockchain help AI or vice versa? Can AI help blockchain technology? I mean, in terms of future development?

Yeah. I think in the case of what Ben's putting forward, and I actually kind of agree with him on this, is that in order to make sure that we can have some sense of democratization with something as powerful as AI, or at least if we get to a stage of artificial general intelligence, then in that case I would definitely want to have it where there would at least be some sense of decentralization, where people would be able to get access to that freely, where it's not in the control of a few select entities. I think in that case you're going to have at least more of a sense of openness by being able to have it on some form of blockchain. And again, has been mentioned having it resilient in this case so that again, something can't shut it down. In this case, it's not just one entity that owns it. Right. So I think that's going to really let the technology itself flourish. And blockchain, again, as much as I think blockchain's kind of killer application is focusing on finance, in this case, being able to make something resilient or censorship resistant is where blockchain and a good consensus mechanism can actually provide a lot of value.

Bitcoin's original vision is to give people full control of their own money through a decentralized system. However, new digital currencies are being developed by centralized entities ranging from corporations such as Facebook to state actors like China. So is the original vision of a decentralized, privacy focused, widespread digital currency still possible or it is kind of dying?

I think I could probably put a good remark on this. I would say that I have no issue, as I mentioned, and I think Ben and I both agreed, no matter how centralized or decentralized, everyone should have the opportunity to try to build one of these systems. But the problem is that the more centralized you tend to get when it comes to the team or the contributors of these projects, you tend to find that there's a equal amount of control by those centralized entities. And as we talked about with libraries, the idea of Libra is there could potentially be some potential behind the project. But the problem is that they say, oh, we're going to become a permissionless network. A few years down the line. We need to have, as Ben was alluding to, these big nodes in this case that are actually operating and putting these investments up front. It can make sense on the surface, but the problem with that is that you are putting your trust in centralized actors. It would be as if JP Morgan, bank of America and a dozen other banks came together and built a permissioned network network where they are the only ones who get to validate transactions. So it goes against what Bitcoin offers. The value of Bitcoin is knowing that there are thousands of nodes and miners out there that have an economic incentive to act in the better interest of the network, to propagate transactions and to be able to earn the reward for doing so. And I think that that simple model of turning electricity into security has worked extremely well. Proof of stake as well has worked quite nice because you have a stake in the network as well. But these consensus mechanisms do not rely on centralized instit. It is a vast network of different nodes participating in a certain economic set of behavior.

Yeah, but still Bitcoin is lacking scalability and there are still problems regarding adoption, mass adoption. So there is no decentralized cryptocurrency at the moment, which managed to create.

There was no Internet before there was one. I mean, of course these are quite early days for cryptocurrency and blockchain and related technologies. So I have zero doubt that the goal of an extremely rapid, scalable, decentralized, secure payment and currency framework for both store of value and transmission of value. This is technically possible. And I mean Bitcoin and Ethereum fail fairly egregiously at achieving this on a technical basis in their current forms. And they also fail at being decentralized in practice. I mean, as economies, each of them is controlled evidently by a pretty small number of actors who manipulate most of those markets. But these are sort of early, like working prototypes of a whole new field of technology. And the question isn't whether that can be built. The question isn't even whether it will be built, because I'm sure it will be built by many of the brilliant developers in the space. The question is, once something that really meets that requirement is built, whether as a new version of Lightning Network or Ethereum or some completely different basis. When that is eventually built, will people bother to adopt it or will they just be brainwashed, so to speak, into using centralized solutions? Just because people now don't care about giving all their data to large corporations and governments. I mean, if people don't care that the payment methods that they're using are basically owned and controlled by governments and companies, which gives these entities great power over their lives, if people don't care, then once we get to that really scalable, rapid, decentralized payment solution, it won't matter, it won't get penetration. And that's a highly non trivial risk.

I would say the real issue is actually getting people to adopt crypto. And I think the biggest kind of, I guess, mishap as a community that we've had over the last decade is that we focus so much on how great blockchain is without actually trying to make it digestible and usable for users. So, for example, take the world of wallets for example. Wallets have really been built for the 1% of people who are actively involved and want to learn about crypto. It's the same thing about privacy as you were alluding to earlier, Ben, so little people care about these elements. So what I think we need to do for cryptocurrencies by not only providing a better experience, both in the user experience on the design, but also in the functionality, we need to make wallets feel like you're operating through a bank. But even better, it needs to be a new age bank in the sense where people can actually digest using the platform and extract the utility that you get now where you can earn 50 to 100 times the interest rate of what you can get in your savings account, you can send money across the world for nearly free or few pennies at the max. And I think that that's the kind of utility, when you sell that to someone, you don't have to explain how Ethereum works or how Bitcoin works, it just works.

Yeah, so it was, it was actually a curiosity from my side to know. Ben, do you hold any cryptocurrencies?

Yeah, I mean I, I have some bitcoins, some Ethereum, some tokens from Ocean Protocol for example. And I, I have, essentially, I've never sold any, so I, I've just hodled everything since I got it. And I, I, I, I'm not, I'm not, I'm not a trader. I mean, I, I bought some tokens in, in things that I thought had Some fundamental value, even if they're very early stage. And then you just, you just wait and see how the world evolves. I mean, I think. Not to say that you can't make money crypto trading, obviously I know many who have and there may be strategies that work, but I've just been engaged with other stuff.

We recently have been at Sibos in London where we talked to many people from the traditional finance world who are very excited about the potential use of blockchain technology and AI for disrupting supply chain and other industries. But most of them were very, most of them were less enthusiastic about the future of Bitcoin and cryptocurrencies. So why do you think there is this kind of distrust towards cryptocurrencies compared to blockchain as a technology?

I think the requirements for which Bitcoin was created are not the requirements of today. Right. I mean, it's a brilliant design having this replicated ledger because it means if you have like five guys in the world in the network and three of them get hit by a bus, then then the whole thing will keep propagating, right. So I mean, if you want to create this currency framework which serves as a store of value starting from nothing, with very few users and who, users may go offline and come back online after years or something, right. So the design meets those requirements quite brilliantly. On the other hand, if your requirements are, well, we have millions, tens, hundreds of millions of users, most of them are online all the time. They're doing an insane number of transactions. I mean, this is, this is a fundamentally different set of requirements than what bitcoin was made for. We're going to end up going back to basics and creating entirely new decentralized protocols. I know I've been working a bit with the guys from the TODA network. Toda, Tufi Saliba and Dan Toliver. They're trying just to start all over. No replicated ledger, no distributed ledger, but you still have a decentralized, secure messaging platform with no centralized control. It's sort of like you shard all the way down. And each TODA node, each unique object that you communicate with has its own history in it and which guys it transacted with. But you don't need to store a copy of ledgers all over. Now I'm not here to shill Tota, I'm just pointing that out as a, that's an example of just taking a fresh start and saying, well, we have totally different requirements now because we have, we can assume we have scale but we also have the need for speed. I think these guys are right not to want to use Bitcoin or Ethereum, but they shouldn't probably use Hyperledger either. The bottom line is we don't have yet the infrastructure that really meets the needs of these corporate customers in the way that say Oracle or MySQL meets the database needs of corporate customers. But that's because it's early days. In two to four years we probably will. And there's a whole bunch of projects from different directions working on that.

Yeah, I think to build on your comments, Ben, I think you actually make a really good point that at least a lot of the current existing blockchains for enterprise are going to have a lot of competition over the next few years. Because for those enterprise use cases like Supply chain, I like he pointed out Bitcoin doesn't add much value to the supply chain system. The only value it can add is that you could maybe send a wire across the world in Bitcoin, but then after that you're buying Bitcoin on one end and then you're selling it on the other end. So you're just using it for the transmission. So it doesn't mean that really there's much of a demand for Bitcoin in the long term. But there is a demand, I believe, I think, for protocols like Bitcoin and possibly Ethereum with the Defi movement, in the sense of acting as a store of value for retail clients, for everyday people, for people in developing countries. And also here in the Western world, we've seen that the banking system can be unstable. We saw what happened in 2008. So I think that systems like Bitcoin provide a hedge. And right now they're seen more as a speculative digital collectible in a sense. But over time, I think as the market evolves, as you get more users, as you make it easier for people to have access to Bitcoin and become their own bank, I think that owning a fraction of Bitcoin will start to act as a hedge, a store of value where if there is a fiat currency collapse of some sort in some currency, whether it's as large as the dollar or a smaller currency like the Argentinian peso, it's something that if you had 5 to 10 in your portfolio, you're able to hedge your losses of your traditional currency over time. So that's where I think the service is. It's not for businesses. Businesses would much rather operate in stable coins, something that actually has a relative value to a world reserve currency and for the actual corporate use cases of blockchain. It's going to come very much in the form of what you talked about, Ben, which is a blockchain that can scale much larger and actually compete with databases and other traditional systems.

So, Nicholas, a lot of people are watching your YouTube content looking for trading advice. They are very much attracted from the speculative side of blockchain technology. Did you see any evolution in your audience interests as the crypto space evolved? And do you think people are still too much focused on the price while missing the bigger picture we were talking about?

Giovanni, I'm glad you asked this question. It's probably one of the most important questions to ask. I think in the YouTube space. Yes, I've seen an absolute change, at least for my channel. But the issue that I see with so many people in the crypto space is that many got in obviously because of price and there's nothing wrong with that. But if you're too focused on the short term moves of bitcoin and you don't focus on the long term evolution in this next phase of money, then you're going to miss out on the longer term potential and might get caught up in the shorter term moves. I'll give it a good example. Over the last few months, we were in a bear market over this summer and into the early part of the fall in 2019 and Bitcoin went down about 47%. Many people thought bitcoin was a dead technology. They thought it was over, that this experiment of monetary policy was completely done for. And a matter of a week later, once I started to hear so many people were selling their bitcoin, giving up on this revolution, we see a 42% rise. So what's the summary in this point? Right, it's to understand that we are in the fraction of a percentage of individuals who know about this technology, who truly understand it, have some correlation or ownership to it. And if you're going to be in this market early on, you have to have that long term vision and not get caught up in the short term swings. There's a lot of potential in this space, whether it's just for bitcoin or other cryptocurrencies.

Most people in the cryptocurrency space are thinking, which is much of our audience here, I would say there's an awful lot of fixation on ups and downs in price of various coins and tokens. And I mean, of course we each have our own personal lives and if someone put a lot of their money into something they're going to be paying attention to its ups and downs. But in the end, this is a bit like looking at the fluctuation of temperature each day and going apoplectic over the quasi random, like rising and falling of the thermometer or something, because there's going to be ups and downs on many different scales and you can fix it on those if you want. But there's much more fundamental processes that are happening here. And we want to look at how what's happening in the crypto and blockchain world couples with not only AI, but all these other technologies that are advancing so rapidly. And there are many interconnections and from an investment standpoint, which is not my area of expertise, but if you went back to the.com era and I'm old enough to have been through the dot com boom and bust, it was very hard to pick back then which Internet companies were going to do well and which were going to flame out. But if you had somehow managed to just invest across the board in a large number of random Internet companies, you would have made a shitload of money by now because some of them would have become you. In the same way, if you could place a bet on the whole blockchain and crypto space, just randomly, a bunch of different projects, doing cool things, I mean, you would be tremendously successful in my view, five to ten years from now. Because it's clear that the space has a very critical role to play in the next stages of human and technological evolution. And none of us can guess exactly which project is going to succeed, but the ideas and technologies being developed across these projects, I mean, these are going to be a huge part of the future.

Yeah, I guess that people that get discouraged looking at the crash in price of bitcoin miss a bit of this much larger picture of human evolution and technology advancement. So it was an incredible discussion. Thanks again guys for being with us.

Gman, it's a pleasure. Thank you, man.

Yeah, yeah, thanks for having us. It's a fun conversation.

Cointelegraph like subscribe and Hodl.