5. From the Pirate Age to the Blockchain Era (JP Vergne, Blockchain Researcher)

Welcome to Chaotica, a space designed to embrace dissent, discord, and disruption. The following is a conversation with Dr. JP Verne. JP is an associate professor and blockchain researcher at the UCL School of Management. His award-winning research is focused on understanding precisely decentralization. What is it? What does it mean? How do we break it down? How is it measured? He studies its historical values and ties it all the way back to pirates in his book *The Pirate Organization*. But he also looks at its practical applications, so how companies are run today, whether it makes sense to have a decentralized decision-making pool or a completely centralized one. Overall, this conversation was just mind-blowing, and I learned so much, and I hope you do as well. A massive thank you to partners of the show Citizen of Tajikistan. And just like they say, follow the signal.

If you look at the different forms of piracy over time, you will have 2 patterns that are repeating themselves. The first one is that pirate organizations are usually opposing the centralization of new industries and the monopolization of those industries. And then internally, in the way they are organized themselves, they tend to reject the notion of hierarchy. So their internal organization is also more decentralized. So those are the 2 tendencies that you see when you look at pirates on the high seas in the 17th century, when you look at pirate radio opposing the BBC's monopoly in the early 20th century in the UK, for instance, or when you look at pirates on cyberspace.

What do you mean the BBC in the— what happened there? I don't know too much of what happened there, but I think there was the free radio, like people that thought that the radio was very top-down, right? The approach to radio was like, the BBC is the only one that is able to broadcast. Was that the case?

Yeah, that's what happened. And you have this tendency repeating itself across history, right? So when we had navigation techniques that allowed people to go all over the world to do international trade, the way this was organized initially is through monopolies with the East India Companies, the West India Companies. And when we had the possibility technically to send information over the airwaves, we saw the same pattern happening. So governments across the world created state monopolies to basically control radio broadcasting, and that's why the BBC was created in the UK in the 1920s, I think 1922, and it was the only station that was licensed to broadcast information, and a lot of people didn't like this idea. and they wanted to be able to diffuse their own content on the airwaves, and they were called pirates.

Oh, wow.

Because they didn't have that license. And so the way they were trying to bypass the monopoly of the government was by using ships located in international waters that were, you know, far enough from the coasts of the UK or the Netherlands or Denmark or et cetera, and then broadcasting their programming onto the territory, but from the international waters to avoid the laws and the monopoly that was in place in the UK. And there was a lot of resistance against this movement. Like there were government interventions across Europe, but also in the United States against pirate radio. There was like a famous station in the Netherlands called Radio Noordzee that was actually attacked by the military. They have this platform, that was in the international waters off the coast of the Netherlands. And the Dutch government sent the army in 1963, I think, to destroy that platform because we were violating the monopoly.

Literally like physically destroy the platform?

Yes. Oof.

That is quite an attack. And what's the— I'm wondering, is the core piece that is trying to be protected is sharing of information? That is the core currency or is there something else? Like it was mainly like the link between, you know, the pirates back then and then the radio is always, Someone wants to share some piece of information or back at the pirate's day, it was actually slightly different. Was it some other type of currency?

I think it's the fight for the control over the rules that will prevail in a new territory, in a new industry. So if you see the airwaves as a new territory, when radio broadcasting started, We needed rules like what are the standards that are going to guide who is allowed to broadcast programming? Under what conditions can they create value, capture value, make a profit with it? Who has the right to do that? Who needs a license? Right? And you have this struggle over what rules should apply. And then typically a government will say, well, we're going to create an organization that will have a government monopoly. And this way we can very easily set the rules that we like and make sure that they are enforced because we are creating standardization by using a monopoly, which essentially centralizes an entire industry in its birth phase. And what I call with my co-author on the book, The Pirate Organization, piracy is organized resistance to this movement that basically centralizes new industries.

And so how is the How does that happen? Like there is usually a technology, how I imagine it, there is a technological advance. For instance, now we can sail the seas and then it's like, oh, who controls them? So I think, is it usually like a technological advance and who gets there first usually? Is it the pirates or is it usually governments and states or institutions?

It happens at the same time. And that's the interesting pattern. Yes, there is usually a technological advance and there is also the opening up of a new territory, right? So in the 17th century, it was the high seas that for the first time could be used through new navigation techniques to trade over very, very long distances and exchange goods. So there was a massive potential for value creation and no rules. So the rules that prevailed initially was, okay, if like a crew was the first one to reach a particular place, we would give them ownership on that sea route and kind of assume that they discovered it and that they own it. So if you were the first—

Real—

Sailors to ship, to sail from Amsterdam to Indonesia, well, the government would give you a monopoly on that route. And everyone else who tried to trade goods around that route would be considered a pirate because they were in violation of the monopoly. So you had the same struggle at work on the airwaves in the early days of pirate radio, but you also had the same struggle on the early days of the internet, even before the age of the web, whereby there were monopolies on telecommunications that were basically helping governments gain control over this new territory, which was the internet, cyberspace. And that really helped them standardize the rules. But of course, a lot of people disagreed with those rules and they were called pirates or hackers.

But then in cyberspace, it was slightly different because the government started, there was no right to own any first innovation, right? Like once the cyberspace was created, the cyberspace got created by the people, by already the pirates, I would say, no?

They contributed to some of the fundamental building blocks, right? That were behind the early infrastructure of the internet. But initially, government grants in the context of the Cold War that led to the creation of ARPANET, the ancestor of the internet. And there was a strong control of the government on these early hardware infrastructures via telecommunication companies. In the United States, it was AT&T. That was the company that was heavily criticized by the hackers for enforcing a monopoly that a lot of people disagreed with. And interestingly, some of our audience today will have heard of this story, but one of the early hackers who was opposing the monopoly of AT&T in the US was called Steve Jobs. And he was very much against this idea of having proprietary corporate technology on the early communications network that would form the internet.

But who determines who contributed most to the creation? Because if we said the first one that gets there is the one that has right to ownership, how do we determine looking back who was it actually back then that contributed most? Because I'm taking your word for it, but I assume there was some research done around that. And how do we know it's like truly independent research?

I think this is the— I think by default, people in the absence of rules, thought, okay, if we don't know who should have control over something new, we can just try to give that control by default to whoever discovered that thing first, right? And try to understand, you know, who got there first and say, okay, well, you got there first, so it's yours now. But it's not necessarily a very good way of maximizing the value created, or it's not necessarily an optimal way of organizing the economy. And so What we have learned over the years is that there may be better ways of organizing than just trying to understand who got there first, which it looks like it's an easy way, an easy thing to determine, but it's not really. And so what happened, for instance, with international trade is that even though initially portions of the high seas, trade routes on the high seas were deemed to be owned by the merchants or the companies that first discovered those routes, whatever that means. Later, we realized that a much better way of organizing international trade was to take huge portions of the high seas and consider them to be free seas, free oceans, free waters, which we call now international waters. And they're considered to be the common good of humankind. And there's like a United Nations charter that recognizes that as part of the law of the sea. And so now we consider that only the waters that are just around a particular country are under the sovereign control of that country, but everything that's in between is international waters. It's a common good. And it's a much better way to enhance innovation and to encourage entrepreneurs to create new business models when we have these commons that are created and managed jointly by a bunch of countries, because you cannot exclude new entrepreneurs anymore. They have this common basis upon which they can build, and that's very much the same idea that we have today with the internet.

But it makes sense. How was it agreed that, oh yes, I have right over a specific maybe 30 miles, I don't know how long it is in the waters until I have control, but how is it determined as a common shared agreement between states? And what happens if someone disagrees, especially both a state and a pirate?

Yeah, it's a form of, an interesting form of decentralized organization. So you really need to have all the players come to a table and send delegates and agree on what they want to do that can maximize the common welfare and can preserve future opportunities for entrepreneurship, for innovation, for the greater good of humankind as a whole. And it doesn't always work and it's never easy and it can take a lot of time. But if you look at the history of capitalism, you see that the main, the turning points where new industries were formed and we have these like bubbles of innovation that are bursting were always propelled by these moments where we can come to the table and agree on these things. A great example that I really find interesting is how at some point we created a common time in the United States. So in the early days of the railway industry, it was very complicated for entrepreneurs to coordinate their activities because every town had a different time. It was not just the time zones as we know them today. It was like you would go to, you would travel to the next town, they'd use a different time. And so you had like hundreds of different times simultaneously in the United States, of course, in the middle of the 19th century. And so if you were operating railway companies and there was a lot of competition initially, you'd have to coordinate travel with multiple trains for merchandise and for people. But every town used a different time. So imagine the complexity of that. Actually impossible to manage such complexity. So at some point, the railway companies realized it was in everyone's interest to stop competing with time and to just agree on a common time. And that time was called Railroad Standard Time, RST. And it was created by the companies as a way to make the industry more, more ready for further innovations.

But this is a bunch of companies within the rail sort of railway system and they all commonly agreed, hey, this is the new standard.

Yes. And that happened in the, around the middle of the 19th century and really created this common platform for innovation to happen at a faster pace because now it was easier to coordinate.

Wow. Well, how does that happen? Is it usually like the biggest player that is like, this is gonna be the standard? Or is it everybody just really feels the pressure and after a while they just, everything blows up? Or maybe there is a specific event that is usually a trigger. How is the process from going, this doesn't work, but we have no way of organizing to actually organizing?

Yeah, there's no magical recipe here, but there's like a lot of research that has been done around managing the commons, particularly by an economist called Elinor Ostrom. Received a Nobel Prize for her work that identifies a few good practices that can help create these commons, manage these commons. And clearly having like a more powerful actor try to twist everybody else's arms to impose their own standard is not the way to go. But providing like a clear strategy for what will maximize joint value creation and making people accountable, each and every one of them accountable for it, is really a good standard practice to get the conversation going. This idea of like having a common time to be able to coordinate even with competitors is a fundamental idea in the history of capitalism. In fact, if you look at some of the most recent innovations, Today, when I when I started reading a long time ago about Bitcoin, that's one of the things that I got the most excited about is how Bitcoin is basically designing its own internal clock to overcome the fact that in the absence of a central authority on the internet, it's impossible to know what time it is.

Right.

And if you cannot know what time it is, it's impossible to tell whether I sent you. Transaction before I sent another transaction to some other person. So if you cannot keep track of time on the internet, you cannot keep track of who who owns what, and you cannot have like a decentralized form of payment system or decentralized form of money. And so the way Bitcoin solves this problem without having a central authority that creates a standard, that imposes a standard and says, "Well, this is the time it is now." for everyone is by using algorithms and making sure that there's a difficulty adjustment algorithm that maintains a ticking clock that's very steady. Every 10 minutes on average, there will be a new block. No matter how many people join the network, no matter how many miners are lending computing power to the network, there's this algorithm that will try to maintain a steady clock so that coordination can happen on the internet. without a central authority. And this new way of managing time and creating time in a decentralized fashion is a fundamental innovation that started with Bitcoin. And that I think is one of the most fascinating aspects of Bitcoin.

I'm also, I think this may be a bit of a tangent, but I'm trying to, it just triggered in my head and like thinking the theory of relativity that time moves differently for different people. What happens in a decentralized timekeeping versus a centralized one? And then, I mean, the decentralized timekeeping, does it mean that every validator is, well, every miner is a different, like, how does the timekeeping actually happen? Does this happen? What does it mean it's in a decentralized manner exactly? Because, and how does that affect the theory of relativity?

Yeah, the difficulty created by decentralization in the context of Bitcoin is that there is no central authority that authorizes a particular miner to join the network, right? There is no screening of who is allowed to join or not the network.

Right.

So if you have this kind of open public network that anybody can join at any time, potentially when a lot of new miners join and lend their computing power to the network, they will be able to find a new block faster. Right? Because there will be more computing power trying to find the right hash in the network, and that will basically accelerate time. But you don't want that, right? 'Cause if you have this kind of random block time that's completely unpredictable, you cannot coordinate action. But imagine if right now an hour lasts 60 minutes, but 2 hours from now an hour is 17 minutes.

Right.

Right? How could you coordinate any kind of work with your team, especially across time zones and across space? That would be very, very much impossible, right? So you need this Steadily ticking clock. And the beauty of Bitcoin is to have that algorithm that will adjust itself constantly depending on who is in the network, who is not in the network. And so you get to have an open network that is decentralized, that anybody can join and leave whenever they want to. And yet you manage to have a steadily ticking clock. And that's beautiful.

That's beautiful because it's a common, it's a, nobody, I mean, it was, designed by Satoshi, right? But it wasn't, I mean, it's a proof that there is something decentralized, but yet well organized. That's how it ties back to the concept that we were talking about before of pirates and like land of nobody that then self-organizes in one way or another. It is a shape of decentralized organization that stays there. Interesting. I mean, this is a very clear, specific example of how that could look like. But in more everyday life terms, what does today's like fight to decentralization versus fight to, from the regulators versus the pirates of today that maybe are aiming for a more decentralized network and cyberspace, what is happening right now? Can you give us an overview?

I think what is happening right now is that people are looking to build or rebuild an internet that is not controlled by just a few players.

Hmm.

And one way to get there is to have a way to transact over the internet outside the control of corporations. I think fundamentally the rise of cryptocurrency and other organizations that use blockchain technology is premised on this idea that we do not want to have heavy dependence on just a few players to transact on the internet. And those few players, they tend to be monopolistic organizations. They tend to be, or small oligopolies. They also tend to follow national divides. So you have Amazon in the US, but you have Alibaba in China. Yeah, you have Facebook, Meta in the Western world. You have Yandex in Russia. And so you have these giant platform corporations that have become to come to play a role on the web that a lot of people find too important to the point where It could stifle future innovation. And there's been a few cases across countries where even the governments that let those platform corporations emerge and become very powerful are now taking a step back and thinking, okay, are we doing what's best now for creating value in our economy, or should we try to promote more competition? And if we want to promote more competition, What can we do? I think this is where the trend for more decentralized business models kicks in. We are trying to have, to disperse control and authority on the internet across a larger number of players in the hope that it will bring about more innovation.

Interesting. And so it's a mean for the regulators and centralized powers that are not the companies themselves to be like, okay, how do we incentivize innovation within the industry? So it's usually like competition for the North Star metric of innovation, or is there like also everyday productivity, or is the North Star the main and final objective for why they would be incentivized to facilitate decentralization? Like, is the North Star innovation or is it— Something else?

I think what brings people to the common table in the case of cryptocurrency-related technologies is innovation. But then there's different groups of people who have very different objectives on the side. You will have people who are politically motivated to promote particular projects. They want to make financial institutions obsolete. They want to make governments even sometimes obsolete. You have like people who are more on the anarchist side of things. You also have people who just want to make the current system more efficient. So they're not like radical. They don't want to get rid of everything. They don't want a tabula rasa. They just want to make the current system a bit more efficient. So you have these different, I would say, factions, camps in the industry these days who can disagree on a lot of things. But I think What they have in common is the belief that more decentralization on the web will bring about new waves of innovation. The way I got into this space was basically as a follow-up on my work on piracy. When I was reading about the hackers who in the '80s and the '90s were developing new tools to facilitate communications and enable privacy as part of communications. I found out that some of these hackers were actually operating very much illegally. And the reason why they were operating illegally, particularly in the US, was because cryptography was considered to be a weapon at the time by the US government. It was military encryption was the same as just encryption, right? So if you were, as a developer, as a hacker, If you were trying to make encryption better and you were emailing a buddy of yours who was maybe based in Australia about it, this could have been considered an illegal export of weapon.

It seems insane now.

It seems insane in retrospect, but there's still this struggle around how to treat from a legal perspective encryption, right? And there's been this recent story around Tornado Cash that very much echoes what happened in the early '90s. So the US government actually cracked down on hackers in 1990, arrested a bunch of them, put them in jail using these regulations around illegal export of weapons. And reading about these people and also interviewing some of them or interviewing people who were working with them at the time, I really got interested into this connection between piracy on the internet and innovation. And around the same time, I realized that some of the building blocks that these hackers had developed around encryption were in slightly different forms, but reused about 15, 20 years later by a mysterious Satoshi Nakamoto to create a new system to exchange value called Bitcoin. And this is how I got into this blockchain space, which I think is very much part of this pirate movement, at least in its early days. There is very much a pirate spirit behind the creation of Bitcoin. And when you think about it, as we discussed earlier about the fact that pirate organizations were very often opposing some kind of monopoly, whether it's the monopoly of the trading companies in the 17th century, the monopoly of the BBC for pirate radio, The monopoly of AT&T for the hackers in the 1970s. I think people who were initially behind Bitcoin were opposing the monopoly of central banks on the creation of money. And that is very much the last monopoly to stand behind this notion of state sovereignty. And we've had this monopoly of states on the creation of money and the issuance of money since the early 17th century, right? It's one of the oldest features of capitalism. It's been very, very stable since the creation of the first central bank in 1611. I think it was the Bank of Amsterdam. We've had that thing that's like a very stable feature of capitalism, and it is a monopoly. And I think cryptocurrency was in its early days promoted by people who believed that that monopoly had to be taken down. I don't think the majority of the industry stakeholders today are in the industry for that, but this was very much an ideal that was present in the early days.

And that was the first challenge, taking down the monopoly of sort of the state banks. And how has it moved up the ranks now? What are new fights that we've seen in crypto that are slowly being— What are the pirates of today going after, after, you know, currencies?

Well, sadly, a lot of the industry has since then moved to trying to achieve very different objectives. One of them is just trying to make trading of financial assets open 24/7, 365 days a year as opposed to just during the regular working hours.

And— Why is that sad?

They're so in— well, it is sad because it is marginally important at the scale of society for creating value or for bringing about new innovation, right? Having this constantly open kind of—

Casinos.

Casinos. Yeah, that's how some people would call that. is not like creating welfare at the level of society. And it's bringing about new risks that are resulting in scandals along the way that may be decreasing or even destroying the legitimacy of the entire industry, which is quite problematic. And so the initial goal was utopian behind Bitcoin. And it became increasingly something that was, that attracted people from the financial sector. A lot of traders got into the space and the appeal there was really the ability to trade 24/7 using increasingly exotic products. And I think that it is one possible use of cryptocurrency, but it is not necessarily the one that will help bring about innovation or legitimize the industry or make it more acceptable.

Yeah, no, it makes sense. I mean, it's one of the things that caught the eye and I think it's probably because of price volatility and just opportunity to develop. Yes, make a lot of money, but also there is some interesting like new financial tools that are generally helpful probably. I think there is still a long way to go there, but It's one of the areas that have been explored the most. And I think you're probably right when you say probably didn't need to be one of the areas that had so much exploration when there is so much more that we can explore. And so what are some areas that you are actually personally excited about, new directions that this new, like decentralized land with no standards yet, yet the possibility to, I mean, there are standards, right?

Yeah.

Bitcoin itself set a kind of standard for how decentralized land would work. But what are some areas that you're excited about?

Well, to remain without the realm of finance, I think that Bitcoin has created really exciting opportunities for a lot of people in the world, particularly people who live in countries where there is not a trusted government. or where, let's say, the volatility of the political landscape is greater than the volatility of Bitcoin. And if you live in a country where that is the case, then Bitcoin can be life-saving. It is something that people who live in rich Western democracies do not always understand, but Bitcoin has really changed a lot of things for millions of people. in some parts of Africa, in some parts of Central and South, Southern America, in some parts of Asia as well, and has created the possibility to access some basic financial services and ability to exchange value in places where this was not possible or this was too risky or there was no possibility to have any guarantee coming from financial institutions or the government. I think that's a fundamentally— fundamental impact that Bitcoin and the industry has had in the realm of finance. And I think that the ability to develop decentralized finance tools that kind of further this initial objective, this is a really exciting opportunity.

Definitely. No, I agree with that. Well, I wanna take it to the, because we talked a lot about decentralization, but we haven't really defined exactly what it is, why we can all sorts of kind of imagine. But I think if we wanna get precise and try to understand precisely how is it that decentralization defined, what are its nuances, I think it's a good opportunity because we throw the word around a lot, but I personally wouldn't be able to really point it down. So I know you've researched a lot on this space in the past few papers that you've released. So why don't you walk us through what the nuances of decentralization as a term and concept are?

Yeah, it's a very interesting term. I don't really like it, but I feel obliged to use it to be able to have a conversation. But let me explain why. So I am a professor at the School of Management at the business school, and I teach strategy and my field of research is within the realm of management and organization science. And this is the approach I take when I look at decentralization. One trend I have observed and found interesting is the evolution of the discourse of entrepreneurs, web entrepreneurs in particular, over the years. So you may remember when a few years ago, the Web2, the social web was the place to be for most entrepreneurs. And you would look at pitches at TechCrunch or similar events, and most entrepreneurs would use as a way to introduce their project the notion of disruption. They would tell you, with my startup, I want to disrupt industry X, right? So if you were Uber, you wanted to disrupt the taxi industry. Right. But then that model was repeated across industries. You fast forward about 10, 15 years and you listen to Web3 entrepreneurs today, they will tell you, with my startup, I want to decentralize industry X.

Yes.

And so you got the same discourse except the word decentralize has replaced the word disrupt. What is the difference though? If I say I want to disrupt the taxi industry, or if I say I want to decentralize the taxi industry, am I saying something different? Do I mean something different? In many cases, I believe that those 2 words are actually interchangeable in the sense that in both cases, I think what people mean is that they want to bring more disintermediation to an industry. So Uber wanted to make the industry more efficient by removing the intermediaries. which were the taxi companies, and put together, bring together drivers and users without taxi companies in between. I think a lot of the startups that are claiming to want to decentralize an industry today are essentially aiming to do the exact same thing. They want to remove an intermediary. Maybe it's a bank. They want to be able to have people transact without a bank as an intermediary, and they call that decentralization. And so I think there's like an underlying trend that connects Web2 and Web3, and that's actually quite homogeneous. Like the similarities between Web2 and Web3 are probably stronger than what we would assume at first sight. But if you would try to dig a little deeper here, is there something more to the discourse on decentralization today than there was 15 years ago in the discourse on disruption. And I believe there is something more. So beyond the hype and beyond the buzzwords, I think that the technologies that we have now built around blockchain and other related technologies, distributed hash tables and things like that, are actually enabling new business models that were not possible before. But fundamentally, I think the notion of decentralization is used today to refer to the dispersion of authority, which is the idea that in a given system, maybe it's a digital platform, maybe it's an organization, we see value in having more dispersed authority across the agents because we believe that in certain contexts, at least, it can promote innovation, it can promote more equal access to resources, and that there is something valuable there that we must pursue as entrepreneurs. So I believe that there is something really important that's going on with this discourse on decentralization, but I think we need to be very clear about what we mean by that. So a lot of businesses in the crypto world, Broadly speaking, have made claims about decentralization that were bogus. So if you look at some of the recent scandals that have plagued the industry, we see the inside of certain organizations where essentially 2, 3 people controlled everything.

Mm-hmm.

They had a master password to every account. They could move money around, like literally dozens of millions around without anybody else knowing what was going on. There was no dispersed authority when it came to decision-making. And so we see these models that are basically associated with decentralization but have nothing to do with it. But if you look at the template for the entire industry, which is Bitcoin, you have there an organized form that is essentially a digital platform that is allowing people to transact online and exchange value. And that digital platform has managed to grow from being nothing in 2009 when it was launched to being a global platform today, present in every country that has dozens of millions of users, that has thousands of developers, tens of thousands of validators, miners who contribute resources that is worth several hundreds of billions of dollars in market value. And we got to that point, tremendous growth over the last 13 years without having a CEO at the helm, without having managers employed by a corporation. And in fact, without even having employees. We've never had that in the history of humankind. This is the first time we have an organization that grows so fast, so big, that has a market value, and that got to that point without relying on the traditional managerial infrastructure of capitalist organizations, corporations. And that is something that is quite amazing, and I'm still amazed by it 13 years down the road because there is definitely something new here.

Yes, I completely agree. It's mind-blowing. I mean, we all know about it, but said in that way, it's true. There has never been an organization without any sort of management, just an inception, a creation, and then people that believed into the concept. But there needed to be a buy-in from The people. So someone had to find out at the beginning and then had to spread the word and then it became a phenomenon on its own, right? The question is, back to decentralization, you said distribution of authority is the key here. Is that, what does authority really mean when you say that? Is it authority over decision or authority over Like the vision. What does authority imply?

I think there are 2 core dimensions to authority. The first one is the ability to access information. If you don't have access to information, you cannot have any authority over the situation. And the second dimension is the ability to contribute to decision-making. If you cannot contribute to decision-making, then you don't have much authority. These 2 dimensions, access to information, access to contributions to decision-making, are fundamental to authority in any organized setting. But these 2 dimensions are to be examined separately. You can imagine a system where an agent has access to all the information out there, but has no authority to make any decisions. Or vice versa, you can imagine a decision maker that actually does not have access to the information on the ground. Like imagine a dictatorship whereby the person, the dictator makes all the decisions, but everyone else is so scared of the dictator.

They still have to—

For their life that they don't actually tell the person what's going on on the ground 'cause they're afraid of ending in jail or being killed. In that case, you have a decision maker without access to information. So if you want to fully disperse authority in a system, the theoretical maximum that you can get is when you have a system where every agent, every member of the organization, for instance, or every user of the digital platform can access all the information that is relevant to their environment, and they can all equally contribute to the decisions that are made about the future of the organization or the future of the digital platform. In the context of Bitcoin or Ethereum, that would mean if we want to fully disperse authority, that would mean that every user should be a validator, every user should be a miner, every user should be running a full node, right?

Mm-hmm.

If you don't have that, well, you are not reaching the theoretical maximum Decentralization, which I'd rather call authority dispersion, because essentially you will have many, many agents who actually don't have access to all the information and cannot contribute to decisions.

But we do have access to information because it's on the ledger, no? Or what other information are you talking about that if I participate to the network, but I'm not a miner or contributor, I don't have access to? What's the missing piece?

Well, I mean, there's lots of different categories of information that are particularly important on these platforms. So for example, looking at the transactions that are in the mempool, but they haven't been processed yet, right? If you're just a baseline frontline user, you don't see those data. You have to be a miner to be able to get to see this information. If you are not a developer in the project, you won't see the discussions that are taking place, sometimes offline, about what are the potential software upgrades that we are considering, which are strategic decisions, right? So if there's like different types of, if you don't run a full node, you won't see the entire history of the transactions, right? So there's just different categories of information that nobody technically is excluded from accessing them, right?

Everybody's—

can set up a microcode.

But in practice.

But in practice, it's not happening. And there's reasons why it's not happening in practice. Like, it would be inconvenient, it would be costly, it's not needed for ensuring the security of the system. But then we have to accept that if in practice it's not happening and nowhere near what people, you know, we're not anywhere close to this like fully dispersed authority, we need to be okay with the claim that Yes, in theory it could happen. In practice, it's not happening. But the consequence of that is we don't have a ton of authority dispersion in the system. We don't have a ton of decentralization, in fact, in the system. We have to be comfortable with just acknowledging that the claim that X is fully decentralized is not true.

Huh.

But And that's okay.

The question is, is the opportunity to, for like, what determines decentralization itself? Is it the practical, how many people are actually accessing the information? Or is it the concept of people being able to access information, but they're not? Are we sure that we, like, should we look at the practically what is happening or in theory, What's the possibility? Because maybe we can define it still a decentralized system, just not because everybody's taking advantage of that information. It's still available if someone really wants to get their chops together.

Right. I think the difference between decentralization in theory and in practice is fundamental. I think it's important to look at both. I think the most important part is the practice though. Let me give you an example. Imagine that You decide to start a company and it's a social network. And you say, well, I am creating a fully decentralized social network. Everybody will be able to see the code. Everybody will be able to create, delete accounts. Everybody will have the exact same privileges as I have as the founder of the social network, right? And everybody can contribute to the decisions about the design of the social network.

Mm-hmm.

Now you launch your code, you launch your company, you go online and nobody cares and nobody joins the network. And it is a social network with only one person, you, the founder. How decentralized is this? In theory, it's fully decentralized, right? Because everything's open source. But in practice, it's just you, right? And so what do we care about when we are looking at building infrastructure for innovation in society? Do we care about the theory or do we care about the practice? I think we should care about the practice.

But then Do we even want a fully decentralized ecosystem? Because it's like, we want every single member to look at absolutely everything. And then how much is everything? Like, where does it stop? Do we want to access the code? Do we want access? Like, there is so many little pieces and components that I'm not even sure we can include. We know about all the pieces all the time. So can we, is it just an ideal idea that is never going to be achieved or is it? Practically achievable?

I think the key is to stop treating decentralization as a hype and taking the notion very seriously, because I think there's a lot of value to it. But like you said, it won't always be the best thing for a business model or for an idea. The value of decentralization will be contextual. It will be contingent upon certain goals that we are trying to achieve. So for instance, if we wanted to give everyone equal access to information? And we would say, well, that's always the best thing, right? Radical transparency about everything. And then possibly some people would have issues around privacy, or some people would make the claim that, do we want as a country to give every citizen access to information that we consider top secret? Is it really gonna help to not have any kind of restricted access to certain types of information, right? Depending on the goals that you're trying to optimize for, let's say you're trying to optimize for national security, are you going to reveal top secret information to all the citizens in the name of decentralization? Perhaps not. Perhaps it is not desirable. And so in a business model, you need to also think about what the objective is. Do you want to maximize participation, user enrollment, growth, innovation? Or do you want to maximize something else? And it could be that there's an optimal level of decentralization that will correspond to those different objectives.

And so what objectives are there? So let's try to break it down because there is the government, there is a few players here, right? Governments, there is the individual, there is organizations of all sorts, startups, and each one of them has different objectives. Hence, as you're saying, it's gonna need some different practical level of decentralization. Let's try to maybe, since this is Cautica, this is a Stripe office, start with the startups within early-stage companies of any sort that are trying to pursue a decentralized organization of some sort or some level of decentralization. Why and when can it be beneficial to want some decentralized structure? You said, is usually because we wanna remove some sort of middleman. Is that the only thing that is tackling or is there more reasons for why decentralization is a powerful asset to startups specifically?

Yeah, I think there are 2 facets to consider. The one is your external environment. So if your goal is to remove intermediaries in a particular industry sector, you are basically trying as an organization to increase decentralization at the level of the industry. That's the external facet. But then there's the internal facet of how do we organize ourselves internally as a startup, as a company?

Right.

Do we want a CEO that makes all the decisions or do we want to make all the decisions with committees where everybody has a say, everybody has a vote, right? And these 2 facets can be dealt with separately. They don't have to be aligned depending on the nature of the project. So one thing is, I think, likely to emerge as we continue doing research in this particular space and we get more data and we're able to test for relationships is the fact that, for instance, decentralization, so more dispersion of authority in a digital platform, may be really good for increasing the growth of that platform, but not necessarily really good for fostering fast innovation. And there's something quite intuitive there is that if you are inviting everyone to be part of every decision that you make, it's probably gonna slow down the decision-making process and it's probably gonna slow down the pace of innovation. And that's okay. Like there's nothing wrong with that. In fact, a lot of people are criticizing Bitcoin for being too slow with innovation and they're saying like, look, Bitcoin will die because there's other projects out there that are just much faster at bringing new features to the market, which is true. And it is true. And then the Bitcoin people respond, yes, but those projects are not really decentralized.

Of course.

You know, it's a bogus claim and they're a bit right. But the reality is that it can make sense for some projects to be more centralized depending on what they're trying to achieve. If you want to innovate fast, it's likely that having too much decentralization will slow you down. It will not be the optimal structure.

That is in terms of decentralization of decision-making, not of information. Internal.

Yeah, how you organize internally, right?

Wait, hold up, because we have internal versus external and then decentralization of information and decision-making. And these both decision-making and information apply to both external and internal?

Yeah, you can think about the dispersion of control within an industry, for instance. And I, you know, I would be curious to see some data about whether the taxi and limousine industry is more or less concentrated now that we have Uber than it was before. I do not know. I do not have the answer to this question. Is it, is there more dispersion of corporate control in the industry or not? Right.

But it's also like, how do you define it? Because maybe it's an overarching company that enables that dispersion of individuals that don't have to work for sub-companies. So it's just one overarching, but then It's overarching, so it's centralized all over again, right?

Yeah, that's a question. We have ways to measure concentration in industries that are accepted, used by government regulators, for instance, who deal with antitrust policy. So you look at the distribution of market share among the top competitors in an industry. And if you have a lot of market share that's coming from just like a couple of companies, let's say 3 companies control 80% of the market, You know, it's fairly concentrated, right? And you can track that over time. And so you can see what the impact was over time of the introduction of a new business model by a company like Uber. And you could say, well, you said you wanted more dispersion in the industry and you wanted to disrupt it. Like, okay, let's see what actually happened, right?

So concentration within an industry is measured by the market share of the revenues that are going back, floating back to the company. But what if You know, Uber takes profits, right? But a decentralized organization, because like they have oftentimes ways to incentivize participants of the network, right? So what if, yes, all the revenue goes back through that organization, but then it actually goes back to the distributed network? Is that, how do we define that? Because it is distributed, but it's also not.

I think that's a great question. I don't know how our government regulators would would count this particular— would basically treat this particular kind of data in the case of Uber. I think there are jurisdictions that have ruled that Uber drivers were employees. In that case, it means that their wages will be counted as part of one single corporation. In jurisdictions where Uber drivers are not considered employees, they're considered contractors, You could make the argument that in fact every driver is its own independent taxi company, if you wish. And then if that's the data you'd use to compute the, you know, concentration index, you'd find that it's, you know, a lot less concentrated depending on the treatment, the legal treatment of the job status of the drivers, right? So that's an open question, I guess, and the answer would depend on the country and the jurisdiction.

on the country and the jurisdiction. I mean, it doesn't really make a difference in practice because it's like, it's just a term of how do we define it? And then we can either all come to the conclusion, oh, we're very, still very centralized, crypto has failed, but then it's actually not the truth just because how we defined it.

I think that there's a difference that goes beyond the words. And the terminology here. And okay, so we look at the way the revenue is flowing back to the company and then to the drivers. But think about these 2 dimensions we were talking about just a bit earlier, dispersion of information, dispersion of authority. Do Uber drivers have authority of any kind on the decisions that are made by Uber? As a corporation, do they get to vote? Do they have— it's an open question. I don't know how it works. I suppose they have limited authority. Perhaps they are consulted on certain issues. Perhaps they get to share their opinion.

But it is one side of the marketplace, so their needs need to be taken into account in one shape or form. Maybe they're not voicing it out, but there is already some sort of input that's coming from them. It has to be because otherwise no supply.

Right. So possibly that's taken into account to some extent in different various forms. And then the second dimension is dispersion of information. One concept that people bring up a lot in the Web3 space is this notion of not having a single point of failure. If one day the Uber app is down because the information is concentrated there, right, on particular data centers and et cetera, And all the Uber drivers are left without a working app for like 24 hours. Can we make the claim that yes, it was in fact very, very decentralized? Or do we have to recognize that perhaps it was not? So this is where we have questions that are open, that don't have necessarily clear answers. And it really goes back to the start of our conversation about, okay, you are going to create something new. You're gonna bring a lot of innovation in a new space. What are the standards that are going to apply? How are we gonna define these constructs, these notions that are gonna help the innovators, the users, and the regulators make the right kind of decisions? And there's usually not a right answer, right? There's no one best way of organizing. And these are very difficult questions. And now everybody's seeking answers for in cyberspace, around all the innovation that's going on around Web3. A lot of open questions, very few answers as to date.

That's the current situation. It is what it is. In terms of, so this is important for both companies and the regulators as well. What are some other things that from the regulator standpoint are important to decide early on? Because as we were saying, with pirates, for instance, you wanted to decide early on what the rules were so that it's not a complete mayhem after a new piece of sea is discovered and then all of a sudden we don't know who rules what. So how right now, how are the regulators moving and how are they starting to think in terms of decentralization? Are we seeing more like intention to try to control it, but then they also see the benefit within it? So I'm trying to understand what's the tendency that you think there is out there at the moment?

Yeah, so I've had the chance of interacting with regulators in several countries, in Canada, in the US, and in the UK over the years. And they're actually adopting a very prudent approach, which is wait, learn, understand, see what's going on, and postpone the time at which you have to make a commitment that's irreversible. And it's understandable why regulators would function in this way. And I think in many ways it is a reasonable approach. Now it is creating uncertainty for innovators, for entrepreneurs, because sometimes they could benefit from having clearer rules written down, clearer guidelines written down so they know what to expect. And this is like the tension that we observe in the industry. But I think regulators would also want to have more clarity about what happens on the digital platforms that are being created, how they function. In particular, they would like to understand how certain claims are made and what they actually mean. So one project I'm working on these days is Trying to look at the digital platforms that are using decentralization technologies such as blockchain and try to precisely measure just how decentralized they are. And so I could ultimately say, well, you know what? Ethereum is more decentralized than Polkadot, which is more decentralized than Solana, right? And just assign a metric. to each platform that can vary over time so that next to, you know, data on market capitalization, volume, liquidity, number of tokens in circulation and things like that, people could have data on how decentralized the platform is in terms of its authority dispersion. And so—

Always in terms of information and decision-making. Decision-making.

So I'm collecting this data and I'm with my team at UCL, and that we are trying to like put a very precise metric on that. And we are getting inputs from innovators, from blockchain foundations, from multiple networks. We are getting input from VCs, we are getting input from regulators, and we are trying to create a dataset that people across stakeholder groups find useful and can build upon to better understand what's going on in the industry. And I think this is the kind of initiatives that can potentially help build more predictable foundations for everyone, and particularly entrepreneurs and investors. And while working on this project, we are encountering some obstacles. We are realizing, for instance, that some of the data that we thought would be easy to access because it's supposedly public is actually very hard to access. So for instance, understanding how many individual miners are mining Bitcoin, it's very hard to know. And you would think, okay, we don't know if there's 10,000 of them, we don't know if there's like 500,000 of them. We know that we have mining pools, but we just don't know how many people are part of those pools because not every pool publishes data on that. And so without understanding that particular feature on the size of the pool of individual miners in the Bitcoin ecosystem, it becomes very hard to make a claim about just how dispersed authority is in the network. But we're trying to find ways to estimate those data to provide better metrics for everyone in the industry.

And we're starting to do that with layer 1s. So we're starting to do that with the very basic blockchain networks, blockchain infrastructure. Okay. So I assume it looks like a weighted equation, like, you know, 30% depends on the number of miners or people interacting with the network, plus this other piece counts for 10%, and the output is a percentage. How does the actual equation look like?

Yeah, so the output is, yeah, ranges between 0 and 1. It's standardized, and there's one metric that we are designing for measuring the Dispersion of information within the system, and then another one that's designed to capture the dispersion of decision-making authority. Right.

Back up the 2 axes.

So it's basically 2 metrics that take into account a number of dimensions and try to, in a very refined way, look at authority dispersion in a way that's comparable for every network.

And this is without taking into account the goal of the entity. So not thinking about, oh, this wants to be very scalable or whatever. It's just pure decentralization depending on 2 axes, which is information and decision-making.

Absolutely.

Sums it up on authority.

Okay.

I mean, what are some of the findings? So have you already had some outputs yet or are you still redefining how the models work? Can you share anything with us?

I cannot share like like a league table yet of the most or the least dispersed networks out there. Oh, we're gonna get there, but we are getting there.

Excited.

And I'm hoping that by the summer we will have data collected on the top layer 1 blockchains out there. And so I think once we have these data, we will be able to examine things that a lot of people want to know more about in the industry. So let's say I knew exactly over time how much decentralization there actually is in Bitcoin versus Ethereum versus Polkadot versus Solana versus et cetera. Now I can use this data to measure the impact of authority dispersion on market capitalization, on how much innovation there is, on how many developers have been attracted to the ecosystem, on how many complementers have decided to build a dApp on top of the ecosystem, et cetera, right? So once we have the data, we can look at really what that thing that we call decentralization, that's very abstract, that's a bit of a buzzword, we can now start to measure it and we can try to understand how it actually implicates other things that we really care about.

I mean, I assume it's going to be very hard to draw a causational relationship though, right? Because we have a sample size of like, what, 4 or 5? blockchain that are really, we can compare. I mean, there's more, right? But the same—

We have a few dozens and we have potentially weekly data time series. So we may have sufficient amount of data points to start to touch upon some of these relationships. Whether we will be able to make a, you know, have a study that goes beyond correlational analysis to touch upon causality is a question for later. I'm gonna lose my sleep over this 6 months from now, but thanks for asking.

I'm sorry.

Give you a heads up, but yes, it will be tricky to analyze the relationships causally, but we'll do our best and we have some techniques that we can use to do that. So we'll see how that goes depending on the quality of the data we get, basically.

And then do you hope that people maybe read the study and can take decisions based on the findings? What could be, for instance, a finding? Like, what's your thesis? What do you expect we're gonna see, for instance, decentralization, especially when it comes to information or decision-making, will lead to a particularly fruitful environment of early-stage startups. Is that the kind of parallel that you want to draw or what kind of thesis do you have?

Yeah, so I have many. I can pick one that I think is fundamental to managing digital platforms in general, which is if you want to have a successful platform, you need to attract not just frontline users, but complementors. So complementors are like third parties that will come and they will develop valuable additional services that will make your platform more appealing. So if your platform is a video game console, you wanna make sure that you're attracting video game studios who will develop games that will work with your console because that's how you're gonna get more users, right? So same thing works with blockchain platforms and any kind of digital platform. whereby you want to attract developers that are gonna build dApps on top of your layer 1 or layer 2 that will make the platform itself more appealing to users. So, okay, imagine now you can have a very decentralized platform where a lot of people can provide input to make decisions and everybody has access to all the information, all the code is open source and all that stuff, right? Or you can have a very centralized platform where you have like basically a couple of co-founders who are setting the rules about what kind of dApp is allowed or not allowed. And there's basically a review and a process, and not everybody is allowed to build on top, right? So the question is, which of the 2 scenarios is gonna be more appealing for complementers in the context of digital platforms that are powered by blockchain? And you might imagine that at first, when you have a lot of top-down decision-making, the rules are gonna going to be very clear. And that can be appealing for complementers, for developers in the short term, because they know exactly what's happening and they know what to expect. So they might like it at first, right? So you might be able to attract a lot of them in the short term. But if you think more about the long term, it could be that the more decentralized design becomes more appealing because it mitigates one thing that developers really care about, which is platform risk. which is the possibility for the platform to suddenly change the rules of the game in a way that becomes a lot more favorable for the platform and a lot less favorable for developers. So if you think of—

You need to think about the incentives for the developers directly then, right? Which, what are the top incentives right now? I don't know if you've already identified some, but like we have platform risk, as you were saying, what is the chance that just switches out of one day or another? What are some other things that developers today care about?

I think that the innovation potential of the platform is going to be very important for developers. I think the expected size of the user base is going to be very important. I think the features of the transactions, their speed, their cost are also things that developers will care about. I think the incentives that are given by foundations can be very powerful. So if you have managed to raise funding, either through a token sale or through VC funding, and you're able to provide grants to developers, you can also create an ecosystem that will be more appealing. And I think the reliance on foundations is actually a very interesting feature of Web3. Because instead of just having a CEO that says, this is what we are going to do and you are my employee, I'm paying you every month to do it. Foundations are providing a more, a much softer incentives. They're saying, we have this money and even though you guys can develop whatever you like because it's a public network, if you develop in one of those areas of priority A, B, and C, we are actually able to fund that and help you with that. You can do something else, we just don't have funding for it, right? So it's basically providing guidance in a way that allows for platforms to have a strategy with specific goals in mind without having a CEO. And I think this is a really interesting feature of Web3 in terms of how The digital platforms are organized because it provides guidance, but without the managerial authority and the top-down kind of hierarchy.

This is interesting. I like this where we can talk about, I think, the bigger piece of that is bureaucracy, right? So which aspects do we want to abstract players in and which aspects do we want to actually have someone that is constantly there And then how, what does that imply in terms of processes? So you say today what's interesting is that we can have an initial idea of direction and then we can sort of codify where the funding goes to promote that, the following of that idea, right? So for instance, unlocking funding for new initiatives in that area. What aspects, however, are not so like, It's interesting because you're abstracting the role of the manager that constantly plays there. How does that attach to bureaucracy aspect and all the processes of the everyday basis? Does that make the organization leaner?

So the bureaucracy is a fundamental feature of capitalism and it's something, it's a term that has become used in a negative way at times, but originally bureaucracies were highly regarded. They were seen as a higher, superior form of organizing because what they were going against is basically what was there before capitalism, which in many parts of the world was feudalism. In feudal societies in the Middle Ages, people got positions, got jobs based on family ties, nobility, aristocracy, or whether they had married the cousin of their brother or whatnot. Right. And this system was fundamentally inefficient because it was not based on skill or competence or merit of any kind. The idea of bureaucracy is to say, if we want to run organizations efficiently and rationally, we need to depersonalize the positions. So we need to create stable roles, stable job designs, and we need to find people to fulfill those roles not because they're part of my family or part of my network of military alliances, but because they actually have competence for that particular role. And they will be good at applying a stable set of principles to deal with organizational issues in a way that will be rational. And so the initial idea of bureaucracy is a great idea, and it rests upon this assumption that by having managers that are skilled to occupy a particular position, we can make organizations more rational. And in fact, the implementation of the modern bureaucracy, which is a phenomenon that was studied by Max Weber in the early 20th century, is seen as one of the fundamental reasons why we started to have large corporations That were increasingly more efficient, able to grow and create massive amounts of wealth.

Because we productized the individual piece of contribution and we made it like a little square. This is what you're supposed to do. This is what you're supposed to— how you're supposed to behave and how you're supposed to contribute to the bigger system.

Absolutely. There was this division of labor and this specialization that helped make the organizations more efficient as part of these bureaucracies. Now, Of course, bureaucracy has come to mean something negative. It has come to be known as a synonym for inefficiencies within organizations.

I'm Italian, so I feel it very wholeheartedly.

And I am French. And I live in the UK.

So true.

Yeah, we have some good experience of inefficiencies in organizations, of course. So Max Weber was aware of these dangers of bureaucracy becoming too impersonal, becoming too slow, becoming too inert, being soulless as well. And so organizing bureaucracy efficiently is fundamental to have well-functioning organizations. The way bureaucracy led to decentralization is quite interesting because it did contribute to that. If we can define job tasks, job roles and positions quite clearly in a way that's stable, we are allowed to basically divide labor, make people more specialized, and we are essentially able to have delegation of authority, which is a form of dispersion of authority. So bureaucracy, when it's done well, is actually a source of authority dispersion or decentralization, if you wish. And it can really help with that. So if you look at a second layer of the way modern corporations emerged and grew to create a lot of wealth in capitalist societies, there's the managerial layer that we just talked about, and then there's the ownership layer with like managers being actually employed on behalf of shareholders. Who own shares in a corporation, right? So you've got these 2 layers and you've got this dichotomy between owners who basically possess the shares and then the managers that actually control the corporation by making decisions about its strategy, for instance. That's another layer of authority dispersion that came about with the birth of the modern corporation at the beginning of the 17th century. where we had the first publicly listed companies with tradable shares on the first stock exchanges. That's about 300 years old, 400 years old, sorry. So what's quite interesting to see now in the latest evolution of the web startups and projects is blurring of the lines. Of these traditional lines where we have specialized managers as part of hierarchy and then a layer above that of owners. Because we are now seeing digital platforms where there's no shareholders per se because the platform is not incorporated, it's not a corporation. But instead we have users who own tokens and because they own tokens, they can also contribute to decision-making because the token gives them decision rights. Okay, so now the question is, does that mean that we have more authority dispersion with that new model? And is it helpful? One thing it is doing, and we can understand that quite easily, is that by telling everyone who has a token because they're a user, you can now vote on decisions. We are essentially renouncing the power of the division of labor. We are potentially saying, Everybody should have a say. Perhaps they're expert in that particular issue, perhaps not, but they will have a say no matter what. So this can lead to a more democratic decision-making process, but this can also lead to inefficiencies, of course, by bringing to the conversation, to the table, people who may not have a strong understanding of the discussion at stake. And so this issue is now at the core of what the so-called DAOs are trying to do. And if you are following the conversation, and I know you are, you will read every day on social media, on Discord, on Twitter, people trying to find ways to organize their DAOs, talking about decentralization, about who should be voting, complaining that people who are supposed to vote are not actually voting, and how can we incentivize them to vote? But should they be voting if they're not knowledgeable about that particular issue? How do we deal with all that stuff? This is a very old conversation. This is like literally 100, it's been like 400 years that we've been talking about this. And people who are now involved in the DAO communities are kind of rediscovering the value of having these conversations and are not always aware that this conversation has already been taking place for a while. And so maybe they are missing out on some of the things that we already know about how to organize, how to disperse authority in a way that is rational and efficient. Recently, I bumped into this quote that I found incredible by Edson White, who's president of a meatpacking company called Armour and Company. And the quote is, big business is rapidly becoming decentralized and it desires to be. And what I found amazing about this quote is the date. That's a quote from 1924.

What?

It's almost 100 years old, right? So this conversation is not new. What Edson White meant by that is that the decentralization of big business was happening because more and more people were becoming shareholders. More and more people in the general population were investing a part of their disposable income into shares. And by that, we were dispersing authority by having more and more people who could potentially vote on the major proposals coming from management. Now, 1924, we're like in this period that's leading up to the 1929 crisis where, you know, millions and millions of Americans were like buying shares in companies, making a lot of money on that until the bubble popped in 1929, right? But so you see that to understand authority dispersion, you need to look at these different levels. So do we want, is it desirable that everybody is a shareholder and everybody has a right to vote? Is it desirable to have a lot of people who vote and do not necessarily have an expertise in the topic that they're supposed to vote about? Is it reasonable to believe that people will vote on everything that happens about within every digital platform they are a member of, even loosely speaking. And so here's, I think, the paradox of Web3, one of the paradoxes of Web3, that by wanting to push for more democratic decision-making, consultation processes, we may be doing things that are counterproductive. And we may be forgetting that there is value in bureaucracy. We may be forgetting there is value in having managers to whom we can delegate particular types of decisions in a way that's reliable. Imagine that by trying to make capitalism more efficient through these democratic consulting processes, I have a token, I can vote. Imagine that we could in fact be going backwards and creating a form of token feudalism. So going back to what was there before capitalism, a form of medieval feudalism whereby every blockchain platform becomes some kind of fiefdom independent from the other fiefdoms. And if you are a user of, let's say, 17 platforms, for different purposes. One is like for music, one is for sharing videos, one is for, you know, sending payments, et cetera, right? You end up with 17 different tokens across maybe 9 different wallets on your smartphone.

Mm-hmm.

And every day you are being prompted to vote for whatever is happening on each and every one of those 17 platforms, keeping an eye on your tokens, trying to understand the rules of each and every one of those digital platforms that each represent a fiefdom with its own rules, each represents as its own currency, as its own unit of measurement for market value.

Right.

That is not necessarily something that would be desirable. That's an open question. But it's also quite unrealistic to believe that this would function and that in terms of user experience, this is what people would appreciate. No, I agree. And so this is where bureaucracy shows some value. It shows that by standardizing processes, making them stable, constant, and delegating authority to people who are knowledgeable, you are actually relieving users from a burden that they may not want to carry on their own shoulders. And so I think Web3 experts, entrepreneurs, investors, users, developers, we should all, researchers, we should all have this conversation. What are we trying to build here? Are we really trying to envision a state of the world where maybe 10, 20 years from now, everybody's expected to manage 123 different tokens and then vote all the time on all those things, even if they have zero expertise about it? Are we actually rediscovering the value of delegation and bureaucracy through mechanisms such as delegation staking, where we are basically saying, well, I have all these tokens, but I don't want to worry about it. I don't want to vote. You know, I just wanna listen to music. That's why I'm on this platform. So here are all my tokens and I delegate all my voting rights to A, B, or C, right?

No, no, no, absolutely. I think the power in The good thing is that we unlocked the— we are trying to find a way to unlock the secret to being able to choose to go decentralized whenever we want to. But it's not necessarily that we need to go there for every single thing, right? We were setting the new standard and was trying to stretch it out as much as possible on one side. But then I don't think necessarily we do want that kind of decentralization forever. We talked earlier about the— You know, like the trade-offs of being distributed as a system with information versus decision-making, et cetera. So I am completely with you that it doesn't, to me, in my eyes, it doesn't make sense to want absolute decentralization of authority for every single piece of it, that for sure. But it's very interesting what you say regarding bureaucracy as well, because we're codifying and making it so efficient that the bureaucracy aspect is abstracted and then people freely interact within a community with the bureaucracy still there. It's just so perfectly interacting within each other because it's codified and hopefully we kind of nail it one day. So it never clicked for me that there is such a clear correlation between bureaucracy yesterday and today. It's just that we're making it better.

We are trying to make it better, but we are also, I think, in the process forgetting what was already known and assuming that because we call our new mode of organizing DAO, that we can just, we are operating into a void and that there is nothing there that we used to do in the past that can be used today and that everything is new. It's not. A lot of the things that we are seeing is not new. When we have like, you know, these mechanisms of staking and delegation to nominate people that will basically act on our behalf, We are basically recreating some form of a managerial hierarchy where we are delegating power to people to act on our behalf. And we know how this can be done in ways that are efficient because there's like, you know, there's like 100 years of research already done in the social sciences, in economics, in corporate governance on all these issues. And I think that in some cases, people who are involved in DAOs are trying to reinvent the wheel when the wheel is already around.

Are we sure though? But like such a clear connection because it's really hard to, I mean, you tell me, I don't know how hard is it to draw the parallels and apply the learnings to today's new ecosystem because I'm sure there is a lot of metrics that are completely different. And so maybe it looks like we can try to apply some sort of structure, but then it doesn't actually work because it's such a new system as well. So What do you think has already worked in applying learnings from the past? If you've seen anything interesting, for instance, this delegation aspect, is there some other examples that you know of, of really successful new structures that have been applied, taken from past, taken from the past?

I think there are ways to create incentives so that the owners of the tokens And the people they delegate their authority to are basically operating with the same goals and the same interests. So there are incentives that can be built in to kind of align the interests of the token holders and the people that are actually making the decisions. I think that in many platform ecosystems, that would mean trying to find ways for developers who are setting the rules and for token holders and for delegators who are making strategic decisions, maybe at the level of the foundation, to act by being on the same page. And I think tokens actually offer new ways to create these incentives in a way that we can fine-tune the incentives better than we could do it with traditional corporations. So there's definitely things that we can learn from the past that we can apply today. and maybe try to do a better job with that. But there's also new obstacles. When we are operating in a pseudonymous environment, for instance, it's a bit harder to know about the credentials of people. So if I have to delegate my authority based on the number of tokens that I have, and I want to delegate that authority to someone else, if all I have is just a list of public addresses, how do I choose? How do I know who is the better person to make the decision on my behalf? What information do I have exactly to make me, to help me make a good delegation decision, right? So the pseudonymity is also creating new hurdles that need to be taken into account so that people are able to make the right decisions. It could also be that, you know, with public addresses, it looks like there's a whole bunch of options, a whole bunch of delegators I can choose from. But what if they are actually all controlled by the same entity? How would I know about that? So it could also be that because of that, there's like conflict of interest or there's like corporate structures that are hidden because all I see is pseudonymous identities, but I don't know really what's behind it. So there are new obstacles, but also new solutions. And I think that's what's really exciting about the Web3 space. One, I wrote a book today that I think is a fantastic read. It's David Graeber. It's a book called The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy. He's a fantastic anthropologist. And this is a great read because he tells some simple stories that I think are opening new avenues to think about decentralization. So one of them that I can share with you is, So David Graeber was an activist. He was involved in the Occupy movement. And then before that, in the early 2000s, he was part of a social justice movement in the United States that was called the Direct Action Network. And he's telling an anecdote about his friends as part of this movement. They were organizing protests and all sorts of things in the big cities in the United States. And then Trying to get donations to fund their movement. So it was very much an anarchist experiment. He's defining himself as an anarchist. So there was no leader, there was no managers, there was no boss making the decisions on behalf of the group. They were collectively making decisions as democratically as they could. And that was working really, really well until one day somebody had the terrible idea of donating not cash to the organization, but a car. And then they were confronted with a very frustrating issue, which is that they couldn't decide who was the owner of the car. And they realized that a decentralized network cannot legally own a car. You have to be an individual to be the legal owner of a car. You have to be a corporation. You have to be incorporated. But the fact that a car was donated to a decentralized network of activists just didn't fit with any of the legal frameworks. And the car became a burden because they had to decide what to do with it and they disagreed and didn't have the legal tools to manage this particular situation. And so this question of like, can a decentralized network control assets? It's a big question today in the DAO communities, right? It's an old question. It's an old question that has been addressed in different ways, experienced in different ways by cooperatives in the past. Which in many ways are just a synonym for DAOs today in a lot of contexts. And one thing they could have done is they could have created a, they could have incorporated their activist network as a nonprofit, but then that would've come with a whole bunch of red tape, a whole bunch of paperwork, legal fees. They would've had to have a lawyer to do that, right? So you would've created additional complexity. And then if you become the owner of a car, of a tangible asset, you also gain exposure to additional issues. Let's say you are protesting some government policy and the government doesn't like you and they wanna give you trouble. Well, they know you own a car. Great. So now they can come, they can send like a, they can send somebody who works for the car regulator or the vehicle authority of the state and they can inspect your car and find that maybe it's not up to code. They take the, Maybe the headlights are not up to code, or maybe the tire is not like good enough to be on the road and they can give you a fine or they can force you to upgrade the car if you wanna be able to use it. So they can create additional trouble for you, right? And so this experience of like not being able to own tangible assets as a decentralized network, I think is an interesting thing to think about because it's a use case that needs to be one way or another. If you're gonna make DAOs work, we need to find easy ways for DAOs to own tangible assets, not just tokens, but tangible assets. How is it gonna work? How are we going to organize that effectively? With what legal framework? I think this is a huge question. And if the answer is like, well, we're just gonna incorporate the DAO, then what you've done is just create a traditional corporation. You call it DAO on Discord or on Twitter, and that's great, but basically you've created a corporation. And then what's different from what we already know? It's unclear.

And from the regulator's perspective, what's the downside of having, like, why was there in the first place no rule for a decentralized entity to own something? Like, what's going on from their point of view?

Well, to be the legal owner of a car, you need to have legal personhood. And to have legal personhood, you have to either be an individual, a person, a physical person, or you have to be a corporate person. And there's no other way.

But the question is, is that something deliberate or is that just, it falls slightly outside of what they considered?

Absolutely. I think it just falls out. It was like the law was written at a time where this question of decentralized networks was not really a thing. Whether the decentralized network is just a bunch of people, you know, meeting in a basement to discuss, or whether there's like an instantiation of it on a digital platform, a blockchain platform, doesn't really fundamentally change the story. It's still a decentralized network. It's not incorporated and it's just not one person. There's no boss, right? So if you're gonna have ownership of a tangible asset, regulators, governments will want to have accountability, right? What if your car explodes and kills people? Who's responsible, right?

Right.

Who is the victim gonna sue? Who are they gonna get trying to get insurance money from, right? So this idea of saying, well, it belongs to a decentralized network, it's a bit tricky.

For accountability mainly. That's the key.

For accountability, for tax purposes, for all sorts of reasons that, you know, make sense from a legal perspective, but can also be used by governments to prevent new forms of organizing. So this is where regulators have a strategic role to play because I think regulators fundamentally want to see these new forms of organizing create value in society, but they also need to be careful so that it doesn't create these, you know, massive amount of liability and damages for people.

But can there be a sort of more nuanced type of ownership? Maybe we need to kind of change what ownership means, right? In the sense, you know, you can have access to something, but maybe you don't own it. And then, so for instance, the car, you know, maybe the network owns it, but then the people that use it and that have access to it are the participants, right? So maybe we need to define ownership very quickly. How do we even define it?

I think that's a really exciting area to discuss. And that's one of my favorite conversations to have with people in the Web3 space. because here we are touching upon the fundamental issue involving politics. And the idea of DAO is often discussed alongside the idea of the end of ownership.

Oof.

And so what does that mean? And what are the political implications of that? It's really cool to see the divide in the community. Initially, the cryptocurrency promoters, supporters, advocates tended to be anarcho-capitalists. There was a lot of them who were free market proponents, but, you know, who were more like on the right side of the political spectrum. And they were really pushing for free market agenda and the ability to have disintermediated private property. But then later on, a lot of people got excited about these new digital platforms based on blockchain for kind of the opposite reason, which is the ability that they give you now to create digital common goods that are not owned by anyone, but that everyone can contribute to and contribute to the governance of. And so you see that if you have like a right-wing interpretation, free market interpretation of those digital platforms, the notion of property is essential for people coming from kind of this side of the political spectrum.

Yeah.

But people see in those same platforms a potential for the end of ownership, which is, it doesn't sound like a right-wing agenda, right? The end of ownership is like the end of private property potentially. And so when I, you know, when I go to a party or an event with a lot of crypto people and I want to have like an exciting kind of icebreaker with people I don't know, I just ask them, do you think Bitcoin is capitalist or communist? And it's a great way to start conversation with strangers. I don't have the answer, but I think it's worth discussing this question because it's really reshuffling what we think is private property. It's reshuffling what's the notion of redrawing the boundaries of the notion of ownership because we have Bitcoin essentially is a not-for-profit organization, right? Bitcoin does not make profit. Like, people who use Bitcoin can make profit individually, but Bitcoin does not need to make a profit as an organization, right? It doesn't have a CEO, it doesn't have shareholders that are trying to like create shareholder value. And fundamentally Bitcoin, because it is open source, is a common good, right? It's not excluding anyone. Anybody can join, anybody can become a user, anybody can become full node if they want to, download the software, propose changes to the code. So is Bitcoin some kind of communist utopia for the 21st century, or is it the opposite of that? Is it like a pipe dream for like right-wing free market proponents who just want to get rid of the state and want everything to be run as private property without any government intermediation? It seems to be a little bit of both, and that is crazy.

Oof. What do you think? I know it's like, it's a tricky one, but what are the answers that you got from the people at the parties, first of all? Do you think that it's more leaning towards capitalism or communism? And what do you feel like?

So one thing I can tell you is that over the years, I have more and more people leaning towards the communist interpretation, or at least the common goods interpretation of the potential for DAOs. More and more people being excited about the potential to create not-for-profit digital platforms that create value jointly and for large communities in a way that's not exclusive to anyone. So more and more people are excited by that side of the story. But I think now you still have this confrontation of projects, of strategies. But what that means, I think, is that the technology itself, If it is able to break the boundaries of these basic notions that are fundamental to our society, such as private property ownership, decision-making, contribution, transparency, right? It's redefining all these concepts at the same time. It means that it's a radical, it's a disruptive technology that is possibly heralding a new age in capitalism. And I strongly believe that society and organizations that are run by digital platforms that use blockchain technology are not quite capitalist anymore. I think they are something else. A few years ago when I was still working in Canada, I had created like a small research group based on the grant that I had received to study this phenomenon. And that was around 2014 and I had called it the Crypto Capitalism Center, and that's a term that I felt was kind of showing how the potential of this technology was, you know, stemming from capitalism but also going beyond capitalism. And I feel that yes, we have the potential to leave socioeconomic structure now and move to a different one, and The world we live in basically was created in the early 17th century, in the period ranging between 1600 and 1615, period of 15 years. All the fundamental building blocks of our capitalist societies today were created. The first publicly listed corporation with tradable shares was created around that time. The first stock exchange was created in the early 17th century. The Amsterdam Stock Exchange. The first central bank was created around that time. And in fact, these 3 structures were created by a government, the Dutch Republic, United Provinces, it was, they were called at the time. And so in a period of 15 years, 400 years ago, the institutional foundations of our current society were laid down and they remained very stable over 400 years. Now, if we are able to move to an organizational model for society where potentially there's a different role for central banks because we can have these decentralized digital money, where potentially users of a product are also co-owners of the organization that creates the product or the service through token ownership, are we still in a capitalist society? I don't know, perhaps we're entering something else, a new age.

That's interesting. What would the term for the new age be? I mean, what aspects of the— what aspects stay the same and what aspects change? It's a, it's a big piece, right? Because there is so many components to capitalism and so many components to communism and the other in-betweens, right? Um, it's funny that you say that. We, we spoke on this, um, about this topic and like it's a recurring theme. It comes back and back and nobody really has the answer of what's this new thing that is in between this communism and capitalism that come together. And do you think, do you think it's the best of each or is something inherently new and we shouldn't even try to, like, is, do you think it's gonna fall something in between or is it something that is just beyond the same wavelength?

Um, I actually wrote another book You came prepared. This is one of the most influential books for me. This is the French version. It's a book by Deleuze and Guattari called Capitalism and Schizophrenia. So it's a book written in the early '70s. They're philosophers, but they're looking at the history of capitalism. And the main thesis of that book about capitalism is that the The enemy or the antithesis of capitalism is not communism, it's feudalism. And their theory is that what capitalism goes against is not communism as much as it is feudalism, which is a mode of organizing whereby capital and labor, which are the 2 things that you need to recombine to create value, were attached. To land ownership, which was part of a feudal system versus bureaucrat, the capitalist bureaucracy, which is concerned with efficiency and rationality. So in a feudal system, you couldn't just take capital and labor and just move it around and recombine it because it was basically stuck to a plot of land. When in the feudal times, in the medieval times, people would sell. Land, the labor was attached to the land and you would buy not just the land, but labor, serfs or slaves at times. And that the labor was basically not something you could move around. Right. And capitalism, according to Deleuze and Guattari, is that moment in time where the norms, the social norms, the political norms that keep labor and capital glued to a piece of land are broken. And now labor and capital can move freely around, including beyond state borders, and they can be recombined. And that is the birth of capitalism according to them. And it basically feeds upon the destruction of the feudal system. And the way it happens is by having the emergence of sovereign states. That emerge against religious authorities, against city-states, against the aristocracy, and create this universal jurisdiction whereby they say, now this territory is our sovereign territory and we get full authority to create norms that will apply equally to everyone. So where we used to have 12 different standards for measuring distances, now We will all use the metric system. Where we used to have 112 different times depending on the town where you live, now there will be only one time and the sovereign will decide that time. Where we used to have multiple coins and currency systems depending on the town where you come from, now we will only use one currency and it will be printed by a central bank that depends on the sovereign. And now that we have this kind of homogeneous sovereign territory that is created, we can take capital, labor anywhere and we can move it around. The standards are there, they're consistent. And so you can start moving things around, recombining it in creative ways, and you can create value in ways that we couldn't before. And when you see the growth rate that starts to be, you know, pumping up in capitalist societies, when that happens, you really see the contrast with feudalism that where there was very little opportunity for creatively combining capital and labor.

So are we stopping that with the codifying of where capital and labor is going to go with Bitcoin and broader blockchain? Are we stopping that phenomenon of just capital and labor freely floating around, or is it just a new norm? So does Bitcoin just compete directly with the state?

I think we are possibly leaving the capitalist system as we know it by having the possibility of having currency that's independent from sovereign powers. But at the same time, there's a risk that we touched upon earlier of recreating a form of token feudalism if the various blockchain platforms that are being created cannot communicate and cannot be standardized to the point of users being able to easily move capital, labor, and digital assets around. And so it's up to us who are working in this space and up to the builders and the designers in Web3 to decide whether they want to create a token feudal system or they want to create something that looks more like capitalism, but with some of the fundamental parameters of capitalism changed or removed. And I think it's still unclear whether we will be able to build something that doesn't look like fiefdoms that are unable to speak to each other, each with their own rule, each with their own currency. What would be the point of doing that? Perhaps there is value, but making all these things interoperable, I think, is the biggest challenge of Web3.

I mean, what you're saying gives me, on one side is like, oh my God, I think we are forgetting that, you know, we've been trying these things for so long and it's probably gonna take like a lot of time before we get it right here. So on one side, I'm very like, wow, we're really like not doing anything much different. We're just trying to find new subforms and shapes of control of capital and labor and playing around with that. So it's going to take a long time until we figure out the effective formation of that and framework for that for the specific purposes of each company. But on the other side, I can see that we have much faster experimentation, so we can try out different types of structures much quicker than having states and then revolutions and then complete changes because we have these much smaller and closer communities that can experiment around with that. Is that a fair comment to say? Or do you think, like, what's the horizon until— I mean, it must be exciting for you that you're like, you've read so much about history and now it's like we get the chance to experiment properly and see which frameworks of capital and labor actually do work for which purposes.

I think it's a very exciting time. I think the comment is totally valid. And I am quite excited to see that a lot of the protocols and a lot of the startups in Web3 today are actually concerned with trying to enable the circulation of assets, enable the circulation of skill. So that people can actually find a good match between what they can do and where they can contribute. So startups that are helping with recruitment of Web3 talent independently of national boundaries are, for instance, contributing to this movement of creating this new level playing field. where there's like homogeneous norms for everyone to be creative rather than play a game that could lead to a new form of feudalism, except in the digital world.

Yeah, no, absolutely. Wow. I mean, it's an insane digression. I think I would like to run back this episode in 5 years once we understand, you know, what actually stuck, like what worked, what sticks and what didn't. For which purposes? Fascinating, honestly. We have a last thing that I wanted to mention and bring up, which is your book Déjà Vu, which was an incredible experiment around memory and just a new form of media as well, which I think is quite exciting. So wanted to ask you how you conceptualized it and run us through this experiment back when you were writing it in 2017.

Yeah, so the book is here. So it's like a graphic novel that I worked on with Sarah Legault, who's an artist from Canada. And basically what we wanted to do is experiment with media, with illustration, with text, and also with technology. And so the book basically tells the— so it's written in French and also in English. And so you can read the story in 2 different languages and the story is told slightly differently depending on the language. But the story basically is about a corporation that comes up with a new technology that is a little bit scary because it enables the corporation to edit people's memories. And there are employees of the corporation who find this too scary and they're actually trying to take down the corporation. They're whistleblowers, if you wish. And so the, the, in a very experimental fashion, the, the, this graphic novel tells the story of, of these 2 people who are trying to take down that corporation. But the story itself has been edited, like the memory of the story itself has been edited. And the way the story happens, the way the chapters are ordered in the book is telling one narrative, but there's another narrative that has been recorded. In the Bitcoin blockchain by essentially creating a cryptographic hash of each chapter and recording that using the Bitcoin's timestamping capabilities in a different order. And so the book contains, we printed in the book the public addresses that were created for each of the book's chapter. And you can go to the Bitcoin blockchain and see basically at what time exactly The events that are being described in each chapter actually happened. And if you can, you can put the pieces of the puzzle back together.

So the Bitcoin version is the original one, is the one that is supposed to be the source of truth.

Exactly. But that's not the one that's been printed in the book. So the book is basically a lie and the truth only lies in the Bitcoin blockchain. And there's a way to find that and to find it in a way that's provable because each chapter is basically as its hash that's been converted to a public address.

And this, The story is like completely the opposite. Like, is it very different? I assume.

I don't wanna say too much. It's quite different. It's quite a different ending. But what we found interesting with this is basically playing with this idea of the single source of truth, as you suggested. Also playing with this idea of having this provable ordering of events, provable timing of things where, you know, what you read, cannot necessarily be trusted, but what's in the blockchain has kind of a different level of trust attached to it. But also there's this idea of like creating a sort of weird NFT. I mean, the term was not really on our minds at the time. We did this in like 2017, but basically each Bitcoin address has a transaction that's been sent to it and the Bitcoin address itself represents a hash of each chapter. So we can, prove that the text that's in a PDF is actually the text that was written at a particular point in time, right? But those addresses, because they were created based on a hash, they don't have a private key to them. So each address basically contains a digital trace of each chapter in a way that's provable, but it's not transferable. I cannot send anybody the Bitcoin transaction, like these unspent amounts, They're stuck there forever because I wanted to be able to choose exactly what public key I wanted to use so it matches the hash of the chapter. But of course, the downside of that is I cannot match the private key with it 'cause it hasn't been generated jointly. And so these are non-transferable tokens that are stuck in the blockchain forever, each representing one chapter in the book and the order in which the events happened.

Huh. You engineered your own NFT in one way or another.

It's a stupid, useless NFT that cannot be transferred.

That's crazy. Now I'm really intrigued. Does it differ from the French version to the English one?

It does, just because I wrote the text in English first and then back translated it into French. And because the writing is quite experimental, it was very hard to do a proper translation. So there's like gaps. There's just things that you cannot find a proper translation for, and I'm sure it happens when you're trying to talk about something in Italian and then say it in English or vice versa. There are certain things, it just doesn't quite add up. And instead of trying to paraphrase around to have like the best rendering possible, the most accurate rendering possible, we decided with Sarah to just leave this imperfect. even when it actually told a slightly different story. And sometimes some very small translation gaps, errors can lead to big changes in the events that are being described.

Like what if we had Bitcoin in 1984? What would've happened? No, it's interesting. I mean, how did you even think about it at the beginning? And then what did you learn throughout the process? Did it change any perspectives that you had? What were the takeaways for you?

Yeah, the takeaway was really experimenting with the technology in relation to cultural production. So we have blockchain, we have timestamps, we have the ability to prove the state of a particular digital file at a particular point in time. What are the consequences of that if you are a writer, if you are an artist, if you are a musician? What can you do with it? that you couldn't do before. That was really the goal was to experiment with that. And we used that as a way to also attract funders for this project. It was crowdsourced. And what we did is like, you know, each illustration in the book that Sarah made was actually an actual painting, a unique painting that we sold as a way to fund the production of the book itself. So there was like an interaction between the real world, what was printed in the book, and then the way the story is told on the blockchain. And so there are people who own one of the limited edition copies of the book. There are people who own one of the original artworks from the book, one of the illustrations. And then everybody can verify ownership by looking at the Bitcoin blockchain. So a lot of experimentation going on there. But the possibilities are endless. And I think the NFTs, the NFT technology, the idea of basically an NFT is like a piece of, it's a cryptocurrency with a file attached to it, right? I think that's the way to describe an NFT that makes the most sense to me. Imagine a cryptocurrency, either an unspent transaction amount or something held in an account depending on the platform, but next to that there's a file. Maybe it's a video file, it's an image, or it's an audio file, right? And they're attached. and you can move them around and you can code things so that the file doesn't have to be immutable. It can change depending on circumstances, and that can be programmed in a piece of code. The possibilities of this are endless for creation, for artists, for marketing teams working for decentralized protocols, but also for traditional corporations. And I think this may be the most promising use case of the technology that has emerged in recent years. I find that the growth of that particular segment of Web3 is incredibly promising. We see large corporations signing deals with blockchain protocols to work on the potential of NFT technology. And I think this is going to change fundamentally the way products are marketed and also the way creators in the arts and culture create content.

And that drives mainly back to the piece of immutability and source of truth that it provides because it's brought onto the blockchain, right? So that's always the bottom line is going back to the immutability and source of truth because we know it's truthful.

Yes, there's that aspect that's fundamental to the economics of those projects. And then there's another aspect, which I think is about the ability to have the digital trace interact with the real world in a way that's programmable. And I think for cultural content, this is something that is tremendously novel and that will lead to applications that we cannot yet even fathom.

Well, that's because digital content is ubiquitous, right? It moves super fast. You can copy it, you can slap it everywhere. So there is no way to trace anything back to the principle of it. Which is what you were trying to prove with your book. Goddamn it. It's exactly it. Yeah. Makes a lot of sense. No, it's— wow. Phenomenal. Uh, I'm definitely gonna have a read of this book and I suggest any reader, any, yeah, listener hopefully becomes a, a reader as well.

It's not, uh, available anymore, sadly.

Oh no. What do you mean?

There is no— so, so, you know, adding to the experimentation, there is no digital copy of this book that was made available, right? So there's like only 500 physical copies. And that's it. There's no, you cannot read this as an ebook.

Wow.

Right? So it exists digitally, but only in the Bitcoin blockchain, but not the text and the illustrations do not. So it's fundamentally an anti-digital product whose trace and authentication can only go through a digital process. So it's a bit of a paradox.

Wow. And where are the 500 copies right now? We got one of them right here that my family has.

There's a few left, but most of them were sold as part of a presale to raise funding for the project, right? So yeah, there's I, I, there's maybe a couple of dozens left, but it's really, yeah, there's, it's not really for sale at this point.

No, of course. I mean, you can't sell them.

But this one's for you though.

No, no, no, no, no, I cannot.

Well, well, you know, it is for you.

Wow.

It doesn't, you won't be able to sell this for eBay, on eBay for a lot of money or anything.

It's not yet, but wait until this episode goes out.

I will.

No, I'm joking and I would never sell it. Wow. I appreciate it so much. It's such a nice piece of authentic and because you have 500 of it. All of a sudden the limit brings value to the—

It's like an NFT, but like tangible.

An actual NFT. Yes. Awesome. Fantastic. Thank you so much for coming on. I really enjoyed it.

Thank you, Michelangelo. That was fantastic.

I appreciate it.