The World Changing Podcast

[00:00:00] greg: Uh, we gotta grow the grid by like 60% in the next handful of years. I think we'll probably talk to Gary about that too. Mm-hmm. Uh, the next episode. So it's just like all this new stuff that has to get built for this new reality that we're in and this dream of digital money, ubiquitous digital money for every single person in the world.
[00:00:18] greg: There's just like a lot of stuff that we have to build.
[00:00:20] greg: Welcome to the World Changing podcast. Was that too much? Yeah, that was probably too much, but let's keep it, we'll keep it anyway. How about this? If we do the podcast and the world doesn't change, Then we can take that out. Welcome to the World Changing podcast, where we deconstruct the projects and products that are moving us towards a decentralized and carbon-free future.
[00:00:51] greg: We'll talk to the skeptics, supporters, and innovators in the fields that depend on electricity to run their industries, which is changing every single day. I'm your host, Greg [00:01:00] Robinson, co-founder of Aston Labs, a decentralized infrastructure company, and on the other side of the camera here, we. Flo Lumsden our producer, and she will make sure that the train stays on the tracks while we do this.
[00:01:16] flo: Hey, it's Flo.
[00:01:18] cryptocurrencies, blockchain,
[00:01:20] What the heck is crypto?! Prepare to join us on a thought provoking and philosophical journey. Our conversation transcends the technical aspects, delving into the profound implications of these technologies and their significance in our lives. Head to the show notes for references we talk about during the episode.
[00:01:40] Sit back, relax, and let's take on crypto.
[00:01:45] flo: I think crypto, like when I
[00:01:48] flo: Hear the word crypto, I'm like, my mind just goes blank. Like, I mean, not blank blank, but
[00:01:53] flo: it could be so many different things in my mind that I'm like,, I don't really know what you're talking about when someone says [00:02:00] crypto. Do you mean coins like tokens? Do you mean blockchain technology? Do you mean the concept of digitalizing everything? Like I So to what, if somebody need to be more specific when they say crypto to me, cause I'm like, that brings nothing to mind.
[00:02:19] flo: Like that could be, they're like finances. It's like, you know, finances. I'm like, yeah, money. Like the economy. Yeah. That's a very big concept. Like what? That's a big concept. What are you talking
[00:02:32] greg: about? And so let's say somebody did say, what if you were like, Hey, I don't know what you're talking about. Are you talking about coins or are you talking about tokens?
[00:02:38] greg: What if somebody did actually answer you? Does it, is it still blank or does it get
[00:02:43] flo: clear? No, it gets a little clearer, but, in my experience, because it's a new. Word ish in our lexicon, , it means different things to different people.
[00:02:56] flo: Mm-hmm. And even if they say, yeah, you know, coins, [00:03:00] tokens, uh, like Ethereum or, Dogecoin, I still, I just still don't really know what they're thinking of. I have my idea about it, but to have a real conversation about it. We'd have to have a very long conversation about what they think and their opinions and their, it's just so, yeah.
[00:03:19] flo: Subjective to me
[00:03:23] greg: at this point. You feel like that's like life? Is that just life? Like you just need to understand people's context before you can actually have a conversation with them, but yes, definitely. With crypto, I, I wish we could have a room full of people where we just say like, what does crypto mean to you?
[00:03:39] greg: I've been so excited to have this conversation because I think I could be wrong at this point, but I feel like no one can say I am a crypto expert. Yeah. Yeah. I agree. You know what I'm saying with that? Like, almost everybody I talk to about crypto is just like reaching Oh, totally. [00:04:00] For the answer and no, and nobody has.
[00:04:03] flo: And kind of uncomfortable cuz they're like, uh, no one's really
[00:04:07] greg: confident. Right? Yeah. Well, the, I think the danger is, is if you're like really overconfident and you also don't know, then people will just be like, well, that person sounds confident. We'll just believe. Yeah, that person, I'd probably fall into that trap sometimes.
[00:04:26] greg: , so if somebody said, I'm talking about tokens. Okay, what does that mean to you?
[00:04:34] flo: Okay. There's different coins or tokens out there that are meant to be more like cash or a digital financial currency that could act as cash if you could buy things
[00:04:52] greg: with it. Is that different than a coin to you? No. Or the same? To me it's the same. Yeah. So like a
[00:04:59] flo: coin or a token? Yeah, [00:05:00] because I think it's meant to be a visual metaphor of money,
[00:05:03] greg: right? Mm-hmm. Yeah.
[00:05:06] greg: And money. Okay. What's money to you?
[00:05:10] flo: Um, we've actually had some really good conversations leading up to this. So I, I have a good idea of what I think money is now, and I can say that, money is a form of transferring value between people. So if I am a hat maker and you are a dog trainer and you wanna buy a hat from me, but I don't need your dog training services, you can give me money.
[00:05:43] flo: Like we are exchanging value with that is stored in the cash.
[00:05:49] flo: Maybe you sold a bunch of, dog training lessons to other people and they gave you money, and then you can use that value storage device to buy a hat from me. [00:06:00] And then I have the money and if I wanna buy an orange, I can, it's like a value storage device Yeah.
[00:06:09] flo: That we all collectively agree on and believe in. And then that's what makes the magic work. Yeah.
[00:06:16] greg: We didn't believe in it. It wouldn't work. So like before money, you just, like, if you wanted a hat mm-hmm. Then I was gonna need. Dog training services. Yeah. Like right then too,
[00:06:30] flo: I think for a while people like just used cows and chickens.
[00:06:33] flo: Yeah. Like they just exchanged commodities. Livestock as a commodity. Yeah. Like
[00:06:38] greg: again, something that we all believe in the value of, right. Like if we all believe that chickens are valuable mm-hmm. To our family at some point in a reasonable timeframe, then we'd be willing to accept the chickens.
[00:06:51] greg: Yeah. Uh, what if you showed up and they're like, sorry, I'm vegetarian. Yeah.
[00:06:57] flo: I mean I think it was
[00:06:59] greg: keep it as
[00:06:59] a
[00:06:59] flo: pet. [00:07:00] It's just an in between. It's a pet there. Well, money's really an old, we've had coins from the Roman era, coins from, I don't know when it started, but it's been around for a long time and probably for a very good reason.
[00:07:09] greg: Yeah. You'd think we would've looked all this stuff up. We didn't.
[00:07:13] flo: I mean, we can add it in. Yeah. Later at the
[00:07:16] greg: end. We probably won't, we probably don't. That's fine. Somebody can look somewhere. I mean, the beauty of some of these conversations we've been having is this isn't like an academic class, it's more of just like having the actual conversation that people are actually having.
[00:07:30] greg: A lot of things that I hear in crypto especially is I would say there's definitely like belief, like there's so much belief. It's mostly like a religion, you know? Mm-hmm. It's like some people believe heavily in Bitcoin is the all, is what we all have to believe in, so that it is the standard currencies.
[00:07:48] greg: Like they're sort of looking for this standard currency. And then there are other people that it's like, well, Dogecoin or whatever. It could be any one of these things that enough people agree upon. [00:08:00] Um, but yes, like
[00:08:02] flo: People who believe in Bitcoin believe in the intrinsic value of having to mine it and the fact that it, there's a scarcity to it.
[00:08:09] flo: Yeah. Is what I've picked up on. And it's like, well, maybe other people don't value the fact that you have to mine it. Yeah. Similar to gold, like Yeah. Gold you have to mine. There's not much of it does. Yeah. Do you need gold to live, to eat? No. Is it gonna build a house for you? No. Right. But it's a,
[00:08:29] greg: store of value that people have agreed on for years.
[00:08:32] flo: It's just agreed on. Yeah. Yeah. There's not much inherent value in gold on its own.
[00:08:37] greg: Right. ] if everybody just stopped believing that it had value, then it would not inherently have value. I guess you could build things outta gold. You can, if you like gold stuff. If you like gold stuff. Yeah.
[00:08:49] greg: Which, but there we're back in the chicken situation again. Yeah. it's like I might not have a value for it but if enough people believe, so that was what one stat that we looked at before this was,
[00:08:59] greg: and this is probably [00:09:00] out of date, but 2022, uh, 950,000 people in the world had at least one Bitcoin. If only 950,000 people in the world had a US dollar, I think we'd see the same sort of weird price action that you see in Bitcoin.
[00:09:21] greg: A lot of people talk about the volatility how much the price is changing every single day. And I think it's a matter of if you don't have that much, that many people owning it, participating and you have people owning large amounts of it. Exactly. Then then any trade is going to change the, any kinda lopsided.
[00:09:39] greg: Yeah. It is just gonna, the price is gonna change a lot. If you had 350 million people mm-hmm. With a quarter of a Bitcoin. Mm-hmm I don't think the price would change. It could be totally wrong on that, but just statistically speaking, it seems like the price would change less because you would allocate that across many more people who might be [00:10:00] buying and holding.
[00:10:00] greg: So I think then that's why adoption is so important. To these communities. Right. Because if more people adopt it and it's easier to trade in a specific price. Like if I wanna send it to you, it's the same price a day later after I give it to you. Like, if I give you a dollar, chances are tomorrow the dollar's pretty close to a dollar.
[00:10:22] greg: Yeah. But, um, you know, I could give you $2 worth of Bitcoin and tomorrow it might be, you know, $20 worth of Bitcoin. That's not a good store value. Yeah. It didn't store the value. Well, it's
[00:10:33] flo: almost like, you know, I have, I have some stocks that I buy for fun just to see if they go up or down and, and I only spend like two or $300 on those.
[00:10:40] flo: \ I'm not rich, so I don't like put a lot of money in like particular stocks. Mm-hmm. But I have all, I have pretty much all of my savings in a diversified, widely held. Mm-hmm. Like a mutual fund. Very, the funds, you know, index several, several funds and it's like the risk is, is so spread [00:11:00] out.
[00:11:00] flo: Yeah. And so it's similar with these coins, because not many people are in the community the risk of the value isn't spread out among as many people Right. Or as many assets. Right.
[00:11:10] greg: Yeah, it is. I mean, that gets into the diversification of. All of the assets you own, people will own many, many cryptocurrencies and they'll say, well, I just believe in the crypto industry, so I'm just gonna buy all of them, and then I'll, or their index funds and different things that people have created and that allows them to diversify away from just Bitcoin.
[00:11:35] greg: Mm-hmm. Just Ethereum. But again, that gets us back to that issue of if people diversify into a whole bunch of cryptocurrencies, and especially if they're mostly currencies, they're not like other forms of assets. Mm-hmm. Like you're talking about stocks or maybe own real estate, maybe own, that's diversifying across different asset classes.
[00:11:53] greg: Yeah. If you're just in the crypto asset class and it's all currencies, it's like buying [00:12:00] Euros and US dollars and all of these different types of currencies of cash, types of cash. But now you steal, not steal, but you move money away from Bitcoin and now there's less adoption, there's less money in Bitcoin.
[00:12:14] greg: Ah, yeah. Does that make sense what I'm saying? Yeah. It's like if you didn't have a whole bunch of people owning Bitcoin, then a whole bunch of people,. If hundreds of millions of people own Bitcoin, then it would be.
[00:12:29] greg: A standard currency that we could all use. It would stay more stable.
[00:12:33] greg: Now let's say that you said, oh, and by the way, there will only ever be 21 million of these things. Well, that would make the argument that if hundreds of millions of people owned Bitcoin and there was only 21 million, which again, it can be split up into a million pieces. So many more people can own it than that.
[00:12:56] greg: But let's say only 21 million. You could [00:13:00] argue, if it had wide adoption, a lot of people were using it for a lot of goods and services and there was only 21 million, then the price for each one of them would be huge. Right? Right. And so that's what I think a lot of people are believing in when they're say, cuz what's is sitting here talking about , how it's like cash.
[00:13:18] greg: It's like, well if it was totally like cash, then there would be an ever growing supply of that cash. Right. That the US dollars are, and that's what holds it at this base level price. Bitcoin caps out at 21 million. Bitcoin is more like
[00:13:31] flo: oil or
[00:13:32] greg: gold or some, yes. There's a scarcity. It's
[00:13:35] flo: more like an investment if you believe in the value.
[00:13:38] greg: Yeah. If you believe people will adopt it. Yeah. Let's go back to your gold point is like if gold, if all of a sudden people are like, yeah, I don't really, I don't really think gold is valuable, we don't really use it. Like if we don't use it in our stuff anymore and I don't really need it, I'm just gonna know that it's in a gold bar somewhere.
[00:13:59] greg: And the [00:14:00] price of gold plummeted. It doesn't really matter that it's scarce anymore. Like the price of gold is gonna plummet if nobody cares about it, if there's no demand and there's, yeah, it doesn't matter how scarce it is. So I think the same argument could be applied. It's a Bitcoin is like, it really does require this belief that is a good way to transfer value.
[00:14:19] greg: Um, so let's stay on this currency topic for a minute, . So let's say, you know, your dollar bill has a serial number on it, right?
[00:14:29] greg: And there is a, somewhere there's a list of all those serial numbers that have been printed, right. And. With the government, you could go and see all of those. So let's say you and I meet for the first time. i I have dog training services and you're gonna sell me a hat and I just want a hat right now.
[00:14:52] greg: And you're like, I don't have a dog. So, so, uh, so I was like, okay, well I guess you're not gonna want my services, so I'll [00:15:00] pay you in this dollar we've never met before. Right? Presumably you have a business license or something like that. So that if, if my hat was, you know, if I had a problem with my hat, then they caught find you, but you might like shut down your shop and run away today.
[00:15:15] greg: So now we're talking about trust. Like, I have to trust you that when you sell me this, I can send you this, this US dollar and this us and, and you have to know that I didn't print this US dollar on my printer at home so that when you receive it, you'll be able to use it for whatever you need to use it for.
[00:15:32] greg: Well, that serial number that's printed on that is really the way that someone would find out if that was counterfeit. Mm-hmm. Right? But we don't have that database sitting on our phone to like take a . Picture of that serial number and be like, oh, that's legit. We do what happens in the grocery store where somebody like holds it up to the light.
[00:15:53] greg: It's like they're basically auditing. This, this contract that you're having with them right now. Th this [00:16:00] that is the, that is like their sort of, um, version of securing the transaction is they hold up the thing to the light and they look in the, and they, you know, they look at the, you know, all the different markings and the little strip that's in the dollar bill.
[00:16:16] greg: So we kind of do this anyway in the manual world. We get a, we get cash, it gets audited in some way so that we trust it and then we accept it is payment. Now let's take it a step further. You have a wallet. I have a wallet, a real wallet. Like when you open, stick a bill in. Now let's say you put that bill in that wallet and your wallet scanned.
[00:16:44] greg: Your wallet scanned the, the dollar serial number when you put it into the wallet and then checked the database to see that that was, that, that's a real dollar. Like now we took a, a step further from the whole light thing where they hold up the dollar bill to the light, [00:17:00] um, or the $50 bill to the light.
[00:17:03] greg: So now I send it to you, you, it comes out of my wallet, goes into your wallet, and then your wallet scans the serial number and says, oh, that's a legitimate dollar bill. Now you can imagine that we keep sending that through all of these wallets, and now there's this like trail of that serial number.
[00:17:19] greg: Mm-hmm. Right? And so now you could go back and you could even see. If I'm even allowed to have that dollar bill that I gave you, because did it come from someone else who, is like a legitimate known person? Mm-hmm. And you know, or , did it work in such a way that by the time it came to me, nothing weird happened?
[00:17:40] greg: There was, somebody didn't say that they had the dollar bill. Who didn't have the dollar bill. So you could see doing this with regular dollars. Yeah. It's just the dollar wasn't designed that way. And so I think that's what makes, in my mind, now we're getting to my own bias, but that's what I think the genius of a cryptocurrency is, [00:18:00] is that you've taken that audit trail concept that I just said, and you've built it from scratch.
[00:18:06] greg: That way you built a form of money that could still allow me to buy a hat and you to buy dog training services or not. Maybe you go buy a dog with it, then you come back for the services and then, but it would allow us to do all of that and audit those transactions.
[00:18:23] greg: We don't wanna be auditing ledgers. Mm-hmm. Like that. I'm not in the business of auditing I have to teach dogs. Now we have computers somewhere else that someone else owns and they sit and just look through that ledger constantly.
[00:18:38] greg: Well, what if their computer gets hacked? Well then we better have at least two computers looking through that list. And now let's say we're like, well, what if both of those get hacked? We're gonna have to have a lot of people and a lot of computers looking at it, not just one or two or three, one as many as we can possibly get [00:19:00] looking and agreeing on that trail of that dollar bill that went through there.
[00:19:05] greg: So that is really the point of a cryptocurrency is that it brings together all of these things that in the world have been easily scammed, honestly. The fact that you can counterfeit the money that somebody who, somebody can steal it from you. And that then that person, when they steal the dollar from you, they can go use that dollar and no one asks any questions.
[00:19:32] greg: That is what kind of cryptocurrency is trying to solve. Hmm. But it's not like they're inventing anything. I mean, they're, you said at the beginning, they're really just inventing a new technological way to do what we've been doing for years and years and years. But get rid of some of these like bad things that happen with the currency.
[00:19:52] greg: My wallet was stolen. Yeah. Your crypto wallet or your actual wallet? No, my
[00:19:57] flo: actual physical wallet was stolen. Yeah. The I r [00:20:00] L wallet, the i r L wallet was stolen Leather pink, or? No, it was, uh, it was blue and green. Mm.
[00:20:08] greg: Leather. Did you have a pink one
[00:20:10] flo: stolen too? No, I have a pink one now, so I got confused.
[00:20:12] flo: My replacement one was pink. Nice. Mm-hmm. But, um, it got stolen in San Francisco. I was at my favorite bar. I was just relaxed cuz I thought, this is my old neighborhood bar. It was packed though. Someone reached in and grabbed it and they stole a lot of my money. Mm-hmm. And I got most of it back, but I think there's still $600 missing.
[00:20:34] greg: There you go. I, the one thing I will say is this hasn't been solved in crypto. That situation still can happen in crypto. You could still lose your keys. You could still have them, you could still have your hardware wallet sitting on the table at a cafe. Somebody could take it. And if they also stole your wallet where you kept your password or your secret key or something like that, or your private key.
[00:20:57] greg: Mm-hmm. Um, [00:21:00] it's possible. Yeah. So I, I don't wanna say that like, oh, they've solved it. They haven't solved it, but I think you still see people getting things stolen. It's typically from stuff like, just, it's not hacking. Like people aren't like hacking into your wallet, they're just finding your password.
[00:21:17] greg: Yeah. , it's like social hacking in a way, fishing, fishing, pH. What are some
[00:21:23] flo: other benefits, like people that are super excited about crypto? What are some other exciting opportunities?
[00:21:31] greg: So we've just been so far we've just been talking about cash, right?
[00:21:35] greg: Like currencies, money. And I think if we put all the way back up to the top, and, you know, there are many different opinions about how broad, when you talk about the financial sector, I would put cash in the financial sector. When you talk about that, , it can get really broad, but let's just focus it down for the sake of brevity.
[00:21:59] greg: You have [00:22:00] cash, you have debt, you have equities or stocks, like you talked about equities, ownership in something, and then you have, let's just say alternatives, but really it's like we're just talking about a contractual claim to something of value. Okay? Right. So we've been talking about cash.
[00:22:22] greg: The other ones though, debt, equities and alternatives will call alternatives like com commodities and real estate and just put everything that's not the other ones in that bucket for now. I think that the promise of having both the ownership of that contractual claim. Mm-hmm. You think of it as like your your online account or your blockchain account in this case.
[00:22:49] greg: But you have this account just like you might have a Facebook account or an email account that is commonly known as a wallet. And it's a digital wallet. [00:23:00] And if you could put the contractual claim in that wallet and people couldn't steal it easily unless you like, left it on the table with all your passwords and keys and everything, uh, then you could connect all the way from who owns it.
[00:23:20] greg: . You could also have the contractual claim, the rules of the contractual claim. So that could be like, I own a house. Mm-hmm. I have a deed for a house. So you could have flow, you could have the contract for the house, and you could have like your cash in there.
[00:23:35] greg: Uh, you could also have your mortgage contract, that's debt that falls in the debt category. So now you start to imagine this world where instead of having, uh, I don't know if everybody has this, but have like the secret pile of papers that exists in mm-hmm.
[00:23:50] greg: In the safe or whatever. Or you have it now on a drive or you put it in a Dropbox folder, you put it wherever. Your ownership of those documents is only represented by the fact that you signed a [00:24:00] piece of paper, which is kind of scary, right. That, I mean, that's, that's the old way.
[00:24:04] flo: I mean, it's isn't, I mean the government has it recorded somewhere. Right. And
[00:24:08] greg: that's recorded on, on, again, this gets back to that ledger thing. It's recorded on someone's ledger somewhere. Well take all of those disparate, well, treasure map, someone has the treasure map. Probably the bank or the deed, the records office or something.
[00:24:24] greg: Mm-hmm. Uh, they have the treasure map of who owns it, who has the mortgage, who has a claim to the property. If you sell the property and you didn't pay off your, I don't know, your new roof or something, like they might have a claim to your property. And so bring all those together in the same database and then make that database accessible to anyone who wants to see that.
[00:24:50] greg: Mm-hmm. Or who needs to see that. And there's many ways you can set the rules however you want of how that database works. Bring all of those pieces together so we have, who owns it, [00:25:00] what are the terms of the deal, how much money has been given by somebody, and how much do I owe on a regular basis back to that party?
[00:25:10] greg: And you put all of that in the same place and then you make it impossible to tamper with. So you some random person can't just come change the terms. That to me is the promise of blockchain technology is you take all of this, I'm gonna call it a treasure map, this treasure map of information that we have out there that if, if you have the treasure map of where all that information is all good.
[00:25:35] greg: Yeah. I love, but if you ever look for a password or you've ever looked for that mortgage contract that you signed or any of that in your life, you'd love it if it was just like on a. And a unchangeable database that anybody you needed to, to have access. Probably the
[00:25:50] flo: government. Connected to the government.
[00:25:54] greg: It could be, yeah. I mean in this case it should be. Right? It's like if you have a records office. Right. Wouldn't it be cool if the [00:26:00] people at the records office could just audit the blockchain? Yeah. Which again, is this, this
[00:26:06] flo: database the closest thing I have too. I have a mint.com account and obviously doesn't have any of my documents in it or deeds or mm-hmm.
[00:26:14] flo: I just put in all my assets so I can see what my net worth is and what I owe to credit cards and stuff like that, but yeah, it's sort of the beginning of that. I could imagine it would be really nice to easily be able to, like, if I wanna get a home equity loan, I have to jump through all these hoops.
[00:26:31] flo: They have to go verify the deed and it takes three weeks. Yeah. It's like, that's stupid. Yeah. Like it's already been verified that I own the house.
[00:26:39] greg: Yep. So interesting you brought up home equity loan. There is a company called Figure, and I use them, uh, to get, I don't remember exactly why we got home equity loan, but we got a home equity loan and it is a, it's a [00:27:00] blockchain based company and.
[00:27:04] greg: I don't even think the fact that it's blockchain almost doesn't matter to me as much as how easy they made it. And I think in some ways it's like that philosophy of simplifying ownership of something. The auditing of the ownership of something and the transfer of value between two parties in like an instant.
[00:27:28] greg: Mm-hmm. I mean, I literally sat in my backyard and got a home equity loan, went on a video call with a notary. Cool. I was just sitting in my backyard and I think it took me minutes to get done with this home equity loan. Are they
[00:27:40] a
[00:27:40] flo: bank or just a
[00:27:42] greg: facilitator? I don't want to speak for them, but we can put that in the notes of, I thinks, I mean, I would assume so.
[00:27:48] greg: I would assume figure has all of its licensing that's necessary. Um, but at the end of the day, they're like a broker dealer. You can invest in [00:28:00] as like an investment club in certain deals that they source. You can invest in, in different, projects that they approve.
[00:28:07] greg: I did it for the home equity line. I just went to the site and I learned that they were building the company. On blockchain tech. And I think, again, if you're a business and you can just bring all this stuff, like the identity of the person, the value that they have mm-hmm. In their wallet, cuz that can be seen.
[00:28:24] greg: Mm-hmm. Like if you came with a wallet to my website and I had, , actually asked in lab's website that, we'll , get launched very soon. That has the ability where you'll be able to come to that, connect your wallet to it, and we'll be able to see the value that you have mm-hmm. In your wallet.
[00:28:42] greg: Mm-hmm. What are the assets that you have currently. Now if you had a home deed for a certain address and that was in there, all you would have to do to come and get this home equity loan. It wouldn't have to be like, upload all of your information and do all this. It's like it's already there. Yeah. Yeah.
[00:28:58] greg: So that simplicity of [00:29:00] administration, it really to me allows for business, it allows for businesses to run more efficiently. But it also I think has an added benefit, which is just like equal access. Mm-hmm. I mean, like what if you don't have a secure place for all of your records?
[00:29:17] greg: Mm-hmm. I mean, that's sort of like a luxury for people. It's like to, oh, I have a safe for me to put all of my records in, or I, you know. Yeah. A lot of these systems are built for people who have their, like lives completely organized in together, right. And it's like, well, I would, I'm assuming I'm, maybe I'm sort of projecting here, but I'm assuming that's not the truth for everybody.
[00:29:40] greg: So I would say there is a dream for at least a segment of the population to have all of your stuff in one place digitized and unable to be tampered with and replicated in many places so that it's not just like one server and then that one server goes down and then everything's gone. Uh, it's distributed, it [00:30:00] lives on long after the person at the bank who you are working with no longer works there.
[00:30:06] greg: And so I think. Really, I'm seeing all of this to just like, it's not as scary as it sounds. We're just trying to like, improve the systems. Yeah. You know, just trying to make 'em more efficient and it makes you have to rely less on like third parties to do the right thing all the time.
[00:30:22] greg: Right. So,
[00:30:22] flo: and then, you know, in terms of moving away from big centralized banks, what do you think folks that are really excited about that? Like why are they excited about that? Like what opportunities and challenges, just like decentralized finance provide?
[00:30:41] greg: Geez, I think we should, I mean, there's so many examples over the years of, of things going, failing.
[00:30:50] greg: Well, banks failing, but I was gonna say even of the decentralized vision sometimes gets obscured by, by people. [00:31:00] You know, it's like, I think the FTX situation is really telling that wasn't even decentralized. You didn't bring your own wallet there. You signed up for an Xtx wallet and you used their software tools.
[00:31:13] greg: It was like, if you're gonna use their wallet, then they kind of own the funds. Right. So, and now, it's almost like every one of these innovations has its own. Ethics class that has to be taught where it's like, you know, okay. SBF owns a company, and there's people on the team.
[00:31:36] greg: And which company? Uh, sandbank Free. Sbf FTX is the company. SBF is the guy's acronym. Oh, oh, that's his name.
[00:31:45] flo: Okay. Okay. Got it. I was making sure I knew
[00:31:47] greg: what you were talking about. Yeah, let's just say FTX has this company and people run it, and they're capitalizing on the crypto ethos of, [00:32:00] you know, not having to trust anyone. And like everybody just has their own crypto. And so they got really big in that. And I think there were enough people I talked to over the years of FTX that were like, the people who like decentralized networks, they don't want to go put their money into somebody else's wallet.
[00:32:15] greg: Yeah. Like, that's, that's crazy. And so it, for a lot of people, FTX was fundamentally against the ethos of crypto. Ah, was like totally against the values set. They were a centralized exchange, meaning that like they ran the wallet. Mm-hmm. Now, I don't know if that's a bad thing, because if somebody came and hacked one of those wallets, Uh, you know, they would've to hack, they would be able to build, we'll call it like Fort Knox level security around all those wallets.
[00:32:45] greg: But now you're just back in the same situation where you're just trusting this group of people to not screw you over. And I think now we're at that fork in the road where now you've got this human being with all the [00:33:00] amazing and terrible things that go with that, with that human being, with human beings.
[00:33:06] greg: Uh, and, and then they have to make that decision of like, I have all of this money and wallets that I own. Should I invest that to try to make it bigger, take some for myself and, or, maybe go buy some houses, diversify the portfolio of all these things that I own, or should I just leave it alone and like, let and just pretend like they're not mine.
[00:33:38] greg: Even having that decision point for a human being in the crypto world, that's bad. We don't even want to give that person the ability to have, to make that ethics choice. Mm-hmm. If I show up with my own wallet, they don't own it. I just use the software that runs their exchange, but everything belongs to me.
[00:33:56] greg: And when I want to transact. They just facilitate [00:34:00] the pricing and the data that allows me to do a transaction with you directly. It's okay if like FTX is like a data provider or clearinghouse or they have all of the regulatory licenses. Mm-hmm. Which they didn't, uh, I guess in some cases they did.
[00:34:15] greg: In some cases they didn't, they didn't have a board. It's okay to have a group over there with data and math and the ability to facilitate trades and then we use that math with our transaction. Yeah.
[00:34:30] flo: But we own our own, the wallet is, is independent right. Of
[00:34:34] greg: them. Right? Mm-hmm. Then nobody on that team, even if they were total crooks, they could be the same exact people that they are.
[00:34:42] greg: Mm-hmm. Uh, and, and, and they just wouldn't even have the ability to do it. They would not even have that option to say, ah, I think I'm gonna steal that. I'm gonna steal all that money. They wouldn't even be able to say that. So I think that's an important thing about crypto and the vision of the [00:35:00] blockchain is that you're just trying to take, like there's a concept in building software products where really great software engineering doesn't just give you the ability to use the software.
[00:35:14] greg: In the way that the company wants you to use it, they make it so you can't use the software in the wrong way. Really great products and really great software engineers. It almost saves you from yourself. Mm-hmm. Saves you from making human mistakes. And I think the vision of blockchain and crypto is to save people, to save humanity from even being able to make bad things happen.
[00:35:39] greg: Obviously we haven't gotten that there yet with crypto. We've had Ponzi schemes, we have theft, we have. Crime people can move, things that are really, really efficient and not easily tracked. It's like that's a really great place to do things that you don't want people seeing. Yeah. And so that's an argument.
[00:35:56] greg: But you know, paper cash, that was pretty [00:36:00] easy to do. Bad things that people couldn't see too, right? So it's not like you could solve every issue. Going back to the cash debt, equities and alternatives, those types of financial assets, we've had those for forever. Yeah. As you were saying, like way, way, way, way back in like ancient civilizations we're solving for these concepts.
[00:36:20] greg: Now, fast forward, just through the United States alone, there have been entrepreneurs and just pick on like Rockefellers, Carnegie, all of you know those people. A lot of the agencies that we have now and regulatory oversight that we have now came from those entrepreneurs being like, I'm gonna make a lot of money, doing this over here.
[00:36:46] greg: And they're like, ah, we didn't see that coming. And so then they had to create an agency or some kind of reg or regulatory body or some type of regulation to stop that from happening again. So over the year, I mean that over the [00:37:00] years, regulations and laws have blocked people from doing these really bad things.
[00:37:05] greg: We're like a little over a decade into crypto right now and the crypto industry has stomped out Ponzi schemes in a few years. The paper version, in some cases the design of that system of US dollars has allowed Ponzi schemes to run for 20 years.
[00:37:24] greg: You know, Madoff had like, I watched the movie yet. Did you? Yeah, I haven't watched that yet. Is it? It's good. Yeah. So you saw that it's like they had, like, they were running that scheme for many, many years.
[00:37:40] flo: He almost got away with it for the rest
[00:37:41] greg: of his life. Yeah. But you could argue that like if it was on blockchain, it wouldn't have been long before somebody saw like, something's weird here.
[00:37:48] greg: Yeah. Right. And so like that's kind of the silver lining of this that I see. Well one FTX wasn't even in the ethos of crypto, so you can't really br blame crypto mm-hmm. For what happened there. Yeah. [00:38:00] I mean that wasn't even decentralized finance. It was centralized. Super duper centralized. Branded as decentralized brand.
[00:38:07] greg: Yeah. Kind. Yeah. I don't even know if they ever said that. I was just like, it was doing crypto and people were like, oh, de defi man or decentralized finance. It's like wolf and sheep's clothing. Right. Exactly. That was it. For sure. That's like, should be in the dictionary. SBF should just be in the dictionary as the representing that statement.
[00:38:28] greg: Um, but yeah, so I think, I think the fact that we have. So going back again, cash debt, equities and alternatives. Moving those into distributed ledgers and just aggregating the owner, the, the terms of the contract and the value of that contract in one place. Mm-hmm. It just makes everything easier. Yeah. It levels the playing field for a lot of people too.
[00:38:56] greg: It gives people, I mean, fastest rate of crypto adoption in the world is in [00:39:00] Africa. Wow. So you have this situation where they don't have all of these, regulatory bodies set up to make sure that the, currency is, is, I say the currency is safe. That's not really the case in any currency's situation, but in some areas of the world, there's just more trust from the individual to the currency.
[00:39:23] greg: Mm-hmm. And where you don't have, that, you're seeing like the con, the African continent and a lot of people in Africa leapfrogging all of that and just being like, nah, I'll just use this. I'll use this thing. Like I have more trust in this database that can't be tampered with. And now I can take me the owner, the contractual terms of this asset that I have, whatever that is.
[00:39:46] greg: It could be money, it could be real estate, stocks and companies. Anything hot shop is.
[00:39:54] flo: I used Cash App and, and when I bought some stocks on there and I told my parents about it, they were like, oh, they were [00:40:00] asking me all these documentation questions and I was like, Nope. I just went on the app and I bought it, and now I own it and I trust it.
[00:40:09] greg: Right, right. And so you have to have that trust in Cash App. Now everybody else is doing it probably fine. Right? And so like now, if Cash App went and started investing all of your money and like really high risk investments that you didn't approve, and they started giving out loans to their employees, that was actually your money.
[00:40:28] greg: And then one day somebody's like, Hey, that's bad. And then everybody lost trust in the Cash app and then started running away from it and started taking all their money out. And then Cash App was like, sorry, we actually loaned all your money to somebody else that you've never heard of before. That would be the unraveling of Cash app.
[00:40:47] greg: Right. And so if Cash App, I'm sure they have in, in internal controls, they have a board, they have, they've built this organization of trust. It's, it's, wasn't
[00:40:56] flo: it? So actually, [00:41:00] um, I used to live in San Francisco for six years and one of my, a bunch of my friends knew the founder of Cash App. Mm-hmm. He was recently murdered.
[00:41:08] flo: Yeah. Stabbed to death. Yeah. Death in the middle of the night in downtown, but like the financial, like the fancy financial district, I think. Mm-hmm. Mm-hmm. Anyway, but he, he worked for Square, which is now. Something else and I think isn't block Block. Mm-hmm. And, um,
[00:41:28] greg: the three dimensional version of Square.
[00:41:32] greg: Oh, cool. Isn't it, isn't that, I mean, that's gotta be the Oh, it's gotta be the smart, it's gotta be the reason.
[00:41:38] flo: Or they could un they could un cube. That's
[00:41:40] greg: the same. Okay. Dunk Cube. It'd be more accurate. You can have a rectangular block.
[00:41:45] flo: But, um, even like, I think it's cool that I have friends that knew the founder of Cash App.
[00:41:52] flo: Like that gives me trust in, right. And it's, I trust Square or Block, and I think Cash App is now associated with [00:42:00] Block. Mm-hmm. They own it sounds right. Some so verify Yeah. Cash up. I mean, A Square was around for a long time. Right. And they have a good reputation.
[00:42:11] greg: Right. So this is all like, reputation stuff.
[00:42:13] greg: It's like a, again, I, I think
[00:42:19] greg: y you're basically highlighting the situation where it's like if big, if, you can build that trust over years and years and years , now you have an institution that you can trust. Mm-hmm. Well, an institution is only as trustworthy as the people inside of it. And so now it's like, well now what if all those people go away and somebody new comes in to run it?
[00:42:41] greg: Mm-hmm. Then, that's all. It's all gone now. It, or you have to do, you have to build trust again. You don't because we're, we are, again, the beauty and the terror of humanity is that we believe in brands. We can see a logo and be like, ah, good thing that [00:43:00] company is running this,
[00:43:01] greg: Now when we look at ftx, we're gonna see that logo and be like, oh, that's the villain and now we're gonna see, we might see Cash App or Square or Block or whatever. And you would say, uh, those are the heroes. I tr those are the heroes. Yeah. So here's the villains and here are the hero.
[00:43:17] greg: Well, what if that one, what if that hero, now is run by somebody else? It's like for a while they'll be able to hold ha that brand. So again, getting back to blockchain and crypto, the dream of that is that we don't have to do that. Mm-hmm. We don't need our economies to be personality based or it, well, it doesn't have to be based on trust.
[00:43:37] greg: Mm-hmm. Building trust is hard. Mm-hmm. Building trust when you have more and more people in this world is even harder. Building trust when you have like government intervention with, again, people who are changing constantly in the government. So it's like the government. You're really just trusting that people follow the rules.
[00:43:56] greg: Yeah. And if what, what if they don't? I I think that's really the, that's [00:44:00] really the point. And if you look at how many people don't have bank accounts in the world. Mm-hmm. How many people don't have electric reliable electricity in the world? How many people don't have clean water in the world? How much pollution still persists in the world?
[00:44:14] greg: Even though we've been told for many, many, many, many, many, many, many years that, hey, this isn't good. But it still happens. Now we're saying like, do we trust, I mean, this gets into the huge topic of trust. It's like, do we trust that the people who are, who have the power to change things or to improve things for all people will be able to do that?
[00:44:36] greg: And I think unequivocally, at least historical context, the answer is no. Right? And
[00:44:42] flo: so we wanna, we wanna ledger that is being verified by lots of computers and lots of
[00:44:47] greg: people that, but just taking a step back, you wanna make sure that who owns it? What are the terms of the contract that you write [00:45:00] between the parties and what is the value?
[00:45:03] greg: You gotta make sure that is equal access for every single person. Every single person should be able to own this house. If they can get, if they can write a contract with someone else to get. The money that's required. Mm-hmm. And they could put that in, and that could come from anywhere. That could come from 10,000 people in the world could lend you money.
[00:45:27] greg: You don't even know them. But it's the ownership, the contract of that money and the value was all tied to the deed of this house. And when this house was sold by the courts, let's say you defaulted on your mortgage and this was sold by the courts, those 10,000 people all over the world should get their money back.
[00:45:45] greg: Yeah. And that could happen with blockchain. You could create a system like that for blockchain. The way we have it today, those 10,000 people are never seeing that money again once they send it to someone to buy this house. Would you agree with that? Yeah. Yeah. So I think that's really it. It's like how [00:46:00] do you connect those three things?
[00:46:02] greg: Who owns it? What are the contractual terms of the deal? And what is the value transfer? And if the contract is broken or somebody needs money back, well the money can just be sent to that wallet address no matter where they are or where the money came from. Mm-hmm. And I think that, again, that is the dream of, of having an, a decentralized system in a database
[00:46:24] flo: that's like that.
[00:46:25] flo: That's like if you wanted to renovate houses for a living and you wanted to take investors Yeah. From all over the world, you could do it.
[00:46:31] greg: Mm-hmm. Yeah. That gets into like securities law and all of that. But if it was just a loan, it was like, I'm gonna do a loan, I'm gonna loan this to you. Uh, we're probably like, Again, the, the, the reason I think that companies, the company's role, like why do you found a company?
[00:46:49] greg: Why do you found a blockchain based or a web three or a crypto company? It's sort of an odd concept because it's really nothing decentralized about a company like [00:47:00] you file a. So this is where we get into this thing of like, there's this idealized, decentralized world mm-hmm. That's idealism, that's like we burn the whole place, we burn all the systems to the ground, and then we're in complete shambles and we rebuild utopia in Webs, Freeland.
[00:47:19] greg: That's not how the world's gonna work. I would assume it's never how it's worked. So we have to have sort of this transition period from mm-hmm. The nor the way, the trust way to the trustless way. And I think the company's job is to form fit , the utopian way, the idealized crypto way to the way things are today.
[00:47:42] greg: So if I want to do what we just said, and I want 10,000 investors in my mortgage for my home, well some company or some group of people, which there are these things called decentralized autonomous organizations, which you can actually file to become one in the state of Wyoming. So [00:48:00] the Dow, , and it's an actual.
[00:48:02] greg: Like replacement for a C corporation or a limited liability corporation. And the fact that you can go, you can set one of those up in any way. You set up an entity and that entity of people would work to make sure that when those 10,000 ch you know, dollars or whatever, 10,000 different people sent their money into your mortgage, uh, that money would all flow through and it would follow all the local regulations like the deed, right.
[00:48:29] greg: And the trust. Mm-hmm. And the title and all of those things would have to still work. And so that's this thing I'm trying to fit crypto into home. , I think the reason Bitcoin was like that perfect application to start with is that trust in a currency does not require like physical stuff to happen right at the ground level.
[00:48:54] greg: It's something that can be totally digital. And then we had, you know, digital art in NFTs[00:49:00] and the idea of NFTs was, I always hear that they're like, oh, NFTs are just like digital baseball cards. And it's saying, well, today they are, because art is digital, art is easily transferred. It doesn't require an interface to the real world.
[00:49:16] greg: Mm-hmm. But now let's say I have a contract now, let's say my mortgage contract. Is this digital file that's been signed by me and all of the buyers, and I've got all of the people I owe money to when I send my payment in. So let's follow that thread again. 10,000 people send me money from my mortgage.
[00:49:35] greg: I go get a real estate agent. I buy this house, and I could be anybody again, by the way, I didn't have to go to a bank, and the bank didn't have to look at me and be like, Hmm, you don't look like our other borrowers. Mm-hmm. Your bank account doesn't look like our other borrowers. Your the running race or Oh, I see.
[00:49:56] greg: Oh, I see. You run a business for a living. Right. I'm not [00:50:00] sure we want to give you any money. Right, right. And so you're not at that mercy. You're at the mercy of like, could with 10,000 different people, gimme a little bit of money so I could get a mortgage. And then again, if I, as long as I keep paying them, because I have
[00:50:16] flo: a YouTube channel and people watch me renovate things.
[00:50:18] flo: Yeah. And they like what I do and Yeah. I've been making money. Yeah. Getting, they make it, you're getting, they wanna get in on, in, on
[00:50:24] greg: it. Right. It can be an individual experience. It doesn't have to be, you don't have to fit into some box that, that a, that a bank has just, you know, decided you have to fit into.
[00:50:35] greg: And then I'm sure someone has, I'm sure there are many conspiracy theories about who makes that box. Mm-hmm. And what makes that box and who decides. The boxes that you're allowed to fit in for a mortgage. Um, you know, I have a lot of friends who are business owners, small business owners, and they have a terrible time getting mortgages for homes.
[00:50:58] greg: And in some ways they're like the [00:51:00] most Yeah. Disciplined with their money because their entire livelihood relies on them being disciplined when they're money.
[00:51:07] flo: Right. They're not gonna get fired. Right. I mean, people get fired all the time. Right. I don't, it doesn't seem fair, right? That they can get a mortgage and business owners
[00:51:16] greg: can't.
[00:51:18] greg: Yeah. I mean, it could just be that it's like, , if you're in the employment system, then you have this like W2 that's coming in all the time and you're doing everything exactly the way that the system wants you to do it, then it's really easy to go and get some loans or some debt from the system.
[00:51:33] greg: But as soon as you say, I'm gonna start my own business and I'm gonna have my own company car and my house is gonna be owned by this llc, and you start to do things that are kind of a little bit outside the box, and now they just have to put you in another box and they have to say, well that's, well now, now you look weird.
[00:51:52] greg: Mm-hmm. You know, you don't live in the right part of town, so you can't, you know, we've noticed that this area and these [00:52:00] demographics are, don't pay their mortgages and so therefore I'm gonna have to. You know, or, or your credit score. All of these things we're talking about, these are all just about this one mortgage piece.
[00:52:10] greg: But you're right, there could be other criteria for these 10,000 people or this network of people to loan you money and you go get the house. And again, if that ever needed to get liquidated that house because you didn't pay your mortgage, that comes to the real world question. Who liquidates the house today?
[00:52:31] greg: It would be the bank would take it over and somebody inside the bank would sell it. So maybe we need a new network of people who this job doesn't even exist today, which is who are the repo people, the repossession people for the crypto networks. I don't have the answer to that. I think
[00:52:48] flo: I know where you're, what you're saying, but it's like stacking all this theoretical stuff on top of, it's hard to hold theoretical house up in your mind and be like, oh yeah, you would need, like, [00:53:00] it's all, it's easier once things start moving to imagine what the next step is.
[00:53:03] flo: Yeah. Once it's materialized in the
[00:53:05] greg: world. Yeah. But then you have to be the one person who finds the bug. They're like, ah. I forgot about the repo person. Mm-hmm. I forgot about, I got about how that works. I mean, the, the bank would take over the deed. So this gets to that thing of that is a real situation we have in the world.
[00:53:22] greg: We have deeds, we have titles, we have people who don't pay mortgages. And so the theoretical world where 10,000 people loan me money for my mortgage, they've crowdsourced, I've crowdsourced my mortgage through my YouTube followers. Um, what happens if I don't pay those people back? There almost needs to be this now, this inter intermediary who deals with the fact that you're like squatting in a house that you're not paying for.
[00:53:49] greg: Mm-hmm. And so that would have to be probably like a company. Mm-hmm. Or some kind of organization that, like Airbnb. [00:54:00]
[00:54:00] flo: I mean, something like that. Obviously it's
[00:54:01] greg: different, but do you think it just auto converts to Airbnb? But how did they get you out of there? You know, its like,
[00:54:08] flo: no, no, no. I mean, I've been thinking, cuz I had my house on Airbnb for a couple months.
[00:54:12] flo: Yeah. And
[00:54:15] flo: They have some infrastructure built in to help you get started pretty easily. Like the insurance for Oh yeah. And they have a team for claims and for both parties, for the renter and the owner. Um, I didn't find it particularly amazing, but the fact that they have insurance built in is great.
[00:54:36] flo: Yeah. But it's a digital platform to allow for commerce that wasn't a category
[00:54:41] greg: before. Right. So there's, and the interface to the real world, which I think is really Yeah.
[00:54:46] flo: They, they're the box
[00:54:48] greg: maker for it. Yeah. Right. Yeah. And so this scenario that we've run now several times is like, whoever designs that system, and that could just be a network of [00:55:00] people who agree these decentralized, autonomous organizations.
[00:55:03] greg: It could also be a thousand people around the world who just agree that like, Hey, we're gonna kind of work on this problem together. Mm-hmm. And then maybe those people get 1% of all the loans that come through it, because those people need, need a life. Yes. They do the work. Yeah. And so now that 10,000 people give you a mortgage, 1% goes to the network of people who are running this show.
[00:55:26] greg: The blockchain
[00:55:28] flo: organizers.
[00:55:29] greg: Right. Yeah. And, and the facilitators, the real world facilitators. Really, it's the people who like, how do you get your keys? Yeah. Who gets you the keys? I guess real estate agents could still do all that, but they would've to interface to some organization. And then maybe the real estate agent has like more power than they do today.
[00:55:48] greg: They sort of become the managers of the. So the stewards of these people, you know, zooming
[00:55:54] flo: out again, I just thought as we've been talking about all the potential [00:56:00] promise and opportunity in blockchain, it occurred to me that yeah, there's a lot of the same principles and ideas and opportunities that were presented when the, the idea of the sharing economy was really mm-hmm.
[00:56:12] flo: Popular. Yeah. The identity, the ratings you get as a Lyft rider mm-hmm. The rating system, on Facebook, when you sell something on marketplace, it, asks you who you sold it to and, um, if you had a good experience with them, all these, like trust, trust building, trust building.
[00:56:32] flo: There are some companies that are, I think of them more as like the sharing economy or, alternative online marketplaces for individuals between IND individuals. Yeah. There's like some of this interfacing with the real world to make that possible happening already. That is very related to goals in the blockchain.
[00:56:50] flo: Enthusiasm. Yeah. Enthusiast community. Yeah. I had never connected that before.
[00:56:55] greg: Yeah. The one modification would be they don't want there to [00:57:00] be a centralized company. Right. Responsible for that. Mm-hmm. A great example would be like, if I want you to pick me up and you're like, on this network of people and that network of people is just like using a wallet.
[00:57:17] greg: Like why did we use an Uber app that like tracks our phone around and mm-hmm. And all of that. But GPS is not a revolutionary situation, by the way. GPS is run by, by the US government. Right. Right. So, um, so you gotta solve for that. If you're really trying to get to this utopian, you don't have to trust anybody, but yeah, like your phone just tracks the gps.
[00:57:43] greg: So if your wallet had a data feed from the GPS of your phone, it could just send to the nearest phone who maybe they hold a, uh, like a little N F T or something in their wallet that says like, I'm an approved driver. Mm-hmm. And so now you're just [00:58:00] using these wallets and these standardized files, NFTs and cryptocurrencies and things like that.
[00:58:07] greg: You're just using all these tools that has been built by the blockchain projects to piece together these offerings like Uber or Airbnb, and then maybe you have like some kind of reputation score. In the blockchain world of like, you might have like a little gold star in your wallet that says, look, this person's a super host for their home.
[00:58:28] greg: Yeah. Well there's an example of those are centralized companies. They have their, they solve these problems in their way, right. With the decentralized organization.
[00:58:38] greg: Anybody, anywhere who is a part of that network could solve these issues. Now, like you said, we've been talking about all the good things. There are bad things about this too. Like, if you give every single person equal vote on what happens with every single thing that happens, nothing [00:59:00] will get done eventually.
[00:59:02] greg: Like you just eventually gravitate towards being like a pure, every single vote would be like a pure democracy. , you have this many people are against it and this many people are for it. And so then like a religion. Then that person has to leave and start their own, their own better version of what they believed over here.
[00:59:24] greg: And so now you just have Everybody has this vision of what Utopia looks like. And so they defect from the old, from the thing they liked before and they go start a new one with land. When we started countries and economies, when they were all land tied, they were all tied to their physical footprint.
[00:59:41] greg: They didn't really happen that much cuz there was like a lot of bad things that had to happen for you to go get a new piece of land. You had to kill or be killed was basically the way you go get new pieces of land in the original days. Oh. In the digital landscape to start your own economy.
[00:59:56] greg: You could start a new group of people that had the same [01:00:00] ideals like that I could show up tomorrow and be like, where are all my dog walkers at? You know? And I could form a dog walking community where we're like, we only want fellow dog walkers to walk our dogs. Like, we don't want to pay the hat makers or something like that.
[01:00:16] greg: We just want well trained trainers and so we could go form a little society and we could have our own currency and we could only buy houses from each other and we could only lend money to each other. So all of that's very easy. We just described starting an economy mm-hmm. Of dog walkers Very easy in the digital world.
[01:00:38] greg: The downside of this is since we've only been talking about the good things, the downside is that, uh,
[01:00:47] greg: No one ever sticks around and grows something meaningful. Mm-hmm. They just see a better version and they're like, nah, I'm gonna go make it a little better. So now you have this like hyper fragmented mm-hmm. Nobody adopts [01:01:00] Bitcoin fully, they adopt Bitcoin 2.0 fully, or, and then some people are like, I don't like Bitcoin 2.0, I'm gonna start Bitcoin 3.0 And then not, not, and now you've got Bitcoin 1.0 through version 100 and no one has fully adopted it.
[01:01:16] greg: So now it's sort of worthless cuz you, I think that's the piece of crypto and all of these things that we're talking about where if you completely erase the trusted third parties mm-hmm. Then all of the absence of trusted third parties and the reason we had 'em in the first place, like a lot of those symptoms are gonna come back and they're gonna come back like when you least expect it, you know, they're gonna come back in the places, like we talked about, when the person gets the loan from the crypto group and then they stop paying their mortgage.
[01:01:47] greg: Mm-hmm. What happens? Those are the kind of things that I, those are the problems or the challenges that have to get solved. So I think we have
[01:01:57] greg: That makes sense. [01:02:00] Yeah. So now I, there's another thing that always goes around my mind, which is like, Well, what is, we're gonna tie this back to what we usually talk about here. What is the one thing that you need everyone in the world to have for every single person in the world to have a digital wallet?
[01:02:22] greg: Electricity. Right. And so historically, electricity systems have been built for the public good by some centralized organization that says, I want to create electricity for these people. Mm-hmm. I guess it wasn't always public good originally, it was just like for rich people to be able to keep working when the lights or when the sun went down.
[01:02:48] greg: Right. They didn't wanna light candles anymore. So like, I want this electric light and put this in my house, and so I want light bulbs. And then they're like, well, my buddy JP has it [01:03:00] over in Manhattan, so I want it here. And so, so they just did that and then that scaled up and eventually it was like, well now our whole economy runs on electricity.
[01:03:10] greg: And so they started having these utility companies and these utility companies, so they couldn't abuse the everyday person. They go get approval from a state agency and then they come. And, they say, well, you can spend this much money and you can get this much return on your investment and you can charge your customers this much money.
[01:03:33] greg: So that's how it works today in this world. We just came up with where 10,000 people around the world finance, uh, data center, well, we didn't say data center, but now we're gonna use data center, 10,000 people around the world finance a data center in the middle of nowhere for an application like crypto mining, that the people who pay the power bills for [01:04:00] the power grid, uh, to uphold the power grid, they don't want that.
[01:04:04] greg: They don't want that data center, and they don't want that crypto mining. So now what? Now we're stuck in this place where, who pays for it? Well, those 10,000 people now also have to build their own electricity grid to power their digital world. That, that they want, because the public utility isn't gonna power this data center that nobody wants.
[01:04:26] greg: The public utility doesn't finance things that people that like the, there isn't a general consensus that people want it. Does that make sense what I'm saying? Yeah. In their community, right? Like if you put up a Bitcoin mining operation over here, across town and. A whole bunch of new electricity grid had to be built to serve that thing, and that was going to potentially increase the price of your power bill at your house.
[01:04:56] greg: And you don't like crypto mining. You're gonna say [01:05:00] no. And the state agency is gonna say no. And so then they'll start to shut that down. And they have, I mean, there have been moratoriums at state levels on crypto mining, and now we just saw that New York Times article that came out that's like crypto mining is polluting like crazy.
[01:05:16] greg: And so all it's gonna take is just a little more narrative for people to be like, ah, crypto mining sucks. Like, shut it down. And we don't have to dive too deeply into, what side people should be on or not. Um, I think just unpacking the fact that there is a public electricity service to serve the public electricity.
[01:05:40] greg: Right. And now we're moving into this world with like ai, electric vehicles, blockchain technology, and these like new, these new decentralized networks of people. Uh, and now the question [01:06:00] always comes to my mind of like, who's gonna pay for all that new electricity infrastructure? Mm-hmm. Because the public utility is not really.
[01:06:08] greg: Built to serve unique applications that the general public doesn't want or need. Mm-hmm. And so, um, those are the things that go through my mind. It's like, and, and I, we don't have to dig into this today, but I think questions, I would leave anybody listening to this with, it's like, who's gonna finance it?
[01:06:27] greg: Who's gonna finance all of this new stuff? Will the public utility do it? My guess is no, it's just not built to do that. More importantly, like whoever finances it and builds it, how do you determine that the people who are using that service are credit worthy? Mm-hmm. You know what I'm saying?
[01:06:47] greg: Like we were talking about the mortgage thing. If somebody just like walks away and doesn't pay the bill. Mm-hmm. Well, so how do you, it's called underwriting. Like how do you underwrite the financing of all of that new stuff? Mm-hmm. [01:07:00] Uh, and then of course, who builds it? I'm assuming that whoever those 10,000 people are who are financing this data center, there will be some local builder who will build it.
[01:07:11] greg: Once you solve the financing piece, I think all the other pieces are solved. Mm-hmm. But today, the way it gets financed is what I just said. You go to a state agency, you get approval. They say, great, you can spend this much money, you can add this much of a margin, and you can charge all of your customers.
[01:07:28] greg: But when your customers don't want or need. The EV charging the crypto mining, the ai, the 5g, when they don't want or need that we move into this new world, which has nothing to do with public utility service. It now starts to look more like customized electricity grids. Mm-hmm. Um, and so, and then the question is always like, who manages it?
[01:07:55] greg: I think those are easy answers. I think the, who finances it? Um,[01:08:00] it's pretty much all we think of about at Aston Labs currently. That was the question that ultimately led to us starting the company was like, this isn't gonna work. Like, there's just, the way we built the grid, the first way is not gonna be the way we build it for all these new fragmented, customized solutions.
[01:08:18] greg: Oh, we didn't even say the biggest thing, which is no carbon. Right. The general consensus is not that we should eliminate all the carbon from the grid.
[01:08:31] flo: It's not that we should eliminate all the carbon from the grid.
[01:08:34] greg: I don't think, I mean, do you think every single person you talk to, do they all believe that fossil fuels should be shut down?
[01:08:40] greg: No. Maybe you just have cooler friends than I do, but, oh,
[01:08:44] flo: I dunno. I mean, I, I don't, I think a lot of people would agree that it would be ideal, but I think a lot of people would not agree that it's feasible.
[01:08:55] greg: Hmm. I like that. So similar to the decentralized crypto [01:09:00] thing, we also can't immediately jump to that idealized world of fossil fuels.
[01:09:07] greg: But yeah.
[01:09:09] flo: Uh, they might be open to seeing a, like a small scale version of, of what could potentially be scaled in the future. Like new, right. Yeah. Ideas of being, um, right. Being, uh,
[01:09:27] greg: propped up. Yeah. And then we get into that big question of trust that we talked about for a really long time, uh, which is do you trust the companies that exist today that make a lot of money off of burning carbon burning, fossil fuels?
[01:09:46] greg: Are they gonna go along with it? My guess is no.
[01:09:51] flo: Which companies are we to kind of talk? Which com? What speed More specific?
[01:09:56] greg: Um, the ones that have been around for over a [01:10:00] hundred years burning fossil fuels, like for electricity, Exxon and Shell and bp. And for, for cars
[01:10:06] flo: or for the grid?
[01:10:08] greg: Well, I mean, think, I think those companies do both, right?
[01:10:11] greg: Oh, they do both. Oh, yeah, yeah, yeah, yeah. Oh my God. Like Shell is. Probably one of the largest, one of the largest participants in the electricity markets. Oh, okay. They have a huge, like electricity trading group. Okay. Because natural gas is a huge, you know, natural gas of course is, is u is used as natural gas for cooking and various things, but it also is, is it they, run turbines with it and generate electricity.
[01:10:40] greg: So Exxon, shell, BP is the same old people, and a lot of those companies came out of Standard Oil, like John Deere, Rockefellers, the breakup of all of those companies. Mm-hmm. And so, you know, Chevron, so do you, all of those people do pg
[01:10:56] flo: and e, do they have contracts with those companies?[01:11:00]
[01:11:00] greg: I would assume so. I mean, I, I
[01:11:02] flo: Duke Energy do, do they directly buy from them?
[01:11:06] greg: They might buy from some of their plants that were built by them. They might trade with them. But remember, like the United States is not all like pg e is a little bit different than Duke Energy. Like Duke Energy is in a place where they're not in an open market and they are this single only buyer and only seller of electricity.
[01:11:28] greg: Mm-hmm. In, their area. Pg and e is in an open market. Okay. But they're a regulated. Monopoly. Like they're the only buyer and seller of electricity. And there's all sorts of random programs that have been put into place by the state of California that sort of chips away at their power that they have.
[01:11:46] greg: Mm-hmm. They're no pun intended, but like the Yeah. The strength that they have to control things. But yeah, I mean, pg and e owns, fossil fuel. They likely have fossil fuel portfolios and lots of utility companies own fossil fuel [01:12:00] portfolios for sure. Duke Energy for sure, Southern Company for sure, pretty much every one of the major utilities also has a portfolio of these types of assets.
[01:12:08] greg: But the fuel that they buy for those assets comes from Shell, Exxon, bp, right? So you have a natural gas plant, you gotta buy your natural gas from somewhere. And that might come from one of the classics. So the question was what do we think the odds of those people going along with that they build wind, wind farms and solar farms.
[01:12:33] greg: I mean, all these fossil fuel companies are diversifying their portfolio into other things, but I don't think their goal is to shut down all their other stuff. Mm-hmm. And so that gets into this question of, of trust is like if they finance the clean grid mm-hmm. Do we trust that they will finance it all the way down to nothing Like anybody who owns any fossil fuel assets whatsoever.
[01:12:57] greg: And they're generating revenue from those [01:13:00] assets, then, then that those are the things you sort of ask yourself. You know, if you, if you want the grid to be a hundred percent clean, anybody who's making a lot of money off the fossil fuel version, it's like Right. Would they,
[01:13:15] flo: and even if, even if it takes a long time to, to realistically be able to let go of all fossil fuels for, for security re reasons mm-hmm.
[01:13:23] flo: For backup reasons. Mm-hmm. You would want someone who's extremely motivated to move in that direction Right. As quickly as possible. Yeah. And not someone that's not as motivated to move in that direction as quickly as possible.
[01:13:36] greg: Right. And it could be that all the people inside of the organization want to move in that direction.
[01:13:44] greg: It could even be that this is pretty unlikely, but it could be that a lot of the shareholders want to move in that direction. But because the grid was built so long ago, there's also just this general fear that like if I move this Jenga block out, right. Is that the day that that the tower [01:14:00] falls over, you know?
[01:14:01] greg: Mm-hmm. Um, not, there are things on our grid that no living person had a part in designing. Yeah.
[01:14:09] flo: Right. Which is why, which is what we'll have to talk to Gary about.
[01:14:12] greg: Yes. Yeah. We're definitely gonna talk to him about that because I think that like seeing the evolution of this network into this.
[01:14:21] greg: Very centralized behemoth that we all are just like hoping that the lights always stay on. But as I said, there's this fragmentation that's happening with the buyer, where some people want a hundred percent carbon, some people don't. Mm-hmm. Some people want EVs, some people don't.
[01:14:39] greg: Some people want crypto mining. Lots of people don't. Uh, there's, yeah. Some people want, ai, lots of people don't. Everything I just mentioned fundamentally runs off of electricity. And so at its lowest point in terms of its like way that it stays on. And it uses a lot of it.
[01:14:57] greg: Like AI is going to use a [01:15:00] lot. Blockchain doesn't have to use as much. I think AI is gonna use far more electricity than, oh, than blockchain technology as a whole. We'll use, we're gonna have to get into all that today. But, um, energy consumption of a lot of these blockchain projects is not even in the ballpark of what Bitcoin is.
[01:15:21] greg: Say that one more time. Yeah. So Ethereum, Dogecoin, these other types of coins mm-hmm. They don't use as much as the mind. Coins of Bitcoin.
[01:15:34] flo: Right. And would you put that in the AI
[01:15:37] greg: category? I Bitcoin and AI Pro?
[01:15:39] greg: Yeah. You're using a lot of server activity, right? For Bitcoin, you're using the last server activity for ai. You're not using a tremendous amount of server activity anymore for Ethereum. Right. You were originally, but you're not anymore. And so I think they did some big transition to move into, um, a different way to [01:16:00] secure or to believe that the ledger is true.
[01:16:03] greg: Okay. Um, more efficient Yeah. They just made it very energy efficient per transaction. and that was the very thoughtful of the Ethereum Foundation to actually go with that. Mm-hmm. Um, but I think that fragmentation of the buyer profile, like who wants what?
[01:16:20] greg: I think when it was, JP Morgan, not the company that the guy was like, want some light bulbs. And Edison and buddies were like, great. Put some light bulbs up. And then, their guy named Samuel Insole went over to Chicago and he was like, well, my buddies want light bulbs too, so I'm gonna do what Edison's doing over there.
[01:16:45] greg: And then he put in some. Light bulbs. And it, there was like a general consensus of like, we all want the lights on at night. Mm-hmm. And then people were like, oh, we want TVs. Oh yeah, we want TVs. And then, and these were very sort of like low electricity [01:17:00] use applications. Right. But now you're talking about like, just for EVs and basic stuff that is now sort of trending.
[01:17:08] greg: Uh, we gotta grow the grid by like 60% in the next handful of years. I think we'll probably talk to Gary about that too. Mm-hmm. Uh, the next episode. But, uh, yeah. So it's just like all this new stuff that has to get built for this new reality that we're in and this dream of like digital money, ubiquitous digital money for every single person in the world.
[01:17:30] greg: There's just like a lot of stuff that we have to build. And that is the piece that always comes up in any conversation I have with people about building that is just like, who's gonna finance it? And when they finance it, who's gonna make sure that it was a good investment? And who's gonna make sure that it gets paid back?
[01:17:45] greg: And if we do it the old fashioned way that we've been doing it for many, many years, it's gonna take like a decade just to Get enough consensus that we even should build it to start building it. Mm-hmm. So on one hand you have people like [01:18:00] policy people talking about we're gonna build this much of, clean energy in 10 years.
[01:18:04] greg: Meanwhile it takes us 10 years to plan a transmission line. Yeah.
[01:18:08] greg: There are some really interesting. Arguments for crypto mining that like if you build a new crypto mining site, you also have to build the power to serve that.
[01:18:18] greg: Mm-hmm. And that could be all clean energy. It doesn't have to be, right. It could be all clean energy serving this crypto mining site. And then if the big grid needed some of that power in an emergency, it could pay the crypto mining rig to shut down. Mm-hmm. That new power would not have been made unless the crypto mining site was built.
[01:18:40] greg: Yeah. That's a cool connection. So new demand creates new supply in the grid setting. Yeah. And so if we could just say, any new demand for crypto mining has to build a hundred percent clean energy, carbon free energy, then when the grid needed that energy, they could have it [01:19:00] go.
[01:19:00] greg: Mm-hmm. I think that there's always an optimistic view. I guess the challenge that I would give from this whole thing that we talked about today about crypto and trust all of those things I think boil down to, there's always an optimistic view to the new technology.
[01:19:17] greg: There are warnings, there are problems, there are bugs. It's always gonna happen, but I think there's always that optimistic view of like, how can we use this in the best way possible? And I think with, definitely with crypto, uh, this is the other thing I would say is like, let's not think of crypto as this new investment class.
[01:19:36] greg: Let's just think of it as a digitization of all of the existing financial assets that we've been using for a hundred years. Yeah. We're just making 'em better. Right. And there's gonna be problems. Yeah. It always is. All right. All right. Two Hours later. Was that two hours? Yeah. It's nothing that comes to crypto.
[01:19:59] greg: Um, [01:20:00] all right. You you wanna call it,
[01:20:02] flo: call it, call it.
[01:20:04] greg: Thanks for tuning into this episode of the World Changing Podcast. Be sure to follow us wherever you get your podcast, Spotify, Stitcher, YouTube to hear the latest episodes.