1 00:00:15,396 --> 00:00:33,276 Speaker 1: Pushkin Pushkin from Pushkin Industries. This is Deep Background, the 2 00:00:33,316 --> 00:00:36,436 Speaker 1: show where we explored the stories behind the stories in 3 00:00:36,476 --> 00:00:41,276 Speaker 1: the news. Today's episode explores a fascinating story that combined 4 00:00:41,316 --> 00:00:44,316 Speaker 1: two interests that I have. You may have heard about it. 5 00:00:44,716 --> 00:00:48,116 Speaker 1: A few weeks ago, an original printed copy of the 6 00:00:48,196 --> 00:00:51,636 Speaker 1: draft Constitution of the United States from seventeen eighty seven 7 00:00:51,956 --> 00:00:55,636 Speaker 1: went up for sale at Southby's. The auction made national news, 8 00:00:55,876 --> 00:01:00,236 Speaker 1: but not for the reasons you might think. The actual 9 00:01:00,316 --> 00:01:03,436 Speaker 1: copy of the Constitution was not all that rare, though 10 00:01:03,436 --> 00:01:06,636 Speaker 1: there weren't very many that remained on the market. What 11 00:01:06,796 --> 00:01:10,356 Speaker 1: was newsworthy was that a group called the Constitution TAO, 12 00:01:10,756 --> 00:01:15,196 Speaker 1: or a decentralized autonomous organization, came together over social media 13 00:01:15,276 --> 00:01:19,676 Speaker 1: over a very very brief period of time to crowdfund 14 00:01:19,756 --> 00:01:23,236 Speaker 1: tens of millions of dollars for the specific purpose of 15 00:01:23,436 --> 00:01:27,876 Speaker 1: purchasing this copy of the Constitution at auction. Now, as 16 00:01:27,876 --> 00:01:31,156 Speaker 1: it turned out, the TAO did not win the auction, 17 00:01:31,476 --> 00:01:34,116 Speaker 1: but the whole event did a lot to raise public 18 00:01:34,156 --> 00:01:38,916 Speaker 1: consciousness about taos, which are an innovative new technology that 19 00:01:38,956 --> 00:01:43,716 Speaker 1: nobody can exactly decide about. Are they progressive? Are they progressive? 20 00:01:44,116 --> 00:01:48,556 Speaker 1: Are they libertarian? Are they anti racist? Mark Cuban was 21 00:01:48,636 --> 00:01:52,476 Speaker 1: quoted as calling them the ultimate combination of capitalism and progressivism. 22 00:01:52,676 --> 00:01:54,476 Speaker 1: And I will leave it to you to figure out 23 00:01:54,476 --> 00:01:57,516 Speaker 1: what that means. But I've been on a trajectory myself 24 00:01:57,596 --> 00:02:00,116 Speaker 1: of trying to learn more about Taos ever since my 25 00:02:00,156 --> 00:02:03,956 Speaker 1: conversation on this podcast with Vitalic Puderan, and I wanted 26 00:02:03,996 --> 00:02:06,996 Speaker 1: to speak to someone who was deeply involved and engaged 27 00:02:07,196 --> 00:02:10,596 Speaker 1: in the Tao world. Right now, I'm joined today by 28 00:02:10,796 --> 00:02:14,276 Speaker 1: Eric Vorhis. He's a tech entrepreneur who founded the bitcoin 29 00:02:14,356 --> 00:02:19,556 Speaker 1: company Coinipolt and later founded Shapeshift, which was a cryptocurrency exchange. 30 00:02:20,236 --> 00:02:24,116 Speaker 1: This past year, shape Shift announced it was switching from 31 00:02:24,156 --> 00:02:27,156 Speaker 1: a classic corporate style government structure with a board of 32 00:02:27,156 --> 00:02:32,596 Speaker 1: directors to a DOW based on decentralized decision making, and 33 00:02:32,876 --> 00:02:35,876 Speaker 1: Eric explained all that in a medium post that will 34 00:02:35,916 --> 00:02:39,436 Speaker 1: put in the show notes. I'll be talking Eric about dows, 35 00:02:39,476 --> 00:02:43,636 Speaker 1: what they are, how they function, and about the politics 36 00:02:43,996 --> 00:02:48,196 Speaker 1: or anti politics of the DOO movement. Eric, thank you 37 00:02:48,236 --> 00:02:54,236 Speaker 1: for being here. I'm really excited to talk about a 38 00:02:54,276 --> 00:02:57,156 Speaker 1: topic where my own learning curve is, let's say, at 39 00:02:57,156 --> 00:03:00,476 Speaker 1: the very steep part of the curve So let's just 40 00:03:00,596 --> 00:03:05,116 Speaker 1: go right into the question of dows decentralized autonomous organizations 41 00:03:05,116 --> 00:03:06,596 Speaker 1: to give you some sense of how new I am 42 00:03:06,636 --> 00:03:09,036 Speaker 1: to the topic. The first time I talked publicly about 43 00:03:09,036 --> 00:03:11,116 Speaker 1: the subject, I still wasn't clear whether it was supposed 44 00:03:11,116 --> 00:03:13,076 Speaker 1: to be pronounced dow or spelled out as dao, and 45 00:03:13,116 --> 00:03:15,236 Speaker 1: I was a little skeptical of the idea that DOO 46 00:03:15,316 --> 00:03:20,236 Speaker 1: sounded too much like a Eastern religious tradition. So talk 47 00:03:20,276 --> 00:03:23,356 Speaker 1: to me about doos starting with one oh one, and 48 00:03:23,396 --> 00:03:25,196 Speaker 1: then with any luck, we'll move up to the more 49 00:03:25,196 --> 00:03:28,516 Speaker 1: advanced level or the course of the conversation. Cool Well, 50 00:03:28,836 --> 00:03:30,396 Speaker 1: about a year and a half ago, I was probably 51 00:03:30,396 --> 00:03:33,636 Speaker 1: in the same place you were, so this is still 52 00:03:33,676 --> 00:03:39,596 Speaker 1: relatively new to me. Also, DOO stands for decentralized autonomous organization, 53 00:03:40,036 --> 00:03:43,076 Speaker 1: which is a lot of syllables, and essentially it's just 54 00:03:43,156 --> 00:03:47,756 Speaker 1: a new way for humans to organize towards some kind 55 00:03:47,756 --> 00:03:54,476 Speaker 1: of economic ends. So generally people organize toward economic ends 56 00:03:54,836 --> 00:03:57,636 Speaker 1: like a for profit corporation like an LLC or a 57 00:03:58,436 --> 00:04:01,036 Speaker 1: C corps or something like that, or through some kind 58 00:04:01,036 --> 00:04:05,036 Speaker 1: of nonprofit organization, and those are both very well known. 59 00:04:05,796 --> 00:04:09,236 Speaker 1: Think of a DOO as basically a new version of 60 00:04:09,356 --> 00:04:15,356 Speaker 1: economic organization, and the defining feature is that there's no center, 61 00:04:15,636 --> 00:04:21,796 Speaker 1: there's no central entity whatsoever. It's not registered anywhere, there's 62 00:04:21,836 --> 00:04:26,276 Speaker 1: no one who is the CEO of a DOO. And 63 00:04:27,316 --> 00:04:31,636 Speaker 1: it is found generally in the cryptocurrency world, but I 64 00:04:31,676 --> 00:04:37,196 Speaker 1: think it can expand eventually beyond that. So let's talk 65 00:04:37,236 --> 00:04:40,356 Speaker 1: about what are the agreements that turn a DOO into 66 00:04:40,356 --> 00:04:42,676 Speaker 1: a doao. If you and I wanted to create a 67 00:04:42,756 --> 00:04:46,836 Speaker 1: DOO to disseminate this episode of this podcast, what would 68 00:04:46,836 --> 00:04:49,796 Speaker 1: we want to do to do that. Yeah, So thinking 69 00:04:49,836 --> 00:04:52,076 Speaker 1: about it from the perspective of contracts, I think is 70 00:04:52,276 --> 00:04:54,716 Speaker 1: a good way to do it. The key difference here 71 00:04:54,836 --> 00:04:59,436 Speaker 1: is that instead of being paper contracts written in English, 72 00:05:00,236 --> 00:05:04,076 Speaker 1: signed by humans and enforced by the state, these are 73 00:05:04,156 --> 00:05:09,116 Speaker 1: contracts written in code, essentially what are called smart contract 74 00:05:09,916 --> 00:05:14,636 Speaker 1: which operate independently. They are not enshrined or protected by 75 00:05:14,676 --> 00:05:18,236 Speaker 1: the state in any way. They simply execute because the 76 00:05:18,276 --> 00:05:23,716 Speaker 1: code makes them execute. So they are much more immutable 77 00:05:24,036 --> 00:05:28,636 Speaker 1: than the normal contracts that would govern a corporation, and 78 00:05:28,676 --> 00:05:31,036 Speaker 1: they are subject to exactly how the code is written. 79 00:05:31,676 --> 00:05:37,316 Speaker 1: So generally in the cryptocurrency world, the locust is the treasury. 80 00:05:37,476 --> 00:05:40,836 Speaker 1: So you have like a treasury contract of a certain 81 00:05:40,876 --> 00:05:45,316 Speaker 1: digital asset, and let's say that contract is holding a 82 00:05:45,396 --> 00:05:50,916 Speaker 1: million dollars of ethereum cryptocurrency. That contract sits there and 83 00:05:51,196 --> 00:05:54,276 Speaker 1: executes certain rules. And so the simplest set would be 84 00:05:54,996 --> 00:05:59,276 Speaker 1: if fifty one percent of the holders of a certain 85 00:05:59,316 --> 00:06:03,716 Speaker 1: token vote to move money out of this treasury contract, 86 00:06:03,756 --> 00:06:05,876 Speaker 1: then it will move to where the voters say it 87 00:06:05,916 --> 00:06:11,276 Speaker 1: should move around. That in entire DAO can form, and 88 00:06:11,436 --> 00:06:14,396 Speaker 1: it doesn't use a bank account, it doesn't have a jurisdiction, 89 00:06:14,956 --> 00:06:18,076 Speaker 1: it's not, you know, subject to any particular country. It 90 00:06:18,156 --> 00:06:22,236 Speaker 1: just exists on the Internet as one or more self 91 00:06:22,236 --> 00:06:28,276 Speaker 1: executing smart contract sets of code. A terminological question before 92 00:06:28,276 --> 00:06:31,716 Speaker 1: we dive into the really fascinating I think already practical 93 00:06:31,716 --> 00:06:35,156 Speaker 1: and philosophical consequences of this way of doing things. You 94 00:06:35,276 --> 00:06:37,636 Speaker 1: spoke of it as a treasury contract, and then you 95 00:06:37,676 --> 00:06:40,756 Speaker 1: said that contract sits there. I take it that this 96 00:06:40,836 --> 00:06:43,956 Speaker 1: is a kind of term of art in taospeak. It's 97 00:06:43,956 --> 00:06:46,636 Speaker 1: that the fund sits there, the money sits there, or 98 00:06:46,676 --> 00:06:49,956 Speaker 1: the asset sits there, and that as it is referred 99 00:06:49,956 --> 00:06:52,916 Speaker 1: to as the treasury, or effectively as the treasure, or 100 00:06:52,956 --> 00:06:55,516 Speaker 1: as the treasury contract. Am I getting that right? Yeah? 101 00:06:55,636 --> 00:06:57,876 Speaker 1: Treasury is just kind of like a colloquial name given 102 00:06:57,916 --> 00:07:02,316 Speaker 1: to it. But it's a contract that holds cryptocurrency. So 103 00:07:02,516 --> 00:07:04,636 Speaker 1: some kind of digitalized makes it a contract. What makes 104 00:07:04,636 --> 00:07:06,716 Speaker 1: it a contract is that there's an encoded set of 105 00:07:06,836 --> 00:07:15,636 Speaker 1: rules that are connected inextricably to the reality of this holding. Correct. Yeah, 106 00:07:15,756 --> 00:07:18,196 Speaker 1: So think of it like a bank account. You know, 107 00:07:18,236 --> 00:07:20,956 Speaker 1: the bank account has a bunch of written and unwritten rules, 108 00:07:21,636 --> 00:07:23,356 Speaker 1: and if you have money in the bank account, the 109 00:07:23,436 --> 00:07:25,876 Speaker 1: money will leave the bank account if certain things are done, 110 00:07:26,076 --> 00:07:29,836 Speaker 1: like if the person who owns the bank account directs 111 00:07:29,876 --> 00:07:31,956 Speaker 1: money to be moved, and if X, y, and z 112 00:07:32,116 --> 00:07:35,516 Speaker 1: people at the bank approve of the transfer, the money 113 00:07:35,516 --> 00:07:38,436 Speaker 1: will move out of it. All of that is handled 114 00:07:38,516 --> 00:07:43,116 Speaker 1: and managed and overseen by humans on some layer. Smart 115 00:07:43,156 --> 00:07:48,676 Speaker 1: contracts are operating as code, and so computers can make 116 00:07:48,756 --> 00:07:52,516 Speaker 1: the money move on their own. No human has to 117 00:07:52,516 --> 00:07:55,676 Speaker 1: be involved whatsoever. And so instead of money being held 118 00:07:55,676 --> 00:07:58,916 Speaker 1: by a bank movable by humans, money is held in 119 00:07:58,956 --> 00:08:04,796 Speaker 1: a smart contract movable by code and machines. Let's talk 120 00:08:04,836 --> 00:08:10,636 Speaker 1: about change. So we've got your stylized example of a 121 00:08:10,716 --> 00:08:13,596 Speaker 1: fund of a million dollars worth of I think you 122 00:08:13,676 --> 00:08:18,116 Speaker 1: said ethereum sitting there. And there's a rule of decision 123 00:08:18,156 --> 00:08:21,476 Speaker 1: that's built into the code, which is that if fifty 124 00:08:21,476 --> 00:08:24,476 Speaker 1: one percent of say, the token holders who have a say, 125 00:08:25,636 --> 00:08:29,036 Speaker 1: choose to distribute the asset in a particular way, then 126 00:08:29,076 --> 00:08:33,116 Speaker 1: it happens. If you were to build in, as well 127 00:08:33,156 --> 00:08:37,076 Speaker 1: to that initial code, the possibility that fifty one of 128 00:08:37,116 --> 00:08:41,956 Speaker 1: the holders of the token could change the rules for distribution, 129 00:08:42,796 --> 00:08:46,436 Speaker 1: then you'd have a more open ended set of arrangements, 130 00:08:46,756 --> 00:08:49,676 Speaker 1: at least in principle. There's no reason you couldn't design 131 00:08:49,716 --> 00:08:54,476 Speaker 1: it that way, correct. Yeah, And actually, since fifty one 132 00:08:54,516 --> 00:08:56,476 Speaker 1: percent of the people can move the money out of 133 00:08:56,476 --> 00:08:59,476 Speaker 1: the contract, if fifty one percent of the people decide 134 00:08:59,516 --> 00:09:01,796 Speaker 1: that a change is needed, they just make a new 135 00:09:01,796 --> 00:09:04,316 Speaker 1: contract and move the money into that new one. So 136 00:09:04,356 --> 00:09:07,916 Speaker 1: the initial one doesn't even need to contemplate that kind 137 00:09:07,956 --> 00:09:10,516 Speaker 1: of change. Well, what it does need to contemplate, though, 138 00:09:10,556 --> 00:09:12,716 Speaker 1: is it needs a rule of decision. Right, it needs 139 00:09:12,756 --> 00:09:15,116 Speaker 1: to know that fifty one percent is the rule of decision. 140 00:09:15,156 --> 00:09:17,076 Speaker 1: You could also do it by any number of other 141 00:09:17,396 --> 00:09:19,316 Speaker 1: modes of governance. Right, you could have ten percent of 142 00:09:19,316 --> 00:09:22,196 Speaker 1: those who own a special token or just ten percent 143 00:09:22,276 --> 00:09:23,956 Speaker 1: of the people could put it out of existence. I mean, 144 00:09:23,956 --> 00:09:27,316 Speaker 1: there's nothing magic about the majority control. It's just whatever 145 00:09:27,356 --> 00:09:31,116 Speaker 1: you lock in the program, because that's what this is. Effectively, 146 00:09:31,116 --> 00:09:34,276 Speaker 1: it's a program. A set of programs will execute. Ye. 147 00:09:34,636 --> 00:09:39,756 Speaker 1: So if that's the case, then I'm curious about how 148 00:09:39,876 --> 00:09:42,916 Speaker 1: much thought goes into the process of choosing that rule 149 00:09:42,916 --> 00:09:45,356 Speaker 1: of decision. I would assume it's an enormous amount of thought, 150 00:09:45,596 --> 00:09:47,756 Speaker 1: because that's, as it were, the whole ball of wax. 151 00:09:47,796 --> 00:09:50,636 Speaker 1: If you talk about a smart contract, they will execute itself. 152 00:09:50,636 --> 00:09:55,596 Speaker 1: But actually it will execute itself unless that circumstances whereby 153 00:09:55,836 --> 00:09:58,796 Speaker 1: the rule of decision can change is executed, in which 154 00:09:58,836 --> 00:10:02,076 Speaker 1: case it won't execute itself. Yeah, and this is where 155 00:10:02,196 --> 00:10:06,236 Speaker 1: dows are all just experimenting with different models. So a 156 00:10:06,316 --> 00:10:08,076 Speaker 1: DOW can be very small, you know. It could be 157 00:10:08,116 --> 00:10:09,956 Speaker 1: like two or three p bull that have some kind 158 00:10:09,956 --> 00:10:13,196 Speaker 1: of smart contract that they all participate in. It could 159 00:10:13,196 --> 00:10:16,116 Speaker 1: be massive. It could be millions and millions of people 160 00:10:16,156 --> 00:10:21,116 Speaker 1: in controlling billions of dollars of economic assets. And the 161 00:10:21,236 --> 00:10:24,636 Speaker 1: rules can be simple, like a simple fifty one percent 162 00:10:24,836 --> 00:10:27,516 Speaker 1: moves the money, and that's the core. Nothing else is 163 00:10:27,556 --> 00:10:30,076 Speaker 1: written other than that single rule, or it could be 164 00:10:30,156 --> 00:10:33,196 Speaker 1: very elaborate with lots of interlocking contracts with different rules 165 00:10:33,636 --> 00:10:37,556 Speaker 1: and singular Dao organizations may change over time. They learn 166 00:10:38,036 --> 00:10:40,756 Speaker 1: how to govern themselves, they learn what works and what doesn't, 167 00:10:41,396 --> 00:10:45,036 Speaker 1: and so they evolve and adapt. The important point here 168 00:10:45,076 --> 00:10:48,796 Speaker 1: isn't what specific rules the Tao chooses. It's simply that 169 00:10:48,836 --> 00:10:53,796 Speaker 1: you now can have humans interact economically with no central 170 00:10:53,876 --> 00:10:56,956 Speaker 1: party being involved whatsoever. Well, let me ask you a 171 00:10:56,956 --> 00:10:59,756 Speaker 1: follow one question about that. Let's say you know again, 172 00:10:59,796 --> 00:11:01,876 Speaker 1: it's a simple dow You and I are the only participants, 173 00:11:01,916 --> 00:11:03,116 Speaker 1: or maybe there're three of us, so that we have 174 00:11:03,116 --> 00:11:06,356 Speaker 1: a fifty one percent option, and we write it so 175 00:11:06,396 --> 00:11:09,756 Speaker 1: that there's a majoritarian rule of decision. Then two of 176 00:11:09,836 --> 00:11:12,676 Speaker 1: us get together and vote within the system, saying we 177 00:11:12,716 --> 00:11:14,596 Speaker 1: want to change things and disburse the funds in some 178 00:11:14,676 --> 00:11:17,916 Speaker 1: different way. And in principle, that would seem to follow 179 00:11:17,916 --> 00:11:21,476 Speaker 1: the rules as written. But the person who is the 180 00:11:21,476 --> 00:11:24,516 Speaker 1: third person says, I think that somehow the system has 181 00:11:24,556 --> 00:11:29,196 Speaker 1: been hacked here, and in fact my vote was cast 182 00:11:29,276 --> 00:11:31,316 Speaker 1: let's say, without my knowing it. I didn't mean to 183 00:11:31,396 --> 00:11:35,636 Speaker 1: vote this way, but someone voted my share the program 184 00:11:35,716 --> 00:11:38,756 Speaker 1: doesn't know that. Presumably it's just going to execute. What 185 00:11:38,916 --> 00:11:43,276 Speaker 1: if any recourse does that person then have. I mean, 186 00:11:43,316 --> 00:11:45,716 Speaker 1: if there's no recourse to the state, then that person 187 00:11:45,836 --> 00:11:48,356 Speaker 1: is just out of luck. Game is over for that person. 188 00:11:48,756 --> 00:11:50,836 Speaker 1: If there is recourse to a state or a government, 189 00:11:51,476 --> 00:11:53,716 Speaker 1: or maybe to a broader set of users, that person 190 00:11:53,756 --> 00:11:57,796 Speaker 1: could appear in some form and say, hey, you know 191 00:11:58,156 --> 00:11:59,996 Speaker 1: this is supposed to only have happened if there's a 192 00:12:00,036 --> 00:12:02,316 Speaker 1: majority vote. There wasn't really majority vote. I was hacked. 193 00:12:02,356 --> 00:12:05,836 Speaker 1: I didn't mean to do this. Yeah, well, anyone familiar 194 00:12:05,836 --> 00:12:08,676 Speaker 1: with cryptocurrency systems, you know this won't sound alien too. 195 00:12:08,756 --> 00:12:13,196 Speaker 1: But the code executes, and that is the arbiter like, 196 00:12:13,316 --> 00:12:16,196 Speaker 1: that's what happens. So there is no recourse outside of 197 00:12:16,236 --> 00:12:18,716 Speaker 1: the code. If you make a mistake, or if the 198 00:12:18,756 --> 00:12:20,716 Speaker 1: code is written poorly, or if there's a bug or 199 00:12:20,956 --> 00:12:24,556 Speaker 1: anything that can happen, the code executes and then it's done. 200 00:12:25,116 --> 00:12:28,236 Speaker 1: So when writing these kind of contracts, obviously you have 201 00:12:28,276 --> 00:12:32,116 Speaker 1: to be very careful, and the more complicated they get, 202 00:12:32,156 --> 00:12:34,276 Speaker 1: the more likely it is that there will be errors 203 00:12:34,276 --> 00:12:37,516 Speaker 1: of some kind. You could, of course add complexity to 204 00:12:37,636 --> 00:12:41,076 Speaker 1: help mitigate this effect. You could say, any vote can 205 00:12:41,076 --> 00:12:43,756 Speaker 1: be reversed within a week if x, y and z 206 00:12:43,916 --> 00:12:46,916 Speaker 1: factors happen. So you can write any number of arbitrary 207 00:12:46,956 --> 00:12:50,276 Speaker 1: rules to these things. But yeah, once as they execute, 208 00:12:50,396 --> 00:12:53,476 Speaker 1: no government in the world can unwind a smart contract. 209 00:12:53,996 --> 00:12:56,596 Speaker 1: And this is super critical when it comes to something 210 00:12:56,636 --> 00:13:00,076 Speaker 1: like bitcoin, which is arguably the world's first daw even 211 00:13:00,076 --> 00:13:02,756 Speaker 1: though people didn't use that terminology for it, but it 212 00:13:02,836 --> 00:13:05,956 Speaker 1: happens throughout cryptocurrency and these smart contracts, they just do 213 00:13:05,996 --> 00:13:10,116 Speaker 1: what they are programmed to do. We'll be right back. 214 00:13:19,716 --> 00:13:23,876 Speaker 1: Let's talk about what are the advantages and uses of doaos, 215 00:13:23,916 --> 00:13:26,876 Speaker 1: at least at this stage, and what are the limitations 216 00:13:27,196 --> 00:13:29,356 Speaker 1: associate with it. I keep coming back to the question 217 00:13:29,356 --> 00:13:33,236 Speaker 1: of what an ordinary limited liability corporation does. So an 218 00:13:33,316 --> 00:13:37,516 Speaker 1: ordinary limited liability corporation has shares and has shareholders who 219 00:13:37,556 --> 00:13:41,236 Speaker 1: have paid in It has a governance structure, and typically 220 00:13:41,476 --> 00:13:44,396 Speaker 1: it's organized to do anything that would make a profit 221 00:13:44,436 --> 00:13:46,796 Speaker 1: for the shareholders. If it's for profit, they may have 222 00:13:46,836 --> 00:13:50,156 Speaker 1: a goal at the beginning, but typically the rules are 223 00:13:50,156 --> 00:13:53,116 Speaker 1: written so that they can have maximal flexibility and decision making, 224 00:13:53,316 --> 00:13:55,476 Speaker 1: and there's also rules of decision just like there would 225 00:13:55,476 --> 00:13:57,756 Speaker 1: be in a DOO in some sense, there could be 226 00:13:57,756 --> 00:14:00,116 Speaker 1: a majority rule in electing members of the board, and 227 00:14:00,156 --> 00:14:03,356 Speaker 1: then the board itself has the capacity to hire the 228 00:14:03,396 --> 00:14:05,276 Speaker 1: managers or the firm, and then the managers make the 229 00:14:05,316 --> 00:14:08,396 Speaker 1: decisions subject to supervision from the board. So it's got 230 00:14:08,396 --> 00:14:10,236 Speaker 1: a set of rule of decision in it as well. 231 00:14:11,676 --> 00:14:15,316 Speaker 1: So that has a lot of flexibility in It seems 232 00:14:15,356 --> 00:14:21,636 Speaker 1: your flexibility is constrained by what you've said upfront, right, 233 00:14:21,636 --> 00:14:25,836 Speaker 1: You've written that contract in and unless you have a 234 00:14:25,916 --> 00:14:27,716 Speaker 1: rule of decision that enables it to be changed with 235 00:14:27,756 --> 00:14:31,436 Speaker 1: an elaborate government structure attached, you sort of have to 236 00:14:31,476 --> 00:14:35,316 Speaker 1: do what you started with. Does that seem like a 237 00:14:35,316 --> 00:14:37,796 Speaker 1: fair concern? I see what you're saying, but I think 238 00:14:37,796 --> 00:14:40,516 Speaker 1: it's I think it's the opposite. The main benefits of 239 00:14:40,516 --> 00:14:45,516 Speaker 1: ADAO are the greater flexibility, not the greater constraint. To 240 00:14:45,556 --> 00:14:48,716 Speaker 1: give a very like clear demonstration of how much more 241 00:14:48,716 --> 00:14:55,156 Speaker 1: flexible ADAO is, any normal company that employees employees has 242 00:14:55,196 --> 00:14:58,516 Speaker 1: to follow, you know, all sorts of employment laws in 243 00:14:58,556 --> 00:15:02,436 Speaker 1: a specific jurisdiction. Those employment laws have nothing to do 244 00:15:02,636 --> 00:15:06,316 Speaker 1: with serving the customer. They have everything to do with 245 00:15:06,516 --> 00:15:10,436 Speaker 1: certain special interests. In the past, arguing for political reasons 246 00:15:10,996 --> 00:15:15,196 Speaker 1: that external rules should be imposed on the mutual work 247 00:15:15,236 --> 00:15:18,876 Speaker 1: between two people. A dow doesn't have to abide by that. 248 00:15:19,516 --> 00:15:21,636 Speaker 1: A doubt does not exist within a territory, and a 249 00:15:21,636 --> 00:15:25,236 Speaker 1: dow does not have employees as defined under law. So 250 00:15:25,276 --> 00:15:28,796 Speaker 1: a dow can pay a worker in some country to 251 00:15:28,836 --> 00:15:34,596 Speaker 1: do X, Y and Z task with zero concern about 252 00:15:35,396 --> 00:15:39,596 Speaker 1: the five hundred different you know, labor laws of any 253 00:15:39,676 --> 00:15:43,996 Speaker 1: arbitrary country. And that's this is a very important thing 254 00:15:43,996 --> 00:15:46,796 Speaker 1: you're saying, and I want to take it on head on, 255 00:15:47,396 --> 00:15:48,676 Speaker 1: and I want to do it, if it's okay with you, 256 00:15:48,716 --> 00:15:50,516 Speaker 1: in two parts. First, I just want to respond to 257 00:15:50,516 --> 00:15:52,356 Speaker 1: what you were saying about flexibility, and then I want 258 00:15:52,356 --> 00:15:55,036 Speaker 1: to go straight into the employment law and the more 259 00:15:55,116 --> 00:15:59,476 Speaker 1: deeply libertarian versus regulatory conceptions that one might have of that. 260 00:15:59,916 --> 00:16:01,596 Speaker 1: But before we get there, and I'm really excited to 261 00:16:01,596 --> 00:16:03,636 Speaker 1: get there, I just want to quickly do a clarification 262 00:16:03,756 --> 00:16:06,956 Speaker 1: on the flexibility point. Yeah. So you know, a group 263 00:16:06,956 --> 00:16:09,676 Speaker 1: of people got together and they very quickly created ADAO 264 00:16:09,796 --> 00:16:11,636 Speaker 1: to buy a copy of the Constitution that was up 265 00:16:11,676 --> 00:16:13,356 Speaker 1: for auction, and they all had to put in money 266 00:16:13,436 --> 00:16:16,036 Speaker 1: because you have to put your assets in advance or 267 00:16:16,116 --> 00:16:19,756 Speaker 1: create those assets in advance in a DAO and then 268 00:16:19,796 --> 00:16:21,956 Speaker 1: they didn't win. They didn't get the object because they 269 00:16:21,956 --> 00:16:24,516 Speaker 1: were outbid fair enough, and they need to have a 270 00:16:24,596 --> 00:16:26,516 Speaker 1: rule of decision of what to do about that money 271 00:16:26,556 --> 00:16:28,316 Speaker 1: after the fact, because the money was all in there, 272 00:16:28,316 --> 00:16:30,196 Speaker 1: it was set that the program was set up. So 273 00:16:30,316 --> 00:16:32,076 Speaker 1: if they won then auction, they would have bought the 274 00:16:32,156 --> 00:16:35,676 Speaker 1: constitution if they if the TAO then wanted to say, 275 00:16:36,236 --> 00:16:39,196 Speaker 1: we want to go into business now to do something 276 00:16:39,236 --> 00:16:41,596 Speaker 1: completely different. You know, we want to go into business 277 00:16:41,596 --> 00:16:45,396 Speaker 1: to promote I don't know, to promote the idea of doubts, right, 278 00:16:46,316 --> 00:16:47,996 Speaker 1: and we want to have all the elements that you 279 00:16:48,076 --> 00:16:49,956 Speaker 1: need to go into business that require more than just 280 00:16:50,116 --> 00:16:52,916 Speaker 1: paying people, like a whole business operation. To do it, 281 00:16:53,996 --> 00:16:56,436 Speaker 1: they would need to have a rule of decision that 282 00:16:56,596 --> 00:16:59,196 Speaker 1: enabled the majority of the members of the doubt to 283 00:16:59,316 --> 00:17:03,196 Speaker 1: enact what would be in effect rules of corporate governance. Right. 284 00:17:03,236 --> 00:17:05,116 Speaker 1: They would have to say, this is how we're going 285 00:17:05,156 --> 00:17:06,996 Speaker 1: to appoint our CEO, this is how we're going to 286 00:17:07,316 --> 00:17:09,436 Speaker 1: how we're going to supervise the CEO, this is how 287 00:17:09,756 --> 00:17:11,756 Speaker 1: the decision ers are going to proceed on a day 288 00:17:11,756 --> 00:17:13,796 Speaker 1: to day basis. Otherwise, they'd have to make ever, have 289 00:17:13,916 --> 00:17:16,756 Speaker 1: every single decision made by vote of the whole collective 290 00:17:16,756 --> 00:17:18,196 Speaker 1: the way sort of like a town meeting in New 291 00:17:18,196 --> 00:17:19,916 Speaker 1: England does it. And as anyone who has ever been 292 00:17:19,916 --> 00:17:22,516 Speaker 1: to one of those town meetings, no, it's wildly inefficient. 293 00:17:22,596 --> 00:17:24,996 Speaker 1: So that's why guess what I meant on the flexibility point. 294 00:17:24,996 --> 00:17:28,476 Speaker 1: I mean, I get that in principle, the DAO could 295 00:17:29,876 --> 00:17:32,916 Speaker 1: legal structures of the state provided just say we're not 296 00:17:32,996 --> 00:17:36,556 Speaker 1: we're now adopting rules of incorporation. But unless they reinvent 297 00:17:36,596 --> 00:17:39,316 Speaker 1: the wheel of the rules of incorporation, it seems all 298 00:17:39,356 --> 00:17:42,196 Speaker 1: everything they do they have to do by the same 299 00:17:42,276 --> 00:17:44,236 Speaker 1: rule decision they've adopted in from the beginning. If that's 300 00:17:44,276 --> 00:17:47,276 Speaker 1: fifty plus one, then they need to vote on everything 301 00:17:47,276 --> 00:17:50,156 Speaker 1: fifty percent plus one. Am I getting that right? Yeah? 302 00:17:50,316 --> 00:17:52,876 Speaker 1: So this is a super important point, and it was 303 00:17:52,916 --> 00:17:54,996 Speaker 1: one of the things that I was initially skeptical on 304 00:17:55,036 --> 00:17:58,436 Speaker 1: about DAOs is you know, if every decision of an 305 00:17:58,476 --> 00:18:00,196 Speaker 1: organization has to be voted on, it's going to be 306 00:18:00,236 --> 00:18:03,876 Speaker 1: a disaster for many reasons. DAWs generally get around this 307 00:18:04,116 --> 00:18:09,076 Speaker 1: by simply creating groups with delegated authority. So you create 308 00:18:09,236 --> 00:18:11,636 Speaker 1: this initial tao. It has a million dollars, and it 309 00:18:11,676 --> 00:18:13,516 Speaker 1: just has the simple rule that fifty one percent of 310 00:18:13,516 --> 00:18:16,836 Speaker 1: the token holders can move the money. The next vote 311 00:18:16,956 --> 00:18:20,556 Speaker 1: might be, Okay, we need marketing, so give one hundred 312 00:18:20,556 --> 00:18:24,076 Speaker 1: thousand dollars to this guy because he seems credible with marketing. 313 00:18:24,556 --> 00:18:27,276 Speaker 1: He gets one hundred thousand dollars. And then everything he 314 00:18:27,356 --> 00:18:30,996 Speaker 1: does for marketing is not up to a vote. It's 315 00:18:31,036 --> 00:18:33,476 Speaker 1: just up to him, so he has full autonomy over 316 00:18:33,516 --> 00:18:36,316 Speaker 1: his role. At some point he's going to want to 317 00:18:36,316 --> 00:18:38,516 Speaker 1: come back from our money, right, and so that's when 318 00:18:38,516 --> 00:18:40,556 Speaker 1: he needs to demonstrate, like, hey, here's what I did 319 00:18:40,596 --> 00:18:43,116 Speaker 1: for you as the DOAO, Here's how well I spent 320 00:18:43,156 --> 00:18:45,196 Speaker 1: all that hundred thousand dollars, and here are the results. 321 00:18:45,436 --> 00:18:47,236 Speaker 1: Give me more money and I'll keep doing this for you. 322 00:18:47,956 --> 00:18:50,476 Speaker 1: So in that case, you know, only one decision was 323 00:18:50,556 --> 00:18:52,596 Speaker 1: voted on, which was give one hundred thousand dollars to 324 00:18:53,476 --> 00:18:58,116 Speaker 1: this guy, and he has tons of flexibility. I don't 325 00:18:58,156 --> 00:19:00,676 Speaker 1: want to labor the point, but I do think that 326 00:19:00,796 --> 00:19:02,796 Speaker 1: in the real world of contracts, one of the things 327 00:19:02,836 --> 00:19:07,596 Speaker 1: that contracts are used for is repeated iteration by the 328 00:19:07,636 --> 00:19:10,556 Speaker 1: same players over a long period of time, with ongoing 329 00:19:10,636 --> 00:19:13,436 Speaker 1: negotiation and shifts in what the duties are. So let's 330 00:19:13,436 --> 00:19:16,156 Speaker 1: say I have a company, and I hire an ordinary company, 331 00:19:16,156 --> 00:19:17,956 Speaker 1: and I hire someone who does marketing, and I pay 332 00:19:17,996 --> 00:19:20,796 Speaker 1: the person monthly for a certain amount of work, or 333 00:19:20,796 --> 00:19:24,516 Speaker 1: by the job for a certain amount of work. Each month, 334 00:19:24,596 --> 00:19:26,516 Speaker 1: we check in with each other, or maybe even every day. 335 00:19:26,556 --> 00:19:27,996 Speaker 1: We check in with each other, and we see how 336 00:19:27,996 --> 00:19:29,676 Speaker 1: each of us is doing, and when the term of 337 00:19:29,716 --> 00:19:32,356 Speaker 1: the contract ends, we're capable of renegotiating the contract. In fact, 338 00:19:32,356 --> 00:19:33,556 Speaker 1: we don't even have to wait for the term of 339 00:19:33,556 --> 00:19:36,036 Speaker 1: the contract end. In the real world, people are constantly 340 00:19:36,036 --> 00:19:39,836 Speaker 1: renegotiating contracts all the time, based on their needs, based 341 00:19:39,836 --> 00:19:42,996 Speaker 1: on circumstances. And it does seem to me that that 342 00:19:43,156 --> 00:19:47,036 Speaker 1: iterative structure of engagement. I agree that in principle it 343 00:19:47,076 --> 00:19:49,676 Speaker 1: could be done. In a doubt, that seems correct to me. 344 00:19:50,316 --> 00:19:52,356 Speaker 1: But it seems like one of the great advantages of 345 00:19:52,556 --> 00:19:55,996 Speaker 1: ordinary corporate form of government is that the shareholders are saying, 346 00:19:55,996 --> 00:19:58,196 Speaker 1: we don't have the time to manage the firm in detail, 347 00:19:58,596 --> 00:20:00,876 Speaker 1: so we're going to delegate that management to people who 348 00:20:00,916 --> 00:20:03,356 Speaker 1: have the full time job of, among other things, talking 349 00:20:03,356 --> 00:20:05,476 Speaker 1: to the marketing guy who gets hired and making judgments 350 00:20:05,476 --> 00:20:08,796 Speaker 1: about that. And it seems like, again, unless you reinvent 351 00:20:08,876 --> 00:20:12,316 Speaker 1: that within a DOO, you lose that. Yeah, it's reinvented 352 00:20:12,316 --> 00:20:15,836 Speaker 1: within the DOO. The DOO can decide to hire someone 353 00:20:15,916 --> 00:20:19,236 Speaker 1: who acts sort of as a manager to oversee several 354 00:20:19,476 --> 00:20:22,516 Speaker 1: roles beneath them. So if the DOO organization wants to 355 00:20:22,516 --> 00:20:27,516 Speaker 1: do that, it absolutely can. There's no reason that can't work. 356 00:20:27,916 --> 00:20:29,716 Speaker 1: So let's go to the point that you made about 357 00:20:29,716 --> 00:20:32,876 Speaker 1: employment laws. And here what you said was to my mind, 358 00:20:32,956 --> 00:20:38,236 Speaker 1: very reminiscent of some of the early arguments for cryptocurrencies, namely, 359 00:20:38,956 --> 00:20:42,836 Speaker 1: you can avoid regulation. And I want to raise two 360 00:20:42,916 --> 00:20:45,156 Speaker 1: concerns about that. One whether it's actually true that you 361 00:20:45,196 --> 00:20:48,876 Speaker 1: can avoid regulation, and two whether you should avoid regulation 362 00:20:48,876 --> 00:20:51,516 Speaker 1: as a normative moral matter. Even if you could, Let's 363 00:20:51,516 --> 00:20:52,956 Speaker 1: say you say, we don't want to fill out. It's 364 00:20:53,076 --> 00:20:54,436 Speaker 1: one of the things that employers have to do, even 365 00:20:54,436 --> 00:20:56,876 Speaker 1: if they're hiring contractors, is they have to send them 366 00:20:57,156 --> 00:20:58,836 Speaker 1: at the end of the year at tax documents saying 367 00:20:58,876 --> 00:21:01,036 Speaker 1: how much money they were paid and go through this 368 00:21:01,036 --> 00:21:03,716 Speaker 1: whole procedure of doing so. Even if it's only minimal, 369 00:21:03,716 --> 00:21:05,396 Speaker 1: they still have to go through it. And you say, well, 370 00:21:05,476 --> 00:21:07,356 Speaker 1: this is a DOO. It's not under the jurisdiction of 371 00:21:07,356 --> 00:21:10,036 Speaker 1: any regulator of any states. It's not going to do that. 372 00:21:11,236 --> 00:21:15,196 Speaker 1: If the state then appears, it can say to the 373 00:21:15,236 --> 00:21:18,556 Speaker 1: employee you got paid, well, hey, you you were under 374 00:21:18,596 --> 00:21:20,796 Speaker 1: a duty to do this and you didn't pay your taxes, 375 00:21:20,836 --> 00:21:22,396 Speaker 1: And the DAO could say, well, we don't care, not 376 00:21:22,476 --> 00:21:25,356 Speaker 1: our problem. But then if the state turns to the 377 00:21:25,436 --> 00:21:28,836 Speaker 1: DAO and says, look, if you're going to operate in 378 00:21:28,876 --> 00:21:33,756 Speaker 1: the state of Delaware, we obligate you to follow our 379 00:21:34,156 --> 00:21:39,516 Speaker 1: employment laws, and we will sanction you by sanctioning the 380 00:21:39,556 --> 00:21:43,076 Speaker 1: people who are in our jurisdiction, who are within our jurisdiction, 381 00:21:43,836 --> 00:21:47,676 Speaker 1: who are participants in the DAO. And if you say, 382 00:21:48,076 --> 00:21:49,436 Speaker 1: and this is going to be easier for the government 383 00:21:49,476 --> 00:21:51,036 Speaker 1: of China than for the government of Delaware, but it's 384 00:21:51,036 --> 00:21:54,636 Speaker 1: in principle possibly even in Delaware, if the TAO effectively says, 385 00:21:54,676 --> 00:21:56,116 Speaker 1: I mean, the DOO can't speak. But if the DAO 386 00:21:56,116 --> 00:21:59,356 Speaker 1: effectively says, sorry, we're not subject to your regulation, the 387 00:21:59,396 --> 00:22:03,396 Speaker 1: hell with you. You know, we're libertarians. The state's ultimate 388 00:22:03,396 --> 00:22:06,076 Speaker 1: sanction is to say it's unlawful for people in our 389 00:22:06,156 --> 00:22:09,436 Speaker 1: jurisdiction to own or participate in dao in the same 390 00:22:09,476 --> 00:22:12,236 Speaker 1: way that some countries have already done with some cryptocurrencies, 391 00:22:12,516 --> 00:22:14,916 Speaker 1: and then people could hide from the law, they could 392 00:22:15,116 --> 00:22:18,836 Speaker 1: unlawfully trade in crypto or unlawfully participate in the tao, 393 00:22:19,036 --> 00:22:20,876 Speaker 1: and then it becomes just the ordinary count and mouse 394 00:22:20,876 --> 00:22:25,556 Speaker 1: game of any unlawful activity. So in those senses, isn't 395 00:22:25,556 --> 00:22:28,636 Speaker 1: it the case that you really can only avoid regulation 396 00:22:28,756 --> 00:22:32,396 Speaker 1: insofar as the state entities where the human beings who 397 00:22:32,436 --> 00:22:38,036 Speaker 1: participate live chooses to allow the dao to remain unregulated. Yeah, 398 00:22:38,156 --> 00:22:42,516 Speaker 1: fascinating topic. So what you've really done in a doao 399 00:22:42,756 --> 00:22:46,876 Speaker 1: is you've removed the corporate entity from the equation entirely. 400 00:22:47,756 --> 00:22:49,916 Speaker 1: So instead of having a bunch of individuals and then 401 00:22:49,956 --> 00:22:53,116 Speaker 1: a corporate entity, which is where all regulation is applied 402 00:22:53,116 --> 00:22:55,876 Speaker 1: at a corporate level, that entity is gone. There is 403 00:22:55,876 --> 00:23:01,716 Speaker 1: no entity. A state can obviously enforce whatever coercion it 404 00:23:01,876 --> 00:23:07,196 Speaker 1: wants against individuals within its territory. And that's true regardless 405 00:23:07,236 --> 00:23:10,716 Speaker 1: of a DOO. But let's say Delaware becomes totally tyrannical 406 00:23:10,956 --> 00:23:14,356 Speaker 1: and says, you know, we don't like all the all 407 00:23:14,396 --> 00:23:17,676 Speaker 1: the freedom going on here. We will make it illegal 408 00:23:17,956 --> 00:23:20,636 Speaker 1: to participate in a dow. How that would be worded 409 00:23:20,716 --> 00:23:23,276 Speaker 1: legally would be very interesting, and obviously it would be 410 00:23:23,316 --> 00:23:27,516 Speaker 1: immediately a First Amendment issue. But even if they succeeded, 411 00:23:28,076 --> 00:23:30,196 Speaker 1: then okay, the people that were part of the DOAO 412 00:23:30,276 --> 00:23:33,636 Speaker 1: in Delaware end up selling their tokens because they can't 413 00:23:33,676 --> 00:23:38,556 Speaker 1: participate anymore, and the DOO morphs into the jurisdictions where 414 00:23:38,556 --> 00:23:42,636 Speaker 1: it can work. Right. So, unlike a corporation, which if 415 00:23:42,956 --> 00:23:45,076 Speaker 1: it's in Delaware and Delaware shuts it down, it's in 416 00:23:45,156 --> 00:23:46,916 Speaker 1: big trouble and it would take a lot of work 417 00:23:46,916 --> 00:23:50,756 Speaker 1: and effort to pull the roots out into redomicile somewhere. 418 00:23:51,636 --> 00:23:54,276 Speaker 1: A doo is very fluid. It's like trying to regulate, 419 00:23:54,476 --> 00:23:57,916 Speaker 1: you know, the movement of air or water, and for 420 00:23:57,956 --> 00:24:01,996 Speaker 1: that reason, it's a it's an entirely different beast. Eric. 421 00:24:02,036 --> 00:24:04,996 Speaker 1: That metaphor of airrow water really nicely tease up the 422 00:24:05,476 --> 00:24:09,596 Speaker 1: should we question, because the reason we, I mean, the 423 00:24:09,636 --> 00:24:11,916 Speaker 1: truth is we can regulate air and we can regulate water, 424 00:24:11,996 --> 00:24:14,276 Speaker 1: and we try to or at least we try to 425 00:24:14,276 --> 00:24:16,476 Speaker 1: regulate human interactions with them. But the reason that it's 426 00:24:16,516 --> 00:24:18,556 Speaker 1: hard to do that is that those are naturally occurring 427 00:24:18,716 --> 00:24:22,716 Speaker 1: entities that don't in their very nature subject themselves easily 428 00:24:22,756 --> 00:24:26,476 Speaker 1: to jurisdiction. Employment relations are different from that there are 429 00:24:26,556 --> 00:24:31,756 Speaker 1: human interactions between people, and states are interactions between people 430 00:24:31,756 --> 00:24:35,636 Speaker 1: and exist to regulate relations between people. Well, you described 431 00:24:35,716 --> 00:24:38,356 Speaker 1: employment laws, I think essentially what you're saying was that 432 00:24:38,396 --> 00:24:42,956 Speaker 1: they're the result of special interests lobbying for different forms 433 00:24:42,996 --> 00:24:45,676 Speaker 1: of regulation at past times. And that's absolutely the way 434 00:24:45,716 --> 00:24:48,116 Speaker 1: some people would describe employment laws, the way some economists 435 00:24:48,196 --> 00:24:50,956 Speaker 1: might describe it. But another way to describe employment law, 436 00:24:50,996 --> 00:24:54,316 Speaker 1: of the way say legislators would describe it, or unions, 437 00:24:54,956 --> 00:24:59,636 Speaker 1: is that they're the product of complex social negotiation between 438 00:24:59,756 --> 00:25:05,636 Speaker 1: people in society, making moral judgments and political judgments about 439 00:25:05,676 --> 00:25:09,396 Speaker 1: how much people need to live, about whether this social 440 00:25:09,436 --> 00:25:12,476 Speaker 1: conflict between unions and management that you almost burned down 441 00:25:12,516 --> 00:25:14,636 Speaker 1: Europe and the United States in the nineteen and twentieth 442 00:25:14,636 --> 00:25:18,236 Speaker 1: centuries should be regulated by some set of mechanisms. That 443 00:25:18,316 --> 00:25:20,596 Speaker 1: they are products of social forces, for sure, I think 444 00:25:20,636 --> 00:25:23,876 Speaker 1: everyone would concede. But many people think that employment law, 445 00:25:23,956 --> 00:25:27,996 Speaker 1: like other law, is a desirable set of forms of 446 00:25:28,076 --> 00:25:31,356 Speaker 1: regulation of human conduct. And if you believed all that, 447 00:25:31,396 --> 00:25:32,836 Speaker 1: I'm not saying that you have to or that one 448 00:25:32,876 --> 00:25:35,436 Speaker 1: has to. But if someone believed all that, would they 449 00:25:35,476 --> 00:25:38,916 Speaker 1: be right in thinking that taos are very very bad things. 450 00:25:39,076 --> 00:25:43,116 Speaker 1: I mean, if they exist to evade regulation, then they 451 00:25:43,156 --> 00:25:47,476 Speaker 1: exist to evade to the extent that they're able relations that, 452 00:25:47,516 --> 00:25:50,516 Speaker 1: at least in adjust in democratic society, have been adopted 453 00:25:50,516 --> 00:25:53,396 Speaker 1: by everybody in the hopes of making everybody better off, 454 00:25:53,396 --> 00:25:56,716 Speaker 1: and ironically, that have been adopted by democratic procedures, which 455 00:25:56,716 --> 00:25:59,316 Speaker 1: are the kinds of democratic procedures that the Tao talks 456 00:25:59,356 --> 00:26:03,396 Speaker 1: about using. So should my listeners who who like the 457 00:26:03,476 --> 00:26:07,156 Speaker 1: rule of law be turned off of taos? Exactly at 458 00:26:07,156 --> 00:26:11,716 Speaker 1: this point in the conversation, I like the rule of law. 459 00:26:12,396 --> 00:26:14,236 Speaker 1: I just think that there's a lot of laws that 460 00:26:14,316 --> 00:26:20,316 Speaker 1: are coercive and unethical. And the reason to be opposed 461 00:26:20,316 --> 00:26:23,596 Speaker 1: to taos is if you didn't like the idea that 462 00:26:23,676 --> 00:26:29,116 Speaker 1: two adults could just consensually interact with each other. Anyone 463 00:26:29,156 --> 00:26:33,236 Speaker 1: who's opposed to consensual interaction between adults is not going 464 00:26:33,316 --> 00:26:35,716 Speaker 1: to like taos because it allows them to do that. 465 00:26:35,996 --> 00:26:37,356 Speaker 1: You know, an economic pow do you have to be? 466 00:26:37,436 --> 00:26:38,756 Speaker 1: I mean, I guess I'm asking is how much of 467 00:26:38,756 --> 00:26:41,076 Speaker 1: a libertarian do you have to be? To like taos 468 00:26:41,156 --> 00:26:45,796 Speaker 1: because could one be a non libertarian dow lover or 469 00:26:46,036 --> 00:26:48,756 Speaker 1: is it that you have to basically be a libertarian 470 00:26:49,356 --> 00:26:55,996 Speaker 1: to love a doo. Doos are like pristine equality in 471 00:26:56,356 --> 00:27:00,956 Speaker 1: relationships between people. There is no corporate hierarchy, there is 472 00:27:00,996 --> 00:27:05,796 Speaker 1: no boss. It is simply a format on which any 473 00:27:05,836 --> 00:27:10,516 Speaker 1: two individuals or more can come together and opt in 474 00:27:11,236 --> 00:27:14,236 Speaker 1: to trade with each other on terms agreeable to both. 475 00:27:14,956 --> 00:27:20,156 Speaker 1: That's it. A lot of people are uncomfortable allowing to 476 00:27:20,516 --> 00:27:24,356 Speaker 1: adults to consensually agree with one another, and for those 477 00:27:24,356 --> 00:27:26,756 Speaker 1: people probably not going to like anything that increases the 478 00:27:26,796 --> 00:27:30,676 Speaker 1: ability for human adults to just like interact freely. You know, 479 00:27:30,796 --> 00:27:35,276 Speaker 1: dows are not asking anyone's permission for anything, and if 480 00:27:35,316 --> 00:27:37,596 Speaker 1: you don't like the DOO, you shouldn't be involved in it. 481 00:27:37,996 --> 00:27:41,876 Speaker 1: The DOAO is only by definition, going to include participants 482 00:27:41,916 --> 00:27:46,836 Speaker 1: that willingly wanted to interact with that organization. So Eric, 483 00:27:46,916 --> 00:27:49,116 Speaker 1: let me just be clear again about why I'm asking this. 484 00:27:49,196 --> 00:27:50,996 Speaker 1: I mean, I think I'm actually really interested in the 485 00:27:51,036 --> 00:27:52,996 Speaker 1: moral questions, but I think that's not the thing that's 486 00:27:52,996 --> 00:27:56,156 Speaker 1: most valuable to listeners. What's most valuable is people are 487 00:27:56,156 --> 00:27:58,036 Speaker 1: trying to figure out I think many people are trying 488 00:27:58,076 --> 00:28:00,756 Speaker 1: to figure out how serious or taos, how long will 489 00:28:00,756 --> 00:28:04,556 Speaker 1: they last, what kinds of capacities do they have to 490 00:28:04,596 --> 00:28:07,956 Speaker 1: the extent that doos are dependent upon. If they are 491 00:28:07,996 --> 00:28:11,836 Speaker 1: dependent upon that kind of a theory, no boss, no master, 492 00:28:12,316 --> 00:28:16,356 Speaker 1: they run the risk of being regulated in exactly the 493 00:28:16,356 --> 00:28:19,436 Speaker 1: way that everything else in society is regulated. Right, So, 494 00:28:19,796 --> 00:28:22,796 Speaker 1: democratic theory says that in democratic society there are no bosses, 495 00:28:22,836 --> 00:28:26,156 Speaker 1: no masters. And yet within democratic societies, by a whole 496 00:28:26,436 --> 00:28:31,156 Speaker 1: set of processes, vast economic inequalities emerge, those generate property 497 00:28:31,156 --> 00:28:35,316 Speaker 1: and equalities, and then via contract, we get bosses, and 498 00:28:35,356 --> 00:28:37,556 Speaker 1: we might even get masters and slaves if they enter 499 00:28:37,596 --> 00:28:40,516 Speaker 1: into those relationships by contract, And in principle, you know, 500 00:28:40,636 --> 00:28:42,956 Speaker 1: through if you think of an indentured servitude contract, which 501 00:28:42,996 --> 00:28:46,316 Speaker 1: was a very common form of contract in early America, 502 00:28:46,436 --> 00:28:48,196 Speaker 1: you get something that looks a heck of a lot 503 00:28:48,236 --> 00:28:53,956 Speaker 1: like slavery, just by voluntary contracting. So that's why the 504 00:28:53,996 --> 00:28:57,556 Speaker 1: great majority of well all governments that have ever existed 505 00:28:57,796 --> 00:29:02,516 Speaker 1: have regulated in ways that are in commensurate with genuine libertarianism. 506 00:29:02,556 --> 00:29:04,476 Speaker 1: Now again, I'm not saying that to make a philosophical 507 00:29:04,556 --> 00:29:08,356 Speaker 1: argument against libertarianism. I'm saying it because if the DAO 508 00:29:08,556 --> 00:29:11,436 Speaker 1: depends on that libertarian theory, then a lot of us 509 00:29:11,436 --> 00:29:15,356 Speaker 1: think that as a predictive matter, it's way more likely 510 00:29:15,476 --> 00:29:18,716 Speaker 1: the taos will in fact be subject to radical regulation 511 00:29:18,916 --> 00:29:22,396 Speaker 1: and therefore won't be able to achieve they're somewhat utopian purposes. 512 00:29:22,876 --> 00:29:25,316 Speaker 1: Then if you told me no, as a lot of 513 00:29:25,316 --> 00:29:27,436 Speaker 1: people are saying in crypto, look, there's nothing wrong with 514 00:29:27,476 --> 00:29:30,396 Speaker 1: crypto being regulated. Sure, crypto can be regulated. You know, 515 00:29:30,436 --> 00:29:32,516 Speaker 1: at the beginning people said, well, what's great about cryptos 516 00:29:32,516 --> 00:29:36,036 Speaker 1: It will evade all regulation. And now as crypto's getting 517 00:29:36,036 --> 00:29:38,996 Speaker 1: bigger and bigger and more and more successful, lots of 518 00:29:39,036 --> 00:29:41,276 Speaker 1: advocates of crypto say, it's not a problem for crypto 519 00:29:41,316 --> 00:29:43,476 Speaker 1: can be regulated. We can we can manage that regulation. 520 00:29:43,516 --> 00:29:46,596 Speaker 1: And crypto's got all kinds of other valuable functions other 521 00:29:46,636 --> 00:29:48,996 Speaker 1: than the evasion of regulation. So I guess what I'm 522 00:29:48,996 --> 00:29:52,196 Speaker 1: trying to figure out is is that where are DAWs 523 00:29:52,276 --> 00:29:54,396 Speaker 1: different in some way or is it like crypto where 524 00:29:54,436 --> 00:29:56,356 Speaker 1: of course there's still lots of crypto people who would 525 00:29:56,396 --> 00:29:59,476 Speaker 1: like no regulation to exist, but lots of advocates of 526 00:29:59,476 --> 00:30:02,436 Speaker 1: crypto have sort of accepted the reality of future regulation. 527 00:30:03,516 --> 00:30:09,116 Speaker 1: So both in cryptocurrency and in DAOs, you are established 528 00:30:09,556 --> 00:30:15,356 Speaker 1: a layer of human society that is beyond politics. And 529 00:30:15,676 --> 00:30:17,836 Speaker 1: this is a weird thing to say and to hear, 530 00:30:17,916 --> 00:30:22,196 Speaker 1: because it's not really existed before a smart contract, you 531 00:30:22,316 --> 00:30:27,636 Speaker 1: cannot regulate it. Or, to be more precise, politicians can 532 00:30:27,716 --> 00:30:31,236 Speaker 1: write whatever rules they want, and the smart contract is 533 00:30:31,636 --> 00:30:34,476 Speaker 1: oblivious to them. It will execute according to the code, 534 00:30:35,156 --> 00:30:38,996 Speaker 1: no matter the rules that politicians write about it. In 535 00:30:39,036 --> 00:30:42,076 Speaker 1: the same way that if if I write rules about 536 00:30:42,076 --> 00:30:46,396 Speaker 1: how the dust on the moon should settle, it doesn't matter. 537 00:30:46,716 --> 00:30:48,956 Speaker 1: The dust on the moon shall settle according to the 538 00:30:49,036 --> 00:30:53,956 Speaker 1: laws of physics, and the rules within a cryptocurrency protocol 539 00:30:54,316 --> 00:30:57,116 Speaker 1: will execute according to the rules of the code the 540 00:30:57,236 --> 00:31:00,196 Speaker 1: code is. This is just a clarifying question, not an 541 00:31:00,236 --> 00:31:03,676 Speaker 1: argument question. But on the clarification side, isn't it the 542 00:31:03,676 --> 00:31:06,156 Speaker 1: case that there has to be a distributed network of 543 00:31:06,196 --> 00:31:10,716 Speaker 1: computers on which the code runs, unlike the laws of physics, 544 00:31:10,716 --> 00:31:12,516 Speaker 1: which I mean, they need some substrate. We need to 545 00:31:12,516 --> 00:31:15,756 Speaker 1: live in the universe as it's presently constituted. But if tomorrow, 546 00:31:16,556 --> 00:31:19,436 Speaker 1: you know, all computers in the world went down, or 547 00:31:19,476 --> 00:31:22,396 Speaker 1: if all states in the world that were capable of 548 00:31:22,436 --> 00:31:26,396 Speaker 1: hosting big enough servers to run a global network regulated 549 00:31:26,436 --> 00:31:30,436 Speaker 1: and shut down these smart contracts, they would stop, right. 550 00:31:30,476 --> 00:31:34,556 Speaker 1: I mean they're dependent on distributed computing, right, correct, and 551 00:31:34,996 --> 00:31:37,916 Speaker 1: certainly not quite like the laws of physics, not quite 552 00:31:38,076 --> 00:31:42,436 Speaker 1: in that. Yeah, they do have prerequisite technology that exists. 553 00:31:42,556 --> 00:31:46,236 Speaker 1: But if the argument against cryptocurrencies functioning, or against you know, 554 00:31:46,316 --> 00:31:50,076 Speaker 1: smart contracts and DAW's functioning, is that maybe all computers 555 00:31:50,076 --> 00:31:52,596 Speaker 1: in the world will shut down, we're already talking about 556 00:31:52,636 --> 00:31:55,356 Speaker 1: some kind of horrible dystopia in which, you know, most 557 00:31:55,396 --> 00:31:58,436 Speaker 1: of humanity is dying from starvation. Anyway, I didn't mean that. 558 00:31:58,476 --> 00:32:01,476 Speaker 1: I meant what if all states where there are enough 559 00:32:01,596 --> 00:32:08,156 Speaker 1: big server farms to host distribution insisted on regulation or 560 00:32:08,196 --> 00:32:10,956 Speaker 1: where or in a world where all states regulated their 561 00:32:10,956 --> 00:32:15,836 Speaker 1: citizens sufficiently to bar them from engaging in the conduct 562 00:32:15,836 --> 00:32:18,476 Speaker 1: that is required to keep the thing running. Yeah, I mean, 563 00:32:18,676 --> 00:32:21,836 Speaker 1: you know, most states have made it illegal to consume 564 00:32:22,276 --> 00:32:25,356 Speaker 1: certain kinds of narcotics, and yet those narcotics are everywhere. 565 00:32:25,716 --> 00:32:29,156 Speaker 1: So so what but that's not Yeah, but that really 566 00:32:29,196 --> 00:32:30,956 Speaker 1: doesn't seem analogous to a lot of physics. That just 567 00:32:30,956 --> 00:32:34,556 Speaker 1: seems like governments are incapable of complete enforcement. Well, what's 568 00:32:34,556 --> 00:32:37,156 Speaker 1: analogous to the physics is that the code will execute 569 00:32:37,156 --> 00:32:40,516 Speaker 1: if the system is turned on. And you can debate 570 00:32:40,556 --> 00:32:42,716 Speaker 1: about whether a government can turn the system off or not, 571 00:32:42,796 --> 00:32:47,836 Speaker 1: and that's a fascinating discussion, but practically speaking, these networks 572 00:32:47,836 --> 00:32:51,316 Speaker 1: cannot be turned off, or more specifically, the ones that 573 00:32:51,356 --> 00:32:53,756 Speaker 1: are the most robust are the furthest away from being 574 00:32:53,796 --> 00:32:56,876 Speaker 1: able to be turned off. You know, Bitcoin cannot be 575 00:32:56,916 --> 00:32:59,716 Speaker 1: turned off at this point. Ethereum cannot be turned off. 576 00:33:00,436 --> 00:33:03,316 Speaker 1: If you start a new crypto platform tomorrow and it 577 00:33:03,316 --> 00:33:05,396 Speaker 1: has it's just running on your own computer or like 578 00:33:05,476 --> 00:33:08,036 Speaker 1: you and your three friends, obviously that one's going to 579 00:33:08,076 --> 00:33:11,236 Speaker 1: be a little more fragile and susceptible to some kind 580 00:33:11,276 --> 00:33:14,996 Speaker 1: of intervention. Eric, tell me, what are some advantages and 581 00:33:15,116 --> 00:33:20,156 Speaker 1: benefits of taos that are distinct from being able to 582 00:33:20,196 --> 00:33:24,276 Speaker 1: evade existing regulations. So, yeah, it's not I don't want 583 00:33:24,356 --> 00:33:26,196 Speaker 1: this to come across as like the point is to 584 00:33:26,276 --> 00:33:32,316 Speaker 1: evade regulations. The point here is that you remove frictions 585 00:33:32,356 --> 00:33:35,916 Speaker 1: which have been built up by society, which are arguably 586 00:33:35,956 --> 00:33:38,836 Speaker 1: harming the purpose of what many organizations try to do. 587 00:33:39,676 --> 00:33:42,236 Speaker 1: If you're a you know, if you're a for profit business, 588 00:33:43,556 --> 00:33:46,716 Speaker 1: You're really there to build some kind of product or service, 589 00:33:46,996 --> 00:33:52,156 Speaker 1: serve customers, and earn a positive return on that. So 590 00:33:52,196 --> 00:33:55,076 Speaker 1: you should care a lot about how happy the customer is. 591 00:33:55,436 --> 00:33:58,036 Speaker 1: You should care a lot about how good your product 592 00:33:58,116 --> 00:34:00,756 Speaker 1: is and how resilient it is. These kind of things 593 00:34:00,796 --> 00:34:03,316 Speaker 1: are at the core of any business, and any one 594 00:34:03,396 --> 00:34:05,756 Speaker 1: of your listeners who's ever run a company, you know, 595 00:34:05,756 --> 00:34:09,516 Speaker 1: at any management or executive level, will know that so 596 00:34:09,636 --> 00:34:12,716 Speaker 1: much happens in a corporation which is not at all 597 00:34:12,756 --> 00:34:16,036 Speaker 1: about serving the customer or about making the product good. 598 00:34:16,916 --> 00:34:20,356 Speaker 1: It's about all this other like cruft that has built up, 599 00:34:20,916 --> 00:34:25,676 Speaker 1: some of it regulatory, some of it just habitual. Some 600 00:34:25,756 --> 00:34:27,596 Speaker 1: of it has to do with like you know, IP 601 00:34:27,836 --> 00:34:30,516 Speaker 1: law and that kind of thing. There is a whole 602 00:34:30,556 --> 00:34:35,156 Speaker 1: world of friction that is built into corporations today, and 603 00:34:35,236 --> 00:34:38,316 Speaker 1: all of that disappears when you're in the doo world. 604 00:34:38,756 --> 00:34:41,116 Speaker 1: And this does not mean that dows are utopian. They 605 00:34:41,756 --> 00:34:45,076 Speaker 1: have other problems, right, They're not perfect. They introduce new 606 00:34:45,156 --> 00:34:48,076 Speaker 1: new issues that a centralized corporation may not suffer from. 607 00:34:48,876 --> 00:34:54,996 Speaker 1: But having lived through building a centralized corporation and being 608 00:34:55,076 --> 00:34:58,076 Speaker 1: in the midst right now of transferring this into a doo. 609 00:34:58,356 --> 00:35:01,476 Speaker 1: Speaking of my own company, Shapeshift, I have just seen 610 00:35:02,156 --> 00:35:04,596 Speaker 1: the degree to which we can focus our time, attention, 611 00:35:04,596 --> 00:35:07,116 Speaker 1: and resources on serving the customer and building the product 612 00:35:07,836 --> 00:35:12,516 Speaker 1: has increased dramatically, and that is I think fundamentally highly 613 00:35:12,556 --> 00:35:16,116 Speaker 1: valuable to all of society. I want to close by 614 00:35:16,156 --> 00:35:21,036 Speaker 1: asking you about the egalitarian sort of aspirations here that 615 00:35:21,076 --> 00:35:23,516 Speaker 1: you've mentioned a few times, specifically in the context of 616 00:35:23,516 --> 00:35:25,836 Speaker 1: your company. So, in preparation for our interviewer, I read 617 00:35:25,836 --> 00:35:29,396 Speaker 1: you're fascinating, fascinating medium post about how you were going 618 00:35:29,436 --> 00:35:33,516 Speaker 1: to go about transforming shape Shift into a DOO. I 619 00:35:33,516 --> 00:35:35,756 Speaker 1: guess you must have had some unconscious expectation of that, 620 00:35:35,796 --> 00:35:40,036 Speaker 1: given the name of the company with shape Shift. But 621 00:35:40,036 --> 00:35:42,676 Speaker 1: but you say somewhere towards the end of the post, 622 00:35:42,956 --> 00:35:45,916 Speaker 1: listen full disclosure. I'm going to be the largest holder 623 00:35:45,956 --> 00:35:49,396 Speaker 1: of this new currency, I think at five percent of 624 00:35:49,476 --> 00:35:53,156 Speaker 1: the total unlocking over some period of time. Others who 625 00:35:53,196 --> 00:35:55,596 Speaker 1: are your co founders or your close associates will also 626 00:35:55,676 --> 00:36:00,516 Speaker 1: have larger blocks. So coming right in the DOW has 627 00:36:00,596 --> 00:36:05,116 Speaker 1: some features that other corporations might have, namely that some people, 628 00:36:05,636 --> 00:36:09,476 Speaker 1: just from the get go have more say in how 629 00:36:10,196 --> 00:36:14,476 Speaker 1: the entity is conducted than others, And it sounded like 630 00:36:14,556 --> 00:36:16,156 Speaker 1: from what I read, at least in your case, that 631 00:36:16,156 --> 00:36:19,316 Speaker 1: didn't give you more than five percent of the voting rights. 632 00:36:19,316 --> 00:36:21,676 Speaker 1: You just had five percent of the voting rights alongside 633 00:36:21,716 --> 00:36:24,156 Speaker 1: five percent of the currency. But one could imagine people 634 00:36:24,276 --> 00:36:27,836 Speaker 1: organizing DAWs where there were differential voting rights for different 635 00:36:27,916 --> 00:36:31,396 Speaker 1: kinds of ownership. You could have a governance token that 636 00:36:31,796 --> 00:36:33,876 Speaker 1: was set up more like shareholder voting, so you could 637 00:36:33,876 --> 00:36:38,556 Speaker 1: have different classes of governance tokens. Why wouldn't we expect, 638 00:36:38,636 --> 00:36:42,116 Speaker 1: and in fact, why wouldn't eleborate libertarian welcome the emergence 639 00:36:42,156 --> 00:36:46,276 Speaker 1: of radically non egalitarian structures in the now world, where 640 00:36:46,316 --> 00:36:47,956 Speaker 1: it wouldn't be that everyone would have the same say, 641 00:36:48,316 --> 00:36:52,076 Speaker 1: Some people would have much greater say than others, and 642 00:36:52,676 --> 00:36:54,516 Speaker 1: it would be consensual in the same sense that any 643 00:36:54,516 --> 00:36:57,396 Speaker 1: economic relationship is consensual. Right. I need a job, but 644 00:36:57,476 --> 00:37:00,156 Speaker 1: I can negotiate at arm's length with Uber. But I'm 645 00:37:00,156 --> 00:37:01,636 Speaker 1: not going to get very far if I say to Uber, 646 00:37:01,676 --> 00:37:02,796 Speaker 1: you know what, if you want me to drive, you 647 00:37:02,796 --> 00:37:04,796 Speaker 1: have to pay me a lot more than everybody else 648 00:37:04,836 --> 00:37:06,636 Speaker 1: gets paid. Right, I don't have a lot of negotiating 649 00:37:06,676 --> 00:37:09,076 Speaker 1: power in that situation. So why wouldn't we just get 650 00:37:09,116 --> 00:37:12,156 Speaker 1: at the re emergence of exactly the same kinds of 651 00:37:12,796 --> 00:37:17,076 Speaker 1: societal inequalities here that we get in the real world 652 00:37:17,796 --> 00:37:19,756 Speaker 1: over time. And I guess maybe there'd be nothing wrong 653 00:37:19,796 --> 00:37:21,196 Speaker 1: with that from your perspective either. I don't mean to 654 00:37:21,196 --> 00:37:23,236 Speaker 1: say that would be a bad thing. Yeah, I think 655 00:37:23,276 --> 00:37:27,276 Speaker 1: there's a lot of kinds of inequality that are not wrong. Right. 656 00:37:27,356 --> 00:37:30,756 Speaker 1: So an obvious example, if two people are hanging out 657 00:37:30,756 --> 00:37:32,636 Speaker 1: and one guy sits on the couch doing nothing, and 658 00:37:32,676 --> 00:37:34,916 Speaker 1: the other person goes out and does something productive, that 659 00:37:34,956 --> 00:37:36,756 Speaker 1: person is going to end up with something more than 660 00:37:36,796 --> 00:37:38,876 Speaker 1: the one sitting on a couch, right, And this is 661 00:37:38,996 --> 00:37:41,356 Speaker 1: a very simplistic example, but I think most people would 662 00:37:41,356 --> 00:37:45,156 Speaker 1: agree in that in that example, the outcome being unequal 663 00:37:45,276 --> 00:37:49,556 Speaker 1: is not an ethical problem. If you imposed something to 664 00:37:50,036 --> 00:37:52,996 Speaker 1: cause the outcome to be equal, even despite that difference 665 00:37:53,036 --> 00:37:56,396 Speaker 1: in their input, that would arguably be unethical. So I 666 00:37:56,436 --> 00:38:02,196 Speaker 1: have to be careful about this inequality perspective. Certainly, doaos 667 00:38:02,316 --> 00:38:06,316 Speaker 1: won't suddenly make everyone economically equal. What they do, however, 668 00:38:06,476 --> 00:38:09,676 Speaker 1: is they give everyone the same set of rules. The 669 00:38:09,756 --> 00:38:14,116 Speaker 1: rules can't be changed by you know, like bias. So 670 00:38:14,236 --> 00:38:17,076 Speaker 1: here's a good example in the Shapeshift dow. A lot 671 00:38:17,076 --> 00:38:18,796 Speaker 1: of the people that contribute to it and are part 672 00:38:18,796 --> 00:38:22,076 Speaker 1: of it are pseudonymous. I don't know. I've never seen them, 673 00:38:22,196 --> 00:38:23,436 Speaker 1: I don't know who they are, I don't know what 674 00:38:23,516 --> 00:38:25,316 Speaker 1: country they're in. I don't know if it's a male 675 00:38:25,396 --> 00:38:28,476 Speaker 1: or a female, and it doesn't matter. They're just an identity, 676 00:38:28,676 --> 00:38:31,356 Speaker 1: a pseudonym on the Internet, and they're based on their merit. 677 00:38:31,396 --> 00:38:34,116 Speaker 1: Their contribution is based on their merit. So a lot 678 00:38:34,156 --> 00:38:36,996 Speaker 1: of inequities that you see in a corporate setting that 679 00:38:37,116 --> 00:38:40,156 Speaker 1: people rightly point out as wrong, you know, certain biases 680 00:38:40,236 --> 00:38:44,036 Speaker 1: or something, you know, racism for example, there's no racism 681 00:38:44,036 --> 00:38:47,196 Speaker 1: in Adao, right because anyone can take whatever identity they want. 682 00:38:47,276 --> 00:38:50,116 Speaker 1: They can assume full pseudonymity. They can be public about 683 00:38:50,116 --> 00:38:52,796 Speaker 1: who they are, what they look like, their background, or 684 00:38:52,876 --> 00:38:55,316 Speaker 1: they can keep it all private. Coming from a position 685 00:38:55,316 --> 00:38:57,956 Speaker 1: where you care about equality for the right reasons, that 686 00:38:58,036 --> 00:39:00,516 Speaker 1: should be very encouraging. Someone should look at that and 687 00:39:00,556 --> 00:39:03,076 Speaker 1: be like cool. You know. Finally, there's a system of 688 00:39:03,076 --> 00:39:06,236 Speaker 1: economic organization that removes a lot of these biases, and 689 00:39:06,316 --> 00:39:08,636 Speaker 1: it doesn't remove them through some kind of government diktat. 690 00:39:09,116 --> 00:39:12,076 Speaker 1: It removes them through a new a new method of 691 00:39:12,116 --> 00:39:16,436 Speaker 1: interaction between people. Yeah, I mean, I think I hear 692 00:39:16,476 --> 00:39:19,516 Speaker 1: the appeal of that for sure. At the same time, 693 00:39:19,796 --> 00:39:21,516 Speaker 1: although the doo is not a human, the people who 694 00:39:21,556 --> 00:39:23,756 Speaker 1: make the dour humans and the people who invest in 695 00:39:23,756 --> 00:39:26,596 Speaker 1: the dower humans, then the outputs are also going to 696 00:39:26,636 --> 00:39:30,516 Speaker 1: reflect inequality. And that doesn't mean that the process is racist. 697 00:39:31,076 --> 00:39:35,556 Speaker 1: It just means that the process replicates the inequalities which 698 00:39:35,556 --> 00:39:38,916 Speaker 1: we already have in a society that has historically been 699 00:39:38,956 --> 00:39:42,676 Speaker 1: inflected by racism. So it's hard to and it's not 700 00:39:42,716 --> 00:39:45,716 Speaker 1: that dowers are unique in this problem that it's that 701 00:39:46,076 --> 00:39:49,556 Speaker 1: you can't always escape the results of the past just 702 00:39:49,556 --> 00:39:52,396 Speaker 1: by entering into a new domain. Yeah. Yeah, doos don't 703 00:39:52,476 --> 00:39:59,196 Speaker 1: solve history, but neither does anything else, right, So what 704 00:39:59,236 --> 00:40:02,876 Speaker 1: are we comparing it against? What dows do is allow 705 00:40:02,916 --> 00:40:07,396 Speaker 1: people to have transparent economic organization with no center, and 706 00:40:07,516 --> 00:40:11,636 Speaker 1: that is a fundamental new primitive of humanity. DAOs did 707 00:40:11,636 --> 00:40:15,356 Speaker 1: not force anyone to do anything. They're purely voluntary for 708 00:40:15,396 --> 00:40:19,516 Speaker 1: people who care about results and interacting with other people 709 00:40:19,556 --> 00:40:23,356 Speaker 1: toward productive ends, and doing it in an open, equitable 710 00:40:23,396 --> 00:40:27,476 Speaker 1: way in which the rules are clear, open source. This 711 00:40:27,556 --> 00:40:31,356 Speaker 1: is something really beautiful, but it doesn't solve world poverty. 712 00:40:31,436 --> 00:40:34,596 Speaker 1: It doesn't solve all iniquities of the past, but neither 713 00:40:34,636 --> 00:40:38,036 Speaker 1: does a centralized corporation, and certainly neither does a government. Well, 714 00:40:38,076 --> 00:40:39,876 Speaker 1: I think on another occasion it would be fun to 715 00:40:40,316 --> 00:40:42,196 Speaker 1: talk about the empirical side of this, and we might 716 00:40:42,236 --> 00:40:44,716 Speaker 1: not see exactly eye to eye, but what I want 717 00:40:44,716 --> 00:40:47,916 Speaker 1: to say is, thank you for a really helpful walk 718 00:40:47,996 --> 00:40:51,236 Speaker 1: through of the basic principles and some of the philosophical 719 00:40:51,276 --> 00:40:55,156 Speaker 1: consequences of the dao structure. I learned a lot, and 720 00:40:55,196 --> 00:40:58,396 Speaker 1: I very much enjoyed the conversation, and I'm super grateful too. 721 00:40:58,396 --> 00:41:00,316 Speaker 1: Thank you so much for your time. Thanks. Yeah, this 722 00:41:00,396 --> 00:41:04,436 Speaker 1: was really good. Happy to be on the show. We'll 723 00:41:04,476 --> 00:41:17,676 Speaker 1: be right back. I was really fascinated by this conversation 724 00:41:17,716 --> 00:41:19,996 Speaker 1: with Eric Vorhees, and I really am grateful to him 725 00:41:20,036 --> 00:41:22,396 Speaker 1: for sharing it with me. On the one hand, he 726 00:41:22,436 --> 00:41:25,356 Speaker 1: really helped me understand some of the basic structure of 727 00:41:25,356 --> 00:41:27,756 Speaker 1: what a tao is and how it functions, and I 728 00:41:27,796 --> 00:41:30,476 Speaker 1: hope that his explanations were of value to you listeners 729 00:41:30,676 --> 00:41:34,516 Speaker 1: as well. I remain interested in trying to figure out 730 00:41:34,916 --> 00:41:38,276 Speaker 1: for what taos are good and for what taos may 731 00:41:38,316 --> 00:41:40,916 Speaker 1: not be good. I am fascinated by the question of 732 00:41:40,956 --> 00:41:44,876 Speaker 1: whether they are more or less efficient than traditionally existing corporations, 733 00:41:44,996 --> 00:41:47,476 Speaker 1: and whether they are more or less flexible than those corporations. 734 00:41:47,996 --> 00:41:49,916 Speaker 1: The other theme that came out very strongly in this 735 00:41:49,996 --> 00:41:54,156 Speaker 1: conversation was the question of whether taos ultimately are connected 736 00:41:54,356 --> 00:42:00,036 Speaker 1: to a libertarian ideal of evading governmental regulation. Eric seems 737 00:42:00,076 --> 00:42:04,236 Speaker 1: to think fairly strongly that they are. It's not that 738 00:42:04,276 --> 00:42:06,596 Speaker 1: he's saying that the only advantages of taos are its 739 00:42:06,596 --> 00:42:09,556 Speaker 1: ability to avoid regulation, but he is saying that what 740 00:42:09,756 --> 00:42:13,116 Speaker 1: makes a doo worthwhile distinctive, unique and original, and to 741 00:42:13,196 --> 00:42:16,756 Speaker 1: his mind, attractive, is its capacity to array people in 742 00:42:16,916 --> 00:42:21,036 Speaker 1: freely entered into contracts free of what he calls government coercion, 743 00:42:21,316 --> 00:42:24,676 Speaker 1: but I and others would think of as governmental regulation. 744 00:42:25,756 --> 00:42:28,116 Speaker 1: I was reminded of the fact that in the crypto 745 00:42:28,196 --> 00:42:31,756 Speaker 1: world as well, many of the early innovators were very, 746 00:42:31,916 --> 00:42:35,116 Speaker 1: very focused on the libertarian and I would say, to 747 00:42:35,156 --> 00:42:38,756 Speaker 1: some degree utopian aspects of the idea of currencies that 748 00:42:38,796 --> 00:42:42,876 Speaker 1: could operate outside of governments and outside of states. My 749 00:42:42,916 --> 00:42:45,236 Speaker 1: own view is that there may be many benefits to 750 00:42:45,316 --> 00:42:48,116 Speaker 1: taos that have nothing to do with its capacity or 751 00:42:48,236 --> 00:42:51,596 Speaker 1: lack of capacity to evade regulation. I promised to continue 752 00:42:51,636 --> 00:42:56,156 Speaker 1: to explore this issue in future episodes until the next 753 00:42:56,196 --> 00:42:59,636 Speaker 1: time I speak to you. Breathe Deep, think, deep plots, 754 00:43:00,036 --> 00:43:03,996 Speaker 1: and with the holidays upon us, definitely have some fun. 755 00:43:05,676 --> 00:43:08,796 Speaker 1: If you're a regular listener, you know I love communicating 756 00:43:08,836 --> 00:43:12,076 Speaker 1: with you here on Deep Background. I also really want 757 00:43:12,116 --> 00:43:15,076 Speaker 1: that communication to run both ways. I want to know 758 00:43:15,156 --> 00:43:17,596 Speaker 1: what you think are the most important stories of the 759 00:43:17,676 --> 00:43:19,836 Speaker 1: moment and what kinds of guests do you think you 760 00:43:19,876 --> 00:43:23,036 Speaker 1: would be useful to hear from. More so, I'm opening 761 00:43:23,076 --> 00:43:26,596 Speaker 1: a new channel of communication. To access it, just go 762 00:43:26,676 --> 00:43:30,076 Speaker 1: to my website Noah Dashfelman dot com. You can sign 763 00:43:30,156 --> 00:43:33,316 Speaker 1: up from my newsletter and you can tell me exactly 764 00:43:33,356 --> 00:43:36,756 Speaker 1: what's on your mind, something that would be really valuable 765 00:43:36,796 --> 00:43:41,556 Speaker 1: to me and I hope to you too. Deep Background 766 00:43:41,636 --> 00:43:44,596 Speaker 1: is brought to you by Pushkin Industries. Our producer is 767 00:43:44,636 --> 00:43:48,476 Speaker 1: mo La Board, our engineer is Bentaliday, and our showrunner 768 00:43:48,556 --> 00:43:53,356 Speaker 1: is Sophie Crane mckibbon. Editorial support from noahm Osband. Theme 769 00:43:53,436 --> 00:43:57,236 Speaker 1: music by Luis Gara at Pushkin. Thanks to Mia Lobell, 770 00:43:57,556 --> 00:44:02,796 Speaker 1: Julia Barton, Lydia Jean Cott, Heather Faine, Carlie mcgliori, Maggie Taylor, 771 00:44:02,916 --> 00:44:06,036 Speaker 1: Eric Sandler, and Jacob Weisberg. You can find me on 772 00:44:06,076 --> 00:44:09,036 Speaker 1: Twitter at Noah R. Feldman. I also write a column 773 00:44:09,156 --> 00:44:11,876 Speaker 1: or Bloomberg Opinion, which you can find at Bloomberg dot 774 00:44:11,876 --> 00:44:16,716 Speaker 1: com slash Feldman. To discover Bloomberg's original slate of podcasts, 775 00:44:16,916 --> 00:44:20,836 Speaker 1: go to Bloomberg dot com slash podcasts, and if you 776 00:44:20,916 --> 00:44:23,436 Speaker 1: liked what you heard today, please write a review or 777 00:44:23,516 --> 00:44:26,356 Speaker 1: tell a friend. This is deep background