Speaker 1: All right, welcome back. You are listening to another episode
Speaker 1: of the markma Show where we talk about the decentralized revolution,
Speaker 1: the way the world is changing from centralization to decentralization.
Speaker 1: Of course, we look at it through the lens of politics, finance,
Speaker 1: and technology. Technology is the catalyst that changes the world
Speaker 1: through thousands of years of history, and of course we
Speaker 1: have the decentralized technology of bitcoin that has changed in
Speaker 1: the world. We're gonna dig into a topic. Like I said,
Speaker 1: I like to look at it from the lens of politics, finance,
Speaker 1: and technology, and today it's really all three combined that
Speaker 1: are under attack. And I'm joined in studio by Ohmid Malikan.
Speaker 1: If I said that right, you can find him on
Speaker 1: Twitter at Malik Anam's will put it in the show
Speaker 1: link down below. He's the author of a book called
Speaker 1: re Architecting Trust, which, of course, to be watching my
Speaker 1: show is something I talked about a lot, and he's
Speaker 1: the adjunct professor at Columbia Business School as well. Oh Man,
Speaker 1: thanks so much for joining me today. Thanks for having
Speaker 1: me so. You know, I like to look at the
Speaker 1: world changing through the lens of the politics, finance, and technology,
Speaker 1: and this one issue specifically, and we'll talk about today,
Speaker 1: is really all three of those. It's a political method
Speaker 1: attacking um source of some sort of technology that kind
Speaker 1: of masquerades as a as a financial thing. And it
Speaker 1: was you know, all of the Treasury Secretary, you know,
Speaker 1: the Treasury Department. I mean, it's all three of those,
Speaker 1: um and and it's something you've been talking about quite
Speaker 1: a bit um And of course we're talking about Tornado cash.
Speaker 1: Why don't you kind of frame that up for us
Speaker 1: a little bit? So one thing that not enough people
Speaker 1: recognize or appreciate is the fact that in crypto, full
Speaker 1: transparency is the default state, which is definitely not true,
Speaker 1: would say the banking system. Right, like you and I
Speaker 1: do a bitcoin transaction, we both now see each other's
Speaker 1: the entire financial history, which is great from a security
Speaker 1: point of view. But then, uh, if this technology and
Speaker 1: new financial system is to go mainstream, then it's not
Speaker 1: really gonna work, right, Like, you can't have it that
Speaker 1: every time you want to make a donation to a
Speaker 1: charity or your company is paying you in crypto, now
Speaker 1: suddenly you've exposed your wallet address that has your everything, right,
Speaker 1: And I think like on a long enough timeline, it.
Speaker 1: Your wallet will have your everything, your money, your stocks,
Speaker 1: your n f T s, maybe the d to your house,
Speaker 1: et cetera. So Tornado Cash for Me has actually a
Speaker 1: very innocuous use, which is to just restore a basic
Speaker 1: amount of financial privacy, which I think most people would
Speaker 1: agree is a good thing. And what was so troubling
Speaker 1: about the U. S. Government adding it to the sanctions
Speaker 1: list was the fact that they were not criminalizing people
Speaker 1: doing committing an actual crime like funding North Korea or
Speaker 1: terrorists or something. They are now criminalizing the mere act
Speaker 1: of seeking financial privacy. And I think the connotations for that,
Speaker 1: the dangerous connotations for that move are actually much bigger
Speaker 1: than crypto. Uh yeah, I would say that. I would.
Speaker 1: I would even say, um, maybe it's even bigger than that.
Speaker 1: So the problem that we have is when we have
Speaker 1: I consider bitcoin to be a technological revolution, not a
Speaker 1: new technology. And the difference of that is a new
Speaker 1: technology is cool, it's a it's a continuation of something. Uh.
Speaker 1: An iPhone is a new technology. We took a computer phone,
Speaker 1: we put them together. That's cool, great. Um a technology
Speaker 1: technological revolution is different, it's bigger. There's been five of them. Um,
Speaker 1: so industrial revolution, steam engines, railways, electricity and steel, um oil, automobiles,
Speaker 1: microprocessors and when humans we are not good at seeing
Speaker 1: the future, so we try to understand it from something
Speaker 1: that we already know. So, like when electricity was invented,
Speaker 1: what was the first application of electricity? It was a
Speaker 1: light bulb? Right, So what is this electricity thing here? Omitt, Oh,
Speaker 1: well it's kind of like a digital candle. What the
Speaker 1: hell do we need that for? Candles have been light
Speaker 1: for five thousand years? Right, Um, we don't them. We
Speaker 1: don't need all these stupid wires. We just have a candle. Well,
Speaker 1: electricity was like that, but it became so much more.
Speaker 1: And so the problem that I have is I think
Speaker 1: this is something so revolutionary. Um, all new technology has
Speaker 1: the first killer application, like the Internet. The first killer
Speaker 1: application of the Internet was email. That's what got everybody addicted.
Speaker 1: But now we use it to like have my car,
Speaker 1: use AI to navigate me around traffic, using social media
Speaker 1: or something right like. And so when we say that
Speaker 1: it's an attack, it's an attack on software, it's attack
Speaker 1: on financial privacy, but it's really it's it's an attack
Speaker 1: on software. I think maybe because if if it's only financial,
Speaker 1: then that limits the really the grasp of what software
Speaker 1: really could do. Maybe I don't know if that matters
Speaker 1: for what you're thinking. It does actually in part because
Speaker 1: the I like your framing of crypto really being a
Speaker 1: financial revolution, because the idea of a revolution is not
Speaker 1: just not just financi right, sorry, a a revolution technological
Speaker 1: and and even application wise, go bigger. Like my the
Speaker 1: book I wrote is really a book about trust, because
Speaker 1: trust matters in everything that's important in life, and that
Speaker 1: includes finance, but it also includes something like a social
Speaker 1: media platform, like you're gonna go on Twitter, Facebook, how
Speaker 1: do you trust what they're showing you? How do you
Speaker 1: trust that they're not gonna suddenly cancel you if you
Speaker 1: say something that's politically not fashionable. Um, and the and
Speaker 1: the risk. The list goes on and on from there.
Speaker 1: So I've spent years trying to figure out how to
Speaker 1: communicate the core value proposition of crypto to people who
Speaker 1: are not technologists, they're not financed people, they're not traders,
Speaker 1: And the one thing that I found resonates is to
Speaker 1: just tell them that this is a new and better
Speaker 1: way to build trust among communities of people and the
Speaker 1: applications of that to me are end us, which means
Speaker 1: that if you have something like an arm of the U. S.
Speaker 1: Government trying to really clamp down on it, then the
Speaker 1: limitations that they're going to impose on all the benefits
Speaker 1: are also endless. Yeah. Definitely. Yeah, So it's definitely trust lists, right,
Speaker 1: so instead of having to trust this third party central
Speaker 1: in a mary, um, now we don't have to trust anybody.
Speaker 1: But the reason why I wanted to take it like
Speaker 1: one level higher was because of really what I think
Speaker 1: the implications are. Because if you're saying, well, they're trying
Speaker 1: to take away people's right to financial privacy, which is true,
Speaker 1: But I think what they've done is to the point
Speaker 1: that you made earlier. Um, what they've done is they've
Speaker 1: sanctioned a software protocol, which has never been done before.
Speaker 1: So they typically would sanction a person or maybe a country,
Speaker 1: but that person should have some sort of due process
Speaker 1: and should have a right to probably appeal that or something.
Speaker 1: As a matter of fact, I believe on the sanctioned
Speaker 1: list there's a link where you can actually appeal to
Speaker 1: get taken off of that list. But how does the
Speaker 1: software protocol have due process? How do they appeal that.
Speaker 1: That's a great point. They can't, which is kind of
Speaker 1: the scary part of this, right, because once you expand
Speaker 1: the sanction ability to code and language and maybe even
Speaker 1: physical devices, then the skies the limit, right, Like, yes,
Speaker 1: I am sure bad people have used Tornado cash, but
Speaker 1: bad people I also use the Internet and iPhones and flashlights.
Speaker 1: So this is one of those instances where I think
Speaker 1: the slippery slope argument is very applicable. Yeah. Yeah, we
Speaker 1: we have laws against doing certain things. Um, so if
Speaker 1: you commit murder, obviously we have a law against that.
Speaker 1: But if you drove a car on the highway to
Speaker 1: commit that murder, you don't sanction the highway, right, you
Speaker 1: don't sancs in the car. We have cars, we have
Speaker 1: we have highways. I bet that that killer probably drank
Speaker 1: some water before he went there too, we don't sanction
Speaker 1: the water, right. Um, what what he did was illegal,
Speaker 1: and so we look at it in those terms. And
Speaker 1: so I was just trying to look at it from
Speaker 1: a bigger standpoint because what I'm afraid is like, um,
Speaker 1: what about you know signal on my phone or tour
Speaker 1: uh tour for my you know internet? Right, So what
Speaker 1: it's doing is it's a it's I don't even know
Speaker 1: if it's a mixing service so much, but it's a
Speaker 1: way that we can kind of like hot blend in
Speaker 1: with a bigger transactions. But that's exactly what tore does.
Speaker 1: It blends my internet surfing together or sit you know. Um,
Speaker 1: and if you if you start sanctioning that, that has
Speaker 1: massive implications. Yeah. And it's not just tour I mean,
Speaker 1: if you're talking about software and language, then yes, but
Speaker 1: like why do we have blinds and curtains on our windows?
Speaker 1: Why why do we have doors for bathrooms? It's it's
Speaker 1: to me privacy is one of the most fundamental human
Speaker 1: rights because any person, you mean, it doesn't matter whether
Speaker 1: political discvision, this position is there are things about themselves
Speaker 1: that they don't want the world to know. Yeah. I
Speaker 1: love that thought. I want to I want to come
Speaker 1: back to that. I want to get back to this
Speaker 1: privacy and trust issue. We'll talk about your book. I'm
Speaker 1: in the studio with Ohmd Molikan. We're talking about the
Speaker 1: death of trust, something to talk a lot about. Of course,
Speaker 1: you're listening to the Mark Moa show talking about the
Speaker 1: decentralized Revolution. I'm gonna be back with this conversation and
Speaker 1: more in a minute. So don't go away, We'll be
Speaker 1: right back. All right, welcome back. You are listening to
Speaker 1: the Mark mo Show talking about the decentralized revolution, the
Speaker 1: way the world is changing through the lens of politics, finance,
Speaker 1: and technology. I'm in the studio with Ohmd Molikan. He's
Speaker 1: the UM author of a book called re Architect and
Speaker 1: trust Agent, professor at Columbia Business School. Let's um, we
Speaker 1: were talking before the break about you know what happened
Speaker 1: and the sanctions against the software protocol what that means.
Speaker 1: Let's just jump even back to a higher level. So
Speaker 1: before we went on the break, you were talking about, um,
Speaker 1: why do we have curtains on our home? Why don't
Speaker 1: we have doors in our bathroom? A lot of people
Speaker 1: might say, well, if you don't have anything to hide,
Speaker 1: what you need privacy for? And I would love to
Speaker 1: find one person like in real life that would actually
Speaker 1: say that. And then I would say, well give me
Speaker 1: your phone, let me let me stroll through your phone.
Speaker 1: Like nobody would do that, right, Like they wouldn't do that. Um,
Speaker 1: but let's jump to a little higher level. And when
Speaker 1: you wrote the book re Architect, and trust. Um, how
Speaker 1: does this issue with trust and privacy? How do you
Speaker 1: see those two things were kind of working together. So
Speaker 1: there's this The interesting thing about trust is that there
Speaker 1: is this cyclicality to it. And uh, you alluded to something.
Speaker 1: I think it was earlier this year at the Bigcoin conference,
Speaker 1: after the UM what happened with Russian sanctions and the
Speaker 1: Canadian truckers that they don't We're witnessing the loss of
Speaker 1: trust and then you reach a point of no return
Speaker 1: where the whole thing falls apart, and I try to
Speaker 1: build out allegorically this thesis in the book that the
Speaker 1: funny thing about trust is that in the long run
Speaker 1: it's always self defeating. You know, the more trust people
Speaker 1: put in a person, a company, a government and institution,
Speaker 1: then the more likely it becomes to abuse that trust
Speaker 1: in the long run. Right, And like a simple example
Speaker 1: of that is we had a guy like Bernie made Off,
Speaker 1: who was actually considered a very clean, respected man on
Speaker 1: Wall Street, and because of that, no one bothered to
Speaker 1: double check what he was doing. If it was just
Speaker 1: you and me trying to do what he was doing,
Speaker 1: then probably people would have been a lot more suspicious
Speaker 1: and skeptical and not that we would do a Ponzi scheme,
Speaker 1: but we couldn't get away with it even if we
Speaker 1: wanted to. So history is rife with examples and I
Speaker 1: have many of them in the book where someone does
Speaker 1: something good, becomes in a position where we trust them,
Speaker 1: and then they slowly begin to abuse that trust for
Speaker 1: the simple reason that they can. And that's why trust
Speaker 1: is always cyclical. So in the example that we're talking about,
Speaker 1: one of the reasons why the dollar is the global
Speaker 1: reserve currency and frankly why America is the most powerful
Speaker 1: country in the world in many ways, the most um
Speaker 1: desirable country roles for people to interact with and living
Speaker 1: is because of trust. Because our system, our laws, and
Speaker 1: historically our system of money was one that was predictable.
Speaker 1: There were rules. We followed our own rules, even when
Speaker 1: it harmed us and what's been happening. And we had
Speaker 1: a rule of law. That's the big thing that you're saying.
Speaker 1: We had a rule of law. Other nations they seize
Speaker 1: people's stuff whatever the no rule of law. We had
Speaker 1: that here people could trust that there would be a
Speaker 1: rule of law. Yeah, and historically, specifically, if you want
Speaker 1: to be the issuer of a global reserve currency, then
Speaker 1: having a reliable legal system is a requirement. Um, that's why,
Speaker 1: like today, China is one of the biggest economies in
Speaker 1: the world, the biggest country by population, nobody uses its
Speaker 1: currency for international trade because they don't trust its legal system.
Speaker 1: So it's troubling with Tornado. And then before that, what
Speaker 1: happened with Russian sanctions. And I know the Canadian truckers
Speaker 1: was Canadian, but it's actually not hard for me to
Speaker 1: imagine the same thing happening here in America is that
Speaker 1: we are starting to abuse that trust. We're starting to
Speaker 1: go back on our own values of the rule of law.
Speaker 1: And I think for Americans like me and you, this
Speaker 1: is going to have negative consequences down the road. What
Speaker 1: about I mean, one thing that really shook me hard
Speaker 1: was the highest branch of government, well one of the
Speaker 1: three branches of government, that the Supreme Court had information leaked,
Speaker 1: the most sacred body in the United States, the Supreme
Speaker 1: Court had information leak that was obviously one side, very partisan,
Speaker 1: that was specifically leaked for a very specific purpose that
Speaker 1: was an attack on the highest union. And then and
Speaker 1: then not to be outdone, California, then, um, they were
Speaker 1: mad because the Supreme Court had also overturned some gun
Speaker 1: rights laws, and the California governor and the head the
Speaker 1: head of the Justice Department said, um, that we're going
Speaker 1: to come back and fight against this with everything that
Speaker 1: we have. And then a week later, os we just
Speaker 1: leaked all the names of all our concealed permit like
Speaker 1: so not on the Supreme Court, and then the Department
Speaker 1: of Justice in California just accidentally leaked it after they
Speaker 1: vowed to get vengeance, Like those are the highest level.
Speaker 1: If we can't trust the courts and the Justice Department,
Speaker 1: what does that say about trust? Yeah? Unfortunately, these are
Speaker 1: examples of a continuing trend that we're all experiencing in America,
Speaker 1: and I think it's actually like the scariest part of
Speaker 1: it to me is that it's totally bipartisan. The kind
Speaker 1: of things that trouble someone like me, like violating the
Speaker 1: rule of law and some of these slippery slope examples
Speaker 1: with things like financial crimes. Uh, these are the things
Speaker 1: that seemed to be happening on both sides, and the
Speaker 1: result is what we're seeing today, which is that people
Speaker 1: increasingly don't trust their government, and then by extension, don't
Speaker 1: trust each other. So it's cyclical. I like how you
Speaker 1: frame that up. I hadn't really thought about it like that.
Speaker 1: And the problem is that we have human nature that's
Speaker 1: always involved, and so that's kind of like to your point, right,
Speaker 1: that's the same reason why, in my opinion, we can't
Speaker 1: have humans controlling money. Not one should control money. UM.
Speaker 1: And so back to trust. So gold had been money
Speaker 1: for five thousand years. UM. They said, hey, gold doesn't
Speaker 1: have enough velocity. We can't move it fast enough. So
Speaker 1: if we put the gold into the bank, UM will
Speaker 1: issue debt on top of it. So you have a
Speaker 1: paper goal stificate and IOU and we'll hold the gold.
Speaker 1: You have the I O U s and then whatever
Speaker 1: you want, you can just redeem them. And so people
Speaker 1: trusted that. But then they printed too many of those
Speaker 1: paper goals stificates and so by nine thirty three the
Speaker 1: government owed more gold than they had. So they said, well,
Speaker 1: here's what we do. Well, just seize all the gold.
Speaker 1: So they seized all the gold, and then after they
Speaker 1: seized it all, then they revalued it. So not only
Speaker 1: do they seize your gold, then they stole your wealth.
Speaker 1: So that was a big blow to trust it. Somehow
Speaker 1: people still trusted I don't know how UM. And then
Speaker 1: one comes along and they say, oh, now we're just
Speaker 1: going to default to the whole world on the goal
Speaker 1: that we owed up. I guess you know, are bad.
Speaker 1: Like like, it seems like that the death of trust
Speaker 1: has been coming, coming, coming, coming. Do you think at
Speaker 1: some point, like it's cyclical, like, where does it, like
Speaker 1: UM come to a head? At some point, you could
Speaker 1: argue it comes to a head with the inflation that
Speaker 1: we're starting to see in almost every country in the
Speaker 1: world now. And part of the reason why is, by
Speaker 1: the way excellent history of money there. That's chapter one
Speaker 1: of my book UM. When you tether your currency from
Speaker 1: any form of discipline, like having it be backed by something.
Speaker 1: It could be gold, could be anything, could be bitcoin, UM,
Speaker 1: then you end up in situations with every subsequent crisis
Speaker 1: where the central bank is like, oh, well, you know,
Speaker 1: we can fix this by just printing a trillion dollars.
Speaker 1: But then the next time around it you need to trillion,
Speaker 1: and then the next time around you need a trillion.
Speaker 1: And then you also have people in UM politics saying, oh, well,
Speaker 1: if we're printing all this money, here's a list of
Speaker 1: causes that are near and dear in my heart. Can
Speaker 1: you please print money to fix them? Yeah, exactly. So
Speaker 1: I'd like to keep chasing this thread with you a
Speaker 1: little bit because, um, in my opinion, as we I
Speaker 1: kind of both just agree to it's it's humans. It's
Speaker 1: just human nature. And uh, centralization leads to manipulation and
Speaker 1: something I like to say, And so the more power
Speaker 1: and control you give me, the more I'm just gonna
Speaker 1: probably start trying to manipulate that a little bit to
Speaker 1: my favor, of course. But then so at some point
Speaker 1: it seems like there must come to a head if
Speaker 1: it's cyclical, and then it starts over again. So I
Speaker 1: want to chase that through with you a little bit.
Speaker 1: When we get back. You're listening to the Markma Show.
Speaker 1: We're talking about the decentralized Revolution, the way the pendulum
Speaker 1: is swinging from centralization to decentralization, looking at through the
Speaker 1: lens of politics, finance, and technology. I'm in the studio
Speaker 1: with Ohmed Moli Khan, the author of re Architecting Trust.
Speaker 1: We got a lot more to cover when we come back.
Speaker 1: Don't go away, We'll be right back, all right. Welcome back,
Speaker 1: you are listening to the Mark Moa show. We're talking about,
Speaker 1: of course, each and every week, the decentralized revolution, the
Speaker 1: way the world is changing through the lens of politics, finance,
Speaker 1: and technology. Of course technology being that big piece which
Speaker 1: I'm in the studio talking with Ohmed Moli Khan, the
Speaker 1: author of re Architecting Trust, and I think we're gonna
Speaker 1: come back and pin technology on fixing this. But let's
Speaker 1: see where we go with this. So, um, you're you
Speaker 1: said how trust is cyclical, and I hadn't really thought
Speaker 1: about it like that before, so it's kind of new.
Speaker 1: I'm thinking through this as we're talking, and I can
Speaker 1: understand how you're saying. The more we give trust to somebody,
Speaker 1: the more it gets violated or manipulated, and then at
Speaker 1: some point it breaks, and then I guess it starts
Speaker 1: over again. So, um, I don't trust my business partner anymore.
Speaker 1: I probably will never trust him again, but maybe at
Speaker 1: some point I'll go get a new business partner and
Speaker 1: I'll trust them, right, But then, like, um, you know,
Speaker 1: I won't trust my wife again if she cheats on me,
Speaker 1: but I'll probably get married again at some point, right
Speaker 1: to be That's how it starts. UM. But then if
Speaker 1: I think about it, like there's a lot of nations,
Speaker 1: most of the nations in this world who don't have
Speaker 1: a good rule of law. We're about we're kind of
Speaker 1: in that bend today, But um, these nations don't seem
Speaker 1: to restart, like trust never gets re established in China
Speaker 1: or Iran or Lebanon. So how do you see that
Speaker 1: cyclicality kind of playing out in the environment that we're in.
Speaker 1: If you go back historically long enough, then you could
Speaker 1: argue that even in those countries, like there were times
Speaker 1: where they were the high trust societies and say like
Speaker 1: the West was not UM. And one of the interesting things,
Speaker 1: since we were talking about in the previous segment technological revolutions,
Speaker 1: the one thing that those always trend in one direction
Speaker 1: are the interesting ways that people built and invent new
Speaker 1: technologies to become better at building trust. So even any
Speaker 1: examples that you gave, like with your business partner, UM,
Speaker 1: one example of a technology that will hopefully help you
Speaker 1: regain trust with the future business partner is a contract.
Speaker 1: Contracts to me were a technological innovation UM invented to
Speaker 1: solve the problem of trust, and in ancient times they
Speaker 1: had this problem of like, how do we even know
Speaker 1: if the thing is authentic? So they would do in
Speaker 1: the Middle Ages this crazy thing where they would write
Speaker 1: two copies of the contract on the same piece of
Speaker 1: paper and then they just tear it in half and
Speaker 1: each party we get one half and when they got
Speaker 1: together in the future, if the teeth lined up, then
Speaker 1: it was an official contract. It wasn't a forgery. And that,
Speaker 1: by the way, is the word where the word indenture
Speaker 1: comes from from the Latin for dente or teeth. So
Speaker 1: people have been doing this forever basically, And UM, to me,
Speaker 1: a simple way to understand blockchain and crypto is the
Speaker 1: latest technological innovation in order to achieve trust, particularly in
Speaker 1: a digital and global setting. I like that answer, And
Speaker 1: that's that's exactly the way that I see it. It's
Speaker 1: and that's kind of what I said at my I
Speaker 1: was talking about my my talk at bitcoin at the
Speaker 1: Bitcoin conference, and I said, UM, it's almost like we
Speaker 1: need a decentralized ledger that nobody can control because as
Speaker 1: long as somebody controls the ledger, and that's really what
Speaker 1: it comes down to. Back to the gold example that
Speaker 1: we had. UM, when I put my gold in the bank,
Speaker 1: and the bank gave me a paper clertificate they had
Speaker 1: the ledger, who had you know who who has the
Speaker 1: golden who has the I O US and so whoever
Speaker 1: controls the ledger or the database, then that's who we're trusting.
Speaker 1: And so as long as Facebook has my data, I'm
Speaker 1: trusting them not to manipulate my data. But of course
Speaker 1: we can't trust them, they've been proven to sell my data.
Speaker 1: As long as well as Fargo has my banking records,
Speaker 1: I trust them not to do stuff. But they paid
Speaker 1: the largest fine in history because they added a bunch
Speaker 1: of fake bank accounts. Right. Um, So like we've continued
Speaker 1: to lose trust all these institutions, and so how do
Speaker 1: we gain trust again. We need a new relationship and
Speaker 1: probably with a new piece of technology that fixes that problem.
Speaker 1: Which is back to the question I posed the audience
Speaker 1: at the Bitcoin conference, which is it's sort of like
Speaker 1: we need that decentralized ledger. So if we have a
Speaker 1: ledger that nobody can control, um, then we could have
Speaker 1: trust or as would bitcoin, we say it's trust less.
Speaker 1: I don't have to trust, I can verify you trust
Speaker 1: the outcome. Right, you don't have to trust any other
Speaker 1: party that's part of the system. But you just trust
Speaker 1: that your coins are yours and yours only to do
Speaker 1: something with and if you decide to send some to
Speaker 1: a friend, no one can interfere with that transaction. Yeah,
Speaker 1: now you've you've you know, I keep talking about bitcoin,
Speaker 1: you keep talking about crypto, So there's a little bit
Speaker 1: of a disconnect there. I'm just curious to your answer.
Speaker 1: You would agree that if somebody could if somebody could
Speaker 1: change the ledger, then it's not a trust less technology.
Speaker 1: It would only be trust less if nobody could control
Speaker 1: the ledger. Yes, yeah, so, m I I put a
Speaker 1: tweet this morning, or maybe I started writing and I forgot,
Speaker 1: but um, it was something to the effect of what
Speaker 1: we need is like a trust less technolog g about
Speaker 1: what we got is a bunch of dog coins and
Speaker 1: memes or whatever. Right, But it's like the real revolution.
Speaker 1: The real revolution to me is decentralization. That's the revolution.
Speaker 1: So we've only we've only had centralized controls of ledgers,
Speaker 1: and the real revolution is now we have this decentralized
Speaker 1: technology that can have a ledger that nobody can control.
Speaker 1: So if we have a ledger that somebody can control.
Speaker 1: That's not really revolutionary in my opinion. So would you
Speaker 1: agree with that? Yeah? So, I mean there's there's all
Speaker 1: types of technologies and they're all cool and like I mean,
Speaker 1: if you can put a dog on a on a
Speaker 1: meme or whatever, like that's cool. But it's just not
Speaker 1: a revolution. The revolution is the decentralization and that's where
Speaker 1: the world needs. We need a way to regain trust
Speaker 1: again because we need to have global trade. Right with
Speaker 1: global trade is uh is what allows us to have
Speaker 1: ideation and progress. But if we can't trust each other,
Speaker 1: I'm afraid I did. I did a talk called d
Speaker 1: evolution re evolution and so as the world has evolved
Speaker 1: through global trade, um, now it's going to d evolved
Speaker 1: because now we're going to go back into these small
Speaker 1: island nations we can't trust each other. But then we
Speaker 1: can re evolve if we can have a decentralized ledger
Speaker 1: like bitcoin that we can trust. So I think I
Speaker 1: think it's inevitable. Um. The more that I talk about
Speaker 1: it was someone like you, the more I think it's inevitable,
Speaker 1: um that we have them, and there's just no other
Speaker 1: way that the world can move forward at this point.
Speaker 1: It seems like I agree, and the more um trust
Speaker 1: is lost in the traditional ways of doing things that
Speaker 1: I think the greater the opening for something like bigcoin
Speaker 1: and and the other applications of the technology. I'm not
Speaker 1: to me, the battle here, the battle in the world
Speaker 1: of ideas isn't really like between bigcoin and dog coins.
Speaker 1: Even though I've never owned the dog coin, I'm not
Speaker 1: really interested in dog coins UM. To me, though, I
Speaker 1: feel like in crypto we fall into this trap where
Speaker 1: we f fight a lot of these civil wars amongst ourselves,
Speaker 1: but really it's a relatively small community UM going up
Speaker 1: against everybody else. And the applications start first and foremost
Speaker 1: with what bitcoin represents, which to me is censorship resistant
Speaker 1: and UM eight political algorithmically minted money. I think that
Speaker 1: is a magnificent, magnificent accomplishment in the having studied the
Speaker 1: history of money. But then there are a lot of
Speaker 1: other applications like defy because like you said, you know,
Speaker 1: what is a bank. A bank is just a bunch
Speaker 1: of ledgers. But they are not transparent ledgers. They are
Speaker 1: not auditable ledgers, not by me and you anyway, UM,
Speaker 1: they're not censorship resistant ledgers. In fact, the entire financial
Speaker 1: system is built on active censorship and discrimination. So to me, um,
Speaker 1: when you start with bitcoin, it's almost inevitable that then
Speaker 1: you get to be like, well, why don't we use
Speaker 1: the same idea to evolve not just money, but then
Speaker 1: something like banking. Well, I think I think the reason
Speaker 1: why is because back to the word of the day,
Speaker 1: which is trust. I would encourage everybody on this let's
Speaker 1: listen to this right now. UM. I talk a lot
Speaker 1: about investing topics. Don't ever loan money or invest money
Speaker 1: into somebody that you don't know and you don't know
Speaker 1: if they have ability to pay you back. Don't ever
Speaker 1: do that. You need to know who that person is.
Speaker 1: You must have done your due diligence, and you have
Speaker 1: to have enough information where you trust that they'll pay
Speaker 1: you that money back. And so when I got a
Speaker 1: house loan, I needed someone to look at my credit
Speaker 1: worthiness and determine if I can pay that money back
Speaker 1: and give me a rate. Yours maybe isn't as good
Speaker 1: or yours as better, so they give you a better rate,
Speaker 1: and that's okay, But somebody has to decide that. And
Speaker 1: the problem that I have with defy is like now,
Speaker 1: I'm gonna, like, I'm gonna give money to somebody who
Speaker 1: I don't know, and I don't know what the credit
Speaker 1: worth is and I don't have any trust there. We'll
Speaker 1: talk about that in a second. That's that's a big
Speaker 1: topic I own a dig into. We don't have enough
Speaker 1: time before the break, but it's an interesting conversation that
Speaker 1: I love. I mean, like I said, this is a
Speaker 1: key word that I use. Trust. You're listening to the
Speaker 1: market Moall show. Of course, we talked about each and
Speaker 1: every week, the decentralized revolution, the way the world is
Speaker 1: movements from centralization to decentralization with the new technology that
Speaker 1: we have. I'm in the studio with Ohmad Malikan. You
Speaker 1: can find him on Twitter at Malik Mali konoms Sorry man,
Speaker 1: I'll link to in the shows down below. He is
Speaker 1: the author of a book called re Architecting Trust. You
Speaker 1: should check it out, and he's an adject professor at
Speaker 1: Columbia Business Business School. We're gonna be back talking about
Speaker 1: defy and trust and technology and more in a minute.
Speaker 1: You don't want to miss the conclusion of this, so
Speaker 1: don't go away. We're gonna be right back, all right,
Speaker 1: Welcome back. You were listening to the Markma Show. Forced
Speaker 1: we talked about the decentralized revolution. Each and every week
Speaker 1: I'm in the studio with Ohmed Malikan. You can find
Speaker 1: them on Twitter at Malikan Ohms will link to that
Speaker 1: in the show note below. He's the author of a
Speaker 1: book called re Architecting Trust, which is a really cool
Speaker 1: book you should check out, talking about the ciclality, cyclicality
Speaker 1: of trust, UM and looking at through the lens of
Speaker 1: the financial system, which is pretty cool. Adjunct professor at
Speaker 1: Columbia Business School. Now, Omen, before the break, I kind
Speaker 1: of cut you off. I'd posed a question and then
Speaker 1: cut it off. So I'll just reask the question again,
Speaker 1: which is um. When it comes to money and business
Speaker 1: and all these things, we need trust, and so UM
Speaker 1: defy to me, UM, at least in the current state
Speaker 1: we have today, doesn't really seem very practical. Maybe almost
Speaker 1: sort of a scam um not using that word lightly.
Speaker 1: But when I think it's one thing, but I get
Speaker 1: something different back, and so UM defy this decentralized finance.
Speaker 1: I'm putting money in these protocols, but I don't know
Speaker 1: who's getting them. I don't know what the risk level
Speaker 1: is and so it seems to actually work against trust.
Speaker 1: I would only want to invest into somebody's business or
Speaker 1: loan them money to buy something if I had trust
Speaker 1: with them, because I've done due diligence, I knew them, etcetera.
Speaker 1: So how do you reconcile those two things? Well, do
Speaker 1: you have a bank account? Yep? Okay, So when you
Speaker 1: have a bank account, you are lending money to a
Speaker 1: whole bunch of other people that you don't know. Well,
Speaker 1: I'm not really because, um one, that's not really how
Speaker 1: the bank works anymore, and the old fractional reserve system
Speaker 1: it did. But um I have insurance against all the
Speaker 1: money in my bank count So if they if they
Speaker 1: did something and lost my money, I have insurance on
Speaker 1: that money. Yeah, the lack of fd I C insurance
Speaker 1: is a I think that's a valid complaint against defile. However,
Speaker 1: I think it's interesting to ponder the social and economic
Speaker 1: consequences of things like FDIC insurance, particularly when it comes
Speaker 1: to banks doing stupid things with people's money because people
Speaker 1: don't care anymore. But nevertheless, the problem that you spelled
Speaker 1: out is it's always been a problem, right, Like, there
Speaker 1: are people who want to lend and there are people
Speaker 1: who want to borrow. That's just the state of humanity.
Speaker 1: And if they only limited themselves to those who they
Speaker 1: strictly knew, then they would just be a lot less
Speaker 1: credit in the economy. So historically, what we've done is
Speaker 1: we put a bank in the middle. Uh. There are
Speaker 1: different models of banking, but one of the roles that
Speaker 1: the bank plays is to solve this problem of a
Speaker 1: coincidence of want and trust, right, like me and a
Speaker 1: borrower have to want to borrow and lend at the
Speaker 1: same time and trust at the same time. The bank
Speaker 1: solved that problem, which I think is actually an im
Speaker 1: thing for the economy. There will be a lot less
Speaker 1: economic growth if we had a lot less credit. The
Speaker 1: problem is the state of banking as it's been for centuries,
Speaker 1: which is that one it's completely opaque. I don't know
Speaker 1: what's happening inside a bank. You know, there's been things
Speaker 1: that happened when it turns out nobody knew. Even the
Speaker 1: CEO didn't know what was happening inside the bank. And
Speaker 1: to a lot of what should be a automated transaction
Speaker 1: is still left up to someone's discretion, right, So it's
Speaker 1: something like, Hey, if somebody is buying a house worth
Speaker 1: five thousand dollars, don't lend them a million dollars, only
Speaker 1: lend them up to that for example. Um So, the
Speaker 1: reason why I think defy is important from a trust
Speaker 1: building perspective, particularly when it comes to financial services, is
Speaker 1: that it takes the flaws of the banking system as
Speaker 1: we have it and address it with the same kind
Speaker 1: of features that makes something like bitcoin special, mainly transparency, consensus, automation.
Speaker 1: I don't in that example that you've given, though, I
Speaker 1: don't know if um, like, it's still going to require
Speaker 1: some it's more of like a c FI model, which
Speaker 1: was kind of like the Celsius kind of block Fire
Speaker 1: model in a sense where they do automate a lot
Speaker 1: of stuff supposedly, but like somebody was still kind of
Speaker 1: going behind the scenes. Now, if they had more transparency,
Speaker 1: maybe it wouldn't have ended it so badly for them.
Speaker 1: But in that in that example, if somebody wants to
Speaker 1: loan a house, buy a house, get a loan for
Speaker 1: a house, Um, how do we know that house is
Speaker 1: valued at five thousand and not a million? To your point,
Speaker 1: So then we have to use an oracle so an
Speaker 1: oracle has to be tied in with a local agent.
Speaker 1: So then now I'm trusting that local agent to be
Speaker 1: that oracle. So that's a central entity. It's not it's
Speaker 1: not truly decentralized because now there's a central person that's
Speaker 1: making that decision. So it's kind of like a we're
Speaker 1: using software to offload a bunch of stuff and automate
Speaker 1: a lot of things, which gives us efficiencies and hopefully
Speaker 1: gives us greater returns, but it's not truly decentralized because
Speaker 1: somebody's they're making those decisions and inputting that data. Right. Yeah,
Speaker 1: as I always tell my students, to me, decentralization is
Speaker 1: not binary. It is a spectrum. And there are things
Speaker 1: that are very decentralized, like I consider bitcoin very decentralized
Speaker 1: right now, which is part of its charm and appeal. Um.
Speaker 1: But then decentralization also has its limitations as far as
Speaker 1: adopting something, upgrading it, evolving it over time. Um. So
Speaker 1: most other crypto applications do involve trade offs from the
Speaker 1: pure decentralization model. But to me, again that's not the
Speaker 1: most important comparison. The most important comparison is what do
Speaker 1: I trust more properly designed defied protocol or a bank,
Speaker 1: And the answer is the defied protocol, which, by the way,
Speaker 1: I think in the future there's already a bank in
Speaker 1: Philadelphia that's sourcing wholesale funding from a defied protocol. So
Speaker 1: I think in the future it's going to be a
Speaker 1: sort of a conversion of the two and not necessarily
Speaker 1: a replacement. Yeah, I would, I would agree on that.
Speaker 1: I mean, obviously to your point that the solving the
Speaker 1: need and want we have you know, peer to peer
Speaker 1: blending mark it's for example, and those have grown really big,
Speaker 1: and those serve a good need. Um, you know, somebody
Speaker 1: is using technology to kind of compress and automate that.
Speaker 1: There's greater returns and so, um, there's some efficiencies there.
Speaker 1: I guess for me, I would just say not everything
Speaker 1: needs to be decentralized. I just I feel like not
Speaker 1: everything needs to be decentralized. Um. One thing that does
Speaker 1: is money, because if we if we give it to
Speaker 1: somebody to control. We know, to your point, trust to cyclical,
Speaker 1: and so if someone has control over money, we've been
Speaker 1: we found out through millennia that they're always going to
Speaker 1: try to distort that in some way, whether that's clipping coins,
Speaker 1: or that's issuing more paper to certificates on top of it,
Speaker 1: or whatever it may be. So one thing that does
Speaker 1: need to be decentralized is money for sure. Um, back
Speaker 1: to kind of what we started talking about, UM, some
Speaker 1: of these communication protocols like that might might need to
Speaker 1: be as well. Kind of a thing. Right, money is communication, right,
Speaker 1: So money communicates our wants and our needs and our desires. Right.
Speaker 1: So money is communicate sation. So that's where like this
Speaker 1: whole Tornado cash going back to where we started to
Speaker 1: get so messy, and again understand that technology is going
Speaker 1: to become so much bigger than we understand it. Um,
Speaker 1: they're really since they can say they're not, but they're
Speaker 1: censoring communication. And I believe that the Supreme Court has
Speaker 1: already upheld that three or four times. I'm not a
Speaker 1: legal expert. I hope they have. But I like the
Speaker 1: idea very much that money, money is a form of
Speaker 1: personal expression, um, which here in the West we really treasure.
Speaker 1: So it's funny to me that increasingly in the financial domain, UM,
Speaker 1: because of all of these different laws that are supposedly
Speaker 1: designed to catch crooks, they keep limiting every individual's right
Speaker 1: to personal expression with their money. Yeah, exactly. I was
Speaker 1: just trying to look that up. I know I covered
Speaker 1: that before. I believe it was three or four different
Speaker 1: court cases where it's already been challenged and the courts
Speaker 1: held that up. You know, Uh, code is speech, code
Speaker 1: is communication. Money is communication. I had it up here,
Speaker 1: but I can't I can't seem to find it real quickly.
Speaker 1: But yeah, it's gonna it's gonna be interesting. But again
Speaker 1: back to you kind of where we started too and
Speaker 1: then being able to actually censor a public good. So
Speaker 1: now again back to the highway. Should well, it looks
Speaker 1: like more criminals use this highway um than other highways,
Speaker 1: so we should sensor that highway and just the precedents
Speaker 1: that it's set. So in your opinion, I guess to
Speaker 1: kind of put a bow in this. We gotta kind
Speaker 1: of wrap it up here. Um. It's cyclical, and typically
Speaker 1: it's some sort of technology that then brings the trust back.
Speaker 1: I couldn't trust my handshaken deal before, so now we
Speaker 1: have the technology of a contract. So now I'll trust
Speaker 1: again using that piece until that piece fails me and
Speaker 1: then we'll have to come up with something new and
Speaker 1: you think that is a bitcoin blockchain. Um, and that's
Speaker 1: how we'll get trust. And am I summon that up right? Perfect? Yes? Yeah,
Speaker 1: well I would agree, I would agree, and and and
Speaker 1: and the more that we see it, I mean, there's
Speaker 1: the more inevitable it gets to me. Right, It's like,
Speaker 1: how do we how do we go forward without it?
Speaker 1: Like I just I don't understand that we can go
Speaker 1: back to the dark ages, but that nobody wants that either. Um, awesome, awesome.
Speaker 1: I appreciate it. Um. Everyone check out the book re
Speaker 1: architect Ing Trust that's been that's the author's my guest,
Speaker 1: Ohmed Mali Khan. You can find him on Twitter at
Speaker 1: Mali Khan Olmes. He's uh, the author of that book,
Speaker 1: re architect and Trust, the adjunct professor at Columbia BIZ.
Speaker 1: He's been talking a lot about the need for trust,
Speaker 1: and I agree it is something really really big that
Speaker 1: we all need to be aware of. And uh, man,
Speaker 1: like I said, the more I think about it, the
Speaker 1: more inevitable it seems to be. Um, we need a
Speaker 1: decentralized letter nobody controls. That's what I got free today.
Speaker 1: Thanks so much for listening to the Mark Moss Show.
Speaker 1: I appreciate it. Hit us up on social media. Let's
Speaker 1: know you heard this issue and that's what I got.
Speaker 1: Until next time.