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<v Tory Shepherd>Good day. I am Tory Shepherd.</v>

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I'm the political editor at the advertiser who is rapidly being learning about

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blockchain technology for this next session,

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which is called links in the blockchain and is brought to you by green waste

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essay.

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So I'll introduce you to these guys and then they're each going to give a short

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presentation. And after that, we'll go to questions and answers.

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So as you're listening to them,

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start having a think about what more you would like to know how many people here

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are experts in blockchain. Are you here to learn about it for the first time?

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Who's who's all over the topic.

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Have you seen a letter about it for the first time? Hey, all right.

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About the same as me. Great. So from left to right here, we've got Mark Pesce.

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He works at Digital Culture,

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the digital cultures program at the University of Sydney.

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And you may know him from ABC's the new inventors. He's an inventor writer,

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entrepreneur, educator, and broadcast. That all sounds very exciting.

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He's the author of six books and he currently hosts this week in startups,

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Australia, and they all. Now I'm skipping across Michel Bauwens here,

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the founder and director of the P2P foundation.

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He works in collaboration with a global group of researchers in the exploration

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of peer production, governance and property.

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He's also research director of commons, transitions.org,

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a platform for policy development aimed towards the society of the commons,

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enabling a more egalitarian and environmentally stable post-capitalist world.

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And in the middle, we have associate professor Ellie Rennie.

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She's the deputy director of the Swinburne Institute for social research.

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She's a leading thinker on the social dynamics of technological change.

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She works on problems where the standard approaches to communications policies,

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infrastructures in products fail,

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including in Australia's remote indigenous communities.

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Her recent work looks at the emerging opportunities and challenges of automated

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governance through blockchain technology. All right. So without further ado,

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Mark, you're up first to explain to everyone what we're talking about.

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<v Mark Pesce>Good afternoon, everyone. Can I get my slides up please?</v>

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So blockchain is a word that gets used a lot.

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It's not magic fairy pixie dust, and we need to be very clear on that.

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And what I want to do is spend about five or six minutes explaining to you what

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a blockchain is and how it works,

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because it's not that complicated and that then you go, is that it?

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But it really will be. So what we're going to do is we're going to start,

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it all starts off there's this paper that was published on the internet,

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you know, that says pull of weirdness in 2008,

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which described a new technique for being able to tell

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whether things were valid,

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whether they had been tampered with or not.

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And it's called a blockchain distributed ledger.

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There's a bunch of different terms for it.

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And this is this is the abstract from that paper.

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And what I'm going to do is I'm gonna walk you through in a simple example,

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simpler than you'd probably find in the real world,

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but Clare example of how it works.

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And what we're going to do is we're going to use something from the real world

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that has meaning to me and something that I need to be very clear about and very

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transparent about, and very accurate about my travel expenses.

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Cause I actually travel a lot for a living and travel for clients and my clients

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expect that I'm not going to cheat them when I should have submit my travel

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expenses as you'd expect.

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So what I'm going to do is I'm going to make a blockchain of my travel expenses

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and let me show you how to do it.

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So two weeks ago I went to Brisbane and I left my house in Sydney and went to

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Sydney airport.

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And then I landed in Brisbane airport and went to the hotel where I was

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speaking. And then I went back from the hotel to Sydney airport,

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and then I went from Sydney airport back to my house.

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And so I have four different taxi receipts here.

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And I shared them with the folks who were actually paying me for my trip.

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They're like, yeah, you're right. Those receipts look absolutely nice, mark.

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That's absolutely fine. Okay.

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What I want to do now is I want to bundle these receipts up in a

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way that allows the folks who I'm sharing this receipts with and me to make

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sure that they haven't been tampered with.

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So what we're going to do is we're going to create a signature that uniquely

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identifies those receipts. Now the fancy mathematical term for this is a hash.

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And so we're going to go in generate that hash right now.

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And the hash basically looks like a great big, long number,

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but here's the thing you need to remember about a signature or a hash it's

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unique. If I changed a single digit on any of these receipts and actually their

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photographs, if I changed a single pixel on any of these photographs,

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that signature wouldn't just change a little bit, it would change completely.

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And so changing anything even a little bit changes the signature completely.

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And so that signature is truly unique. All right,

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that's my first bundle of receipts we're done now this past week,

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I went to Melbourne for a client.

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And so of course I have a receipt to take me to the airport and another receipt

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to take me to the venue.

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And then another one to take me back from Melbourne airport and then another

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receipt to take me home.

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And so I have another bundle of receipts that I've also shared with another

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client and they're like, oh, you're right. These receipts are all fine. Okay.

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So I want to bundle these receipts together, but, and this is the magic bit.

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Before I bundle these receipts together,

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I'm going to take the signature from the first bundle and pop

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it in here. Now, why would I do something like that? Well,

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let's say I got the evil idea that I was going to tamper with the first bundle

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and I tampered with the first bundle,

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but also updated the signature on the first bundle so that it agreed

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right well at this point,

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the signature for the first bundle is in the second bundle.

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And so when I create the signature for the second bundle,

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it has the signature of the first bundle in it,

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which means that if I tamper with the signature of the first bundle,

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it's not going to agree with the signature that's in the second bundle from the

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first bundle.

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And we'll do this again because I have a bunch of receipts from this trip and

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Adelaide. So I've got that, that

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and of course I'm going to create a signature for this bundle,

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but I put the signature from the second bundle into the third

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bundle. And that second bundle has the signature from the first bundle.

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So you see what I've done.

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I've chained the bundles together by putting the signature from the

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previous bundle into the next bundle. And because of that,

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if there's any tampering, anywhere,

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the numbers don't add up and you know this.

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And so what you get now is this chain of bundles that

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are roughly equivalent to a kind of set of Russ Russian

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nesting dolls,

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where each bundle has enough information from the bundle before it,

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that you can tell if those bundles are true.

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In other words, if they are authentic or if they have been tampered with,

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and because the signature of each bundle is in the next

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bundle, the bundles are chained together,

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and that's where a blockchain comes from.

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And that is all of the magic right there. So now,

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you know how a blockchain works most blockchains in the real world get fancier,

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but that's the basic idea than it aligns them.

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<v Tory Shepherd>And up next, we've got Michel too. Oh yeah, no, I think it's you Michel.</v>

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<v Michel Bauwens>Well, I can compete with Mark's technical knowledge and with his suits.</v>

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But yes, I've been traveling for nine months and you can see it and nine weeks,

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sorry. So I'll,

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I'll try to give a bit of historical and contextual knowledge to why the

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blockchain is, is important. Why people, why do people get so excited to it?

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And so I'll start with the phrase that the blockchain is to accounting,

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what the internet was to knowledge and computers. So in other words,

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you know, the internet creators universal way to exchange knowledge globally,

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and the blockchain is really a universal accounting mechanism.

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So universal distributed ledger. So that's why people get excited about this.

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And it has to do with two things, accounting and trust.

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And so to understand why, why this may matter,

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I'll give you a very little history of trust.

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So we start our human journey in, you know,

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little nomadic bands and then eventually tribes settled tribes.

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But we live in small groups of people, you know,

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few dozens to 150,

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according to anthropologists and private biologists,

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we can remember 150 relationships.

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So this means that as long as we small, we know each other,

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we have kinship friendship,

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and we can basically solve our issues by going to talk to someone.

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But of course we didn't say, so that was a little brother or little sister,

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if you like. So we trusted each other because we knew each other.

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But then of course, humanity scales, we invent royalty,

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temples, empires, domination, slavery, you know,

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all the, the big windfalls of civilization.

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And so how do you make that work? You know, when you have a huge,

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huge empire? Well, we switched from little brother to big father,

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right? We, we invent or if you're a believer, you know, we discover

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basically religion and the fact that we all watched by

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somebody who can reward and punish us. So if you're, you know,

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if you're part of the Islamic empire or the Roman empire, or, you know,

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the Christian middle ages,

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you behave because you're seen by big father.

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And then of course we invent the nation state and the nation state

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that's big brother, right? We,

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if we're lucky we vote some people in the government,

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but they start watching us measuring is monitoring us, training us,

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and everything gets recorded. And basically we trust each other, like, you know,

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think about Scandinavia where people really trust each other because they trust

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the institutions and they trust the Goodwill of the institutions.

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And you probably know this is not working as well as it,

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it used to like the,

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the drop in trust in institution is down from 70% in 2003

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to maybe 20% nowadays. So people don't trust institutions anymore.

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And actually there's, you know, who we trust now we trust peers.

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So if you look at the,

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like the worldwide surveys of the Edelman trust barometer,

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we actually started trusting our peers much more than our institutions.

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And so the F so that the fact you have, you know,

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what mark was focusing on was trust, right? Trusting his, his things,

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his receipts. And, you know,

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as we complexify to a world where global networks become more and more important

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over and above nation states we need trust mechanisms.

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So you should also see that the blockchain has a return to little brother,

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but at a huge scale.

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So we are basically globally scaling small group dynamics.

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That's what the internet is about.

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We're making these huge projects through the internet with average teams of four

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people,

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and we build Wikipedias and we built software to go to the moon and satellites

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and stuff. And underlying that is also, you know,

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these accounting systems. So accounting,

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I should say a little worried about that too. You know,

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every big revolution in human society has been an accounting revolution.

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So when we moved from tribal federations to the states,

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you know, empires and kingdoms, we invent accounting.

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The first writing that we find is a ledger in summer,

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that's actually the original writing.

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So it starts with counting things in accounting, because these temples,

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you know, they got the grain from the farmers, they had to manage the grain,

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make sure they, they protected it. So that was really what the state was at.

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The origin was a way of managing flows and inventing accounting for

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it. And how did we get capitalism? Well, the same way in the 15th century,

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there's a book, an Australian book about it called double entry,

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which I recommend is, you know, how in the 15th century,

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because we had free cities in Europe, we didn't recreate the empire.

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So the craft guilds in the merchant guilds and the Franciscans and the Templars

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that were, you know, working in these cities and, and,

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and try and starting to do business, they invented double entry book accounting,

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and that gave us capitalism. So in that, in that context,

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the fact that we invent a new accounting mechanism,

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like the blockchain is very significant.

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Now it's not the only thing I want to just mention another thing,

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which is actually for me, more important.

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So I work with peer production communities as was announced.

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And so those are global productive communities who mutualize their productive

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knowledge. So WikiHouse wants to make sustainable housing.

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We can speed makes cars that are used five times less

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fuel. We keep pedia, you know, all these things,

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they are global productive communities.

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And around these communities you'll find entrepreneurial coalition.

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So people need to make a living around these shared resources.

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And we just concluded a study, which was called P2P value.

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It was a consortium of eight organization amongst which the P2P foundation

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funded by the EU. We, for three years,

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we studied 300 paper reduction communities. And to my big surprise,

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we found that 78% of them

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use contributory accounting. So this is not even the blockchain. This is,

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these are ways to measure contribution. So not labor commodified, labor,

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labor as a commodity as we do today. But autonomous people,

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freelancing people who decide to adopt another value regime.

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So they basically want to decide for themselves what the value is.

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So they recognize all kinds of contributions and they have accounting systems

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for that that are not double entry accounting.

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This is a new form of accounting and therefore a very powerful sign of a shift

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in our civilization. And lo and behold,

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one of these communities called SENSORICA,

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which is an open scientific hardware community.

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So they share designs for sensors and stuff.

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They're are actually today linking up.

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They're very contributory accounting system to the blockchain.

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The second thing where it's important is, you know,

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as we move to circular economies and we need to move to circular economy,

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since we already overusing the planet by 1.5,

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is that we need participatory supply chains.

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So we need to mutualize and share our supply chain information.

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Otherwise it's gonna take 50 to 70 years to even negotiate circular economies.

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So these new business ecosystems,

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these entrepreneurial coalitions that work around these shared resources,

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they are, they are developing open supply chains. And how do you,

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what you need for an open supply chain. You need trust.

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You need to know that these things are real.

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So they are also very much looking at the blockchain as a way to do

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what, what they call network resource planning.

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So it's kind of like what companies do, but open to all the suppliers,

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all the users, all the consumers,

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and everybody can see what everybody is doing. Now,

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I want to conclude with a bit of a warning.

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So I call these the, the,

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the necessary necessity of a value sensitive design.

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So I'm a bit of a lefty. You might have guests.

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And so I'm a bit worried about the underlying philosophy of the

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blockchain, which is, you know, the people who originally designed it,

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which is we all individuals and we make society by

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contracting with each other.

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And so there's no really a vision of society, of governance,

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of democracy in this vision. And so if you, for example,

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when you see they, what a lot of people get excited about will be, oh,

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we have this peer to peer energy system,

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and everybody can sell his excess energy to each other. Yes,

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maybe it that's good if you believe that everything should be a marketplace.

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But if you look at Germany, that's not what they did.

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It was consumer cooperatives and then mutualize their energy together and they

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set it together and then they find ways to distribute it together.

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So it's very important that we make that we are conscious of the,

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of the underlying values of the technology we are using including of the

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blockchain.

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And so if you want a blockchain to be useful for more egalitarian

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outcomes, we really need to look at at that end,

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that what we built with and around the blockchain reflect our

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values. That's it. Thank you.

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<v Tory Shepherd>Thank you so much, Michel. Ellie, you're up? Okay. So.</v>

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<v Ellie Rennie>One way to think about blockchain is that this is a means of rebuilding the</v>

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internet as it probably should have been built from the beginning.

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Mark has told us how it works.

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And Michelle has told us a little bit about why it matters.

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And as the third block in this particular chain,

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I'm just going to verify what they said and maybe add a little bit to it around

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what it means for a new kind of internet and our institutions and our economy.

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Blockchain is talked about as a revolution.

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And if you read the articles in the papers,

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there's a lot of hype around it right now,

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but I do think this is something that will become normalised into our lives very

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quickly.

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We might not even use the word blockchain in five years time,

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but I think it's also crucial that we maintain our attention to it.

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I don't mind the hype.

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I think there's a lot of stuff to work out and we need to we need to name it.

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Someone once wrote, well, quite recently in,

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in relation to blockchain, that if you ask people in 1989,

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what they needed to make their life better,

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it was unlikely that they would have said a decentralised network of information

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nodes that are linked using hypertext.

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I love that quote cause the highlights you know, this,

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that the kind of technical nature of the internet and the worldwide web that

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very few of us back in the late eighties understood,

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but which we just now accept. And it underpins every aspect of our lives, well,

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most aspects of our lives. Anyway.

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So we've heard that some of the key elements of this technology are it's peer to

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peer in nature cryptography.

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It's also a consensus algorithm,

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which means that that the different nodes agree on a

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transaction and that's immutable. It stays that way.

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It's the first time we've had a technology that does this as a result,

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it's called the it's called a trust machine,

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or some people refer to it as the internet of value because it's the first time

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that we can actually safely transfer value.

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A young chap could Vitalik Buterin. Who's founded a platform called a theory.

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I'm a blockchain public platform,

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which I highly recommend you look into some most exciting thing in the world at

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the moment. He says that there look,

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there are many centers of trust in the world.

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Those centers can be government agencies that issue marriage certificates, or,

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you know, they register your dog.

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Some of them are large corporations and the internet is way NOAA

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has become dominated by a few large players by big corporations like Amazon,

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Google,

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and Facebook because they've developed systems and concentrated resources

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into making the internet secure for us.

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And they've grown to that size. I think it's interesting.

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They've grown to that size because they walk this fine line between being

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private corporations and doing public good.

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So they'll interact with governments in order to meet our,

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our public expectations.

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A good example of that was during the Sydney linked hostage

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Sage where Uber got criticized because it had surge pricing

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and was charging people in Sydney to get of the area at these exorbitant prices.

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And it reacted quite quickly to stop its algorithm from doing that because it

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needs to maintain a kind of public expectation and image

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with blockchain. Actually,

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none of that really matters because that is ingrained within the code

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itself,

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that we trust it because the code will carry out trusted functions for

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us. So there's no reason why we need large aggregators, like, eh,

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like Airbnb or Uber anymore.

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Some people say that blockchain will disrupt the disruptors for that reason,

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but it could also at the same time disrupt the agencies the,

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the bureaucracies that administer and oversee a lot of our

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public services as well. Those kinds of registries,

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you know, land titles medical records,

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all kinds of use cases

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when it really interesting one is identity.

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The internet has been terrible at identity.

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Whenever I want to sign into a new website,

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I I get asked,

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do I want to use my Facebook profile in order to verify who I am?

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So we're again,

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putting up personal data into this big private intermediary

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with, with blockchain. There's a, there's a, there's an application under,

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under development at the moment called Newport on the Ethereum platform with

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checking out,

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we basically could have our own private avatar where we

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control our data and it interacts in a web three environment for us

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as we choose it to do so all the problems of identity on the internet,

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maybe resolve through this, we might not need passwords anymore.

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It means really important things in terms of efficiency.

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So cutting out intermediaries of course means scaling back on costs.

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So we don't need

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those kinds of middle, middle steps to get to the end of a transaction.

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So that's really important for industry,

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but it's also important for someone here who wants to send money back to her

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family in India,

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who wants to do it instantly and not pay transaction costs alone on the way.

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And yeah, it's also radically transparent.

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There's the possibility that this could lead to new forms of accountability,

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accountability in terms of overcoming government corruption,

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because you can see all those transactions, not just mocks or states,

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but all the kind of, you know,

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say within election fundraising, et cetera.

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So, and then of course, as we've heard,

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it also allows for new kinds of cooperative systems.

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A lot of the hype around blockchain at the moment is in fi financial technology.

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I don't personally think that this is the most revolutionary aspect as Eric

383
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Vorhees says,

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moving from a permission financial network between banks to a permission

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financial network among banks is no great step for mankind because

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in some respects, this is just a giant database.

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It's a lot of it's about backend processes.

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What I'm interested in is the areas where this,

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this technology might transform things that don't currently work very well in my

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00:24:12.981 --> 00:24:15.440
world, an example that doesn't exist yet,

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but which some colleagues and I have been thinking about and hoping to create is

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putting academic journals on the blockchain. The way that they currently work.

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I'll just put this out there.

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As the academic journal publishing industry has a

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higher percentage profit than apple Elsevier

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has a higher percentage profit than apple.

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So everything that goes into an academic journal is produced by people,

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such as my colleagues who are funded by public money to create public

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knowledge, but then because we don't have very good systems,

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it gets locked away by private companies.

401
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And then universities pay again for subscriptions,

402
00:24:56.480 --> 00:25:00.260
for us to access that information and knowledge,

403
00:25:00.320 --> 00:25:01.880
knowledge is what suffers here.

404
00:25:02.390 --> 00:25:05.840
What you could do with blockchain is that I, for instance,

405
00:25:05.841 --> 00:25:08.540
could publish my journal article anywhere.

406
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Not only would the certification be there on a public chain to show that it

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has been refereed and approved within this particular,

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by this particular group of academics and it's therefore verified.

409
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But those that are doing that blind peer review could also own reputational

410
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token something which at the moment is just gets lost in the academic system.

411
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It's labor that we get w w which isn't factored into our metrics.

412
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So that's just one system that's broken. And I think it could apply to many,

413
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many different areas like that. We have, we have systems for banking,

414
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we have systems for government processes,

415
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but there are things that we don't have good systems for.

416
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This is where I think that the true potential of blockchain lies,

417
00:25:55.700 --> 00:25:58.490
but you know, as,

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as Michelle has outlined there,

419
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there are things here that we need to be cautious about.

420
00:26:06.500 --> 00:26:09.740
I said earlier that this will be normalized, but it's, it's also,

421
00:26:09.741 --> 00:26:12.740
it's going to be normalized in a way where it integrates with artificial

422
00:26:12.741 --> 00:26:15.140
intelligence, with the internet of things.

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This is what's going to allow those robot cars

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to, to go refuel themselves and pick us up.

425
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This is the transactions underlying that system.

426
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So we're putting our faith in these what

427
00:26:33.200 --> 00:26:37.280
what's called smart contracts that will determine those transactions.

428
00:26:37.281 --> 00:26:40.250
They're not very smart. They're not very, they're not actually contracts,

429
00:26:40.760 --> 00:26:45.510
but what they are is X is self-executing code.

430
00:26:46.050 --> 00:26:49.710
So you set up a program and it will then if some, if,

431
00:26:49.740 --> 00:26:53.250
if a particular condition is met, it will self execute.

432
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That's all well and good, but what happens if there mistakes in that code,

433
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or if those mistakes were intentional. And there's a, an example called the Dow,

434
00:27:04.201 --> 00:27:06.810
which we can talk about in question time, if anyone's interested,

435
00:27:07.080 --> 00:27:11.790
which was the first major I suppose,

436
00:27:11.791 --> 00:27:16.530
mistake where $150 million was put at risk through this,

437
00:27:17.640 --> 00:27:22.410
but progress is being made all the time and you don't really need

438
00:27:22.411 --> 00:27:24.240
to understand how it works.

439
00:27:24.241 --> 00:27:27.450
I think for that progress to believe in that progress,

440
00:27:27.540 --> 00:27:31.620
I get on a plane and you know, I have no idea how planes work,

441
00:27:31.650 --> 00:27:35.820
but I know that every engineer w that looked at every single plane crash

442
00:27:35.840 --> 00:27:37.890
beforehand has tried to overcome that.

443
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And that's because they shared information.

444
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And I think blockchain innovation is similar.

445
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Will it keep improving the machine,

446
00:27:45.330 --> 00:27:48.810
but do we want to leave that simply up to our programming community?

447
00:27:49.650 --> 00:27:53.880
And if you dive down into some of the forums on Reddit and cryptocurrencies and

448
00:27:53.881 --> 00:27:57.210
the rest of it, you'd be quite alarmed by the conversations that occur there,

449
00:27:57.510 --> 00:28:02.490
Bitcoin, which is the original and largest blockchain is, is,

450
00:28:02.580 --> 00:28:05.670
is going through this kind of I dunno,

451
00:28:06.150 --> 00:28:08.730
Christ's governance crisis and may in fact,

452
00:28:08.731 --> 00:28:11.460
not last because of it because of the people behind it.

453
00:28:13.320 --> 00:28:16.260
So anyway, I'm going to stop now,

454
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but just to put some questions out there, there are questions around,

455
00:28:20.880 --> 00:28:25.800
what do we need to do to bring our existing regulators and authorities up

456
00:28:25.801 --> 00:28:27.480
to speed and which,

457
00:28:27.600 --> 00:28:31.200
which of those authorities and regulators won't we need anymore because of this

458
00:28:31.201 --> 00:28:34.500
technology, some of them are going to be made redundant.

459
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And I don't have all the answers to the human failings behind this so-called

460
00:28:40.231 --> 00:28:43.380
immutable technology, but we need to be keeping our eye on that.

461
00:28:43.770 --> 00:28:47.940
We're going to need new institutions to interact with these technocratic palace

462
00:28:47.941 --> 00:28:48.774
structures.

463
00:28:49.590 --> 00:28:50.630
<v Tory Shepherd>Thank you so much, Allie,</v>

464
00:28:54.320 --> 00:28:57.800
while you guys were talking, I kept thinking of that. I think it's an Arthur C.

465
00:28:57.800 --> 00:29:01.910
Clark quote about any sufficiently advanced technology is indistinguishable from

466
00:29:01.911 --> 00:29:02.361
magic.

467
00:29:02.361 --> 00:29:06.620
So hopefully as speakers have taken a bit of the magic out and introduce you to

468
00:29:06.621 --> 00:29:08.810
this technology, if you've got a question,

469
00:29:08.811 --> 00:29:13.190
please make your way to the microphone that's here now. I might kick things off.

470
00:29:13.220 --> 00:29:15.800
I think there should be a microphone up on the balcony as well.

471
00:29:16.340 --> 00:29:17.930
I might kick things off with the doubt.

472
00:29:17.990 --> 00:29:20.990
So what happens when things go wrong with the blockchain?

473
00:29:21.650 --> 00:29:24.180
<v Mark Pesce>Okay. So let, let let's step back. The Dow,</v>

474
00:29:24.230 --> 00:29:28.430
the digital autonomous organization was a 6,000 line

475
00:29:28.460 --> 00:29:33.380
program that created a venture capital fund that didn't have any venture

476
00:29:33.381 --> 00:29:37.160
capitalists or board of directors. All right. So you can think of it as a,

477
00:29:37.250 --> 00:29:42.190
as a corporate constitution that was written in computer code. All right.

478
00:29:42.191 --> 00:29:46.060
And so people could buy into it by buying shares in it. And they raised, it was

479
00:29:47.620 --> 00:29:47.650
$150 million,

480
00:29:47.650 --> 00:29:50.470
sort of the largest crowd funding that had happened in the history of the

481
00:29:50.471 --> 00:29:55.180
internet. Now, as that raised is being finished, I talked to one of my friends,

482
00:29:55.181 --> 00:29:58.210
who's a very deep geek in these matters. And I said,

483
00:29:58.211 --> 00:30:01.150
have you taken a look at this? He says, yes. I said, and he says,

484
00:30:01.180 --> 00:30:04.450
it's 6,000 lines of code. I don't think it's going to be perfect.

485
00:30:05.830 --> 00:30:07.360
Turns out he was right,

486
00:30:07.390 --> 00:30:11.050
because getting it right with 6,000 lines of code that no one has run before,

487
00:30:11.410 --> 00:30:16.120
after you've handed it $150 million to play with maybe is

488
00:30:16.121 --> 00:30:17.860
not the best way to test something.

489
00:30:18.510 --> 00:30:22.530
<v Ellie Rennie>So what happens then is that the</v>

490
00:30:24.650 --> 00:30:25.980
some, it's a very smart group.

491
00:30:25.981 --> 00:30:30.180
I think that we don't know if it's an individual or a group exploited the code

492
00:30:30.600 --> 00:30:35.460
and started leaking funds out of the Dow. Was it six hours ish?

493
00:30:35.940 --> 00:30:39.930
And it was great because it all started someone within the Dell community posted

494
00:30:39.931 --> 00:30:44.790
a tweet saying guys, I think on Reddit, I think something's going on in the Dow,

495
00:30:44.820 --> 00:30:47.980
but you know, it seems to be leaking funds, but I'm on my way to work.

496
00:30:48.090 --> 00:30:50.770
Can someone check this out? Which, which,

497
00:30:50.790 --> 00:30:55.320
which I kind of loved to kind of showed how there was this true community who

498
00:30:55.321 --> 00:31:00.070
was interested in it and keeping their eye on it. And one thing that was, was,

499
00:31:00.240 --> 00:31:02.520
was important about the code that they did, right,

500
00:31:02.580 --> 00:31:07.110
was that it was a number of weeks before anything could

501
00:31:07.111 --> 00:31:11.280
actually be moved. So they put a timeframe on that.

502
00:31:11.970 --> 00:31:16.320
And so, so the whole community got together and said, what should we do? And

503
00:31:18.080 --> 00:31:22.080
and, and they, they ended up actually rewinding the whole Ethereum blockchain.

504
00:31:22.890 --> 00:31:26.770
<v Mark Pesce>Which you're not supposed to be able to do because it's,</v>

505
00:31:26.771 --> 00:31:30.300
it's basically taking blocks and saying those blocks never happened after you've

506
00:31:30.301 --> 00:31:32.790
made those blocks. But,

507
00:31:32.820 --> 00:31:36.510
and this is a very key point here is that all of this is actually a social

508
00:31:36.511 --> 00:31:38.790
construct. Yes, there's mathematics underlying it,

509
00:31:38.791 --> 00:31:40.650
but it's actually a social construct.

510
00:31:40.651 --> 00:31:45.000
And so if you get 90% of everyone to agree, you can say, okay,

511
00:31:45.210 --> 00:31:48.390
actually folks that never happened. And that's literally what they did.

512
00:31:48.930 --> 00:31:53.340
<v Ellie Rennie>But for me, one of the most interesting things about this was that the the,</v>

513
00:31:53.341 --> 00:31:56.910
the attacker at so-called attacker, it was like a bank heist.

514
00:31:56.940 --> 00:32:01.230
That's the best way to think of it. Said, hang on.

515
00:32:01.320 --> 00:32:04.740
I'm not doing anything illegal here. This is, this is written in the code.

516
00:32:04.770 --> 00:32:08.640
This is permissible within this self-executing code.

517
00:32:09.000 --> 00:32:11.910
And if you try and unwind this, I'm going to Sue you.

518
00:32:13.530 --> 00:32:16.620
They didn't actually do that. I mean, I personally, I think it's the equivalent.

519
00:32:16.621 --> 00:32:19.980
If I leave my, my garage door open and someone steals my car,

520
00:32:19.981 --> 00:32:23.490
I still think it's theft. But anyway,

521
00:32:23.491 --> 00:32:27.600
they were the kinds of questions that this raised yes. Works.

522
00:32:28.200 --> 00:32:31.890
<v Michel Bauwens>So I'm just going to take the occasion to make my little critique on it, right.</v>

523
00:32:32.580 --> 00:32:37.450
And it's distributing something that's not good is

524
00:32:37.680 --> 00:32:40.790
not progress for me. So I'm a big, you know,

525
00:32:40.880 --> 00:32:44.750
I used to be a start over twice and I'm very familiar with,

526
00:32:44.840 --> 00:32:47.360
with start with startups and venture capital.

527
00:32:47.840 --> 00:32:51.980
And the venture capital system is a very extractive and destructive system.

528
00:32:52.850 --> 00:32:57.470
So to merely then distribute it and say, oh, everybody can, can play that game.

529
00:32:59.000 --> 00:33:02.420
It's the same as Bitcoin. Bitcoin is a democratization of rent extraction,

530
00:33:02.450 --> 00:33:02.840
right?

531
00:33:02.840 --> 00:33:06.440
It's designed in such a way that it was easy to make the coins in the beginning

532
00:33:06.441 --> 00:33:10.430
and more and more difficult after. So basically if you buy the coins early,

533
00:33:10.431 --> 00:33:13.940
you can sell them a higher price and you haven't done anything. So it's,

534
00:33:13.941 --> 00:33:17.030
you're extracting value from people coming after you.

535
00:33:17.720 --> 00:33:19.640
And so if you look at the results of Bitcoin,

536
00:33:19.641 --> 00:33:22.970
it's more unequal than even our society today.

537
00:33:23.900 --> 00:33:27.650
So that's very important that in a Dao, for example, one of, you know,

538
00:33:27.651 --> 00:33:32.570
one of the underlying values was that they believe everything can be done

539
00:33:32.571 --> 00:33:36.710
by code. And that's, that's also a belief system because you don't,

540
00:33:36.740 --> 00:33:40.370
you don't trust people. You don't trust democracy, you don't trust governance,

541
00:33:40.850 --> 00:33:44.210
so, oh no, no, we don't need governance. It's just going to be the computer.

542
00:33:44.570 --> 00:33:46.940
That's going to do it in our place and we can trust the computer.

543
00:33:46.941 --> 00:33:51.800
Can we so I just want to mention that as you know,

544
00:33:51.801 --> 00:33:56.060
one of the dangers with this technocratic thinking is that we push everything in

545
00:33:56.110 --> 00:33:59.690
the, in the computer, believing is the machine, but it's actually us.

546
00:34:00.320 --> 00:34:04.160
We have designed the machine. And so it's still in there. Both are good.

547
00:34:04.161 --> 00:34:08.060
And our bad behaviors are actually in the design of these things.

548
00:34:09.490 --> 00:34:10.000
Alrighty.

549
00:34:10.000 --> 00:34:13.330
<v Tory Shepherd>Let's go to some questions. Now. It usual spiel, no statements, please.</v>

550
00:34:13.331 --> 00:34:17.590
Just short questions to the point. Thanks. Sure. Can the panel, please.

551
00:34:17.590 --> 00:34:19.930
<v Ellie Rennie>Give us some examples of how this.</v>

552
00:34:21.940 --> 00:34:26.530
<v 5>Blockchain would be applied to our social institutions like</v>

553
00:34:26.650 --> 00:34:30.970
education and health. All right. No, no, no. Please.

554
00:34:32.050 --> 00:34:35.440
<v Ellie Rennie>Look at there's, there's a lot of work being done on health at the moment.</v>

555
00:34:36.310 --> 00:34:38.140
In the U S for instance,

556
00:34:38.230 --> 00:34:42.910
health insurance fraud is a really big problem because their health

557
00:34:42.911 --> 00:34:44.500
insurance is so terrible.

558
00:34:44.920 --> 00:34:49.300
So having secure and

559
00:34:49.330 --> 00:34:53.620
distributed systems for health information is the kind of thing that we could

560
00:34:53.621 --> 00:34:55.420
see here. And, and as,

561
00:34:55.570 --> 00:35:00.100
as I said before around identity if that's kind of linked to your own

562
00:35:00.250 --> 00:35:04.990
personal identity on the blockchain that's also going to be beneficial because

563
00:35:04.991 --> 00:35:09.580
it's something that you keep rather than you know, providers. All right. So.

564
00:35:09.910 --> 00:35:11.050
<v Mark Pesce>A little story here.</v>

565
00:35:11.051 --> 00:35:15.850
My uncle is a very sort of prominent research chemist in

566
00:35:15.851 --> 00:35:19.930
America. And he was the vice president of a company that did medical tests.

567
00:35:20.380 --> 00:35:25.300
They forged his signature on a hundred million dollars

568
00:35:25.301 --> 00:35:26.530
worth of medical tests,

569
00:35:26.531 --> 00:35:30.730
which then the F probably that whoever was providing the federal government came

570
00:35:30.880 --> 00:35:33.040
and tried to Sue him for,

571
00:35:33.220 --> 00:35:35.800
because it was his signature on all of these fake documents.

572
00:35:36.010 --> 00:35:40.950
So it's exactly kind of fraud that a blockchain would at least be able

573
00:35:40.951 --> 00:35:44.180
to limit. Could you maybe add to that about how.

574
00:35:44.270 --> 00:35:47.660
<v Tory Shepherd>It could affect people's lives? I was having a look at the internet of things,</v>

575
00:35:47.661 --> 00:35:50.120
which I think is such a great phrase. So how will it tie into that?

576
00:35:50.660 --> 00:35:54.440
<v Mark Pesce>This is really good. So I don't know if you've seen over the weekend,</v>

577
00:35:54.620 --> 00:35:58.610
there was a massive attack on the American internet. Did any of you see,

578
00:35:58.611 --> 00:36:02.450
this was the front story in the New York times. It started Friday in America.

579
00:36:03.440 --> 00:36:08.240
The thing is, is that massive attack was coordinated by an army of

580
00:36:08.690 --> 00:36:11.870
cheap web connected cameras. All right.

581
00:36:11.871 --> 00:36:13.970
So the kind that you throw in the house in there on the wifi,

582
00:36:14.900 --> 00:36:19.670
and it turns out that they have default passwords on them that are really easy

583
00:36:19.671 --> 00:36:20.630
to hack into.

584
00:36:20.870 --> 00:36:24.230
And there's a couple of programs that were released on the internet to be able

585
00:36:24.231 --> 00:36:27.290
to scan for these devices and subvert them.

586
00:36:27.890 --> 00:36:32.450
And you had half a million of these devices that were being

587
00:36:32.451 --> 00:36:36.560
used to attack some of the core services on the internet.

588
00:36:36.561 --> 00:36:40.310
So the American internet basically went down for about 24 hours.

589
00:36:40.790 --> 00:36:43.280
Now that's the problem,

590
00:36:43.940 --> 00:36:47.570
but let me put this now say it's four years from now when there are autonomous

591
00:36:47.571 --> 00:36:51.500
cars and a hacker breaks into one of those. So now on a longer, it's a camera,

592
00:36:51.501 --> 00:36:55.370
that's attacking a website somewhere. That's now a two ton vehicle.

593
00:36:55.371 --> 00:36:57.800
That's moving at 150 kilometers an hour,

594
00:36:58.100 --> 00:37:01.190
and it's under someone else's control than the driver.

595
00:37:01.880 --> 00:37:06.170
So we have this fundamental need for devices to be able to

596
00:37:06.171 --> 00:37:10.760
authenticate that they're running the code that they left the factory with,

597
00:37:11.120 --> 00:37:15.650
or when they get an update that that update is coming from the

598
00:37:15.651 --> 00:37:16.790
trusted source.

599
00:37:16.791 --> 00:37:20.990
And these are areas where it's fairly clear that blockchain will come in

600
00:37:21.260 --> 00:37:23.960
now IBM and Samsung, you know, them,

601
00:37:23.961 --> 00:37:27.440
they make the exploding mobile phones have been working for the last couple of

602
00:37:27.441 --> 00:37:31.940
years on standards that will bring the blockchain to the internet of things so

603
00:37:31.941 --> 00:37:33.950
that we can have this level of stability.

604
00:37:34.910 --> 00:37:38.150
<v Michel Bauwens>Yes. Maybe a little anecdote from how these things can be used.</v>

605
00:37:38.540 --> 00:37:41.210
That's actually not a blockchain, but it's a good example. Anyway.

606
00:37:42.081 --> 00:37:45.770
so as you know, the banks have, you know, after 2008, the subprime,

607
00:37:46.340 --> 00:37:48.380
they're not doing it with cars with poor people.

608
00:37:48.381 --> 00:37:53.240
So they are lending money to poor people in the U S who can normally not

609
00:37:53.241 --> 00:37:56.060
afford cars at very high interest rates.

610
00:37:56.600 --> 00:38:01.040
And these cars are linked to a satellite and they just turn off your car if you

611
00:38:01.041 --> 00:38:01.580
don't pay.

612
00:38:01.580 --> 00:38:06.440
So in the middle of the road and they just stop your car and you have no control

613
00:38:06.441 --> 00:38:07.520
over your own car.

614
00:38:08.120 --> 00:38:11.990
And so you can see how the blockchain would facilitate those things.

615
00:38:12.200 --> 00:38:15.560
So it's always about, you know, the law of unintended consequences.

616
00:38:15.561 --> 00:38:20.060
It's like how people use the technology is a human question. It's, you know,

617
00:38:20.061 --> 00:38:23.630
with what kind of mentality are you using the blockchain and the banks,

618
00:38:23.631 --> 00:38:25.850
for example, what they're going to do.

619
00:38:25.850 --> 00:38:28.130
And they're very interested in the blockchain because it,

620
00:38:28.670 --> 00:38:33.200
according to their prediction is going to eliminate 90% of their

621
00:38:33.890 --> 00:38:36.670
infrastructural investments. So huge amount of savings,

622
00:38:37.090 --> 00:38:40.960
and it's going to have them it's going to is it gives them a shot at playing the

623
00:38:40.961 --> 00:38:44.170
remittances market, which is $500 billion.

624
00:38:44.500 --> 00:38:47.350
So the banks are very enthusiastic. You talked about FinTech.

625
00:38:49.120 --> 00:38:53.920
But what they are doing is actually private blockchains. So, you know,

626
00:38:53.921 --> 00:38:57.040
I'm talking about universal accounting systems. That's not what they are doing,

627
00:38:57.041 --> 00:38:59.800
right. They are using it, but then they are doing something else with it.

628
00:39:00.130 --> 00:39:04.810
So they actually may even eliminate some of the transparency that's inherent

629
00:39:04.811 --> 00:39:07.530
in the public blockchain. I.

630
00:39:07.530 --> 00:39:10.620
<v Tory Shepherd>Read your money will be able to transfer money and have it appear immediately in</v>

631
00:39:10.621 --> 00:39:13.590
another account, which seems like magic. Cause we usually wait three days.

632
00:39:14.010 --> 00:39:14.843
Sorry. Next question.

633
00:39:15.600 --> 00:39:16.760
<v 5>Ellie, I'm interested in,</v>

634
00:39:16.761 --> 00:39:21.000
in implications for remote indigenous communities that you've been looking at

635
00:39:21.090 --> 00:39:25.740
and you know, cultural value, not just monetary value,

636
00:39:25.741 --> 00:39:28.470
I suppose, is one thing that comes to mind.

637
00:39:28.890 --> 00:39:33.540
<v Ellie Rennie>Yeah. I'm not sure yet about remote Aboriginal communities,</v>

638
00:39:33.541 --> 00:39:37.920
but I've been working with some indigenous communities in remote Sarawak

639
00:39:37.921 --> 00:39:41.610
Malaysia. And it,

640
00:39:41.700 --> 00:39:46.620
they're really interesting because they have a sharing economy already like

641
00:39:47.280 --> 00:39:50.940
Uber, but without any internet platform to coordinate it.

642
00:39:51.270 --> 00:39:54.780
So they coordinate amongst themselves using text messages and WhatsApp.

643
00:39:54.781 --> 00:39:58.890
And if you wanna someone's take you a ride in their boat down to the next

644
00:39:58.891 --> 00:40:03.210
village. You can do that. And they've got these systems, you know,

645
00:40:03.270 --> 00:40:06.510
the kind of self subsistence systems in a,

646
00:40:06.511 --> 00:40:11.310
in a place where there's no welfare or very little and th they've just,

647
00:40:11.370 --> 00:40:13.680
they've done that as a way of making do,

648
00:40:13.950 --> 00:40:17.700
but it's quite hard for them to coordinate. And it would be really interesting,

649
00:40:17.701 --> 00:40:20.910
I think like they wouldn't want to go through a big intermediary like Uber,

650
00:40:20.940 --> 00:40:25.350
which takes massive profits at the top and where you need particular kind of

651
00:40:25.740 --> 00:40:29.580
standards and the rest of it to comply the credit card and the credit card.

652
00:40:29.580 --> 00:40:33.290
Of course. So I think that, you know, what,

653
00:40:33.291 --> 00:40:37.440
what will be interesting is when we start to see those kinds of

654
00:40:38.040 --> 00:40:42.600
economies on the margin, making use of this in, in a way where,

655
00:40:42.630 --> 00:40:45.030
where they can have efficient,

656
00:40:45.060 --> 00:40:49.770
trusted systems that just really working with their daily lives

657
00:40:50.310 --> 00:40:53.370
for indigenous communities in Australia,

658
00:40:53.371 --> 00:40:55.740
I've got another project with Telstra,

659
00:40:55.741 --> 00:40:59.490
which is looking at cyber safety and a lot of the problems that we're saying

660
00:40:59.590 --> 00:41:04.380
around the way that people share devices because it it's

661
00:41:04.740 --> 00:41:09.000
you know, kinship networks demand sharing obligations in remote communities,

662
00:41:09.360 --> 00:41:11.490
very different ways that money changes hands.

663
00:41:11.491 --> 00:41:15.140
I'm sure a lot of you will be familiar with this. But when, and,

664
00:41:15.141 --> 00:41:19.350
and mobile phones were not designed for those kinds of uses,

665
00:41:19.560 --> 00:41:24.240
so you end up with people posting inappropriate things on

666
00:41:24.930 --> 00:41:27.930
others, profile young people kind of you know,

667
00:41:28.050 --> 00:41:32.430
basically overstepping cultural protocols and the consequences can be really,

668
00:41:32.460 --> 00:41:37.400
really, and cause into family feuds. So I think you know,

669
00:41:37.401 --> 00:41:37.940
if we can,

670
00:41:37.940 --> 00:41:42.200
if we can start to think about how these technologies and identity in particular

671
00:41:42.530 --> 00:41:46.400
might work in better with those systems, that would be really interesting,

672
00:41:46.401 --> 00:41:48.980
but I personally haven't come up with any answers yet.

673
00:41:50.120 --> 00:41:51.500
<v 6>Thank you. Hi there.</v>

674
00:41:53.080 --> 00:41:57.850
<v Mark Pesce>It was a great idea and a great book called antifragile by the black</v>

675
00:41:57.851 --> 00:42:01.270
Swan guy. They are, there is about things that gain from disorder.

676
00:42:01.271 --> 00:42:06.100
So every commercial airline plane crash and we learned from the system

677
00:42:06.101 --> 00:42:08.770
gets stronger. How does the blockchain,

678
00:42:09.120 --> 00:42:12.190
or does the blockchain support that anti-fragile idea?

679
00:42:12.820 --> 00:42:14.830
Why are you all looking at me? Yeah.

680
00:42:17.830 --> 00:42:20.710
I'm not a big Toledo fan. I actually don't believe in that thesis.

681
00:42:20.711 --> 00:42:23.200
So I actually am not going to sort of subscribe to it.

682
00:42:24.160 --> 00:42:27.730
<v Michel Bauwens>Maybe I have a sort of an answer. So the, you know,</v>

683
00:42:27.731 --> 00:42:32.710
in the open source philosophy is that there's always enough people

684
00:42:33.130 --> 00:42:36.730
who can add some knowledge that you need at a particular moment.

685
00:42:37.030 --> 00:42:41.860
So open systems because of their transparency are actually very good at

686
00:42:41.861 --> 00:42:45.580
learning from their mistakes in a way that private organizations,

687
00:42:45.581 --> 00:42:49.540
which want to hide their sins and, and you know, are not.

688
00:42:49.840 --> 00:42:50.651
So the idea,

689
00:42:50.651 --> 00:42:54.040
the generic idea for me is because the blockchain does a really good part of the

690
00:42:54.041 --> 00:42:56.650
blockchain. It's a comment it's open code.

691
00:42:57.640 --> 00:43:01.750
There are open communities working with it has a very good chance actually to

692
00:43:01.751 --> 00:43:06.130
share that learning in a very fast way so that these issues can be overcome.

693
00:43:06.131 --> 00:43:08.980
And of course the exam would be the Dao, which, you know,

694
00:43:08.981 --> 00:43:13.750
immediately was known and discussed and solutions were found in a

695
00:43:13.751 --> 00:43:15.040
very, very rapid way.

696
00:43:16.030 --> 00:43:19.150
<v Mark Pesce>Although there was six hours of simply people watching it happen.</v>

697
00:43:19.570 --> 00:43:22.660
Cause I was on Twitter as people were just all freaking out because their money

698
00:43:22.661 --> 00:43:26.890
was disappearing. That was also very interesting too, because it's, it's a,

699
00:43:26.950 --> 00:43:30.970
it's a type of tragedy, but it's not a human tragedy.

700
00:43:30.971 --> 00:43:34.540
It's a program failure that's happening in real time in front of people.

701
00:43:35.260 --> 00:43:35.500
Can you.

702
00:43:35.500 --> 00:43:38.610
<v Tory Shepherd>Tell us about some more possible future applications? You know,</v>

703
00:43:38.611 --> 00:43:43.180
w we'll be able to have like a census that doesn't break down or be able to vote

704
00:43:43.181 --> 00:43:44.014
online.

705
00:43:44.620 --> 00:43:47.890
<v Mark Pesce>One, one company that I want to highlight here,</v>

706
00:43:48.160 --> 00:43:50.950
and I've been talking about it quite a bit as a company out of Sydney now called

707
00:43:50.951 --> 00:43:51.910
fro full profile.

708
00:43:51.950 --> 00:43:55.690
So full profile are a group of folks who both do commodities trading,

709
00:43:55.691 --> 00:44:00.640
but they're actual farmers and this they've used the blockchain to solve a big

710
00:44:00.670 --> 00:44:01.091
problem.

711
00:44:01.091 --> 00:44:05.530
So when a farmer raises a crop of grain and takes it into the weighing facility

712
00:44:05.531 --> 00:44:07.780
and it gets weighed and it gets graded and it gets stored there,

713
00:44:07.781 --> 00:44:10.180
they get a chip that says, this is what you brought in.

714
00:44:10.480 --> 00:44:14.500
And then at some point later on a grain buyer will come in and buy the grain and

715
00:44:14.501 --> 00:44:16.150
then maybe on sell it two or three times.

716
00:44:16.151 --> 00:44:19.810
And then finally we'll end up maybe at a baker where it's getting mailed and the

717
00:44:19.811 --> 00:44:22.840
payment will be made and the payment will flow back through the chain to the

718
00:44:22.841 --> 00:44:26.710
farmer. That's around 120 to 180 days later.

719
00:44:27.040 --> 00:44:30.910
And that's also a best case scenario because if there's a credit failure at any

720
00:44:31.260 --> 00:44:34.290
in there, because someone lied about how much assets they had,

721
00:44:35.040 --> 00:44:36.210
almost all of their credit risk,

722
00:44:36.240 --> 00:44:39.000
always lands on the farmer and the farmer gets paid nothing for the crop,

723
00:44:39.120 --> 00:44:44.040
even though they have sold the crop and that's to the tune of around $4 billion

724
00:44:44.041 --> 00:44:46.590
a year across Australia. So it's actually a large problem.

725
00:44:47.010 --> 00:44:50.580
And so what full profile has done is when the farmer brings the grain in,

726
00:44:50.820 --> 00:44:54.270
it goes into an entry in the ledger, distributed ledger or blockchain,

727
00:44:54.660 --> 00:44:58.530
and then any buyer for that also has to present sufficient added

728
00:44:59.340 --> 00:45:03.540
assets. And that also has to be verified in the blockchain so that when the sale

729
00:45:03.541 --> 00:45:04.020
happens,

730
00:45:04.020 --> 00:45:08.310
there's just a transfer of the assets and the farmer is paid immediately.

731
00:45:08.550 --> 00:45:11.760
And it sounds like that's really easy to do, but in Australia,

732
00:45:11.761 --> 00:45:14.190
because we have a fully deregulated commodities market,

733
00:45:14.400 --> 00:45:18.150
you wouldn't have to know anything about the buyers or the sellers.

734
00:45:18.151 --> 00:45:22.920
So the blockchain provides that layer of trust that the parties need to be able

735
00:45:22.921 --> 00:45:24.630
to trade in a deregulated market.

736
00:45:25.160 --> 00:45:29.660
<v Ellie Rennie>Smart guns. This is quite a recent example,</v>

737
00:45:29.661 --> 00:45:32.030
which went to what's called initial coin offering,

738
00:45:32.031 --> 00:45:36.500
which is basically the crowd sale. So it's, it's a,

739
00:45:36.501 --> 00:45:41.360
it's a blockchain ledger that is used for

740
00:45:41.630 --> 00:45:46.520
gum registries. And it's you register your gun,

741
00:45:46.550 --> 00:45:50.000
which is a smart gun as in an internet of thing,

742
00:45:50.270 --> 00:45:55.070
which will you know, be tied to your, I suppose,

743
00:45:57.050 --> 00:46:00.500
biometric, what do you, what do you call it? Identities kind of your,

744
00:46:01.600 --> 00:46:06.350
it will be tied to you. So you can't actually use this gun if it's not your gun

745
00:46:08.330 --> 00:46:13.130
and the blockchain will record that. And some people think this is a good thing,

746
00:46:13.131 --> 00:46:17.660
because it means that, you know, guns can't be as easily traded.

747
00:46:17.661 --> 00:46:21.500
And you know, if it's, if it's illegal gun or an elicit gun

748
00:46:23.390 --> 00:46:28.230
I'm sure there are also very sinister outcomes of this, but that's,

749
00:46:28.231 --> 00:46:31.880
that's one example at the extreme where's, where's.

750
00:46:31.880 --> 00:46:32.780
<v Tory Shepherd>The government involvement.</v>

751
00:46:32.781 --> 00:46:36.050
Are there people starting to think about how you would regulate blockchain

752
00:46:36.051 --> 00:46:37.820
technology with the internet of things?

753
00:46:38.600 --> 00:46:43.310
<v Ellie Rennie>Well Michelle and I were on a panel with the asset commissioner</v>

754
00:46:43.430 --> 00:46:48.050
last week and he's absolutely got his eye on

755
00:46:48.051 --> 00:46:50.060
blockchain. He's all over it.

756
00:46:50.210 --> 00:46:53.960
And I'm very interested in particularly with financial markets and how,

757
00:46:54.290 --> 00:46:57.770
how this can be beneficial, but also what regulations they might need.

758
00:46:58.280 --> 00:47:02.840
<v Mark Pesce>So then we should mention, because it's already ongoing ACIC apartment,</v>

759
00:47:03.020 --> 00:47:07.190
not the ASX is moving its settlements to the blockchain that has already been

760
00:47:07.191 --> 00:47:08.540
announced in is happening. In fact,

761
00:47:08.541 --> 00:47:12.470
it's very bright fellow who read the 6,000 lines of code and said,

762
00:47:13.070 --> 00:47:15.050
he's now heading up their development effort,

763
00:47:15.051 --> 00:47:17.660
which makes me feel very happy because he's probably the brightest person.

764
00:47:17.661 --> 00:47:22.460
I know who's working in this space. So sometime in the next 18 months,

765
00:47:22.461 --> 00:47:26.840
settlements, which have been done through ways that can fail,

766
00:47:26.870 --> 00:47:29.620
if the ASX loses power, like it did a couple of weeks ago,

767
00:47:29.980 --> 00:47:32.800
we'll start to be done on the blockchain. So there'll be transparent.

768
00:47:32.920 --> 00:47:34.540
There'll be visible to everyone.

769
00:47:34.541 --> 00:47:37.090
There'll be inspectable and there'll be certain.

770
00:47:37.510 --> 00:47:42.010
So the stock market in this country will be on the

771
00:47:42.011 --> 00:47:45.130
blockchain sometime in around the next 18 months. And this is something,

772
00:47:45.370 --> 00:47:48.100
although if you read the AFR, you would have sort of heard about it.

773
00:47:48.190 --> 00:47:49.540
This is a huge thing.

774
00:47:50.551 --> 00:47:53.730
<v Tory Shepherd>Is anyone just being shy? Does anyone want to come up and ask another question?</v>

775
00:47:53.850 --> 00:47:56.760
I can keep going all day. Michelle,

776
00:47:56.761 --> 00:47:59.940
you spoke about when you're talking about peer to peer networking,

777
00:47:59.941 --> 00:48:01.890
you talked about energy markets.

778
00:48:02.340 --> 00:48:06.080
Now energy markets are of immense interest to us in south Australia because of

779
00:48:06.081 --> 00:48:07.860
the whole state lost power at one point.

780
00:48:08.160 --> 00:48:11.730
And a lot of that has to do with how power is being drawn from interconnectors

781
00:48:11.731 --> 00:48:15.120
and distributed through the network. Is, is there a better way to do things?

782
00:48:17.580 --> 00:48:20.280
<v Michel Bauwens>Well, the only thing I know about is about, you know, these projects,</v>

783
00:48:20.281 --> 00:48:23.070
I want connecting individuals. So I don't think it's,

784
00:48:23.071 --> 00:48:25.170
it's not yet at that metal level.

785
00:48:25.710 --> 00:48:29.340
It's basically communities that you know,

786
00:48:29.341 --> 00:48:34.110
want to create local energy distribution between

787
00:48:34.111 --> 00:48:38.880
neighbors and some of these projects like in Brooklyn and other places.

788
00:48:38.881 --> 00:48:41.490
I think there's a place in Australia as well. Yeah.

789
00:48:41.970 --> 00:48:45.860
That are doing this through the blockchain, but I'm not aware of any, you know,

790
00:48:46.560 --> 00:48:48.300
Metta project at this stage.

791
00:48:48.840 --> 00:48:50.760
<v Tory Shepherd>So sorry, what's the Perth project. So.</v>

792
00:48:50.760 --> 00:48:53.850
<v Mark Pesce>There's a project in Perth called the companies.</v>

793
00:48:53.910 --> 00:48:55.230
There's a startup called power ledger.

794
00:48:55.231 --> 00:48:56.370
But what they're doing is they're working.

795
00:48:56.371 --> 00:49:00.720
There's lots of folks who bought solar PV panels because the feed in tariffs

796
00:49:00.721 --> 00:49:02.730
were really high and then WOA ran out of money.

797
00:49:02.731 --> 00:49:04.710
And the feed in tariffs had been slashed,

798
00:49:05.010 --> 00:49:07.680
but these folks are generally in small communities.

799
00:49:07.681 --> 00:49:11.400
And so they wanted to be able to work out a way to be able to S to sell the

800
00:49:11.401 --> 00:49:12.900
electricity to their neighbors.

801
00:49:13.320 --> 00:49:17.130
And the accounting is always the thing that ends up being expensive in this.

802
00:49:17.131 --> 00:49:21.090
And so they're using a blockchain to basically re re rag,

803
00:49:21.120 --> 00:49:25.650
radically reduce the cost of that. It does add, it adds the question around,

804
00:49:25.651 --> 00:49:29.190
are we trying to make all of this purely transactional,

805
00:49:29.220 --> 00:49:32.850
or are we saying that a community, so solar citizens for example,

806
00:49:32.851 --> 00:49:34.950
is a big part of this event, you know,

807
00:49:34.951 --> 00:49:38.640
would they buy a whole bunch of panels for a community and then, you know,

808
00:49:38.641 --> 00:49:42.090
sort of use the blockchain in order to sort of keep track of comings and goings,

809
00:49:42.091 --> 00:49:43.560
but it's a community project.

810
00:49:43.561 --> 00:49:48.180
And the way they're using that blockchain is more around reinforcing community

811
00:49:48.181 --> 00:49:52.350
resilience and capacity rather than around just tracking who owes, who, what?

812
00:49:53.160 --> 00:49:57.990
<v Michel Bauwens>Yes. So, so the issue is I find it very important myself is, you know,</v>

813
00:49:58.260 --> 00:50:01.860
do we choose asset-based solutions to social problems?

814
00:50:02.280 --> 00:50:06.060
So let's say the, the issue of Airbnb as a good example.

815
00:50:06.420 --> 00:50:10.920
So if you have a house and you're a bit precarious having,

816
00:50:11.250 --> 00:50:15.000
you know, the capacity to sell, to run your room is a good thing for you.

817
00:50:16.170 --> 00:50:20.430
Now, this kind of people are only 10% on Airbnb.

818
00:50:20.460 --> 00:50:25.200
90% of Airbnb are big owners with lots of

819
00:50:25.201 --> 00:50:29.900
houses. So they're basically hotels that don't want to be working in as a hotel.

820
00:50:30.080 --> 00:50:33.410
Cause then they don't have to do all the stuff that hotels have to do. Right.

821
00:50:33.650 --> 00:50:38.570
But, okay. Let's, let's still assume for the 10%. It's a good thing. However,

822
00:50:38.660 --> 00:50:43.270
if you look at the effect of Airbnb from another perspective, well,

823
00:50:43.271 --> 00:50:47.210
what if you don't have an asset? So if you don't have an asset,

824
00:50:47.570 --> 00:50:50.150
if you don't have the money to buy a solar panel,

825
00:50:50.720 --> 00:50:55.010
this is not a good system for you because it actually creates more inequality

826
00:50:55.011 --> 00:50:57.560
within the neighborhood. Some people, you know,

827
00:50:57.561 --> 00:51:00.680
with money to buy lots of Cerner Belk and then sell to their neighbors,

828
00:51:01.010 --> 00:51:03.590
and then you create more inequality within your neighborhood.

829
00:51:04.010 --> 00:51:07.220
So these are things we always have to think about when we choose an asset

830
00:51:07.940 --> 00:51:11.390
property-based solutions is that it's good for people with property.

831
00:51:11.540 --> 00:51:14.690
It's less good for people who don't have, or have a less property.

832
00:51:15.020 --> 00:51:16.220
And for example, Airbnb,

833
00:51:16.221 --> 00:51:20.390
what it does is it actually chases away people from neighborhoods because it

834
00:51:20.780 --> 00:51:24.320
drives up the rent. And if you know a bit about what happened in Spain,

835
00:51:25.040 --> 00:51:29.870
the trigger for the for the electoral victory of a progressive coalition

836
00:51:29.871 --> 00:51:30.830
called en comu,

837
00:51:31.100 --> 00:51:36.020
which is a common space coalition was a demonstration in Barcena letter

838
00:51:36.050 --> 00:51:40.220
from the people protesting against Airbnb and what was doing to the neighborhood

839
00:51:40.730 --> 00:51:45.140
because it made it unaffordable for families with children to stay in this

840
00:51:45.141 --> 00:51:45.860
neighborhood,

841
00:51:45.860 --> 00:51:50.270
which wasn't yet overrun by tourists before Airbnb came in.

842
00:51:51.490 --> 00:51:52.930
<v Ellie Rennie>But I think also if,</v>

843
00:51:52.931 --> 00:51:57.430
if you take it to its logical conclusion blockchain could could mean

844
00:51:58.240 --> 00:52:01.120
co-operatives that we, we actually don't need asset some assets at all. I mean,

845
00:52:01.300 --> 00:52:05.290
the, the car is the obvious example that it can be its own corporation,

846
00:52:05.560 --> 00:52:09.490
which is run by a cooperative of people who own, you know,

847
00:52:09.640 --> 00:52:13.630
tokens of this system that pretty much runs itself.

848
00:52:15.160 --> 00:52:20.110
But you know, I mean, a lot, a lot of the discussion around this,

849
00:52:20.140 --> 00:52:24.810
this new kind of automated society is that, you know,

850
00:52:24.811 --> 00:52:29.800
you won't need a power drill anymore because it'll be so easy to just

851
00:52:29.801 --> 00:52:32.920
get a power drill. That's located somebody else,

852
00:52:32.950 --> 00:52:37.360
somewhere else and use that we won't have garages full of stuff anymore.

853
00:52:37.600 --> 00:52:41.500
So this actually moving, I think possibly, possibly,

854
00:52:41.560 --> 00:52:44.050
maybe this is complete utopianism,

855
00:52:44.410 --> 00:52:49.390
but moving away from asset driven society to a true sharing

856
00:52:49.391 --> 00:52:51.370
economy, not like the one we have at the moment,

857
00:52:51.371 --> 00:52:53.350
which is really just an aggregator economy.

858
00:52:54.160 --> 00:52:55.660
<v Michel Bauwens>Yeah. So one of the cons,</v>

859
00:52:55.780 --> 00:52:59.890
one of the practice we defending the P2P foundation is something called platform

860
00:52:59.891 --> 00:53:04.570
cooperatives, right? It's the capacity of users.

861
00:53:05.260 --> 00:53:09.280
Let's say Uber drivers, but not Uber, right?

862
00:53:09.281 --> 00:53:13.540
So you create a co-op like in Austin, for example, where Uber left,

863
00:53:13.541 --> 00:53:17.080
because they didn't want to follow regulations that were voted in a referendum.

864
00:53:17.500 --> 00:53:21.970
So they don't want to play with normal rules. They only want to play on when,

865
00:53:22.010 --> 00:53:23.800
when they determined the rules.

866
00:53:24.190 --> 00:53:29.190
So that would be a co-op that would be co owned by the drivers and eventually

867
00:53:29.191 --> 00:53:32.190
in a multi-stakeholder system with the city and the users.

868
00:53:32.700 --> 00:53:36.420
And of course those systems could also use the blockchain to manage their

869
00:53:36.421 --> 00:53:40.950
complex systems and create trust within that network. So that's something that,

870
00:53:41.580 --> 00:53:45.720
that is possible. Of course, what happens always is that it's first,

871
00:53:45.780 --> 00:53:50.610
unfortunately, the people with money who drive the, you know,

872
00:53:50.611 --> 00:53:54.280
the direction in the beginning and it takes a certain time before the government

873
00:53:54.281 --> 00:53:57.960
and the citizens say, oh my God, this might not turn out the way we want to.

874
00:53:58.170 --> 00:54:03.030
Maybe we win. So we always a bit reactive. And so that's,

875
00:54:03.031 --> 00:54:06.750
what's, you know, what happened with many,

876
00:54:06.751 --> 00:54:10.200
many technologies and it's happening it could,

877
00:54:10.201 --> 00:54:12.240
and it probably is happening with the blockchain.

878
00:54:12.690 --> 00:54:17.520
So that's why people with different value systems have to think about how to use

879
00:54:17.521 --> 00:54:20.310
the blockchain for their users, for their benefits.

880
00:54:21.000 --> 00:54:24.990
And that's going to be quite different from FinTech which is developed from the

881
00:54:24.991 --> 00:54:27.300
point of view of the banks and their, and their interests.

882
00:54:28.010 --> 00:54:28.790
<v Mark Pesce>Well, we do have this,</v>

883
00:54:28.790 --> 00:54:32.840
I think moment that we're in now where the cost for an accounting system.

884
00:54:32.990 --> 00:54:36.410
So the speed bump that you incur is now gotten so low.

885
00:54:36.800 --> 00:54:39.590
So we're seeing, I think in blockchain,

886
00:54:39.620 --> 00:54:41.720
a similar process to what happened in the web,

887
00:54:41.840 --> 00:54:43.220
where for the first four or five years,

888
00:54:43.221 --> 00:54:47.150
it was the large owners of intellectual property, the magazines who showed up,

889
00:54:47.180 --> 00:54:49.820
and then you get Wikipedia, Wikipedia.

890
00:54:49.821 --> 00:54:53.330
We could have done Wikipedia from pretty much day one on the web because wikis

891
00:54:53.331 --> 00:54:55.250
were invented the same time the web was,

892
00:54:55.520 --> 00:54:58.790
but it took almost a decade for people to sort of get their heads around. Oh,

893
00:54:58.791 --> 00:55:03.470
we can use this to share knowledge and create this virtuous cycle of knowledge

894
00:55:03.471 --> 00:55:03.801
sharing.

895
00:55:03.801 --> 00:55:08.510
And I suspect that blockchain will follow a similar pattern because it just

896
00:55:08.511 --> 00:55:12.590
takes a while for a culture to get its head around

897
00:55:12.860 --> 00:55:14.360
something like this.

898
00:55:15.200 --> 00:55:17.210
<v Michel Bauwens>Yeah. I'm, I'm just reminded of an anecdote.</v>

899
00:55:17.211 --> 00:55:20.240
So when we invented television for 10 years,

900
00:55:20.270 --> 00:55:25.010
people just put cameras in front of the newsreaders. Yeah. So it was radio with,

901
00:55:25.060 --> 00:55:26.360
with, with filming,

902
00:55:26.361 --> 00:55:30.620
the guy was reading the news and that was television and it took 10 years before

903
00:55:30.621 --> 00:55:35.240
somebody said, oh, we can move the camera. All right. So, you know,

904
00:55:35.241 --> 00:55:38.570
that's how it works. People, the imaginary of people,

905
00:55:38.571 --> 00:55:42.290
it takes time for them to integrate this new potentiality.

906
00:55:42.291 --> 00:55:46.700
But I want to say one more thing is the importance of transaction costs in

907
00:55:46.701 --> 00:55:49.790
society. Right? So think about bike sharing.

908
00:55:50.330 --> 00:55:54.470
Bike sharing was tried in Amsterdam with a provost in the 19

909
00:55:55.310 --> 00:55:57.590
1968 or maybe early seventies.

910
00:55:58.280 --> 00:56:02.780
And they tried it five or six times and it failed and failed and failed again,

911
00:56:03.260 --> 00:56:06.410
it was called a white bike program and they would put free white bikes

912
00:56:06.411 --> 00:56:08.990
everywhere. Why did it fail? Because some people said, oh,

913
00:56:08.991 --> 00:56:12.170
I can use that bike and painted red and it will be my bike.

914
00:56:12.590 --> 00:56:16.550
So it's the tragedy of the comments. And,

915
00:56:16.960 --> 00:56:21.860
and this was because the cost of me of maintaining and policing was just too

916
00:56:21.861 --> 00:56:26.020
high. So once we had geolocation chips,

917
00:56:27.310 --> 00:56:31.990
there's no like 6,000 bike sharing programs in this major cities in the world,

918
00:56:32.260 --> 00:56:35.770
including some Chinese cities with 400,000 bicycles,

919
00:56:35.771 --> 00:56:40.270
it all works because the cost of maintaining and protecting the

920
00:56:40.271 --> 00:56:42.220
resource has become trivial.

921
00:56:42.790 --> 00:56:45.970
So this is one of the things that's feeding the comments, revolution.

922
00:56:46.040 --> 00:56:50.650
The sharing revolution is it's not cheaper to share than to own

923
00:56:50.651 --> 00:56:52.570
individually. And for example,

924
00:56:52.571 --> 00:56:57.400
one shared car can replace 24 private cars in terms

925
00:56:57.401 --> 00:57:01.660
of matter and energy expenditure. But here's what happens when you don't do it.

926
00:57:01.661 --> 00:57:05.920
Well, Uber, right, Uber doesn't have a commons.

927
00:57:06.310 --> 00:57:11.170
It makes a drivers compete for being at the right

928
00:57:11.171 --> 00:57:15.580
place, the right time to be a, you know, get the app signal.

929
00:57:16.090 --> 00:57:18.010
So if you would drive like Friday evening,

930
00:57:18.011 --> 00:57:22.240
you would see there's hundreds of cars with drivers driving around.

931
00:57:22.660 --> 00:57:24.670
And so there's studies showing that with Uber,

932
00:57:25.520 --> 00:57:27.760
despite the possibility of sharing,

933
00:57:28.330 --> 00:57:32.800
it actually creates more traffic because the way they designed it in their

934
00:57:33.430 --> 00:57:34.263
interest.

935
00:57:34.480 --> 00:57:38.830
And so these are design issues that we really have to look at the very key.

936
00:57:39.870 --> 00:57:41.760
<v Tory Shepherd>And unfortunately, we're going to have to end on that note.</v>

937
00:57:42.000 --> 00:57:43.950
So if everyone can thank our speakers.