Mike: The Rick and Morty one was fascinating. Then there’s the key thing that…
Euvie: Everyone missed about cryptocurrency.
Mike: Yeah, that was interesting.
Euvie: [00:01:30] That money is about corrasion and power.
Mike: So, what was the central theme in that article, for anyone who didn’t read it?
Daniel: The central theme in that is that, essentially, the real power of cryptocurrency use, and that’s probably its top highlight, is the power to print and distribute money without a central power. And actually, both of those words, ‘print’ and ‘distribute’, is I think the thing that most of the community has missed. In other words, [00:02:00] the Bitcoin template for things is the one that initially everyone copied, but its system of distribution is still a pyramid. It is still highly centralized, it still functions in the same way, in many respects, as Fiat does, right? In that with Fiat, you’ve got a central issuing body or a central authority that sets those rules, the consensus rules.[00:02:30] In this case really, the distribution is to the miners, who obviously help secure the network and provide a useful service. But my thought is that while Bitcoin was super innovative in creating the first decentralized consensus mechanism, right, that worked. It was particularly less innovative in terms of the distribution of money, right? And so, one of the things I like to talk about is [00:03:00] gamifying the delivery of money, but that’s really only one solution. When I talk about gamifying, I’m talking about spreading the money out over the system as widely as possible, right?
So, some people thing that’s a UVI or there’s some sort of Socialist weird thing or whatever the hell, but really, it’s not. Because when you’re printing the money, you’re not taking the money from someone else and giving it to them. You’re literally printing the money and distributing it. And the only [00:03:30] methodology we’ve ever had in the past was print it, give it to a few central banks and then they trickle it down to everyone else, right? And so, in this case, I think if you have a system that uses incentives and rewards and spreads the money out as it’s being printed, you have an opportunity for a new economic paradigm and people are just beginning to explore that right now.
So, there’s a lot of different types of incentives. The biggest example that I talk about, [00:04:00] or the quickest example I talk about, is kind of like a decentralized WeChat. I call it stealth gamification. So, imagine that you’re just on your phone, you’re using a decentralized WeChat, and if you don’t know what WeChat is, Westerners don’t know it very well, but it’s used by 800 million people in the world. It’s the most popular application of all time, and it started as a chat app in China. And it literally does a zillion other things now. It has plugins for buying tickets and getting loans and sending money. [00:04:30] Literally plugins for how crowded an area is before you go shopping, right? All kinds of crazy plugins.
So, imagine you can build a decentralized WeChat, and one of the things that I’ve noticed is that people don’t care about privacy and security. The average person doesn’t care about that. If you watch the Snowden interview, his face sort of drops when John Oliver’s interviewing him and he’s like, “People actually don’t give a shit.” You can just see the look on his face of like, [00:05:00] “I sacrificed my life and nobody cares.” The only thing that they cared about was whether the government had their dick pic on file. You know what I mean?
And so, the average person just doesn’t care. My wife or my friends, or non-crypto people, they’re like, “Whatever.” So, I feel like you have to gift them these things. And the way that you do that is you build an application that is functionally equivalent to an existing application, plus has new features and benefits. So, [00:05:30] if you take something like Viber, which has all kinds of stickers. A lot of gals I know love Viber because it’s got so many different stickers, and the gals will just sit there and chat almost completely in stickers.
It also has purchasable stickers. So, imagine you’re using your decentralized WeChat and you’re using these little stickers and all of a sudden you get an elite cat sticker and you’re like, “Oh my gosh, where did this thing come from?” Just for using the app, you’re getting rewards. It’s almost like a Turing test for using it over time, [00:06:00] but you’re not paying attention to the rewards. It’s just this little blinking light in the corner occasionally.
All of a sudden, you get this elite cat sticker. You’re like, “Wait, where do I get more of those?” You click that little blinking light in the corner and you realize, “Look, I’ve got these little coin thingys. What are these good for?” Imagine you’re not a crypto person, you’re just a regular person just using an app. You’re like, “There’s this little market place and there’s all these elite cat stickers, oh my gosh. I can just get them with this.” So, you start buying them. Then imagine that you can turn that into a universal rewards coin. [00:06:30] So, instead of it being like, “I have a Starbucks card and I can only buy Starbucks with it.” Imagine if you have that universal coin. So, you start selling it to other people, providing an IPA. You have all these plugins in the app.
Each one of them can deliver coins to their users for the behaviours they want to incentive, or just for using it. And so, over time, all of a sudden, you now have this coin that you can take out of the application and trade for real money. You could take it across applications to spend on other things, [00:07:00] and you could just spend it on cat stickers if you don’t really care. The plus side then is, all of a sudden, if you’ve built the app correctly, you’ve gifted people privacy and security, plus they still have their cat stickers. Does that make sense?
Euvie: How do you prevent that from devolving into a…
Mike: Dopamine slot machine?
Daniel: That’s something I spent a lot of time thinking about. When I do, sometimes when I’ve done consulting for ICOs and designing them, a lot of time the traditional companies have every [00:07:30] desire to turn it into the dopamine slot machine. And I believe that it has got to be developed at kind of an open source application level, like platform level. To do that, people have got to think clearly about the things that they want to incentivise. There are days that I am very optimistic about the potential of the technology to do that. In other words, not turning it into a casino, but turning it into something that really distributed the money far and wide, so that lots of [00:08:00] different economic players can come into the system who have never been able to come into it before.
And that becomes very beneficial because the more people who can play the game of economics, the game of life, the broader the opportunity is really for everyone in society and the whole world. It’s not just about, “We want to make sure that people who’ve never had the opportunity have the opportunity for pure altruism.” It’s actually also semi-selfish, right? Because the whole world and the economy benefits the more people are participating in the game. [00:08:30] Other days I am utterly pessimistic about our ability to do this correctly. I am concerned that we’re going to turn this into Candy Crush for attention. And so, I think that it requires people to really abandon the DevOps principles of the world, if you will, just move fast and break things.
It really requires go slow and don’t fucking break things, and really think about [00:09:00] what it is that you’re doing and what it is you want to incentivise. That in and of itself is incredibly challenging and that starts to get us into consciousness discussion. Because whether you are able to correctly see the things to incentivise or not is based upon the individual’s perspective, what I call the prism of their reality. And post people [00:09:30] are very focused on ideology and the construction of that ideology.
And then it warps the light as it comes through their prism, the prism of their ideology or prison of their ideology, pick your world. And it says, “Okay, this is true and these are the things that we want to incentivise.” So, depending upon the perspective of the person creating that system, they can have a tremendously warped perspective and [00:10:00] incentivise terrible things. If you think about maybe the North Korean leader, what he would incentivise in such a system would be quite horrifying. Snitching on your neighbours and toeing the line and being a [inaudible [0:10:13] fucking asshole, whatever, right?
And so, it’s important that we build a distributed open platform and that the rule sets for these types of things are incredibly carefully planned, [00:10:30] or else we end up exactly with what you’re talking about. Actually, it can be worse than what you’re talking about. Not just a casino, it can be a prison for mankind, as well, if we’re not careful.
Euvie: Yeah, it could end up like a Black Mirror situation. I don’t know if you’ve seen that episode where the whole world is gamified through the social application, and people raise each other’s interactions. And based on your social score you then have access or don’t have access to services like getting an apartment in a better area, or even being able to access [00:11:00] certain stores. Basically, if people don’t like you based on how you look or based on how you interact with them, you don’t have access to anything and you can end up dead on the street. It can devolve really horribly.
Daniel: I agree, I have seen that episode. I love Black Mirror. It’s one of the cautionary tales that I use in that that’s a classic example of how a warped perspective about what to incentivize can really screw you up, right? [00:11:30] And the primary problem is either an ideology based one, or programmers not understanding even how to incentivize a specific behaviour. And so, putting in a substitute, right, so for instance, we might not know how to incentivize something like happiness, right, a happiness factor. It’s a nebulous thing. How would you know that someone’s happy or creating happiness, right?
It’s just this weird nebulous [inaudible [0:12:00] [00:12:00], so you might as a horrible hack put in something like the more often people smile is an indicator of happiness. And that quickly turns into the joker face all the time, right? The more you’re smiling, the more rewards you get or the better you get in society. So, yeah, I think we have to be careful, I think that society and life and culture is a pendulum and a cycle. It slings back and forth forever [00:12:30] and ever. And I think that in the early days of anything that’s exciting, it’s very Utopian, right, and we all believe things are going to change the world.
In reality, things end up becoming somewhere in between. They’re both good and bad. We’ve seen this with the internet now. It’s enabled so many amazing things. We’re recording this podcast because of it. We’re also seeing some of the dark side of it, as well, now, right, in the world. There was just an article on doing sentiment analysis on the comments to the [00:13:00] FCC on net neutrality, and 99 percent of the organic ones were pro, positive for keeping net neutrality, and the other ones, there were millions of spam bot comments with tiny variations on the same phrases, right. And so, there’s always a sort of dark side.
So, thing end up being somewhere in between in life, both good and evil, good and bad, depending upon where you are at any given time. However, it also can swing [00:13:30] to a completely dark state for periods of time, certainly during periods of collapse, periods of war or periods where a warped ideology comes to power, right? And so, one of the potentials of blockchain, if it’s done correctly, is to act as a distributed check and balance on that power. For me, and I had this debate with somebody the other day where they were talking about centralized permission chains, and they said, “Don’t be a blockchain maximalist and only talk about open blockchains. [00:14:00]
The permissions ones are useful, as well.”
On one level, I agree. They are useful for limited things. At the same time, I absolutely don’t want to see a large chunk of society’s transactions conducted on the private permission ones. Because, to me, it’s no better than database, right? And he took a very reductio ad absurdum, or whatever, I’m not sure how to pronounce that correctly, but reducing it to an absurd extreme. He said, “Well, a blockchain the definition is just a chain of blocks.” That’s true but also absurd, right?
For me, [00:14:30] the check and balances are a distributed system where different people and different ideologies control parts of the system and have to come to some consensus for changes to be enacted. I actually think that high buried entry is essential to a large functioning system. If you look back at something like the early days in the United States, the founding fathers constructed it in such a way that they expected only the most important laws to get through, they did [00:15:00] not expect politicians to be full-time politicians. None of them were, right. They didn’t expect all this towering inferno of tiny laws, right.
They expected this check and balance of power. They had come out of a totalitarian system and so they distributed power across it so no one entity could get control of the others. And that’s the nature I think, delusion, the nature of power in that each entity thinks, “If I can just get power completely [00:15:30] and wipe out the other mother fuckers, everything will be great.” And, in fact, the exact opposite is true every single time. No person has the correct perspective in life. Every one of us is a point on the spear with a limited perspective.
And when society is healthy, different ideologies have to contend, they might get power for a period of time but their power is hemmed in by checks and balances. And the same thing with the blockchain is really a digital recreation of something that was analogue. The [00:16:00] Constitution is an analogue series of checks and balances. Blockchain, in my mind, a properly implemented one, is a distributed series of digital checks and balances and, if done correctly, you have something that’s very powerful and only the things that we all really agree on get through, and the other stuff falls to the wayside.
Mike: I’m really curious about your perspective, if you’ve done much thinking about some of the more specific mechanisms for incentivizing the right behaviour. For example, if you want to prevent hoarding, [00:16:30] would you implement burned currency or expiring currency, or something like that? Have you thought more deeply about some of the different types of mechanisms that you could apply?
Daniel: Yeah, so, a few things. One is preventing hoarding is an example of what I would say is a classic example of presenting an ideology, right, within a system. So, it’s debatable, for instance, whether hoarding is a good or a bad thing, okay? So, from the coin standpoint, [00:17:00] I believe that you don’t worry about that. What you do is you develop multiple coins. So, the ideal system in my mind will have multiple coins. It’ll have a deflationary saver/hoarder coin, which rises in value over time and incentivizes people to save. People want that.
And you also have a slightly inflationary currency that’s more like the dollar, that is designed to move around and encourage people to spend it before it goes down. There’s value in [00:17:30] that, as well. And there’s room for a gamified token, a universal reward token to incentivize different types of behaviour in the network. And then there’s something I call an action token, which is things that should always be free on the network. This is one of these other things we talk about much in blockchain where we say, “Everyone will pay for everything.” No, they won’t, okay.
It’s like the EO folks said, if it costs you three cents to load the page, to Amazon you’d never load the page, right? There’s certain things that have no value and never should. So, I think the way that you design that [00:18:00] is you design multiple currencies instead of one, in a comprehensive platform. What you do is you step outside of the ideology and you observe life as it is. And the way that life is is all of these different types of coins and types of investments have developed throughout history for a reason.
Certain ideologies look at it and go, “Only deflationary has any value. We should wipe out the slightly inflationary coin.” The other side, right, the sort of [inaudible [0:18:29] side [00:18:30] says, “Deflationary is bad, it leads to a deflationary spiral. We should only have inflationary.” Both of those ideologies are limited and wrong. In other words, both exist for a reason. They both have different purposes. So, what you want to do is create all of the things, all of the components that exist, and let the ideologies contend. You have to be neutral to the ideologies, and let the ideologies contend.
Now, from the standpoint of incentivising behaviours, [00:19:00] I thought a lot about this in particular in a distributed voting system. So, my Cicada concept project was based on my books, I developed, in the [inaudible [0:19:13] it’s China throws off communism and becomes the world’s first distributed direct democracy. No representatives. And at one point in time, I thought it would be really interesting to just slap together a website and have this kind of [00:19:30] futuristic technology from the future.
Then I started to sit down and write this white paper and I thought, “My God, I’m an engineer, I can’t just slap this together.” So, I spent a year diverted from the book, trying to figure out all the ways that the system could actually work.
Daniel: And I ended up solving potentially a lot of problems in the space, and the concepts have gone on to inspire a lot of other projects. One of the ways I talk about it is, for example, battling voter fatigue is a huge problem in [00:20:00] direct democracies. In a representative democracy, for instance, you just vote once every four years, you send a dude down to the capital and he votes for you. Then four years from now you’re angry at him and vote somebody else in, right, that’s all the voting.
But if you actually had to vote on every issue, for instance, the average person A, wouldn’t be able to do it, B, wouldn’t do it, and it would just become something that over time almost nothing got voted on and a very small percentage of people would continually do it, [00:20:30] like the most civically minded. And so, gamifying some of that incentive to read through all of the materials, or watch the materials. I actually thought at some point in the future, for this to work, you’d actually need an artificial intelligence or machine learning to be able to kind of put the issue into different types of explanations for people.
Either a simplified or more complicated one. Because some people are going to want to consume all the information, some are only going to want a quick summary of things. So, you might incentivize [00:21:00] people with leader boards for voter participation. You might also do things like making sure that they are getting rewards for engagement over time, so just having a leader board that, “Hey, I voted a bunch,” over one month is worth less than, “I voted consistently over two or three years.” Those types of things. And so, the real way that you’d have to do this is you’d have to ask like, “What are the behaviours that work [00:21:30] in a functioning society? That are effective in a functioning society? A healthy functioning society.” You have to define those clearly. Then those are the things that you have find a mechanism to incentivize. Does that make sense?
Euvie: So, how do you with different cultures? Because different cultures often have different values. Of course, there are certain things that are kind of human baseline. We all have to reproduce or, at least, a certain percentage of the population has to reproduce to keep the population healthy. People have to get education, blah, blah, blah. [00:22:00] But there are a lot of things that are culturally specific and a lot of behaviours that people in different cultures don’t agree on, whether they are good or bad. How do you deal with that?
Daniel: In a universal system, you don’t. You allow it to be dealt with at a localized level. So, to build a universal platform, what you need to do is build something that is agnostic to those differences. In other words, the system itself does not take a stand on those differences and then you allow – in the Cicada platform concept there is [00:22:30] what I call sort of spheres or circles, and those spheres are essentially it might be a family unit, it might be a sewing circle or a comic book club. It might be a corporation, it might be a nation state. It might be a city. And your identity, which is a decentralized identity, has layers that overlaps with those different spheres, right.
So, the decentralized identity system that I created is essentially [00:23:00] you get a public private key based on your biometrics, and that is – but all that is is, “I am. I exist. That’s the thing that can’t be taken away from me,” right? And then the rest of IDs are identities based on our context, that is, our interaction with other groups, right. And so, you have these layered identities. It might be, “I’m working at this company,” or, “I’m in this social circle. I’m a member of this localized community.” And within those spheres, those spheres have an identity, as well.[00:23:30] Those identities might be distributed with role-based access control to those various spheres, and they can set localized rules for the behaviour that is allowed within those spheres. What I spent a lot of time doing is abstracting unwritten protocols of life, that’s how we do things now in many respects. So, I, as an individual on my own might act in a specific way. If I go to a sewing circle [00:24:00] I might act in a specific manner, and there are rules to how we interact with each other at that localized level.
Maybe we’re only supposed to use a certain size needle, and the other types of needles are [inaudible [0:24:09] in the sewing circle, right, that’s a rule. And the same thing is there’s rules for working in a specific company. There are certain types of things you can’t put in emails, for instance, one type of rule. Or, a certain way of conducting yourself when you speak to customers, right, those are rulesets. And so, each individual community, essentially, you punt [00:24:30] it to the local community and allow people to move in and out of those communities in order to set their rules. But to build an agnostic universal system, you cannot define the subsets of rules, you have to allow the local communities to define those subsets of rules.
Euvie: How do you deal with privacy in these kinds of systems? I have two sub questions for that. So, first, if every kind of mask identity – I think of them as masks, the way that you’ve described them – is attached to your core identity, [00:25:00] is anonymity every possible? And the second question is, if the way that your identity interacts with these different systems is, let’s say, recorded on the blockchain, how do you deal with people making mistakes or doing something that they shouldn’t be doing and then regretting it? But it’s already recorded there and it’s permanently there and you can’t be forgotten basically.
Daniel: Those are important ones, right. So, to start with the privacy thing I have a better answer for. This is probably [00:25:30] the idea that’s taken off the most with other projects, and that is what I would call personal information wallet. And so, personal information wallet is where, essentially, your PII goes and it is attached to your core identity but you’re able to create sub tokens of that that could be sort of a blind token or a role-based access control token to only a subset of your information.
And then that subset of information could be given, just as the token, to [00:26:00] a centralized entity. So, that is, the centralized entity would no longer need to keep all of your information. So, I might have a token that just gives access to my name and, say, credit card, or public key or something like that that I would hand to a decentralized eBay. Then when I don’t want them to have that anymore, I delete it. So, that, in many ways, helps with privacy tremendously, because you no longer need centralized entities to all keep their own system of verifying that you are who you are, right, and saying who you are.
Then, in addition to that, [00:26:30] you have to attack each individual individually, as opposed to what we have now where we have these massive central repositories that are huge targets, right, because that’s where the ID is, that’s where the PII is. So, you’re going to attack it, it’s like almost Al Capone or John Dillinger, one of those guys who said, “Why do you rob banks?” He said, “Well, that’s where the money is.” So, it’s the same thing with, “Why would a person attack these big central repositories?” Because that’s where the [00:27:00] PII is, right?
So, if we distribute the PII back to the individual, that brings back a tremendous amount of privacy. In addition to that, for the voting system that I had designed, you can have zero knowledge types of tokens, or blind tokens, where you get the ability to vote, you know that you voted in a verifiable system. It is attached to your ID, but nobody knows that it’s attached to your ID except you. So, how [00:27:30] all that works, it’s a little too early in the morning for my head to dive back into that, but a lot of that stuff has been worked out in terms of building verifiable systems, right? Where you can have an ID, have a token that proves that it’s you without revealing that it’s you, right, and being able to vote.
So, in that aspect, it’s absolutely possible to remain private or have private interactions. In regards to the second question, how do you avoid mistakes, and they talk about, I think Eric Schmidt I think, talked about this from Google. Where in the future, we may need [00:28:00] to have the ability to just, as kind of a life passage or a life right, the ability to just straight up delete your identity and just become someone else.
I think we used to have this in old tribes where you would have your childhood name, right, then you maybe would go through some type of rite of passage and you would become a man or a woman through this rite of passage, then you would take on a new name. So, in some respects, [00:28:30] the modern equivalent of that is we may need to just say, okay, we have ubiquitous surveillance and we have ubiquitous social media, and people are young and they’re not going to understand the mistakes that they’re making when they go and say, “I’m going to post me with a giant bong on here,” at 15 or whatever.
And they don’t realize that 10 years down the line, people are still going to be looking that up when they’re trying to get a job somewhere. And so, it may be incredibly important for us to completely forget these things. One of the ways I tried to design within [00:29:00] the Cicada concept is that I have what’s called a reputation bank in there, and the reputation bank is actually the thing that secures the IDs. Most people they read the first white paper, they don’t understand it. They think the biometrics are how I prevent civil attacks. I assume that there are going to be some civil attacks.
And so, the reputation system works to contain the blast radius. The biometrics are really only for proving that the ID is yours after fraud. So, you might go to a proof of stakes company or to a court and say, “Look, I do have this iris, it’s mine. You can scan [00:29:30] it.” Now, we both turn the key, flag the old idea as dirty, and I get my ID back. But the reputation system was a new type of system that I created, and it’s not like a Black Mirror rating system, and it’s not like a Yelp system where you’re just voting on each other.
In fact, there’s very limited voting in terms of that. I consider that a type A basic reputation system. The way I designed it is, essentially, an ongoing Turing test for is the ID being used in time. [00:30:00] So, if am I talking to people? Am I creating things? Am I getting a job and having a different ID attached to it? It’s a binary recording within the system. So, it is not actually a recording of the action, that is, I talk to you guys and here’s what we said. It is just I talked to somebody who also has in ID, you see what I mean? It’s a binary recording of the result and some of the actions, a yes or a no, right?[00:30:30] Did the person interact or not? Yes, not. Who did they interact with and when, you don’t want to build up that data, you don’t want to build that information set. This is why I feel this has to be a decentralized platform because the nature of the ideology of a centralized entity that would create this thing, as we’re already seeing with the India Anaha system and things like that, is to begin building up all of those webs of relationships and recording them, right. That’s just the nature of a centralized entity, that’s the prism of their perspective. [00:31:00] They will do it that way.
So, a decentralized system must be one where you don’t record that web information, you merely record the fact that you and I, not you and I specifically, but that I as an entity had communication. Therefore, I’ve done it consistently over time, you see what I mean? Those things prove that you exist, right, and are a functioning member of society without recording you got an Uber here, and you went to this address, and you talked to this person. [00:31:30] So, that is how you do it. It is incredibly tricky, which is why many days I am utterly pessimistic in out ability to pull it off.
But the fact that I can conceive of a way to do it, in such a way that mitigated all of the things that we’re talking about, means that it is freaking possible. It is possible. Very few people have read the Cicada papers and white papers and said, “This is all bullshit. It can’t be done.” In fact, the only thing [00:32:00] anyone’s every quibbled with is whether you can actually build a decentralized ID, at which point they tend to have one to six reactions, all of which I have an answer for.
But nobody’s every said, “You can’t do these other things.” To me, it is feasible, it’s just really, really, really, really, really hard. It’s like climbing Mount Everest, it’s feasible but it’s really hard to do.
Mike: So, I got two questions. One is liquid democracy part of this? Can you transfer votes?
Daniel: When I designed Cicada, I did not include a liquid democracy system. I looked at [00:32:30] liquid democracy and I designed it to not be that. I designed it to be something different. I did not want a representative government when I created the system. I wanted a completely decentralized direct democracy system. And I wanted to see if it were feasible to create that. So, what I created was you could push you vote off to a machine. In other words, one of the three possibilities I created were you could have complete manual votes, or you could say, “I only want to vote on specific issues, and I want the machine to vote for me on the other issues,” [00:33:00] or, “I want fully automated voting.”
The way you could do that would be something like if you’ve ever seen I Side With, I think it’s isidewith.com or something, where you go in and you answer a survey of like 30 questions and it understands your viewpoint on the world. You could create such a system with machine learning that would essentially say, okay, I can auto-vote on these things, send you the result of the action where you might be able to say yay or nay, as an audit system. Or, change it within a specific set period of time if you were concerned that it made a mistake. You might say, “Okay, [00:33:30] I only want to vote on abortion and guns. But everything else, automate.” Which makes it easy.
In essence, I’m designating it to a machine, not to an individual. However, there’s no reason it couldn’t have been used with liquid democracy. I just felt like when I look at liquid democracy, it had the same level of voter fatigue as a pure direct democracy with no automation. In other words, “I have to figure out who’s smarter than me in a specific issue [00:34:00] and designate them my vote. Then I have to audit what they’re doing, then I have to take that vote back if I don’t that they’re doing what I want.” It becomes quickly something that is a scalability problem.
In other words, it’s trying to solve a scalability problem, but to me it didn’t look like it actually solved the scalability problem. In other words, it became this complex thing of managing my individual votes and rights. In addition, I also thought life has become [00:34:30] too complicated for the average person to understand. Not average person, anyone on the freaking planet to understand everything that you need to understand. Again, going back to the beginning United States, life is comparatively simple.
You had defence, you had basic interactions and commerce, most people were farmers. You didn’t have all this complexity. Nowadays, a politician would have to be an expert in economics, science, technology, sociology, psychology, physics, [00:35:00] whatever, just impossible for any human. And so, another possibility is to create designated expert panels. So, you might say, “Okay, cool, we’re going to have the [inaudible [0:35:09] and the Austrians come in and develop their economic plans.” Boards of people, and they’re going to create their proposed system. Then the machine learning would, essentially, translate those different proposals, which would be fast tracked as opposed to citizen proposals which have to go through a series of iterations to, okay, 10 people, 1,000 people, [00:35:30] 10,000 people, right, you can’t just have everyone projecting their concepts into the system with no filter or you end up with the California system.
So, there’s a routing system for citizen votes. But on an expert panel you might say, “Okay, here’s all the scientists and they’re going to put together a plan for X, Y, Z science thing. Here are the different economic schools, they’re going to put together various plans.” You could essentially, over time as we evolve this thing, construct something so that where people are able to vote and there’s an overlap, [00:36:00] it might cancel one part of one plan and merge them together. That becomes incredibly complicated, so I won’t go into too much of that.
But in the expert panels then, you are able to vote on those things. So, you’ve pushed off the need to know everything about a specific thing, you’re trusting the experts to come up with the different bits and you’re voting directly on that. As opposed to representatives who are then interpreting what the science says, and then adding [inaudible [0:36:28] to it and changing the message. [00:36:30] Does that make sense?
Mike: This is fascinating. What’s the status of this project right now?
Daniel: The status of this project is nothing at this point. I went through several teams. So, what’s supposed to happen with Cicada is amazing programmers read it and they’re like, “This is the most incredible freaking thing I’ve ever seen. I must help you. I’m willing to dedicate my life to this and give you a whole bunch of my time. How do I get started?” I go, “Cool, that’s awesome.” [00:37:00] “Let’s go.” I’m like, “Look, it’s going to take a decade and you won’t be able to copy any code that exists.” They go, “Yeah, yeah, no problem.” But really in the back of their mind they’re thinking, “I’m just going to fork some fucking Bitcoin code and grab some libraries off of this and cut and paste some shit from StackHub and add my own secret sauce and boom, I’ll be ready to roll with a minimum viable prototype in six months.”
So, what ends up happening is the kind of delusion sets in right after three or four months and they’re like, “I bit off more than I can do, I can’t do this.” So, I’ve been through DAO that a couple of times. Then the second thing I’ve been through is finding a dowel and the limits of DAO. So, I came together with other teams that had been on successful projects, and I was on this project we were building the meta DAO.
Mike: Let’s just define DAO really quick for people who might not know.
Daniel: Sure, so decentralized autonomist organizations. Basically, an organization that is a distributed non-traditional, doesn’t have a hierarchical rule structure. So, I came together with these other teams [00:38:00] who had ideas and we worked across them and I came up with what I call now the Brave New World Problem. And the Brave New World Problem in a DAO is everyone thinks a DAO is like a smart contract. That is the most basic, least important thing about a DAO. You must have algorithmic and automated rules for conducting transactions amongst the different players if there is no hierarchy. Nothing of which exists currently in reality. Does not exist. There are no effective rules governing structures for DOAs yet, they will need to [00:38:30] develop
So, what ends up happening is you’ve got all these really smart people coming together and you have the Brave New World Problem. Nobody wants to take out the trash, nobody wants to order paper clips, nobody wants to do the grunt work, everybody’s in charge, nobody wants to take orders, it fails. And so, that’s what happened. We had all these things where I was providing 80 percent of the ideas, everybody knew I was providing 80 percent of the ideas but they didn’t want me to be the king. So, I designed a system of checks and balances to mitigate my power.
They couldn’t even agree [00:39:00] on that. So, I said, “Okay, I’ll completely take myself out of it.” But, “Okay, we want this [inaudible [0:39:05] of like three or four people who can make decisions,” and, of course, nobody could make any fucking decisions. Because the hierarchy and the systems to do it have not existed. And so, inevitably that project breaks up and I see that a lot with these types of things. There are very few decentralized governance systems that actually can work in reality, thus far, that we’ll need to develop.[00:39:30] If you look at a company like Valve Software, they don’t have any specific role that you’re hired for, they just go try to find the best people. They say, “Okay, you get here and you don’t have a role.” So, you get there the first day, from people that I’ve talked to, and you just freak out because you’re used to having a set series of things. For months you have no idea what to do. Then you start talking to people and after like panic attacks for three months, all these people are working on different projects and they start pitching you and suddenly you’re taking on 12 projects and you’re like, “[00:40:00] Oh my God, I wish somebody would tell me what to do, because now I have 12 projects to choose from.”
But it works for Valve because they have a very finite game, a very finite set of things that they’re going to do. They’re doing a creative process and there’s already kind of a hidden governance structure in place of monetary funding and the original founders who have bootstrapped it up through a hierarchical system and then stepped back from the hierarchical system and developed a non-hierarchical system. Also, very hard. If you [00:40:30] create a hierarchical system, it tends to stick around. Very rarely do people step back and say, “Okay, cool, we’re going to have a decentralized system.”
Think about, again, the founding fathers. They were the most powerful people at the time, they won a war, they wanted to make Washington king at the time. Everyone would have voted for it. He had the wherewithal to say, “Nope, we’re going to step back and not do this. we’re going to create a decentralized or a checks and balance system.” Very, very, very rare in history, right, that it works. So, the same thing has sort of happened, I think, in a lot of these decentralized projects, [00:41:00] where you see a lot of them break up, where you see a lot of them reform because people have these disputes, inevitable, and they have no idea how to resolve them.
When we had disputes, in my DAO, nobody could say, “No, this is what we’re doing.” Or, you have dumb ideas that start to come to the forefront. Like, at one point I’d laid out a series of tasks lists, right, and I said, “Look, these are the starting point. I’ve thought through all these things. These are the starting points for website creation, and security, and all these things. [00:41:30] What we’ll do is we’ll create a governing board and we’ll assign a leader to each of these things and then they will build their own sub-governance board to execute the tasks at hand.”
At which point, one of the guys said, “No, we’re going to strip out all the tasks, make everyone figure out again. Everyone’s going to elect their own leaders.” I was like, “Okay, that’s insane. We’re not going to have the security team elect the guy they like to drink beer with and hope that the ICO doesn’t get hacked for 100 million bucks.” [00:42:00] In other words, there are all these sort of weird nuisances to conducting these things. And so, that’s a long way of saying that I have essentially failed as a real project.
So, what I’ve tried to do is step back and say, “Look, I created the concepts, I put them out there, and what I really am in my life, I’m an author, I’m a futurist, and I am a thinker, okay? I am at my best when I am putting out the ideas as early and often as possible.” [00:42:30] I have a gazillion ideas I will never be able to write about all of them. I’ll never be able to do all of them. If I try to do even a fraction of them, I’d become distracted from being an author, futurist, and thinker. So, the best thing I can do for Cicada at this point is to just let it be. Let the ideas be out there, talk to people about it, let it inspire other people.
And as soon as I try build it, reality seems to get in my way. There’s a reason for that. So, I tend to let reality [00:43:00] direct what it is I need to do next, right, I call it Playing on God Mode. So, whenever I try to sit down and write, or create something, reality lines up perfectly to allow me to do those things. Whenever I’ve tried to line up everything to do a giant decentralized, open sourced project, reality has lined up to screw me as hard as possible, to make sure it does not happen that away.
So, I have to just try that process, that what I am is [00:43:30] a person who thinks through things, constructs the ideas in a clear and concise fashion, and then I’m going to have to trust that there are people who will understand an implement many of those ideas. That is also the way to influence society and influence the creation of things if you think about, for instance, Bitcoin. The Hash Cash project influenced it greatly, as did the papers on triple entry accounting, right? Neither of which went anywhere. The paper on triple entry accounting was not put in [00:44:00] production, and the Hash Cash was designed to solve the spam problem.
So, that is by if I have a mail server and you want to send me mail, you have to do a proof of work in order to send me that mail, and that was designed to slow down or make it really expensive to send spam. And it didn’t work, because you would have had to change the protocols for email. And so, it just became a really nice idea. Satoshi then took that idea, repurposed it for the [00:44:30] digital creation of money, and that is how the evolution of ideas work. All of us stand on the shoulders of giants. I believe at this point in time, my contribution to the world and society and everything will be that someone will take many of my ideas and implement it into a different comprehensive system.
Mike: Do you plan to keep writing about these ideas, or do you feel like they’re pretty solidly formed that you want to start writing about other things?
Daniel: I feel like the Cicada concept is 100 percent formed. I have a couple of [00:45:00] other tweaks to it. There’s a Think Tank group that I work with who talks about an evolution of democracy and that it’s actually a terrible idea for how people vote yes or no on whether to build a bridge, because they just don’t have the context or the understanding to do it. So, the Think Tank evolved a different system for something where you might say, “Here are the four, five key issues for why you would build the bridge or not.”
Then you could ask the questions in such a way that you might say, “[00:45:30] Do you care about traffic on I95, yes or no? Do you care about the environmental impact to this stream more than X, commerce or whatever?” Blah blah blah, so you lay out a series of four or five questions that are contextual, then you record the resulted some of those and that’s a yes or no to build the bridge, but you never directly ask, “Yes or no on the bridge?” So, I’m started to [00:46:00] conceive of how I can construct something like that as a next wave.
But from the standpoint of the Cicada paper, the initial Cicada paper and the Identity Without Authority paper that, if you’re looking at the get hub, freeze, don’t just read the Cicada paper and then come and ask me the same six questions about the identity paper. There’s another paper out there, it’s called Identity Without Authority. Please read that, it answers all of those six questions.
Euvie: Alright, we’re going to cut it here. Thanks for listening.
Euvie: Bye. [00:47:00]
Today on the show we have Daniel Jeffries, who recently came to prominence because of his Medium articles on blockchain and philosophy.
Dan is an author, futurist and thinker. He writes science fiction novels, short stories and blog articles on topics ranging from cryptocurrency to enlightenment. He is also an engineer and serial entrepreneur who has spent two decades in the computer industry.
This is the first part of our interview with Dan, where we cover the most important features of cryptocurrency, the ideology issues connected with incentivizing behaviour, as well as how a direct decentralized democracy might look like in the future.
The Real Power of Cryptocurrency
Dan talks about cryptocurrency as being revolutionary for a reason that people often miss: it enables people to print and distribute money without a central authority.
Dan has also spent a lot of time thinking about the gamification of the money distribution. This new decentralized methodology for spreading money as widely as possible can end in numerous utopian scenarios, but also comes with major risks.
Is Gamification Just a Dopamine Slot Machine?
Traditional companies have a very good grasp on gamifying applications in a way that turns them dystopian. They have every wish to turn the new system into a “dopamine slot machine”. Here Dan sees an ideology based problem of what to incentivize. Imagine incentivizing something as elusive as happiness. Is the frequency of smiling a reliable indicator? Not very likely.
When you incentivize the wrong thing, even with good intentions, it can end up much worse than a casino.
However, Dan argues that if done ethically and thoughtfully, gamification can be effective at incentivizing positive behaviour.The early days of anything that is exciting are very utopian, and we all believe things are going to change the world. In reality, things end up becoming somewhere in between, both good and bad. - @Dan_Jeffries1 Click To Tweet
Four Types of Cryptocurrency For a Functional Society
Dan believes that effective behaviours in a society can be incentivized through four main types of coins.
- Deflationary coins are meant to be saved, and their value rises over time.
- Inflationary coins are designed to be circulated around and used as payment.
- Gamified tokens incentivize and reward certain behaviours in different areas of life.
- Action coins will always remain free on the network.
Multiple types of coins are a step out of ideology, and they should all be present simultaneously, reflecting life as it is.
Cicada: A Distributed Direct Democracy
Dan’s work in “The Jasmine Wars” served in large part as an inspiration for Cicada, a distributed direct democracy platform.
One of the most interesting features of Cicada is identity. Its decentralized universal ID, called the Human Unique Identifier (HUID), is also a key to providing privacy. Another one is “Info Wallet”, enabling individuals to share only tiny pieces of their information via quickly generated sub-IDs.
Cicada platform also envisions a direct democracy voting system that protects against voter fatigue and allows for such thing as automatic, hybrid or manual voting. For example, you can vote on issues that matter to you yourself, and let the system run by artificial intelligence vote on your behalf for everything else.When you have all these really smart people coming together, you get the Brave New World Problem: nobody wants to take out the trash, order paper clips, or take orders. Everybody is in charge. And it fails. - @Dan_Jeffries1 Click To Tweet
In This Episode of Future Thinkers Podcast:
- What are the most revolutionary yet overlooked features of cryptocurrency?
- New economic paradigm – how to spread the money as widely as possible
- Incentivizing certain behaviours is a double-edged sword
- Solving ideology issues with multiple types of cryptocurrencies
- What is Cicada platform and how does it work?
- How to protect privacy in a decentralized system
- “Rites of passage” applied to digital identity
- How to prevent voters fatigue in a direct democracy
- Can voting be automated?
- DAO and the “brave new world problem”
Mentions and Resources
- Crypto Radio podcast
- CoSyndicate crypto investment platform
- Why Everyone Missed the Most Mind-Blowing Feature of Cryptocurrency by Daniel Jeffries
- Gamifying The Delivery of Money by Daniel Jeffries
- Rick and Morty and The Meaning of Life by Daniel Jeffries
- Daniel Jeffries on Medium
- Cicada, a decentralized application platform and distributed direct democracy system
- Nosedive, Black Mirror S03/Ep 01 on the social interaction rating app
- The Jasmine Wars by Daniel Jeffries