Hashing It Out
Hashing It Out

Episode 69 · 1 year ago

Hashing It Out-#69 - OpenLIbra - Lucas Geiger and Zaki Manian

ABOUT THIS EPISODE

This episode Corey and Collin Bring on Lucas Geiger and Zaki Manian to talk about OpenLibra. OpenLibra is a technology platform and currency for financial inclusion, and it is definitely not run by Facebook. We want to figure out what their goals are and how they plan to achieve them. As always we dive in and have an interesting conversation, enjoy!

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Welcome to hashing it out Asor, we talk to the TEC, inovatorblocin intrastructure, an e entralize network, this technology, the probem they ma aon.The Way I'm listening to learn from the best in the business o join theriweback Oshoverbody Hashan out. As always under host Doctor Corry, pettywith me, my trestico host call in Cuche, say: what'sepver everybody callingwhat's up everybody calling I today we are excited to bring on some proponents of the Open Leberproject. We have Lucas, Gager and Zakymanon again for the third timecoming back and seeing US talk about what open Leber was howdiffernt itself from Libra and Wyatt. It could patitually be quite useful forthe world. So M S. do the normal starts lucas sort, as you tell us, kindo howyou got IUT of the space and Introducein Dolebr, openlybreat yeah.Sure, thanks for for having us on M TAT's, I mean I've been an entrepreneurfor fifteen years and therras to say at this point Um I um been working mostly with FINTECprojects and Um. I got into the space as I was following itheory I'm so I Ihad been following big coin as it came out, but it was really fine, fallingthetalic that really blew my mind opend into thespace. Yet I was, but I was working on a dert start up at the time doinganalytics for the is googl play and Anamazon hapstores Um. But then, as Istarted, you know getting deeper into blockhing space. I I founded a companycalled project, protocal called wireline, and that is a decentalizedapplication framework and h and network, and as we working through that, I I led theeconomics team there and, as we started hearing more about face book, I startedthinking about h. How could that get integrated into the existing blockchainnetworks, the the libr stable coin? And it became clear as we started hearingmore and more about it, that it was going to be a wolt garden and that you know any amount of collateralthat you had in the Leber network could be sort of seized at any time youintendto have it circulating in your network. So I spoke with you, know: Numof the leaders of our space here the the at least the the cipher punkversion of the blockchain space and started formulating wel. What would bean appropriate response to facebook? How O we reappropriate anything thatthey that they developed that as Quitea? That would be useful, and so we came upwith a with a a movement or or name for a movement. We call open, libra andthere'd be many many projects that could use that that brand, but we'regoing to try and informulate an umbrella for any and a space for anyody.That wants to create a Um, great creative response have a responseto corporate coins geal speaking and starting with the Leber project. That'sBi the longer inshe that you're, probably expecting. That's fine talkyou! What about you how'd? You get involved it! This Islie, AORSUREIT's Goodh, I tnk,enoughpery, interesting, stuff, l, lace, yeah, so Um, I think, Tha m R wistermswill be welprobably run into me somewhere else in the blachede media space. I won't go toodeep into my background, but um where I sort of Imean wh. W, what's what sort of shocking about this year is no in manyways, um a lot of the vision that like started,wih, Jequan and, like I know I was an early contributor toeat, then sort of a lot of components of justlike work and thought over the last five or six years, afd suddenly t likblossomed into reality in twenty nineteen, but all in kind of e. Thisvery like compressed way, and so I you know when I you know sort of had been you know, hearingabout the Leber project for a while Um in inside a facebook before it waspublic.

You know had been sort of been aware that they' looked attenderment but was honestly quite surprised, Um, you know when the publicannouncement came out and the source code was open that I'm like. Oh, Istart looking and I'm like this is tenderment m. This is this istendermend and it's frankly like kind of shocking tosee you know. While we were while we wereworking really hard in twenty eighteen sort of getting tenermen in the Consminestecape production ready to watch the COSMO hub. A face book hat, an entireteam of engineers reimplementing exactly basically thi an extremelysimilar design to design that was inspired by Jay's earlier work, and so the minute I saw that I'm likeokay, why you know? On one hand, this is a huge validation of the designand the work. This is clearly a bunch of engineers who have built many realsystems and real distributed systems that serve many millions of people were had had looked at our work and waslike this is t the right architecture in the right design, but we also sortof looked at this. I also Oten and I'm, like you know, we, we sort of designedall of this stuff to be our our vision of tenderment. Ourvision of all this stuff is really as as a tool of human liberation, and we weren't just building this tolike r. Our vision was not sort of empower like nation states and wargecorporations as much as it was people Um and it sort of was a littlebit of apcal to arms. I think for Jy and myself we're all responding to itin different ways. For everyone in our broget but like we need to respond tothe the adoption of our technology byexisting entities with great power in the in the world and figure out how itis that we how how it is that we continue to pursue the mission of likesort of economic liberty and social coordination, and so now byparticipation in the open. LEBOR project is mostly sort of not as atenderment employee or as part of B T as part of the largercosmos ecosystem enclusion as a whole is very interested in the Webroko base.We have a number of projects that we've been working on sort of related to theWabroko Base D, we'll go into more detail about what and why that is, but we have so we've been contributing to the openWeber project and helping them spint up devnets and writing to Lov. At thatawesome, I saw l the obvious question I think from here m. Why start something new? Why make aclone and repurpose a lot of the stuff that Leber's doing and not try andbuild on one of the egosystems that currently exist? Is it not um supporting those ideals? Enough look is when you got start Sur, so here's the the thing that I think issort. I think that that's the hardest part of what facebook isdoing is that if they actually launch this, it's going to become kind of thedefacto smart contract platform out there, not no by any other for anyother reason than the Sher scale that they have and the partners at te him yeand so over market reach goes a long way in terms of putting things in thehands of users that don't have much of a choice, yeah, and so the question then is: Do we want to through advocacy, try and get thosedevelopers that will event they re atempted today to go to facebook orthat are um or on faced Bo once it baunches? Do we through advocacy orother means, try to convince them to come to other smart contractingplatforms, or do we drake some kind of an off ramp for themor or or net that we can catch them before that they they would go to thefacebook space? And so you know we we've talked about this internaly. Likeyou know, one interesting approach would be. You know when Yeth two pointOh launches, and they have execution environments that we could have a move,execution, environment and stable coin. There Um, but you K, W B T and thatcould be, could be a strategy n. It could be an open lever project at somepoint Um, but I think I'm, maybe I'm more more persuaded by the Internet ofBlockjan's story, and I think that at least having one chain that operatessimilarly enough- that, as has...

...compatibility with the Leber chain,will help us advocate for developers, but also maybebend facebook in in the right direction. An gives us a little more leverage onwhat they're doing. So. I think I think there are many open libera projectsthat could exist, but I think there should be one chain. At least that is aUm that is perfectly compatible, but I think there there are many. There aremany alternatives and in many options and a lot of projects that are underthe openlybe umbrella that could be implemented and say, ethereum or or saydirectly in the COSMUS Gosysten. So I guess I'll take my stab at this,which is, I think, the thing that is worth reallyremembering about the current Crypto Giskerston ishow small the current CRIPTOICO system is. It's small ons of developers, it'ssmall in terms of users, it's small in terms of assets under management, even though we've had this like Tenexgrowth, um kind of over the last a two years that meant that took it from completely insignificant. In terms ofall of these things to mildly interesting. One morning, Yabuzzworthy weare still along we'restill a long way from the level of adoption. That makes a a sort of firstmover advantage like a obvious sort of overwhelminglydominant force and what we you know, everyone in theyou know, who's been working on sort of the cipher punk end of thecrypticurrency Spectam has been working to like organically build networkeffects, but the reality of the world is. There are large networks and worgenetwork effects that already exist, and if our technology is adopted, youknow cyphrerpunk technology is adopted. You know it's like you know. I thinkthe I think the best example is Um. With the signal protocol and what'sap,you know in Moxi and trever started out buildingsignal. You know on boarded people who ere mosty in sort of the activistpolitical, distiment and privacy communities. A O KN got couple hundred thousandusers at the time, but, like you know, it was like, and then they convincedthe watzap founders to adopt the signal protocol and they flipped a switch andturned on a billion users on enaned encrypted Messagig and using the signalProtogol Um, you know an, and that was a huge that was, you know again. That'sthat's! That is the power of cycropoine technology being adopted by existinglardscale networks and though we don't know M and there'sa lot of complexity which we're Goin to I'm sure we're going to dig into how successful Faithfuk as going to be with bringing any or any of the otherplayers that are like large in the world. Like the Communist Party ofChina, or any of these other large significant players that are exploringthese technologies, that we all helped come into existence, but if they doactually succeed in that way, there's go. They have this possibility ofbringing enormous networks, enormous developer relations, resources,enormous. You know, sort of distribution channelsto this space, and when we, when we see those things adopted, it is worthwhile as sort of someone on thecipher punk end of things, to figure out how it is that we are going toreinterpret reappropriate operate within a context Um, where,where these sorts of things are happening and certainly not ignore it. Yes, e Ritabit on Socky, saying: I think that there's this there's a sense of inevitability in thein the in the Cypropunk end of t, the CPOCURRENCY spectrum that that permissionless and and trustlessnetworks will win eventually, no matter what, but I I actually think that we'relosing and- and I think next year, it's going to be it's going to be an uphillbattle for, for all of us, with these hyperscale qut corporatecurrencies lag facebooks and on the other end of this spectrum is the China Botching Oject, and I think that'ssomething that I think is remarkably is not being talked about enough Um. Ithink that...

...those two networks are going to probably take up themajority of let's say I hate to use this word, but t more legitimate, usecases out there, so usecases thatare closer to the mainstream, that aren't, let's say in the renegade or ordefi space. I think those two those two networks ontheir own are going to take up a majority of these cases so y. Ah, I cansee them. I te e coming from withthat and especially 'cause. China has such aglobal dominance in I mean, and they are so keen to adopt things that arecentralized and one of the points that I I really want to bring up earlier,but my Michaels Sowork Aus, I couldn't get it apologized, it's Um. I looked atthe open, the open, Leber website and you're very clearly saying this is adistributed system, not a desensualized, distributed system. Now I I think thatit's interesting when I hear Saki talk about the first principles of CIPHORPong in Gaiayada. One of the things that we were striving for is this ideaof who controls this, and I don't see how the system you're building will beany differen than the system that facebook would build, except that youwould be doing it with people. You trust and you don't trust facebook. Sohow are you actually differentiating the open, labor project from the actualLeber project if they're both not technically desentraliste? Oh, there must be some somedisunderstanding there. I think. First of all, we're we haven't made anyclaims as to how we want this network to launch, but we're very clear that weneed such a system to be as inclusive as possible as desentralized aspossible, permissionless to to the maximum extent possible. So I see Iactually must read something so yeah you're right, you're, you're, sayingthat you don't like the Lever Platform, because it's distributed nottosensalize you're, going to be attacking this in a decentralized waythat so what we really want to Grat is thespace for folks that are interested in the Cyphropunk approch to blockchinsand cicurrency to crate, something that is going to have sufficient reach by taking advantage ofby Y, by using Um the technologies that these large hyporschale networks areare building. That's us it to our avanage, that's at's, a simple simplacsI can put it. I think. How do you say notice what I the designapproach, yeah? Exactly? How do you do that? How do you get over Forin Messiscaling problems Um, considering that like facebook would be using hot stuffwhich Um h? Oh, Oh, is it of n it'? What I thinkoky was er, I believeearlier what he was saying that it's their implementation is very, very,very similar to tendermen yeah. So so you know what problems are tenementtheysaing. What what does open labor hope to do differently? How are wegoing to keep this de centralized? What is what is backing this? These are allquestions I still laugh so I'm mostly of the opinion that m the like consensus protocols are probablylike not really, especially in the Post, O thousand and nineteen era, like ahugely different shading factor around decentralization Um. I don't, I think you know like we have. We have I've I've, I've sort of beenvery much taking the position that essentially concensus protocols areover M, that we have grepsparts in the asynchronously safedesign, space like Steller, with Federatedenbysantine agreement like sort of tenderment hot stuff,which is sort of just a nearly optimal implementation of, andlike robust implementation of Casco bfd consensus on that y. u know easilyscaled, so you know to hundreds and thousands of nodesparticipating in a contens architecture and snowman m from the avalanche team H,which gives Yo, which hes uses. You know probablistic approach, but gives you you know efficiencies when if, ifsomehow we could get to millions of contensus notes, but essentially given that like where we'reat right now, like consensus protocols, are, I think, essentially over in terms of what I think of as like reaas like important, interesting pieces and re'remostly into this new space,where we have to think about Um economics H, like economics,...

...incentives, coordination, problems, collateral efficiency, you know composability betweenBlocchans um exits from exist like how do you exit a system into anothersystem? All these little like higher level.Things are by far more dominant than sort of these like questions that wespent a lot of the last five years, sort of obsessing over but yo've goneto a place now m, where we have enough stuff as technically mature that wedon't that like this is not no longer where the interesting problem is yeah. I second that I mean y know. Wewent through this phase of I guess the ICO bubble and hiht where you know there was all this consensusporn going around everybody, oimizing Thean, represensis, yeah, differentconsenses, iun and G, and that's where you get a lot of the professor coinscoming in D and whatnot. But but frankly, you know, we all know that consensus is is moreexpensive than the alternative, but right now we're struggling right now tohave usecases. They are willing to spend the money needed to to to puttransactions on chain. So for me it's it's obvious that the problem is inspace of a product is in problem with abuse cases and and network effects, and it's that'sstill an unsolved problem. Now, G, getting back to your question aboutyou know how? How do we make this more desentialized and more permissionlistthan facebook? We, I think, I think the bar is actually quite low to do thatand Um Cosmos has actually done really good job of showing that this ispossible. I mean ' that's, What's interesting about the COSMUS UMexperiment. What do you mean by that? Is that like there's a bar low becauseof the economic distribution within thenetwork? Yes, because the economic distributionof facebook is, you know a handful of Hier hyperscale corporations andventure capitalists that have an equity interest in this equipment of a Swissllc and that's for the firceable future f the only wayof participating in the governance of of the number, but what's success, what success interms of decentralization 'cause, obviously the pars ill be low m. If youlook at any level of decentralization I'd say libra is, is, is a abbysit. The surface level is a successfrom how things currently run, because they've asked other people they'll, beth, more likely their friends and to to join in to what would be theconsensus of labor. That's that's a drastic step in what we would considerthe right direction of managing such such a platform. What is success foropen Labor to take that even further, I think if we got to wear the cosmoshub is and in the direction that they're in, I think that's a that's aterrific start. I mean I I have a Dr. you know myvision is, is been pretty happyreto drive a dream here, which is thatbasically, if there are, is a fitity group of people h who want to share atechnical infrastructure for their economic coordination, it should bepossible for them to use a block chain as the dominant aslike the primary organizing mechanism of that iffiniihese groups liketechnical and economic ordination m. that's really the goal, and so, likeyou know this, what do I mean by a Finity Grup? I mean,like literally H, everything from you know a municipality to union to cluv to a bunch of people who like toplay video games online if they, if there's, if if they haveneeds that, if we can a lower the baried entry h small enough far enough and they and we can- and we can make these toolseasy enough to use, we should be able to get to the point where, basically,you can spit up a shared state machine easily amongst these amongst these sgripps andthat that gets you to desetralization. I sa. I typically refer to these thingsB, what you for describing as h, microcommunities and the advent of Blockchan ads onmicroeconomy to this, which actually gives a lot of like Um, real human,like interaction across contribution in...

...those in those micro armies andallowing people to be able to spit those up within the context of whateverthey care about and in Er obreak, with the other thingsthat they care about w with the value flows of those things is, in my opinion,to future or division of what allof us is. Now. I guess for what I from what Iunderstand, based on the amount of effort you're putting in of this, youfeel facebook will coofk that Um and a lot of this effort is to show that it doesn't have to be donethat way and give people an option elsewhere. So what my worry is or what my concernis, is that unaddressed Um? You know in withoutwithout significant effort on our heart. What could happen is Um is is the is: is the corporation in alarge large multinational gobal corporations m that are all UM INP for a variety ofdifferent reasons, all looking towards Um blocaine technologies as new sources ofrevenue and Esources of new abilities to exert influence? Um do the go tomarket and the product market fit to these large scale, networks that theyalready have access to? Those are the technologies that mostdevelopers use and the only place then to deploy those technologies are inspaces that they that you know those corporations have sort of founded andestablished, and we basically don't get any real sort of fundamental human improvement in conditions, because whatwe just did is we went from being okay, like you, can watch and appen connectto the facebook API and you can use you know: facebooks payment rails there mto you, can launch a smart contract on the Lebor Bak chain and use lebraspayment rails. But you know: There's: Just like facebook can invect you fromyou know the facebook pay project, the open, the libr governance can canevict you from the Leber bar chain and all of your investment in thattechnical stack in that knowledge, Expertese et Cetera, Um goes away, and what is the world that we're tryingto build we're trying to build a world in which you can safely invest time andenergy and expertisse and capital understanding and learning about andbecoming an expert in e technology? Knowing that there will always benetworks that you can deploy that technology to, because there is nochokepoint where, where, if you're said no to there, there's nowhere else toget next lot of sense, I ike. I could seehow that would be quite valuable so that people always have somewhere to gowith the experience they gain um a lot of THAs stuff rih ho o. How doeseconomics come in O play? Joq You mentioned the consensus. Is We're notgoing to call it dead or done, but like innovation, there doesn't seem to be atremendous amount of potential innovation there. We kindof know howconsensus works. We just need to build implementations and things that use itso on and so forth, but like a lot of the questions, is the economics or Crypto Economics, whateveryou wended up, calling it of how value flows within these systems- and I seelike Lucas- that's what you bring a lot to the table and what and h t what areyou worried about H, thisf facebooks attempts to do Lebra?Had you worried about something and with that p economics perspective forjust kind of how you feel they're going to how they're going to do it yeah. I think there are a number of ofconcerns with how they're they're going about it mean, let's start with.Perhaps what I think is compelling about about Libra Um. I think that a global, what I callinflation, stable assets that could be deployed to billings of people is compelling and I'm I'm not quite agnostic to it, but I B TI think it oud be interesting for to get it no matter who it comes fromto to a certain degree Um. But I think the trouble that we havewith facebook approach is that, first of all, it's backed again in justregular currencies, and so it doesn't reallyget us to e to the idea of of a government independent dependentcurrency. So I think there's an...

...implementation question there, but Ialso think that they chose that design for regulatory, but also for strategicnegotiation with for purpsis for negotiating with largenation states. We can talk about that in a minute, but I think the overalldesign of the libra ecosystem is it's designed as a full reserve bank.So a lot of people said this may not be familiar t to everyone, but there arethere's a certain type of bank and you have these n sort, O they're very nichebanks and Havin all over the world, usually for offshore, using offshore orlocations. But the appeal of the of the Four Reserve Bank is that they don'tlend out any captol. So all the assets that are put into checking accounts,they remain in checking accounts and there's that's it's purpose. It's it's to bethe most secure type of bank out there. It's not a great business if you'rerunning a Foaser Bank as you need to collect fees from the actual depositors,mhmtriedto offer other services onto it, but liebers designed as a full reservebank, meaning the end users who want to hold libra alibreoin. They have to buyit through an authorized. receller. Probably something like coinbase and inQuin base, has the ability to issue libra into your wallet and then has theobligation of taking that dollar that you bought your Leberfor and putting itinto the the facebook trust effectively wh. What does that mean?The end user is paying for the privilege of holding libra in a offensivl secure, secure bank. So how is it pain for thePritiege because you're not getting any interest when you're your deposits? So why is that Worris, son? Well, facebookis trying to get this full reserve bank to be regulated as not a bank and that'swhere a lot of the I think that's the so. The the small amounts ofdecentralization that they have serves for that stratic serv for Tha serves to negotiate with the regulatorsto say well we're actually not one antiti where this decentialized thingblockchain h, you know sprinkle some some other buzwords on this, but it'snot a bank. We promise is not a Bak and we don't want to be regular. It doesn'tbank now. The trouble, though, is that it it works functionally as a bank andif it gets to the scale that we think it could get too very I mean basebokcould very easily get a trillion dollars in there h ten trillion. Isthat possible? I mean, I don't think it's. I don't think it's Um. I don'tthink it's hard to imagine there being that amount of capital in there. It uldbe one of the largest banks in the world. At that point, and then the waythis is designed you know it's, then it becomes a bank,that's actually too big, to fail, that'sl that this one would really bethe one t e type of bank- that's too big to fail, because there's nobodythat coal bail it out Ju know there's no government that has rea duristiction over it. An the governance is governed by you knowthe the association members, which is just effectively an LLC, it's theinvestors. So there's this really disturbing and an perplexing sort ofsituation that faceboo could find itself in where Um it runs one of thelargest banks, it's too big to fail and the end users, don't really have anyrecourse to that any say there. I wul like this is a good reason why I wouldnever launch- and this is kind of the argument for seeing you know likeMelton- did a really great job. She went bfor hogessional committing andshe she was h she laidit out. I mean this. Is these? Are the exact points wekeep bringing up and people are hearing this and going hey facebook stop. Sowhy do you think they're going to succeed? Despite this, I don't know what governments can do tostop. Then, honestly, so I don't. I don't know whatthe? U S, government would be willing to do to stop them again. I think there's a lot of circusgoing on with with the congression of hearings, but think about it like the?U S would probably have to rewrite a lot of its banking regulations to beable to stop libra mean they could t T. obviously, Congress could obviouslypass the law well laws. Tho, say you're not allowed to make ay currency tocompetes to the US der, so they could just use leverage ones that are alreadyexisting like wh. What what is? What is the thing that you think will sway themto Oka this 'cause? I have a feeling, that's what it's going to take. I Imean I, they control the power of force andthat's a strong, powerful tool and they...

...do have the ability to draft laws andthey do have the ability to look at the current existing infrastructure, suchas the major banks. Thad exist, who won't be happy with this hostiletakeover of the economy and they're already entrenched in wha, what's inour curet political system? So what makes you think a facebook couldactually succeed. I'm not really seeing that part to me. It seemed like it wasdead as soon as it was announced. No, I I disagree. I think that, first of all, I think banks are tryingto become technology. Companies and technolgece companies are trying tobecome banks. I think that's the bigger story that's going on, and so, if youhad the? U S, you know you had congresspast some kind of a law that forced technology companies to stop beingbanks. INBANKON OT, the techno Y company, you're Goingno, have actuallya lot of people upset and D. I think it's it would probably be challenged asin constitutional anyway. So I think there's a bunch of other challengesthat nd this is kind o comes down to like what I call the adolescence of Gile, a politicalsignificance of botchins. You know in a world that was where thedollars dominance was unquestioned, where Um geopolitical alliances between nationstates were stable. A space for something like Leber tosucceed would be small, just like in this in the in the samespace that if that was true, I think even demand for bit coin andtradiverences would be much maller than it is today. I think the you have long runningtrends in geopolitics and will go through them,but that why enormously influence this? The other thing to understand is this:has all happened before the origin of the Federal ReserveSystem. Is a group of Incret of techno of UPSTAR technologically significantfinancial firms seizing power from both the state governments and the legacybanking infrastructure that was based in Philadelphia from New York and beingwhat we are the most technically sovisicated actors. We are the ones whohave have th the most reach, the most abilityd to actes capital market andwe're going to actually DISPLAC a? U, and not only was the Federal ReserveO privately created entity that was only later incorporated and sort ofintegrated with the government, but still is a private entity m that so e okay. This has all happened beforeso alwikl. It will happen again. The second piece that is worth observing is the deep instabilityaround the dollar's dominance that, after you know the September eleventerrorist attacks, the? U S, government turned the dollar of financial globalfinancial system into a globaltedollar into I surveillance instrument and thatreally undermined the rest of the world's desire to transact in dollarsbecause it comes with so much surveillance attached to it m, and thenyou have this. You have things like what just happened with Bregit. Youknow, I think I I've commented before that. I think one big winner, probably of the h ofthe of the of Boris of the Conservatives in theUKs majority and dominance in the last election, is now that they have a majornation state that is going to be probably aggressively. Looking forthese kinds of m collateralize, the large scale thintechthings- you know the UK, as already been one of the most progressive places for doingbanking innovation in the world, and that was when it was still underbanking regulation and that won't be true within a year or to okay. So why? Why do you think peopleare going to adopt face book? Then, let'stalk about the social implication of this wife, specifically faithbook,given the fact that they are taking on so much heat, I actually see a projectlike Opran, libe being a easier cell than facebooks libra, because notbecause I understand that there's you know they alred have apps on mostevices Yadayadiada and infrastructure to support this. However, I also kindoflook at as them having a major PR problem that they're not going to beable to overcome. Do you think they will? I mean like why? Why Libra, Ithink operly brow is a good shop, so w t my take on what I think is goingto happen is um either. You know the narrative will shiftinface books, favor and you'll, see something that that you know moreclosewy resemble is what they propose this year in terms of Leav wereactually getting into production, or...

...the narrative will continue to beadverse to facebook, but the simple fact that facebook sort of opened upthis m willing to create so many like a giant list of hundreds of othercorporate entities that will expore similar structures- and you knoweventually one will succeed and Facebook Mad Jis partner with whoever succeeds or the top three thatsucceed like this, doesn't like the reality of o how this plays out is it doesn't forfacebook to bring their existing network effects to the to this opportunity? That is Quik thatis opening up. They don't need to do. They don't needto just charge ahead with Labor. They may have just they've already createdenough space that something likelybra seems to me to be inevitable, if it'snot, if even if it's not doesn't directly come from Labor. I feel as though that the qualitysuccessor that the likelihood of success is heavily dependent upon um who joins these networks in a capitalthey bring to them. How are these things are backed ind, the distributionof those funds, and it it seems as though facebook and Co have that figured outthey. They have a good idea on how to do it. They, it seems as though theycan potetually get a lot of people to throw money at that.If you feel that ten chillions Oro Troyas can get into that, howdoes hasan open system. Do this O it does it does it need? Can it even compete withsomething like that 'cause it? Certainly. I certainly can't do it fora a physical asset standpoint and has to do it from something that the oDigital Esset, an digital scarcity. That's an interesting point D and againwhat we're committed to is to researching the different types ofstable coin implementations that are sensible or global adoption. I thinkthat's the that's the the commitment that we have, but I think the the Lebormodel is could actually be replicated quite quite nicely. Among many affinitygroups o any smal any medium size ti, say a hundred thousand people thatwe're using such a network. They could, I think, that's sort of theyou know. Population of a hundred thousand people could t esally pay forthe administration. Cost corganization like this and againremember that the facebook assets actually in their design and lebordesign. The assets come from the end users. They did. You do have some money,that's put it by the by the association members, but the model is predicated onthe end users actually putting up the capital for him. I think, generally, Ithink therre two ways to think about stable coins, Chinga speaking and it'sabout Whu pace for the stability, so you have the libra model where and it'sthe same thing as the circle model an any of these fully fully collatoralizedassets Um, but so these models, it's basically the the network that has topay for the the stability somehow. So the network has to get capital into into the network and remunerate that capital so that itstays there Um. You know fully backing t e the coin so effectively. Thenetwork used to pay someone to put money in now. There are other models which arequite interesting and that's the the maker model, for example, which isbasically using R a mortgage market, and in that case,the person paying for hi stability is actually the person taking the loan. Soit's actually the person conviding the capital and that's quite an interestingmodel because it scales different and it's actually probably more Umdecentralizable. Generally speaking, so I think those are two models that anetwork that's running, that's trying to create and use a global, stable asset. Thoseare two models that could be used. The facebook one is easy to implementand the administration costs are notactually that high as as might seem, Um and there's a lot of presn legalpresident e her there's regulatory kind of clear waters when it comes from thatOneea yeah, the maker modelis less it's less priven in irregulatory, sinceit still. I still as I I consider a renegade bank M, but it could, it couldbecome um a amoregular regulaor certainty, but it also lends us up wellto decentralization. So you know, I know that you, youbasically Seid concesuss, solve...

...problems. Ky and I understand I kindagree with you um, but they were only scales but so much it's GIS te onehundred notes and that's because it is a classical protocol and there'scertain Marotacts cunflup nonsense, like Lebra, doesn't scale the war. Imean we so based on just like, like level of maturity questions. So we ran tenderment at two hundred andsix nodes during game, a stakes and it was running basically the samebocktime. The cosmyself was running right now. If we wanted it to be five hundred no tat it would probably work and there's a level of t e real smallnumber THOSEAC. I mean like that's really really that's why it's it'You're using Colesseao all roo, because OL use a CASI consensus protocolls,because it has features which Nocomoto Cosesus does not meaning that is not aNar. Now is a consensus of like twelve nodes, so like it's like not be likesuper intented about how scamable nocamotic of the truth in the realworld. The bigger problems, when I say like consensus, is a SOLV problem. IsWe don't really have a mechanism of economically rewarding paying for theoperating cost, insentavising the sovereignty of even a few hundred nodes?Today, likethose, that's the upper woet. Theupper women is not kinwe red, a consensus Berdicol with a million notesin it. The upper the limit is: How would we even pay people through thatsystem through a system to like actually be to like spend time andenergy on no at management and, like actual, have like sovereignindependence of those notes? T thoer really the fundamental challenges atthe current moment, not the question of U of like. Oh. Can I write a concensusprotocol with more nodes in it. Like we can add e, you know we could tchange the cosmo hub to have five hundred or a thousand nodes wor. Wecouldn't pay those people with a billion dollar an hour. You probably need something on theorder of you know hundred billion dollar networks before you can evenstart getting into the realm where you can pay thousands of miuutes him. Imean, of course, that also depended on the cost of running a note. If thecostof running a noit is negligible whatever. Why not right, Um gin a push back on that idea, becauseit's not the cost of running the node, it's the cost of the human beings. Timeto like analyze, the updates understand, what's happening on their node figureout whether you know participate in governance. All of those questions, which is what w is what likesovereignty, brings wik and what t that's what it means to be like asovereign economic note operator, passive note operators that just youknow like we get an automatic update. To my note, I push yes every time and Idon't know anything more, do not add any value to the dcentralization ofthese systems. Yeah Yeah and that's also another good reason why you shuldto have multiple diplomentations of every note software. That's out there Yvoltal people hi, would just to first FY the network and stop that kind ofstuff from happening, but yeah. No, I see what you're saying. At the sametime, though, I'm looking at this and I'm going okay, we do. We are lookingat a target world where IOT devices might be abl to exchange on this kindof stuff Um. If you have a hundred notes, you still look in it. Iis Yourit device need to be a concensus node. What is the METIOTEEDVIC does not needto be concestens. Not It needs to be able to mainly since transactions, soit need some sort of Ndpoin to communicate with. Is this GOI be one ofthese hundred modes, or is it going to be distribute the load across somethingelse? You see what I mean and so happy of more things o trying to Thantresa.You can have ingrass that scale like ingress on transactions. That scalesquite nicely again like it's all like works on Tosbos today, like you're, not ingressing like atsome point. You have to gossip to the walkto one of the balked craters, like that's inevitable, but, like youknow, and lever actually has Li e has a great mempol design. It's like one ofmy favorite pieces of the CP e the code. I've been strongly advocate being forit was actually roughly the design that I was thinking about for, likeKendermint mempole to point out, but had like a bunch of annoyingcomplicated design. Pro Problem, and then I like looked at the Labor ndesign a'd like Oh yeah, that you've solved all the problems. Okay, we'regoing to steal that back Um. I would argue that none of that matters right now, um it we're having a hard time trying Tomablocchain thetworks then gets...

...experience. I know treon that we're having a hard timemaking block cate networks and making the rules in such a way where the people who use them benefit from it.And so, when you make these things, you always have to ask who's using it andwho benefits from their use and that I think it's it's quite asymmetric acrossthe board and facebook will not be different, and so like the goal, and all of thisis tofine incentivization mechanism hat thi, aact H was getting to as that likehow dod we designed these systems of such a way where the rules, ten towardsquote, unquote, good use and then how he to find good and the consensus mechanism is a integralpart of that for sure 'cause that usually ends up being Um. How you distribute money in a lot of ways, especially like Fcollecters and those people who are actually doing the work of running thenetwork, so onc and so forth, but like were, how are you going Ta Salt, like is is,is: Is Open, liber an attempt to solve these problems, or is it just like okaycool? Let's make sure that those who participate in libra have a place to gowhen Shul have the fan? No, I think we definitely need to solvethe NUSECASE problem. Like I said, I think that is theproblem of all Bloctin etworks. Today Thait, we need usecases that are and actually need to use these mtechnologies and pay the cost tothe technologies, and I think that thebiggest problem we have generally is s an industry that we're all trying tobuild products for ourselves, and mostly rich countries, O United Statesin Europe um to he coner degree in inasia. But we don't need a lot of thesetechnologies. We have good information in markets. We havepretty good confidentiality in certain um in our dealings with UMfinancial institutions, but um you know places that actually needthese. These new technologies are developing itions, I mean so you know h. How can we create newmarkets in these places? S using technologist? That's the type ofexporation that I think we need to do and Popalira we're we'repartering with thenon profits that are most interested in doing that n and that have been doingthat historically. So the Danish Red Cross, for example, is one of oursupporters and the participate in governments. A'd opened the and were designing a lot of our technology. An an application layer, umtools for the usecases that they're coming up with- and this is these- arethings like microinsurance ICO credit, local currencies. These these are actual tools that areuseful in large parts of the world. That blockchan can actually do something.Nou Um, I'm actually quite skeptical- thatblockin can offer much value for folks in the United States. Orerrin Europeyeah, I kind of see where you Comieng from with that you need. You need atleast an orderd o magnitude, higher, better user experience better featureset in order for people to just look at it. These days and or any days really Imean and Um Blochin as it stands is actually is stepped down from ourcurrent system from a user experience perspective. This is something I'm kindof concerned about when people design hes systems lately is I' noticing thatyou know the people want Kagainst te finality on Lalar one. You look at M g.You can't do that. We go well my my current MEA. You know manfring systemcan so it's like. Well, how do yo? How do you talk to those people Um? And soI'm kind of rent mafring system does batch jobs overnight and they have tesually the same thing. You know whatI mean so like. How do you talk to thesepeople who, by the way, don't need to know all that information? And how doyou hide the the details of the operation? It seems like a lot of whatwe're doing in the space is exposing how we do things and that givesdevelopers com, ino confidence in he hardcore confidence. Bat in the end,really what we want to give confidence to is the people who'll be using thisand that's generally from from an institutional level, people who are notas savvy as we are and Um. You know as it stands, a lot of these currentsystems, don't provide that I think Lieber as a chance, because it is ausing classical consensis protocalls, which I know those provits me of thefeatures that I think we could maybe make this get off the crownd. I thinkit's greate that ope opely resusing and I think it s great tenament uses it. Umuses hot stuff, Um, it's Grat, alrom, Um and h. You know, I think, uh. Ithink it's really A. I think it's...

...really important that that we focus onhow we're going to sell this to people, because at this point I don't, I don'tsee people um even on in the hard core level like oh I'm, ahardcore bit Clinuer, actually using it all that much for, like day to day,thanks Y, U you can't buy a coffee through the lightning network like theypromised so 'm kind of you know, I'm kind of interested to see how thisplays out ye rrap a little bit. Um t hop that we could go on this forhours clearly, but I know your Anie ar like a weekly Openlebr meeting as we dogo on about this for hours, and it's just like a interative conversationtrying to and and one of many iterative conversations that I'm part of h tryingto like address these. These topics- and I think most of thethe call action is you know for for people who are listening, is toactually start participating in these conversations either you know come toshow up ut, open, libra or in some other contexts, actary start buildingcommunities of people who are working on this. This process. Where do I go, you go to or get up and you you can adda comment or request anywhere in there and you can come to our Um weeklyweekly meetingthis is one t's awesome. I definitely appreciagus coming on andexplaining kind of he curt state of thigs. What's happened? What we're doing nowand where we're going, I I look forward to to learning moreand and hopefully contributing as well right call. Collin Callin runs one ofour death or Denat. I A yeah I've, yet to actually run it.I just G I just got signed up, though, so I'm really stuck about that. So I'llbe happy to Participat, O opening project T forard to it happy to be and happy to be. On theshow, glittle known fact, Colin is my first follower on ontwiter. Look hat: You call that only rix is a first follower right.That's where you get started, ypwithout a first. Follow them won'l, be a secondSOCOOL anw than for coming on guys. His great appreciate it. Jaki is always.

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