Hashing It Out
Hashing It Out

Episode 69 · 2 years 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, a podcast where we talked to the tech innovators behind blocked in infrastructure and decentralized networks. We dive into the weeds to get at why and how people build this technology, the problems they face along the way. Come listen and learn from the best in the business so you can join their ranks. Welcome back to show everybody hash get out. As always, I'm your host, Dr Corey Petty. With me my trustee Co host, Colin Cucher. Say, what's up, everybody calling? What's up? Everybody calling? Nice? Today we are excited to bring on some proponents of the open libra project. We have Lucas Geiger and Zache manyon again for the third time, coming back and seeing US talk about what open libra was, how it different, should sell from libra and why it could potentially be quite useful for the world. So let's do the normal starts, Lucas, sort don't you tell us kind of how you got into the space and introduced him to libra, open libra? Yeah, sure, thanks sir, for having us on. Let's I mean, I've been an entrepreneur for fifteen years and, embarrassed to say at this point I been working mostly with Fintech projects and I got into the space as I was following the theory. I'm so I had been following Bitcoin as it came out, but it was really falling falling the talk that really blew my mind open into the space that I was but I was working on it up there and start up at the time doing analytics for the ISOS, Google play and Amazon APP stores. But then as I started, you know, getting deeper into blockchain space, I found it a company called the project protocol, called wire line, that is it decentralized application framework and and network. And as we working through that, I led the economics team there and as we started hearing more about facebook, I started thinking about how could that get integrated into existing blockchain networks. The libra stable coin, and it became clear, as we started hearing more and more about it, that it was going to be a wall at garden and that, you know, any amount of collateral that you had in the libra network could be sort of seized at any time if you intended to have it circulating in your network. So I spoke with, you know, number of the leaders of our space year or the the at least a cipher punk version of the blockchain space, and started formulating what would be an appropriate response to facebook. How do we reappropriate anything that they that they developed? That is quite is that would be useful, and so we came up with a with a movement, or name for a movement we call open libra, and there'd be many, many projects that could use that, that brand. But we're going to try and informulate an umbrella for any and a space for anybody that wants to create a great create a response, have a response to corporate coins, really speaking, and starting with the Libre Project. That's a bit longer intro that you're probably expecting. Yeah, that's fine. Talking. What about you? How'd you get involved of this? Fine, worry, that's sure. So that's good, pretty interesting. Yeah, so I think the you know, most your listeners will be ref will probably run into me somewhere else in the blockchain media space. So I won't go too deep into my background, but where I sort of I mean what's been sort of shocking about this year is, you know, in many ways a lot of the vision that like started with Jake quon and, like you know, I was an early contributor to Ethan, sort of a lot of components of just like work and thought over the last five or six years of suddenly Trut of like blossomed into reality in two thousand and nineteen, but all in kind of like this very like compressed way. And so I, you know, when I you know, sort of had been, you know, hearing about the Libre Project for a while inside of facebook before it was public, you know, had been sort of been...

...aware that they'd looked at tenderment, but was honestly quite surprised, you know, when the public announcement came out and the source code was open that I'm like Oh, I started looking. I'm like this is tenderment, this is this is tenderment, and it's, frankly, like kind of shocking to see, you know, while we were, while we were working really hard in two thousand and eighteen sort of getting tenderment in the COSMOSS K production ready to watch the cosmos hub, facebook headed entire team of engineers re implementing exactly basically this an extremely similar designed to design that was inspired by Jay's earlier work. And so the minute I saw that, I'm like, okay, like you now on one hand, this is a huge validation of the design and the work. This is clearly a bunch of engineers who have built many real systems and real distributed systems that serve many millions of people. Were had looked at our work and was like this is the right architecture and the right design. But we also sort of looked at this. I also did, and I'm like, you know, we sort of designed all of this stuff to be our vision of tendrement. Our vision of all this stuff is really is it as a tool of human liberation, and we weren't just building this to like our vision was not to sort of empower like nation states and large corporations as much as it was people, and it's sort of was a little bit of a call to arms. I think for Jay and myself, we're all responding to it in different ways for everyone in our project. But like we need to respond to the the adoption of our technology by existing entities with great power in the and in the world and figure out how it is that we how how it is that we continue to pursue the mission of like sort of economic liberty and social coordination and so, you know, by participation in the open Labor project is mostly sort of not as a tenderment employee or as part of it, but as part of the larger cosmos ecosystem inclusion as a whole. Is Very interested in the Weebro Code Base. We have a number of projects that we've been working on sort of related to the Webro coade. Basically. It will go into is more detail about what and why that is, but we have so we've been contributing to the open we were project and helping them spend up deav nets and writing to or for that awesome I saw. I obvious question, I think, from here. Why start something new? Why make a clone and repurpose a lot of the stuff that leaver's doing and not try and build on one of the ecosystems that currently exist? Is it not supporting those ideals enough, Lucas, once you got to start start off. Sure. So here's the thing that I think is sort of I think that's the hardest part of what facebook is doing is that if they actually launched this, it's going to become kind of the defecto smart contract platform out there, not not by any other for any other reason than just sheer scale that they have and the partners that they have. Yeah, and so current market reach goes a long way in terms of putting things in the hands 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 those developers that will eventually are attempted today to go to facebook or that are or on facebook once it launches? Do We, through advocacy or other means, try to convince him to come to other smart contracting platforms, or do we create some kind of an off ramp for them or or or net that we can catch them before that they would go to the facebook space? And so, you know, we've talked about this a lot internally. Like you know, one interesting approach would be, you know, when eath to launches and they have execution environments, that we could have a move execution environment and stable coin there. But you know that and that could be could be a strategy, that could be an openly for project at some point. But I think I'm maybe I'm more up. So I'm more persuaded by the Internet of blockchains story and I think that at least having one chain that operates similarly enough, that has...

...has compatibility with the libre chain will help us advocate for developers, but also maybe bend facebook and in the right direction, gives us a little more leverage on what they are doing. So I think. I think there are many open libre projects that could exist, but I think there should be one chain at least that is a that is perfectly compatible. But I think there are many there are many alternatives and many options and a lot of projects that are under the openly Brumbrella that could be implemented in, say, etherium or, say, directly in the consumers ecosystem. So I guess I'll take my stab at this, which is I think the thing that is worth really remembering about the current cryptogish stem is how small the current crypto ecosystem is. It's small in terms of developers, it's small in terms of users, it's small in terms of assets under management, even though we've had this like x growth kind of over the last two years. That meant that took it from completely insignificant in terms of all of these things to mildly interesting. Yeah, buzz learning, yeah, buzzworthy. We're still along. We're still a long way from the level of adoption that makes sort of first mover advantage, like obvious sort of overwhelmingly dominant force. And what we you know, everyone in the you know who's been working on sort of the cipher punk end of the cryptocurrency spectrum has been working to like organically build network effects. But the reality of the world is they are are large networks and large network effects that already exist and if our technology is adopted, you know, cipher punk technology is adopted, you know, it's like, you know, I think the I think the best example is with the signal protocol and WHATSAPP, you know. You know, Moxie and Trevor started out building signal, you know, on boarded people who are mostly in sort of the activist, political, discimate and privacy communities adopt. You know, got couple hundred thousand users at the time, but, like, you know, it was like and then they convinced the WHATSAPP founders to adopt the signal protocol and they flip the switch and turned on a billion users on and encrypted messaging using the signal protocol, you know, and and that was a huge that was, you know. Again, that's that's that is the power of cipher punk technology being adopted by existing large scale networks, and so we don't know and there's a lot of complexity, which we're going to do. I'm sure we're going to dig into how successful Freithbook is going to be with bringing any of or any of the other players that are like large in the world, like the Communist Party of China or any of these other large, significant players that are exploring these technologies that we all helped come into existence. But if they do actually succeed in that way, there's going they have this possibility of bringing enormous networks, enormous developer relations resources, enorm as you know, sort of distribution channels to this space and when we when we see those things adopted, it is worthwhile, as sort of someone on the cipher punk end of things, to figure out how it is that we are going to reinterpret, reappropriate, operate within a context where these sources of things are happening and certainly not ignore it. Yeah, so riff a bit on sake saying I think that there's this there's a sense of inevitability in the in the in the cipher punk end of the cryptocurrency spectrum, that that permissionless and trustless networks will win eventually no matter what. But I actually think that we're losing and and I think next year it's going to be it's going to be an uphill battle for all of us with these hyperscale corporate currencies like facebook's. And on the other end of the spectrum is the China blockchain project, and I think that's something that I think is remarkably, is not being talked about enough. I think that those two networks are going to probably take...

...up the majority of let's say, it's use this word, but more legitimate use cases out there, so use cases that are closer to the mainstream, that aren't, let's say, in the renegade or defy space. I think those two, those two networks on their own are going to take up a majority of the use cases. So I can see that. I see where you're coming from with that, and especially because China has such a global dominance in I mean and they're so keen to adopt things that are centralized. And one of the points that I really want to bring up earlier, but my Michaelson works I couldn't get it out. Apologize, is I looked at the open the openlyver website and you're very clearly saying this is a distributed system, not a decentralized distributed system. Now I think that it's interesting when I hear Zaki talked about the first principles of Cipher Punks, Yada, Yada, Yada. One of the things that we were striving for is this idea of who controls this, and I don't see how the system you're building will be any different than the system that facebook would build, except that you would be doing it with people you trust and you don't trust facebook. So how are you actually differentiating the open libre project from the actual libre project if they're both not technically decentralized? There must be some some misunderstanding there, I think. First of all, we're we haven't made any claims as to how we want this network to launch, but we're very clear that we need such a system to be as inclusive as possible, as decentralized as possible, permission less to the to the maximum extent possible. So I see I actually misread something. So yeah, you're right. You're saying that you don't like the leab platform because it's distributed in a decentralized you're going to be attacking this in a decentralized way then. So what we really want to create is the space for folks that are interested in the cipher punk approach to block chains and cryptocurrency to create something that is going to have sufficient reach by taking advantage of by by using the technologies that these large type of scale networks are building. That's use it to our advantage. That's that's as simple simply as I could put it. I think. How do you see? What is what is the design approach? Yeah, exactly. How do you do that? How do you get over, for instance, message scaling problems, considering that, like facebook, would be using hot stuff, which, oh, of is it? O of ends. It's what I think sack he was a very time we've earlier when he was saying that that's their implementation is very, very, very similar to tender men. Yeah, so, so you know what problems are. Tenement, tasing? What what does open libra hope to do? Differently, how are we going to keep this decentralized? What is what is backing this? These are all questions I still have. So I'm mostly of the opinion that the like consensus protocols are probably like, not really, especially in the post two thousand and nineteen era, like a hugely differentiating factor around decentralization. I don't, I think you know like we have. We have, I've I've sort of been very much taking the position that essentially consensus protocols are over that we have repo sparts in the asynchronously safe design space like stellar, with federated in Byzantine Agreement, like sort of tenderment hot stuff, which is sort of just a nearly optimal implementation of and like robust implementation of classical bfde consensus that, you know, easily scales, so you know, to hundreds and thousands of nodes participating into consensus and architecture and snowman from the avalanche team, which gives you, which he uses, you know, probabilistic approach, but gives you, you know, efficiencies when, if, if, somehow we could get to millions of consensus nodes. But essentially, given that like where we're at right now, I consensus protocols are, I think, essentially over at in terms of what I think of as like a realize like important, interesting pieces, and we're mostly into this new space where we have to think about economics, like economics, incentives, coordination problems, collateral efficiency, you know,...

...composability between blockchains, exits from existed like how do you exit a system into another system? All of these little, like higher level things are by far more dominant than sort of these like questions that we spent a lot of the last five years sort of obsessing over. But we've got into a place now, how where we have enough stuff is technically mature that we don't read. That why this is not no longer the where the interesting problem is. Yeah, I second that. I mean, you know, we went through this phase of I guess the ICO bubble and hype where, you know, there was all this consensus porn going around, everybody optimizing their different like back represents us. Yeah, different consensus. Outrun that and you get and that's where you get a lot of the professor coins coming in and whatnot. But but frankly, you know, we all know that consensus is more expensive than the alternative. But right now we were struggling, right now to have use cases. They are willing to spend the money needed to to to put transactions on chain. So for me it's obvious that the problem is in the space of a product, is in the problem with abuse cases and and network effects, and it's that's still an unsolved problem. Now, getting back to your question about, you know, how do we make this more decentralized and more permission less than facebook? I think I think the bar is actually quite low to do that and Cosmos has actually done a, you know, a really good job of showing that this is possible. I mean that's that's what's interesting about the Cosmos Expect Arman. What do you mean by that? Is that, like there's a bar low because of the economic distribution within the network? Yes, because the economic distribution of facebook is, you know, a handful of hyper skill corporations and venture capitalists that have an equity interest in this equivalent of a Swiss lllc, and that's, for the foreseeable future, the only way of participating in the governance of the of the nutwerk. That what's success. What success in terms of decentralization, because I obviously the bars well below if you look at any level of decentralization, I'd say libra is is is a at the least the surface level. Is a success from how things currently run, because they've asked other people. I'll be at the more likely their friends and to join into what would be the consensus of libra. That's that's a drastic step in what we would consider the right direction of managing such a such a platform. What is success for open libra? To Take that even further, I think if we got to wear the cosmos hub is and and the direction that they're in, I think that's a that's a terrific start. I mean, I have a dream. You know, my vision is being pretty happier. Be Yeah, I've a dread here, which is that basically, if there are is the finity group of people who want to share a technical infrastructure for their economic coordination, it should be possible for them to use a blockchain as the dominant, as, like the primary organizing mechanism of that affinities groups like technical and economic coordination. That's really the goal. And so, like you know this. Now. What do I mean by affinity group? I mean like literally everything from, you know, municipality to union, to club to a bunch of people who like to play a video games online, if they if there's if they have needs that, you know, if we can a lower the baried entry small enough, far enough, and they and we can and we can make these tools easy 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 groups, amongst these groups, and that that gets you the decentralization I say. I typically refer to these things, but what you for describing as a micro communities and the advent of blockchain adds a microeconomy to this, which actually gives it a lot of like real human like interaction across contribution in those in those microeconomies and allowing people to be...

...able to spin those up within the context of whatever they care about and interoperate with the other things that they care about, book with with the value flows of those things, is, in my opinion, the future or the vision of what all of us is now, I guess for what I from what I understand, based on the amount of effort you're putting into this, you feel facebook will coopt that and a lot of this effort is to show that it doesn't have to be done that way and give people an option elsewhere. So what my worry is, or what my concern is, is that on addressed, you know, in without without significant effort on our part. What could happen. Is is is, the is a is the corporation, you know large, large multinational global corporations that are all in for a variety of different reasons, all looking towards blockchain technologies as new sources of revenue and new sources of new abilities to exert influence. Do the go to market and the product market fit to these large scale networks that they already have access to? Those are the technologies that most developers use and the only place then to deploy those technologies are in spaces that they that, you know, those corporations have sort of founded and established, and we basically don't get any real sort of fundamental human improvement in conditions, because what we just did is we went from being okay, like you can watch an APP and connect to the facebook API and you can use, you know, facebook's payment rails. There too, you can launch a smart contract on the libra blockchain and use libras payment rails. But you know, there's just like facebook can invict you from, you know, the facebook pay project, the open the libra governance can can evict you from the libra blockchain and all of your investment in that technical stack, in that knowledge expertise, etc. Goes Away. And what is the world that we're trying to build? We're trying to build a world in which you can safely invest time and energy and expertise and capital, not understanding and learning about and becoming an expert in the technology, knowing that there will always be networks that you can deploy that technology into, because there is no choke point where you were. If you're said no to you there, there's nowhere else to come next. A lot of sense. I like. I could see how that would be quite valuable, so that people always have somewhere to go with the experience they gain a lot of this stuff. And Right. Well, how does it? How does economics come into play? Your doc you mentioned that consensus is we're not going to call it dead or done, but like innovation, there doesn't seem to be a tremendous amount of potential innovation there. We kind of know how consensus works. We just need to build implementations and things that use it, so on and so forth. But, like the a lot of the questions is the economics, or Crypto Economics, whatever you wanted up calling it, of how value flows within these systems, and I feel like Lucas. That's what you bring a lot to the table and what like. And what are you worried about this? FACEBOOK's attempt to do libra had you worried about something and with that paramote economics perspective, for just kind of how you feel theyre going to how they're going to do it. Yeah, I think they're a number of concerns with how they're going about it. I mean, let's start with perhaps what I think is compelling about about libra. I think that a global, what I call inflation stable asset that could be deployed to billions of people is compelling and I'm I'm not quite agnostic to it, but I but I think would be interesting for to get it, no matter who it comes from, to a certain degree. But I think the trouble that we have with facebook approach is that, first of all, it's backed again in just regular currencies and so it doesn't really get us to the to the idea of a government independent currency. So I think there's...

...an implementation question there. But I also think that they chose that design for regulatory but also for strategic negotiation with for purposes for negotiating with large nation states. We can talk about that in a minute, but I think the overall design of the libra ecosystem is it's designed as a full reserve bank. So a lot of people, so this may not be familiar to everyone, but there are there's a certain type of bank and you have these in sort of the very niche banks and have them all over the world, usually for offshore using offshore locations. But the appeal of the of the Full Reserve Bank Bank is that they don't lend out any capital, so all the assets that are put into checking accounts they remain and checking account and there's and that's its purpose. It's to be the most secure type of bank out there. It's not a great business if you're running a full reserve bank because you need to collect fees from the actual depositors really try to offer other services on to it. But libras designed as a full reserve bank, meaning the end users who want to hold libra, libra coin, they have to buy it through an authorized reseller, probably something like coin base, and then coin base has the ability to issue libra into your wallet and then has the obligation of taking that dollar that you bought your libra for and putting it into the one of the facebook trust effectively. What does that mean? The end user is paying for the privilege of holding libra in all sensibly secure, secure bank. So what how is it paying for the brothers? Because you're not getting any interest your your deposits. So why is that worrisome? Well, facebook is trying to get this full reserve bank to be regulated as not a bank right, and that's where a lot of the I think that's the sort of the the small amount of centralization that they have serves for that. stratus serves for that. Serves to negotiate with the regulators to say, well, we're actually not one, and to tea where this decentralized things, to decentlize blockchain, you know, sprinkle some some other buzzwords on this, but it's not a bank, we promise it's not a bank and we don't want to be regular as a bank. And now the trouble, though, is that it it works functionally as a bank and if it gets to the scale that we think it could get to very I mean facebook could very easily get a trillion dollars in there. Ten trillion. Is that possible? I mean, I don't think it's I don't think it's. I don't think it's hard to imagine. They're being that amount of capital and there would be one of the largest banks in the world at that point. And then, the way this is designed, you know, it's then it becomes a bank that's actually too big to fail. That's lit that this one would really be the one type of bank that's too big to fail, because there's nobody that could bail it out. You know, there's no government that has real jurisdiction over it. The governance is governed by, you know, the association members, which is just effectively an LLC. It's the investors. So there's this really disturbing and perplexing sort of situation that facebook can find itself in, where it runs from the largest banks it's too big to fail and the end users don't really have any recourse to that, don't have any say verywhere. Why would say like this is a good reason, why would never launch? And this is kind of the arguments we're seeing. You know, like Meltam did a really great job. She wouldn't before coccressional committing and she was she she laid it out. I mean this is easy to the exact points you keep bringing up and people are hearing this and going hey, facebook, stop. So why do you think they're going to succeed despite this? I don't know what governments can do to stop them, honestly, so I don't I don't know what the US government would be willing to do to stop them. Again, I think there's a lot of circus going on with the with the congressional hearings. But think about it, like the US would probably have to rewrite a lot of its banking regulations to be able to stop libra. Me They could. They obviously, Congress could obviously pass a law. Well, there's laws to say you're not allowed to make a currency thin competed to the US are. So they could just use leverage, ones that are already existing. Like what? What? What is? What is the thing that you think will sway them to okay this, because I have a feeling that's what it's going to take. I mean straight up, they control the power of force and that's a strong, powerful tool, and they do have the ability to draft laws and they do have the ability...

...to look at the current existing infrastructure, such as the major banks that exist. Who Won't be happy with this hostile takeover of the economy and they're already entrenched in what's in our current political system. So what makes you think that facebook could actually succeed? I'm not really seeing that part. To me, it seemed like it was dead as soon as it was announced. No, I'd say I disagree. I think that. First of all, I think banks are trying to become technology companies and technology companies are trying to become banks. I think that's the bigger story that's going on. And so if you had the US, you know, if you had congress past some kind of a law that forced technology companies to stop being banks and banks not be technology comp you're gonna have actually a lot of people upset and I think it's it would probably be challenged as in constitutional anyway. So I think there's a bunch of other challenges that, and this is kind of comes down to, like what I call the adolescence of Gel at, a political significance of black chats. You know, in a world that was were the dollars dominance was unquestioned, where geopolitical alliances between nation states were stable, a space for something like we were to succeed would be small, just like in this in the in the same space that, if that was true, I think even demand for Bitcoin and trip differences would be much smaller than it is today. I think the you have a long run being trends in geopolitics and I'm will go through them, but that why enormously influence this. The other thing to understand is this is all happened before. The origin of the Federal Reserve System is a group of incredible techno, of upstart, technologically significant financial firms seizing power from both the state governments and the legacy banking infrastructure that was based in Philadelphia, from New York, and being like we are the most technically sophisticated actors, we are the ones who have them, have the the most reach, the most ability to access capital markets, and we're going to actually displace you. And not only was the Federal Reserve of privately created entity that was only later incorporated and sort of integrated with the government, but still is a private entity. That so a okay, this is all happened before, so in all likelihood it will happen again. The second piece that is worth observing is the deep instability around the dollars dominance that, after you know, the September eleven terrorist attacks, the US government turned the dollar financial global financial system, into a global like the dollar, into a surveillance instrument, and that really undermined the rest of the world's desire to transact in dollars because it comes with so much surveillance attached to it. And then you have this, you have things like what just happened with breads it you know, I think I've commented before that I think one big winner probably of the of the of the Boris of the Conservatives in the UK's majority and dominance in the last election is now that they have a major nation state that is going to be probably aggressively looking for these kinds of collateralized large scale fintech things. You know, the UK was already been one of the most progressive places for doing banking innovation in the world, and that was when it was still under EU banking regulation, and that won't be true within a year or two. Okay, so why? Why do you think people are going to adopt facebook? Then let's talk about the social application of this. Why specifically facebook, given the fact that they're taking on so much heat? I actually see a project like open libra being easier cell than facebook's libra. Because not, because I understand that there's an you know, they already have APPs on most devices, Yada, Yada, Yada, and infrastructure to support this. However, I also kind of look at it as them having a human. Your PR problem that they're not going to be uphevercome. Do you think they will be like? Why Libra? I think opendly brows a good shot. So what my take on what I think is going to happen is either, you know, the narrative will shift in facebook's favor and you'll see something that that you know more closely resembles what they proposed this year in terms of Lib actually getting into production, or the narrative...

...will continue to be adverse to facebook. But the simple fact that facebook sort of opened up this going to create so many like a giant list of hundreds of other corporate entities that will explore similar structures and you know, eventually one will succeed and facebook may just partner with the whoever succeeds, or the top three that succeed like this doesn't like. The reality of how this plays out is it doesn't is for facebook to bring their existing network effects to the to this opportunity. That is clear. That is opening up. They don't need to do they don't need to just charge ahead with libra. They may have just they've already created enough space that something like libra seems to me to be inevitable. If it's not, if, even if it's not, doesn't directly come from Libra, I feel as though that that the quality success or that the likelihood of success, is heavily depended upon who joins these networks, in the capital they bring to them. How are these things are backed in the distribution of those funds that and it seems as though facebook and Co have that figured out. They have a good idea on how to do it. They they seems as though they can potentially get a lot of people to throw money at that. If you feel that ten trillions or tens of trains can get into that. How does has an open system do this? Does it does it? Does it need can it even compete with something like that, because it's retainly it certainly can't do it from a physical asset standpoint and has to do it from something that they're digital asset, that digital scarcity. That's an interesting point and and again, what we're committed to is to researching the different types of stable coin implementations that are sensible or global adoption. I think that's the that's the commitment that we have. But I think the libra model is I could actually be replicated quite quite nicely among many affinity group. So any small, any medium sized that's a hundred thousand people that we're using such a network. They could, I think that's sort of the you know, population of a hundred thou people could easily pay for the administration costs of organization, organization like this. And again remember that the facebook assets actually in their design and the libra design, the assets come from the end users. They did. You know, you do have some money that's put up by the by the association members, but the model is predicated on the end users actually putting up the capital for it. I think generally, I think there two ways to think about stable coins generally speaking, and it's about who pays for the stability. So you have the libra model where and it's the same thing as the circle model in any of these fully fully collateralized assets. That so these models it's basically the network that has to pay for the stability somehow. So the network has to get capital into into the network and remunerate that capital so that it stays there, you know, fully backing the coin. So effectively, the network used to pay someone to put money in. Now there are other models which are quite interesting and that's the the maker model, for example, which is basically using creating a mortgage market and in that case the person paying for the stability is actually the person taking the loan, so it's actually the person providing the capital, and that's quite an interesting model because it's scales different and it's actually probably more decentralizable generally speaking. So I think those are two models that a network that's running, that's trying to create and use a global stable asset, those are two models that could be used. The facebook one is easy to implement and the administration costs are not actually that high as might seem and there's a lot of pressent for legal present as just there there's regulatory kind of clear waters, but it comes from that one. Yeah, the maker model is less it's less proven in the regulatory since it's still it's still, as I consider, a renegade bank, but it could it could become have more regular regulatory certainty, but it also lends us up well to decentralization. So, you know, I know that you've basically said consensus is a solved problem. Zake it, and I understand that. I kind of...

...agree with you. But they were only scales, but so much it scales the one hundred notes, and that's because it is a classical protocol and there's certain are completely nonsense, like libra doesn't scale, though. Heard now. I mean we so based on just like like level of maturity questions. So we ran tendermnt at two hundred and six nodes during game of stakes and it was running at basically the same block time. The cosmostub is running right now. If we wanted it to be five hundred nodes, like it would probably work. And there's a level of real small number those actually. I mean like that's really really that's why it's it's you're using coloss already, because people use a costal consensus protocols because it has features which not commodo consensus does not mean that just now is that consensus of like twelve nodes. So like let's like not be like super excited about how scalable, not commotic at the truth in the real world. The bigger problems, when I say like consensus is a solved problem, is we don't really have a mechanism of economically rewarding paying for the operating cost and, said, devising the sovereignty of even a few hundred nodes today like those. That's the upper limit. The upper limit is not can we read a consensus protocol with a million nodes in it? The the upper the limit is how would we even pay people through that system, through a system to like actually be to like spend time and energy on no man management and like actual have like sovereign independence of those notes? Those are really the fundamental challenges at the current moment, not the question of, like, Oh, can I write a consensus protocol with more nodes in it, like we can add. We you know, we could change the cosmos hub to have five hundred or a thousand nodes tomorrow. We couldn't pay those people. With a billion dollar network. You probably need something on the order of, you know, hundred billion dollar networks before you can even start getting into the realm where you can pay thousands of notes. I mean, of course that also depended on the cost of running a note. If the cost of running a notice negligible, whatever, whatnot right, you know, and I'm going to push back on that idea, because it's not the cost of running the node, it's the cost of the human beings time to like analyze the updates, understand what's happening on their node, figure out whether, you know, participate in governance all of those questions, which is what the what is what, like sovereignty brings way and what that? That's what it means to be like a sovereign economic node operator. Passive note operators that just, you know, like we get an automatic update to my note. I push yes every time and I don't know anything more. Do not add any value to the decentralization of these systems. Yeah, and that's also another good reason why you should have multiple implementations of every note software that's out there. I multiple people it would just to first find the network and stop that kind of stuff from happening. But yeah, no, I see what you're saying. At the same time, though, I'm looking at this and I'm going, okay, we do. We are looking at a target world where IOT devices might feeble to exchange on this kind of stuff. If you have a hundred nodes. You're still looking at. Is Your iot device need to be a consensus node? What is the better ITOT devices not need to be concessus node. It needs to be able to manually since transactions. So we need some sort of end points communicate with. This is would be one of these hundred modes, or it could be distribute the load across something else. You see what I mean. And so it has. We have more things trying to entrance. You can have ingress that scale, like ingress on transactions that scales quite nicely. Again, like this all like works on Cosmos today, like you're not ingressing, like at some point you have to gossip to the walk or to one of the box creators, like that's inevitable. But, like you know, and we were actually has like a has a great mem pool design. It's like one of my favorite pieces of the codpiece of the Code I've been strongly advocating for. It was actually roughly the design that I was thinking about for like tender men's mental to point out, but had like a bunch of annoying, complicated design prom problems and then I like looked at the Labrad design and like Oh, yeah, that you solved all the problems. Okay, we're going to steal that back. I would argue that none of that matters right now. It's we're having a hard time trying to make blockchain networks. That it's you experience. I know for every on that we're having a...

...hard time making blockchain 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 and who benefits from their use, and that, I think it's quite asymmetric across the board, and facebook will not be different. And so, like, the goal and all of this is to find in sittimization mechanisms. I think was act was getting sue is that, like, how do we design these systems of such a way where the rules tend towards quote unquote, good use? And then how do you to find good and the consensus mechanism is a integral part of that for sure, because that usually ends up being how you distribute money in a lot of ways, especially like feed collectors and those people who are actually doing the work of running the network, so on and so forth. But like we're like how are you going to solve like is is open libra an attempt to solve these problems, or is it just like, okay, cool, let's make sure that those who participate in libra have a place to go when Shit hits the fan? No, I think we definitely need to solve the use case problem. Like I said, I think that that is the problem of all blockchain networks today, is that we need use cases that are at that actually need to use these technologies and pay the cost for the technologies. And I think that the biggest problem we have generally as an industries that we're all trying to build products for ourselves, and mostly rich countries, so United States and Europe to our and certain degree in Asian but we don't need a lot of these technologies. So we have good information in markets, we have pretty good confidentiality in certain in our dealings with the financial institutions. But you know, places that actually need these these new technologies are in developing missions, I mean, so you know, how can we create new markets in these places using using technologies? That's the type of exploration that I think we need to do and open libra. We're we're partnering with the nonprofits that are most interested in doing that and that have been doing that historically. So the Danish Red Cross, for example, is one of our supporters and they participate in governance at open the right and we're designing a lot of our technology and application layer tools for the use cases that they're coming up with. And this is these are things like microinsurance, micro credit, local currencies, these, these are actual tools that are useful in large parts of the world that blockchain can actually do something. Now, I'm actually quite skeptical that blockchain can offer much value for folks in the United States or in Europe. Yeah, I kind of see where you come from with that. You need it. You need at least in order of magnitude, higre, better user experience, better feature set in order for people to just look at it these days, and are any days really, I mean, and blockchain as it stands is actually a step down from our current system from a user experience perspective. This is something I'm kind of concerned about when people design these systems. Lately, is I'm noticing that, you know, the people wants like insto finality on ladle layer one. You look at me, go you can't do that we go. Well, my my current mean, you know, mainframe system can so it's like, well, how do you how do you talk to those people? And so I'm kind of current inference system does batch jobs overnight and they have actually the same thing, you know what I mean? HMM. So, like, how do you talk to these people who, by the way, don't need to know all that information suit and how do you hide that the details of the operation? It seems like a lot of what we're doing in this space is exposing how we do things in that gives developers comp you know, confidence in the hardcore confidence. But in the end, really what we want to give confidence to is the people who will be using this, and that's generally from a from an institutional level, people who are not as savvy as we are. And you know, as it stands, a lot of these current systems don't provide that. I think libra as a chance because it is a using classical consensus protocols, which I know those provide some of the features that I think we could maybe make this get off the ground. I think it's great that open open levers using it. I think it's great tenement uses it uses hot stuff it's Great Algum and, you know, I think I think it's really a I think it's really important that that we focus on how...

...we're going to sell this to people, because at this point I don't I don't see people, even on in the hardcore level, like, Oh, I'm a hardcore bitcoin user, actually using it all that much for right day to day things. You know, you can't buy a coffee through the lightning network like they promised. So I'm kind of you know, I'm kind of interested to see how this plays out that it's prepped up a little bit. The Stolpe like we could go on this for hours, clearly, but I know with your week we open libra and meeting, because we do go on about this for hours and it's just like a iterative conversation trying to and and one of many iterative conversations that I'm part of, trying to like address these these topics, and I think most of the the call to action is, you know, for people who are listening, is to actually start participating in these conversations, either, you know, come to show up at open libra or, in some other context, actually start building communities of people who are working on this. This process. Where do they go? You go to our GITHUB and you you can add a comment or request anywhere in there and you can come to our weekly, weekly meetings as well. Awesome. Definitely appreciate you guys coming on and explaining kind of the curve state of things, what's happened, what we're doing now and where we're going, and I look forward to learning more and hopefully contributing as well. Right, call and call and runs one of our depth are definite. Yeah, I've yet to actually run it. I just got I just got signed up, though, so I'm really sticked about that. So I'll be happy to participate in the openly project. Look forward to it. Yeah, happy to be and happy to be on the show. Guys. Little known fact, Colin is my first follower on twitter. All, yeah, I look at you, call braakes is a first follower, right, that's where you get started. Yep, without a first follow them won't be a second. So yeah, cool. Anyway, thanks for coming on, guys. It's great. Appreciate it. Ezackly, as always,.

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