Existential Risks, Ecological Economics, and How The Blockchain Will Transform Capitalism: Vinay…

Transcript of the Venture Stories podcast at Village Global, with Mattereum’s Vinay Gupta in conversation with Erik Torenberg

You can listen to the podcast here. Transcript is below:

Erik: Hey everybody, welcome to another episode of Venture Stories at Village Global! I’m here today with a very special guest: Vinay Gupta, Co-Founder of Mattereum. Vinay, welcome to the podcast!

Vinay: Hi, it’s great to be here!

Erik: Vinay, that introduction sells yourself a bit short, given your various interests and background, everything to do from disaster relief to enlightenment. So I’ll let you first introduce yourself, your background, and how you came to the crypto space.

Vinay: Sure. I’m the CEO of Mattereum, I did the project management for the Ethereum launch. My first work in crypto was in the mid-1990s, I was one of the original-generation cypherpunks, wrote a little bit of software in the ’90s, didn’t do anything particularly interesting, but I was kind of around the scene. Then after 9/11 I took a change into energy policy, went all the way through energy policy, disaster relief, large-scale scenario planning stuff. And I watched Bitcoin come up really carefully, like “Okay, super interesting, super interesting, super interesting,” but I knew from the 1990s that currency alone didn’t produce social change; I’d watched the e-gold ecosystem very, very closely, and I knew we needed smart contracts to be able to build new social structure. So when I heard the Ethereum people talking about smart contracts, I quit my job at at a think tank at UCL, and just headed directly into Ethereum, and have kind of been there ever since.

Erik: What is Mattereum? And out of all the things you could be working on in the crypto space, why Mattereum?

Vinay: Mattereum actually starts when I’m still at the Ethereum Foundation, because I keep trying to get the Foundation to sponsor a project to get the lawyers to figure out how to transfer ownership of physical goods using the blockchain. Because I figured if we can’t buy and sell houses and cars and jet engines or whatever happens to be using the blockchain, we’re going to remain stuck inside of the virtual world, in the same way that Bitcoin is kind of stuck in the virtual world; it was hard to get goods and services done, if the smart contracts couldn’t bind onto physical assets and move them around.

So I tried to get it done at the Foundation, tried to get it done at ConsenSys, but people didn’t really understand why that was necessary and they thought it was just going to sort itself out, and now I’m just running a company to try and build this one rivet, to put together the crypto world on one side and the physical world on the other, just so that we can buy and sell and rent and lend and all the rest of that stuff actual physical assets on the blockchain, without having unacceptable legal costs if something goes wrong or having a ton of transactional friction. It’s just kind of trying to figure out how to do an atomic swap for property: the die goes in one side, and the apartment comes out the other; that should just work, right? So that’s what I’m working towards.

Erik: One thing I want to start with is how crypto will change the game when it comes to fundraising and financing projects. The audience for this is a lot of investors, a lot of venture capitalists, a lot of Silicon Valley. How do you make sense of the ICO boom, what venture capital can learn from that, what we can learn from that, and how you see the future of fundraising going forward?

Vinay: My experience in the blockchain space is that it’s clocked about four times faster than the dotcom space. Three months in blockchain feels like about a year in the app world — it’s a very, very fast-moving space. A lot of that is because the access to capital was extremely fluid; frankly, most of it was completely illegal, but that’s really only because we couldn’t change regulation fast enough to keep up with commercial practice.

The overwhelming sense I have from VC is that it’s a 50-year-old model. I mean, the Valley is on its 3rd, 4th, 5th generation of VC firms, and it’s on like its third generation of actual VC people. So I think that we need to sit back and think “Okay, this model is really good at funding things that look kind of like little software companies that do software-as-a-service. It’s much harder to focus the money in structures which are appropriate for say development in hardware.” If you’re doing a robotics startup or something like that, the money needs to be in a completely different shape to a software company, but we’re still thinking in terms of VC of how you allocate funds to that.

If we think of the changes that we’ve seen in the private equity world over the past three decades, there has been so much more transformation of private equity than there’s been in VC, but VCs have actually seen far more technological change happen. So it’s weird that we’ve got a kind of static pattern for the shape of VC firms, when we’ve got such an incredibly rapidly-changing and dynamic funding landscape. I think that crypto has the possibility to bridge that gap, if we could just figure out how to cut a better deal with the regulators, in terms of doing things like changing accredited investor frameworks, or allowing the public to self-certify that they want to do this kind of high-tech funding… There must be other ways of changing the way that this operates.

Erik: As you look out the next five years, when you look at all the value that will be created from the crypto landscape, where do you think that value will be created, and how do you think that value will be captured? Will it be native crypto funds, will it be the masses?

Vinay: Our best possible case here is that the overfunded ICOs don’t get completely murdered by the SEC, and they turn into things which look like Xerox PARC. If you’ve got a $125 million raised by a project with 20 people on the staff, they’ve got more security than professors had when they got academic tenure. They’ve got a long enough horizon where they know the money is there, that they can get all the way down to the bottom fundamental problems in the field they’re working on, and get the really deep fixes made.

So I have a huge amount of optimism about the potential for the ICO-funded entities to get these fundamental breakthroughs that will be field-transforming. The doubt I have is that any of them are going to survive the SEC. I have a real feeling that the SEC is just going to methodically work its way through with a mallet, and I think that that is probably necessary, in as much as a lot of these things are blatantly securities frauds. But on the other hand, the ones that were well-intentioned people with strong teams and clear ideas, that have been spending the money in a sensible way, paying salaries and doing research, it would be a crying shame if those people got nuked as well. So I’m hoping that as the SEC continues to go forward on the regulatory warpath, that they are sensitive to whether people delivered the goods or not. Because I would like to think that the investors are better protected by a running company that delivers on its promises, than winding the entire thing up and throwing perfectly good technologists in jail because they did some careless fundraising, and I just don’t know which way that’s going to go as the enforcement rolls out.

The structure of this has to be that you have to generate the wealth by doing things that change the world. Whether that’s captured as equity or whether that’s captured as tokens is kind of hard to say until the business model finally shakes out. The tokens are a really good way of capturing value inside of a single business process, but if the company pivots, the token holders are potentially left high and dry. So it’s quite hard to design these things in a way which works better than equity, because we’ve had 300 years of practice with equity.

Erik: Totally. If you had to guess, 5–10 years from now, how are crypto projects raising money, the next generation. What does that look like?

Vinay: For the most part, I think that they’re raising money with great difficulty. The really good stuff, the fundamental, transformative stuff, a lot of those were early actors who just went for it, and now they’ve got all kinds of liability on the ICO side. The people that were a little smarter and spent a little more time talking to lawyers before they jumped are now sitting here in the middle of this kind of crypto winter mess, and fundraising is hell. I mean, we are a really, really strong player in the space, and it’s just very hard to get people to commit. Because they’re just like “This crypto thing… We don’t know,” and we’re like “It’s not about the crypto; it’s about changing the goddamn world.” The technology is there; the hard part about this is getting people to see past Bitcoin.

If you can see past Bitcoin, you ignore the coins and just look at the damn technology, it’s very apparent that the world is going to get heavily changed. If you just look around all the projects that are running on the Hyperledger, there are no coins anywhere in the Hyperledger space; those are just ordinary businesses with new technology. I almost feel like the coin thing has become such an enormous distraction, it’s not clear to me how this plays out. I could definitely see reasons for targeted currencies that are being used to tie together complex international business networks to get unified function from a whole, that can do alignment of incentives, that can handle international payments, but there were far more coins issued than business models that actually needed a token. I think that a lot of that value is just going to wind up stranded, and I wouldn’t be surprised if a lot of the token holders don’t forcibly convert back to equity. I think that may actually be how the SEC finally shakes this out, is that in a lot of cases they may just force conversion to equity.

Erik: April 1st, 2019: where are you most excited about in the crypto landscape, in terms of real value being created in the next few years? Or put differently, let’s say we’re doing this interview April 1st, 2024, five years from now we’re reflecting back on the last five years, in terms of what are the big projects that have come out that have changed the game in some fundamental way. How do you respond to that?

Vinay: I’ll tell you where this is, and I feel slightly like a traitor to my own cause for saying this, but… I mean, I was part of the Ethereum team, I’m very close to the Ethereum community, Ethereum is important to me. That said, the most exciting thing that I’ve ever seen in the crypto space is Stephen Wolfram arriving. I saw Wolfram talking at South by Southwest this year, and it was just… He’s one of the smartest people on earth, he’s in the same general category of people as Stephen Hawking, and he’s up there on stage, talking about computational contracts, and how they’re going to build all of this functionality into Mathematica, and it’s going to be the best damn environment for smart contracts that the universe has ever seen.

I just looked at that, and it’s like “Okay, the grown-ups have finally arrived, we’re really going to get some stuff done here — this is the best news ever!” He’s got an 800-person team of the smartest people on earth, they’re already producing the most sophisticated software in the world, and that notion of Oh yeah, right, it’s pretty obvious: Mathematica with a blockchain behind it, that’s the right answer.” It was so revelatory to see that… I really felt a weight of the world lifting off my shoulders, like “Okay, the adults have arrived.” Because once you get people at that level of play looking at the blockchain space… There is so much early-stage, prototyping crap which is held together with coat hangers and duct tape that there has been a desperate need for people at a much higher level of sophistication to arrive and fix it, and I feel like those people are beginning to arrive. The same thing with Telegram. I mean, Telegram takes a lot of flak in the community, but they’ve got 250 million-person-installed base, and they’ve got $1.2 billion to go and hire people that actually know computer science to go and build them a system.

So I sort of feel like the early-stage, 1970s homebrew computer club amateur generation, of which I’m a part, are about to get dumped into an environment where enormously sophisticated entities are coming here to play ball, and it’s going to be a real scramble for the early actors in this space to survive, as these folks pile in. And I’m very glad to see them arrive. It felt to me like it was a kind of completion to see Wolfram arrive in this space, like “Okay, the most sophisticated software people on the planet are finally here, and they’re taking this smart contract thing seriously. Okay, this is a phase transition.”

Erik: Let’s say it’s 2024 and we’re reflecting back on what Wolfram and what the “adults” in the room have accomplished. What are we saying?

Vinay: Here’s how it works: the Internet is a single gigantic computer, it’s a heterogeneous, parallel supercomputer, it’s multi-agent, everything is under other people’s control, but you can provision 50 petaflops of computing power trivially easily, you can sling around petabytes of data, all from convenient Web interfaces, and there is no spare computer power on earth. Every hard drive is filled with somebody else’s backups, every processor is continuously busy doing whatever it is that needs to be done, you have an international legal framework which allows you to use your identity globally, we’ve got KYC regimes which permit you to actually do the transactions. If you live in Brazil and you want to hire somebody in Bolivia to go and do a bunch of Web design work for you, it actually just works, South-South trade is enabled, and we’ve got tracking of 30% of the world’s physical assets inside of systems, because everything that comes off a production line has a 2D barcode and an RFID tag etched on it, and you can go back and trace the thing back to point of origin to make sure there was no slavery in the production, you can extract the carbon footprint, you can offset it immediately, if it’s sold on a secondary market, the warranty follows it and there’s no ambiguity about where did it come from… I mean, we do for physical matter what we did for information over the past 30 years, and it gets fully integrated into all the supply chain stuff… I mean, you just use computers to do the obvious stuff. Like, we stopped not doing the thing that the Internet is obviously made to do, which is act as a planetary resource management system.

Erik: How does Facebook play a role in crypto, or how does crypto play a role in Facebook?

Vinay: Facebook’s natural future, if Facebook just rolls forward on its trajectory, is that Facebook becomes the KYC provider to the entire global banking system. They’ve got a better idea of who people are than just about anybody, vastly more data about individuals than governments, so they basically just become the thing that does KYC and risk analysis for the banks. If Facebook became a credit rating agency, they are going to be far better at judging what kind of credit risk you present than say Equifax is, and they basically become an identity provider, and we, the citizens, pay Facebook to provide us with digital identities which are portable. I think an enormous number of people would pay Facebook for these kind of services; Facebook just provide identity, that’s what they do.

Erik: You actually gave a talk recently about the future of identity and how blockchain will affect it. Could you spell out your talk a little bit about how that might play out?

Vinay: Yeah, sure. In a nutshell here, the problem with identity is that we want identity to be perfect, we want there to be one digital identity per person, and it is all supposed to be clean and sensible. But in actual fact, identity is incredibly probabilistic. People are shedding identities and picking them up all the time, there’s always a few percent of the population that are doing things like living under assumed names, or they’ve immigrated across a country, they’ve thrown away their old identity and they’ve taken a new name… It’s extremely fluid at the edges.

What we really want is for identity to be handled in a probabilistic way. You are 90% Erik, 99% Erik, but if I’m a consumer of your identity, what I want to say is, “I want that as a probabilistic statement. This individual is 99.4% Erik, and if they turn out not to be Erik and you take a financial loss because of that, we will cover your damages.” That’s a regime that we use for credit cards for example, credit cards are hugely about insurance. The reason you could go to Azerbaijan and pay for things with your credit card and it all works out is because when it does go wrong, an insurer comes in and covers the risk, so you don’t wind up getting fleeced and losing all your money. That fine margin of buffering is what enabled us to build a global transactional network around credit.

We don’t have any buffering on identity. If you try and do KYC with a bank and you don’t pass the KYC, there is nothing you could do, end of discussion, it’s over. Because they’re constantly trying to make identity failsafe, at the same time as we’ve got massive, rampant of identity fraud, where people are taking out credit cards in the name of their deceased grandparents. The reason that we’ve got that brittleness in identity is we’ve got no way of putting skin into the game. We need agencies whose job it is to differentiate entities, to do non-obvious identity awareness, as Jeff Jonas calls it; we need the ability to turn identity management into a risk solution, rather than thinking of it as being some kind of brittle binary. And that approach is what pays for your backups, it’s what pays for your biometrics, it’s what allows you to travel and have… Imagine how much better the world would be if you’d have things like probabilistic identity documents for travel. Yes, this is your passport, but you don’t have to use your passport for every single transaction at every single place you go. You’ve got some kind of card issued to you by Visa on the back of a basket, of information, including your passport, and it just allows you to get through the world, because if there is a misunderstanding, there’s somebody there to catch it. You need skin in the game on this stuff, or it just doesn’t work.

Erik: How do you think about reputation then, in terms of identity verification but also what people think of you? Do you think that there will be a world where the Internet will move more to pseudonymous or anonymous? Do you think we’ll have multiple identities, reputations based on different categories? How do you see the future of reputation developing over time?

Vinay: I here am a fundamentalist for a position that nobody else shares, which I think makes me a crack. I think that reputation systems are inherently inaccurate, and are a more or less inherently evil — I just hate reputation systems.

The reason they’re inaccurate is… If you use Amazon or Airbnb or Uber, there are really only two reviews: there’s “This is great,” or there’s “Screw you.” If you give somebody a 3.5-star review on Amazon, it’s kind of like… if you give somebody a 1 review on Uber, you’re threatening their livelihood, and that means that we tend to lie to the reputation systems. There were probably 10 times in the last year when I’ve gotten into an Uber that had an overwhelmingly strong smell of magic tree, but I’m not going to give… You know what I’m saying, right? I’m not going to give the guy a three-star review, because that’s going to harm his livelihood, and Uber doesn’t give me the option of saying, “Too much magic tree.” It doesn’t communicate, because it’s kind of like… It’s like moralising, it’s good or is it bad, and I can’t say, “Preferences: driver is super chatty.” Well, for some people that’s great, they want a chatty driver, because they’re visitors in town and they want to hear the stories; for other people, they just want to be left alone. So there’s no way for me to express preference, it’s just “Person is good, person is bad.” Well, you know, maybe the guy likes magic tree, it’s just a… The reputation thing measures the wrong thing, so we never give it accurate information.

The other problem I have with reputation systems is it’s like ubiquitous surveillance, it’s just you’re being watched by your neighbours and your customers rather than being watched by the state. I just don’t like surveillance capitalism, even if it’s village surveillance capitalism. Even if it’s surveillance capitalism as a cottage industry, it’s still surveillance capitalism — I don’t like it.

What I want to see instead is global systems of accountability, where when somebody screws you over, you can always recover assets in a restorative justice framework. David Friedman writes about this in a book called The Machinery of Freedom, which is phenomenal. David Friedman is the father of Patri Friedman, who is currently running a fund doing kind of sea steading stuff, and Milton Friedman was of course the hardest of the Chicago economists, so there’s a really interesting Friedman family lineage on this stuff. The Machinery of Freedom model is that basically you just stake money to pay your friend’s debts, and if they screw somebody over, you pull money out of that networked escrow system and use it to cover the debt.

So when I see a reputation system… If I see an Uber driver who’s got $25,000 worth of staked value that they’re not going to be a jerk in the car, I feel pretty good about that. Because if something goes wrong, there’s a pool there for compensation, and lots of people trust this guy to do the right thing. To me, that’s the reputation that counts. It’s not what casual gossip says about you; it’s will people stake their cash, where they put their value, where they put their assets behind your reliability and behind your professionalism. I think that that model is completely revolutionary.

Erik: How about reputation in the sense of… When I get introduced from Patri to you, I google you, I look you up on Twitter, I look you up on LinkedIn… 5–10 years from now, how might that online evaluation of people be radically different from what we do today?

Vinay: Let’s distinguish this between the kind of social and the professional. On the professional, there are two things: there is “Is this somebody reliable?” and there’s “Is this somebody brilliant?” and these are two different things. Downside reputation risk is what protects you when somebody screws something up: “This has gone wrong, I want to hit the insurance policy. This has gone wrong, we have a dispute, I want a claim on the network to escrow, I want to make a payment,” and that approach is pretty practical. There’s a company called VouchForMe which is doing that stuff right now, they’re building network escrow systems, and you can even run that on credit cards. The upside is the thing that you might think of being like fame, and the fame thing is how many followers do you have on Twitter, how many people do I know that you know in common on Facebook, it’s something that flows across social networks, and that I think is much better in terms of a reputation system. Reputation systems are good for “Is this great?” but they’re really bad for “Is this terrible?”.

So I think that you could see things that look like a bit like our good old friend the Facebook Like button, where you wind up with public reputation scores that give you some notion of something’s relevance or its brightness, how shiny it is. That stuff I think you can make reputation work for pretty well, but I think it only works in the positive; for the negative you need accountability, not a reputation.

Erik: I want to zoom out a little bit, because you’ve had different careers and have thought about things from different perspectives. I’m curious to ask a general question, which is what are the most pressing problems you see humanity has in this century, and how has that evolved over the last two decades for you, in terms of where you’ve chosen to allocate your time accordingly?

Vinay: Yeah, okay — now the fun begins! We basically have two sources of existential risk, there are two things that could wipe out the entire species and all life on Earth with it. One of those things is astronomical events, like we get hit by a meteor, or there’s a gamma ray burst and we all get toasted. And you could put Carrington events in there, because they’ll kill the techno sphere pretty much completely just with giant electrical storms. Those are risks that we could take action to prevent, but humans are not responsible for making those risks.

The other class of risks is basically just bad engineering risks. Like biological warfare, that is a really stupid idea. We’ve put a ton of work into biological warfare, there’s just no good reason for that stuff to exist, it’s just the worst thing in the world, and we put an enormous amount of effort into engineering that stuff. What the hell were we thinking?! Nuclear weapons. The history of the 20th century in a single sentence: we put the plutonium in the wrong end of the rockets. If you put the plutonium in the bottom of the rocket, you go to Alpha Centauri by the mid-1980s; if you put the plutonium on the top of the rocket, you just get nuclear war –it’s just incredibly stupid!

So I feel like our big problem here is that we’re just unable to guide technological progress into positive channels. The internal combustion engine, it just turned out it was bad engineering: it was great for the first 50 years, and then for the next 50 years all that we got was car crashes, city pollution, and then we discovered global warming. Why don’t we start spending military-style resources doing technological acceleration to get us out of these gutters? It’s a problem of reconceptualising global security, so that when you have a problem that’s caused by inadequate technology, the whole world pulls together to develop the technology to get us away from that problem and to permanently fix it. We need global innovation machinery to pull us away from the abysses when we find them.

Erik: How do we develop that global machinery? We’re not currently really designed effectively for global cooperation, given the way states and countries are designed. What’s your answer to that?

Vinay: I don’t really believe in the nation state. I think that in the nuclear age, if you don’t have a nuclear weapon, you’re not really a country, and that certainly fits with the classical definitions of the nation state, that they’ve got a monopoly on violence inside of their borders. If you don’t have a nuclear bomb, you don’t have a monopoly on violence inside of your borders; if the American government decides that they want to go and pick somebody up off the streets of Sweden and just black-bag them, they’re going to do that, and there’s nothing the Swedes could do about it, because they’re not powerful enough for it to make any difference, there’s no monopoly on violence.

So if you think of the world as having just 15 countries — America, Russia, China, Israel, the UK, France, a few countries that don’t officially have nuclear weapons but could make them in a hurry if they wanted to, like Japan and Germany — international politics becomes pretty simple. Where we’ve got nuclear powers, things tend to be pretty good, because they don’t get pushed around very much; then you get South America and Africa, where they don’t have any nuclear powers on the continents, and they just get the hell kicked out of them by all the nuclear powers and they get used for resource exploitation. So the global scheme is not actually as complicated as it looks like on TV, and each one of those superpower blocs just has a couple of things they do. America does food exporting and technology exporting, Russia does energy exporting, China does manufacturing, Israel does technology and financial services — they all have really pretty large, national business models that cover the vast majority of their economic output.

So it’s not that the global situation is infinitely complex. There are only a handful of actual players, and all of the attention which is spent on people that aren’t actual players is completely wasted. Why does anybody care about what the Australian government says? Even the Australians know the Australian government isn’t really a government! Sweden? Who cares? Norway? What about it? The actual world-shaping decisions are only being made by half a dozen governments, and even inside of those governments it’s only like 30 people inside of that government that really have any power when it comes to the geostrategic level. We only have to convince like 500 people that international cooperation is the way forward, and we’ll get it. But those people are security state guys, buried way down deep inside of the nuclear bureaucracies, doing long-range strategic planning for their nations. If we can convince those people that their interests are aligned, very rapidly you will get progress internationally. But it’s not going to get done through the UN or the 200 country fiction or any of the rest of that stuff; it’s a handful of strategic planners inside of the Pentagon and the equivalent structures inside of other countries that actually make the decisions that matter when it comes to long-term geostrategy.

The thing that I think we need here is to basically completely throw away pre-global politics. Take the nation state, chuck it away, we don’t care, none of that stuff is really important. What’s important is that there are a bunch of dudes maintaining a nuclear weapon, and we live inside of an area that they tax. That’s sort of like a nation state, but we’re not so fussy about the borders and all that perceived stuff about flags and so on, that’s not really there anymore. We’ve just got technocrats with bombs, and that’s the real building block of our new political reality. Once you simplify the technocrats with bombs, and there’s a thing called the defence industrial base that Homeland Security talks about, once you simplify it to that, international cooperation shouldn’t be that hard. Because the technocrats with bombs all look exactly like each other, half of them went to the same universities… Why can’t we just get these guys to admit that they’ve all got a common purpose, like “We don’t want to use the bombs we built, we understand how bad that would be, we understand science & technology, we don’t want global warming, we’re de facto in charge of the world, and we actually all basically have the same values. Okay, maybe we can make peace.”

Erik: Right. If you zoom back out to how you identified the key threats, how does that align with how you’ve chosen to spend your time, and how you’ve chosen what would make the biggest impact, if that’s what you’ve optimised for?

Vinay: In my case, in spring of 2001 I was meditating in Chicago, and I had a freaking vision. I mean, this is not the kind of thing that… It’s unmistakable if it happens to you, and in my case the freaking vision I had appeared to be more or less directly drawn from the pages of The Hitchhikers Guide to the Galaxy or Monty Python — it was hilarious! It was about human extinction, and it basically suggested that if the entire human race went extinct, there was going to be 100,000 years of bureaucratic clean-up to do afterwards, and nobody could face doing the paperwork, so could I please go and save the world, along with like 10,000 other people that would be able to get off their arses? But afterwards, it was like “Oh, I really should do something with my life. I’m 30 years old, I’m not actually getting very much done here. Okay, I’m going to go make myself useful,” and I did actually get off my butt to go and do stuff.

For me, there are the problems which I’m well-suited to fixing, and there are the problems which are important. I’m well-suited to fixing refugee housing, I have tons of experience, everybody that has gone to Burning Man has seen the hexayurt, that hexayurt is great. I could continue doing stuff like that and getting the details right, and I’ll be good at it and it’s fine. That is going to be precisely zero good, if we all get wiped out by malevolent robots. But I’m not well-suited to do anything about the malevolent robot problem, so I’m kind of working on the stuff that is both important and that I’ve got the capability to do something about. That’s not a perfect strategy, because what I should be doing is I should be maximising yield, I should be working on the things which are most important, multiplied by my effectiveness, and I’m not; I’m just working on the stuff that I’m best at. That’s an imperfection, but it’s something that I can live with, and if I ever figure out a way of being more effective, I’ll probably migrate in that direction, but at 47 I’m pretty set in my ways.

The hardest problem here is how do we pay people to do collective action problems at a level above the nation state. How do we pay people to go out there and handle the AI problem? How do we pay people to go out there and do really good climate modelling? How do we get people motivated? Because the universities no longer do tenure, not everything that’s important can be funded in the shape of a company, charities are not very good at operating globally, and they’re very, very bad at making global, long-term fundraising plans. It’s just quite difficult to build the machinery to run an effective global government, without there being an effective global government, and the United Nations, if anything, just gets in the way on this stuff.

Erik: How does crypto intersect with the malevolent robot problem? What is the intersection between crypto and artificial intelligence?

Vinay: The obvious answer is that artificial intelligence gets to the real world through smart contracts. If the AI system says, “Right, I’ve got a car, I’ve got an apartment, and I’ve got some people getting off a plane. I’m going to hire a driver, and I’m going to put that together into a concierge service.” In all probability, the blockchain is how all of that stuff will get implemented at a contractual level; a smart contract is a contract that an AI can sign.

When people start talking about super intelligent, godlike AI… To be honest, I don’t believe in that stuff. My observation is that the smarter people get, past about an IQ of maybe 170, they begin to get gradually and gradually more insane. And I don’t think that’s because the human brain is unable to support superintelligence; I think it’s just that the super intelligence just gets swamped by false positives. You’ve got such an enormous ability to see correlations that you see a whole bunch of correlations that aren’t actually there, but you can’t tell the difference between the stuff which is there and the stuff which isn’t there, and you just wind up with a mind-like, overexposed film.

So I have a feeling that we’re going to get AIs which are extremely fast decision-makers, but I’m not sure that we’re going to get runaway, singularitarian AI; I think it will be torn apart by its own ability to generate narratives which don’t bind to reality, so I’m less worried about that. But there’s no doubt at all to me that blockchain is the containment layer for AI, like you just can’t get out into the real world except going through the blockchain, and that makes sure that the AIs can’t do stuff that we’re not aware of.

Erik: Peter Thiel has described a potential conflict or battle between crypto, which he sees as a sort of decentralising force, and AI, which he sees as a centralising force, he calls cryptos are extreme capitalism and AIs extreme communism and socialism. Do you resonate with that? Or how do you see that playing out?

Vinay: He’s a smart guy, he’s thought about this a lot more than I have. I think decentralisation is largely a myth, to be honest. You know, we say decentralisation, but there’s one Ethereum Foundation. We say decentralisation, but there are like 20 Bitcoin miners that matter — that is not that decentralised. A couple of friends of mine once did a mind-blowing talk, all my recorders were out of batteries so we don’t have any recording of it, but it was Smári McCarthy and Herbert Snorrason under the Icelandic Pirate Party at OHM in 2013, and they talked about Kropotkin’s belief that the electrical motor would decentralise Russian society: you’re going to do all of your agricultural processing in the villages, there will be no economies of scale, it will decentralise agricultural production, it’s going to completely change the world. That tends to be not what happens.

So, I generally speaking, discount the decentralisation thing to zero. I don’t think decentralisation is going to happen, I don’t think it’s that important. For me, the blockchain is about transparency, which gives rise to accountability, and accountability gives rise to trust. I think the blockchain is how we force people to be transparent in their doings as they effect the public sphere. Because if the only way that you could get these services to operate is that you have to write to a public blockchain, we can watch what people do. And I think that becomes incredibly important when we think about things like aircraft maintenance: I want to see a public logbook for every single thing that’s been done to the plane that I’m about to get onto, I want that to be public. So for me, I think that the the ruthless transparency side of this thing is enormously where the value is inside of blockchain, I think that’s where the real action is at.

And on artificial intelligence… As much as we think artificial intelligence is going to be very centralised, I think by the time we actually get to the point where these things begin to operate, we may discover that they look much more like utilities than they look like services, that the AI may be in some sense ambient. I don’t know. I’m wait and see on that, AI is not my strong point.

Erik: Going back to your ’90s cypherpunk self, if put yourself back there and reflect on what you’ve seen 20 years later, how would you and your peers back then have made sense of what’s it like now? Would it have been shocking? What would have been different than expected?

Vinay: Oh man… I mean, we would have been so proud of ourselves, we would be so proud of ourselves! All of our paranoia about “All the Intel chips have been backdoored by the NSA, man,” all of that paranoia has turned out to be complete borne out by history, we just nailed that one, we were right, everyone else was wrong. The fact that we’ve got a functioning global smart contract platform, actually a bunch of them, is absolutely fantastic. The fact that Bitcoin exists, and we’ve got Zcash and all the rest of that… The fuss that we would have made over zkSNARKS as a technology in the 1990s… We had no dream that was possible!

So technologically we’ve succeeded out of all possible recognition. Socially, we’ve just totally underestimated social inertia. You know, social inertia is just… It’s the most powerful force in the universe. So we turned out to be completely right about everything, but only half a million people noticed.

Erik: Right. How do you get over social inertia, how do you overcome that?

Vinay: I had a radical insight five years ago, trying to figure out why nobody was getting off their arses to do anything about social collapse, and what I’d realised was that the English upper classes didn’t react to World War I, even though it had killed like 1 in 3 of their fighting-age men, until about 1925 when they began to notice that they had a lot of unmarried women in their 20s around that were getting very, very angry and causing a lot of trouble. It wasn’t until years after World War I ended that you began to see real social adaptation to the consequences that had been created by this enormous killing.

So what I realised was that social inertia just tended to roll over small problems. The society just ignores enormous amounts of human suffering and death, until it gets to some sort of critical threshold, and then the society just kind of irrationally lashes out. That process I think is pretty deeply hardwired inside of human beings. Because if you’re going down to the waterhole and once in a while a lion eats you, probably you don’t want to stop going to the waterhole, because that’s bad for everybody overall; you just sacrifice a few of the weak, and everybody just kind of pretends it’s not happening and just kind of get on with life, because that turns out to be evolutionarily optimal strategy, and that is very chilling. “Oh, we actually evolved to allow ourselves to be predated to a certain level,” and that’s why it’s so difficult to get people to pay attention to things like the opiate epidemic, until it’s at such an enormous scale that there is sudden massive irrational lashing out, going “Alright, let’s go where those lions are, and we’re going to kill all of them,” that’s our next step.

So those kind of large-scale, I think probably evolved behaviours, I think we just have to really live with that stuff. I’m not optimistic about changing those patterns. I think it’s more that the smart folks have to understand that those are the patterns, and then figure out how to work with them rather than trying to change them. I think we need a much deeper acceptance of human nature as it just is, and then around that we can start trying to figure out how to make a strategy to get progressive outcomes where we need them.

Erik: Yeah, it’s interesting: you accept human nature for what it is, acknowledge it’s hard to change behaviour, and perhaps have to change everything around that, in terms of infrastructure, interface, etc.

Vinay: If we look at the stuff that works, social media works because it turns out that chimpanzees really like playing social games with other chimpanzees. It’s taking an existing human need, and it’s providing a much more complicated way of playing that need out. Maybe it’s good for people, maybe it’s bad for people, but it’s not changing human nature; it’s just a new way for us to play the old game.

If we want to change human behaviour, I think we have to make people better offers than what they have got in front of them right now. I mean, that’s not a controversial statement, but most of the offers that we’re making people in terms of trying to change human behaviour are trying to get people to use willpower to change their behaviour, because it’s morally imperative that they do that, and I think that that is by and large unrealistic. A good example of this is institutional racism. If you want to stop institutional racism, one of the simplest things you could do is just blind things like grant applications and resumes so you can’t see names, and in most instances there’s no downside to doing that. You get much clearer judging on quality… There have been a bunch of studies that suggest that it generally seems to work pretty well, and there aren’t much in the way of downsides.

That, to me, is the way that we fix human nature: you just change the procedures, the structures, the fundamental processes, rather than lecturing people about being race blind and yelling at people who turn out to be a little bit racist unconsciously, just take away the data. If you were 65 years old, and you grew up in a racist corner of America and you had that stuff drilled into you when you were a kid, it’s not realistic to expect every single person that went through that indoctrination to have completely overcome it by the time that they’re figuring out who’s going to get grant funding. So let’s just take away the information that could cause somebody to be influenced, and just do stuff blind. I think that that’s the way to approach this. We need to be much less moralising about these things, and we just need to build the machinery that gets the correct behaviours.

Erik: Are you more of a fan then of things like libertarian paternalism, or the nudge philosophy of use government and other vehicles to make choices a lot easier, or lean towards what we want to be, say not racist in this case?

Vinay: I think that nudge is okay, apart from the fact that the thing that’s doing the nudging is an institution that’s got the functional IQ of like somebody… I don’t know, I can’t even think of what vegetable you would pick. I just don’t want a potato using nudge. So if we’re going to be doing this kind of nudge stuff, I think that we have to have much higher level decision-making about who’s going to be doing the nudging and how that nudging is going to get done, because government is the last place we want to be doing that. Think if you took a consortium of like 25 Ivy League medical faculties, and you had that thing begin to make some decisions about what kind of policies you would implement with a nudge system, you sort of think “Maybe that’s going to be rational,” and then think “But wait a minute. How wrong were these guys on the whole fat versus sugar debate?”

So I kind of feel like you need to constitute a competent authority before you start rolling out nudges as an approach, and it’s pretty hard to identify competent authority right now, because the governments have blown it so badly. Religion is gone, government is gone; what the heck do we put our faith in now?

Erik: To that end, how do you think crypto and governments will intersect? Earlier you called a little bit for the fall of the nation state. But is it going to be sort of an all-out war? How do you expect blockchain and governments, nation states to intersect?

Vinay: We’ve got to divide the governments into two piles here: there are stupid governments, and there are smart governments. The stupid governments are going to fight the blockchain tooth and nail because of issues like tax evasion and censorship-resistant social networks, and they’re going to fight it tooth and nail. The smart governments are going to roll out blockchain, and they’re going to use it for massive control of their economies and their citizens.

It’s a perfect tool, if you want to run a really, really efficient state. If you’re the government of Switzerland… “We’re just going to put everything we could get onto the blockchain, because at the end of the day that will make everything super transparent for our citizens, and it will allow people to understand what their government is doing. If they could see us wasting money, they will be able to identify precisely where, and they can help us close the gaps.” Whereas if you take the blockchain and put it in the UK government’s hands, you’re going to get things like blockchain registration every time you buy a kitchen knife. So I just thing that there’s not going to be a uniformity of response here: the smart governments will be smart, the stupid governments will be stupid.

That said, I think that the zkSNARKS and the confidential transaction technologies in general are going to provoke a head-on war between government and cryptography, of a kind that we haven’t seen since the regulation fights in the 1990s, because that stuff is genuinely threatening to the functioning of the state. I mean, Bitcoin is sufficiently non-anonymous that you could just about run government, even in an environment where Bitcoin was very, very widespread; the same thing is not true for situations where people are making payments over a SNARKS system.

So once you’ve got genuinely-secure private transactions, confidential transactions, I think that you might see a lot of confrontation between government and cryptography. I’m just not sure that that technology is going to be widespread enough in deployment that that fight is going to happen soon. I think it might be actually another generation, like 10–15 years, before there is sufficiently large-scale adoption of anonymous technology, that you really do begin to see government backlash. I think it’s going to be another generation. Because the mindset that you need for use of high-security anonymity is very, very different from the mindset you need for say using Bitcoin, and I don’t think enough people have that mindset yet.

Erik: So do you think that the USA or China is going to be emboldened in the next 30 years by blockchain? Or is it going to be sort of both extremes, like the strongest governments are stronger, but at the same time we’re starting to see a lot more charter cities and a lot more independent nations or cities pop up?

Vinay: Yeah, from that angle for sure. I think the big powers are going to use blockchain as a way of basically managing their empires. The US government basically says, “Walmart, we want to know far more about where you’re important stuff from,” Walmart rolls out a blockchain, “Meet the new boss, same as the old boss, off you go to the races.”

On the other hand, the enormous technological acceleration, the rapid, rapid rate of change, is leaving most governments completely unable to do anything sensible by technology regulation, so they can’t block the bad stuff as it rolls in, but they also can’t foster the good stuff that they should be sponsoring. For example, this whole scooter thing: even the slightest trace of common sense in government could have produced a vastly better experience for everybody. It wouldn’t have taken much of a push from government to really sort that out so it was as good as it could be, and efficient and sensible and all the rest of that. Instead, it has just become kind of a joke. It may still turn out to be enormously successful, but because it’s so freaking disorganised, it really gives the whole thing a bad name.

So here’s what I think it really comes down to. I think that crypto cuts the cost of administering a government, to the point where just about anybody could start one, and I think that that’s really the crux of this. If I’ve got cryptography for managing a register of who owns what physical property, a register of who owns which vehicles, a register of who owns which land, a register of who my citizens are, and some way of stashing their biometrics in encrypted containers, I’m 70% of the way to being able to run our nation state at a bureaucratic level, and it might be 12 million lines of open source software that I downloaded mostly from places like Hyperledger. So I think of this as being maybe not so much about crypto directly empowering microstates, just as crypto being part of the arsenal that a bureaucrat would use to run a microstate.

Erik: Yeah, that makes sense. How do you view capitalism? Now that we’re entering a sort of a phase of extreme capitalism, are you a fan of Austrian economics, are you a fan of more managed, Keynesian or classical school of thought? Where are you on this?

Vinay: Oh, such a great question — thank you! I am of the perspective that what we currently have is information-poor capitalism. We all agree that markets are really good at making decisions, but we’re also throwing away practically all of the data that people need to make decisions. Because when we built this form of capitalism, information was expensive, but now information is cheap. So if I look at something in a store, I want to be able to pull out the total transaction history of that object, right back to where the metal was taken out of the ground. I think that’s my right, as the purchaser of that object, to get full disclosure about everything that went into that object. To me, this is kind of like rich, contextual capitalism. I want to give everybody huge amounts of information to make their decisions, and then what I want is for them to use software to manage the morality and strategy around those decisions.

To me, price signalling is just not enough data anymore. I don’t just want price signalling; I want full bandwidth, read/write access to the entire universe of information about my decisions, including the composition of the things that I might buy, including the options that I could have exercised if I had known they existed, and then I want to use software to crop that complexity down to something that allows me to live. “Never let me buy cheese on a Thursday. I definitely don’t want to consume anything that comes out of Bulgaria, because I went there on a holiday and I hated it,” or wherever it happens to be. Let me express my moral preferences about the world in software, and then let the software prune through the offers that capitalism presents me with, to represent my values. I think the inevitable future is that we’re going to wind up with capitalism-plus-rich signalling, instead of just price signalling.

Erik: Can you unpack a little bit what that would look like?

Vinay: Right now we’re constantly asked to make decisions on really, really poor information. Capitalism, as it’s typically experienced by people, is that you have a vendor that knows everything, and you as a consumer have practically no information to make a good decision. As a result, the vendors constantly pushing us around based on information asymmetry. If I, for example, want to get a cell phone plan, there are probably 600 different cell phones that I could buy: there are dozens of different carriers, and there are all kinds of weird, third-order things, like what is it going to cost me to get data access in New Zealand, if I travel there in a year and a half after they’ve done the 4G upgrade or whatever it happens to be.

So the insiders inside of those companies have huge access to data, they’ve got research teams, they know tons about this, and they use that to set pricing in such a way that it basically fleeces the ordinary customer who walks into the store, because they’re basically just beating down the citizens using information asymmetry. And yeah, sure, that’s capitalism, and that’s the push and pull of capitalism, but it’s incredibly economically inefficient. Because the poor citizens are making bad economic decisions for them, based on being clubbed into submission by people with vast amounts of data at their fingertips.

So the kind of capitalism that I foresee is where a combination of efforts like Wikipedia plus things like AI have given us the ability to make decisions as private citizens with roughly the same amount of sophistication, or at least comparable sophistication, to the companies which are selling us things. I want to understand what’s in my food about as well as the people that manufactured my food, I want to understand my cell phone options about as well as a professional in the cell phone industry. We do that by paying for the information and paying for the analysis in things that look like unions, or we use government fiat to basically force companies to disclose their actual costs of manufacturing, and we basically just stop making decisions based on information asymmetry. Because we’ve got the capability to build a society that runs on economies of omniscience. We make all the information available to everybody, and then we make economically and socially optimal decisions based on that availability of data, and that to me is the future. It’s a relentless squeezing out of inefficiency through bad decision-making, by using big data.

Erik: How about on the macro sense, are you more of the Austrian school, or more of there should be a Federal Reserve setting inflation, etc.?

Vinay: To be honest, it’s all crap. I mean, all of that stuff comes from a time when the predominant problems that we faced were how do divide up the fruits of industrial production. Left-wingers believe that the workers in the factory should own the output, right-wingers believe that the people who capitalised the factory should own the output. Neither left nor right has anything resembling a sensible approach to ecological economics. And if we can’t build ecological economics into the heart of the systems of the world, we’re going to destroy the planet, and it’s not going to matter whether or not there’s a welfare state at all.

So what I want to see is reasoning for ecological limits. We calculate exactly how much we can take out of the planet, and then we build an economic system that divides what we take out of the planet out, in such a way that we never exceed the planetary boundary. That’s what it looks like to build an economic model for the position that we’re now in. Marx versus Hayek was about just dealing with industrial production, how it was transforming society. We’re already through the industrial production phase, that’s no longer relevant, those guys aren’t even wrong. What we need desperately is ways of pricing carbon, we need ways of making sure that we don’t fell the remaining rainforests, when we actually need them for things like drug discovery, never mind for things like just carbon sinking.

The questions that we’re asking of our economists aren’t even the right questions. The economy is meant to not destroy the system that contains it. An economy shouldn’t destroy its country, but it definitely shouldn’t destroy its world. And our inability to conceive of the idea that we need to design an economics which doesn’t destroy the world to me is at the heart of the problem. I mean, Hayek was a really smart guy; if Hayek was alive today, I would love to see what he would do about ecological economics. But until we get to an ecological economics, I don’t really care about left-right politics anymore. It’s way too late for that stuff.

Erik: Let’s say that people get on board and acknowledge the importance of ecological economics. What do we do from there? What are the biggest barriers from us really understanding what our limitations are and how to navigate within them?

Vinay: Let me propose a really simple thing. Right now the financial system basically is information asymmetric, in that when you make a payment, nothing comes back to you. You give them the money, they might give you the product or the service or whatever it is, but there’s no bidirectional exchange of information at a fundamental level. What about a system where when I make a payment, they hand me the carbon bill associated with the payment? I book a flight, and they give me 1.7 tonnes of carbon. “Wow. Okay, I didn’t want that. Oh, and by the way, here’s a bunch of beryllium dust, and here’s a bunch of other inevitable economics impacts of flying on this aeroplane,” and you, as the consumer of this service, are just going to have all of this stuff added to your account, okay? Oh, we could do that. I mean, if I’ve got a bank account that stores my dollars, that bank account could also store my carbon, it could contain some kind of estimate of the amount of slavery that my purchasing is supporting, it could give me some indication of whether I’m eating a bunch of things which are in the process of becoming extinct, and, dammit, my credit could warn me. When I make a transaction at a store, I could have an alert that goes off on my phone, and it’s just like “Dude, that tuna was not caught in a sustainable way. Are you sure you want to do that again? — No, I definitely don’t let me do that again,” so next time it just doesn’t let the transaction go through.

I mean, blinding people to the consequences of their actions has been a huge part of capitalism to date, and we can’t afford that kind of capitalism anymore. What we need is markets which will reveal information to everybody’s benefit, rather than markets which conceal information to a few people’s benefit. And that is not anti-capitalist, but it just suggests that capitalism in an information-rich environment should not look like capitalism in an information-poor environment. We have to stop acting as if information is expensive, and we have to use legislation to do things like break open the databases inside of companies, so that we can make economically-optimal decisions as consumers. We cannot be in a position where we’re going to be bossed around by enormously huge, centralised data repositories. That’s why we have things like antitrust legislation, and the modern equivalent of antitrust legislation, antimonopoly legislation, has to be action on commercial secrecy.

Erik: If it isn’t about centralisation though, and if it’s about transparency, do you worry about a world in which the data silos become increasingly centralised and there’s no recourse?

Vinay: Frankly, we’re already in that world, because the governments are so crap at regulating technology that they’re not even able to conceive of the question. I mean, we’re living in a world where… In the UK, I think we’ve got maybe three STEM graduates in Parliament. In the US, I don’t think you’ve got a single person with a physics PhD anywhere in either Congress or Senate. How are they going to understand the world? Lawyers understand law, they don’t understand anything about engineering, and nearly all of our existential problems are engineering problems: global warming is an engineering problem, nanotechnology, biotechnology, artificial intelligence — they’re all engineering problems.

So if we’re not going to elect people that have the ability to make sensible decisions about technology, technology will wind up being perpetually misregulated. It will be an increasing menace, and we’ll get this thing where everybody pretends there’s no problem, and then you get a massive blowout, and then you get overregulation… It’s just going to be a shitshow.

Erik: How do we get out of this world, or overcome that?

Vinay: I mean, if you gave me a time machine, I would go back, and I would make Steve Jobs go and see a proper doctor, and in return he will promise me he was going to run for president. We’re not going to fix this until we get a nerd in the White House, and I don’t think it particularly matters whether that nerd is a Republican or a Democrat. I think we need to change the kind of people that are in government, and the way that we change the kind of people that are in government is you show people that different kinds of people can be empowered, and you show them what it’s like when they are. Show me somebody that ran a software company, in the White House, making decisions about American national technology strategy.

Erik: When you think about democracy, how do you see governance and political process evolving? Democracies are the defining mode of government today. How is that going to evolve over time, democracy itself, or something else that might take its place?

Vinay: What a great question! On this I have some really, really good news. I mentioned before that Steven Wolfram is getting into the whole computational contract space, and just that sense of “Oh, the grown-ups are here!” Do you know David Chaum, the guy that originally invented digital cash? Chaum has a proposal for setting up a world government on the cheap — it’s incredible! All he basically says is as long as you could randomly pick people, and the randomness is really proper random, then you can basically get statistically significant opinions about events in the world on tiny, tiny sample sizes. You robocall 10,000 people across the world, they’re guaranteeably random people, you run it through a statistical model that manages the sampling problems, like less people have phones in some countries than others, and then you have a certified translator ask them the question using some kind of robodial, you log all the responses on a blockchain, and then you use that to form maps of global public opinion. This is incredible! I mean, it’s going to cost you 10c a call, so you raise $1,000, you make 10,000 phone calls, and you get a statistically significant ruling from the world on how things ought to be done.

Now, I’m not suggesting that those kind of mechanisms would immediately have some kind of legal force. But just being able to get a sense of what the human race collectively thinks about things, in a way which is reasonably statistically sampled and fair, I think is incredibly powerful. We don’t have to live in ignorance of how the world thinks and what the world wants and how the world desires the future to be anymore. We could build a technological infrastructure, using the Internet and the blockchain and a few other bits and pieces, to reach out there and ask people, in a way that’s cheap enough that high schoolers could do it for school projects.

So I think that there are enormous vistas of possibility opening up here, in terms of building global governance, in parallel to the existing nation states, in parallel to the UN, but constituted around citizens of the world rather than around institutional power structures.

Erik: If you could wave a wand, what should the proper role of government be, separate from the role of markets or what’s done within the private sphere?

Vinay: Remember that I don’t believe in government, other than nuclear states, so to me there is no such thing as a government per se. You’ve got the nuclear umbrella, which is the area that you’re going to use the nuclear bomb to defend; you’ve got the nuclear bureaucracy, which is the thing that makes the decisions; and then you’ve got the defence industrial base, which is the network of companies, labs, universities and so on, which produce the necessary stuff and personnel to keep the bombs running. To me, that’s the real state. I mean, in a 100%, just realpolitik sense, that’s the real state, and all the rest of it is just a combination of pandering to the past and population pacification. I mean, this is incredibly bleak, it’s hardcore realpolitik… I used to work for DoD, I worked for equivalent structures in the UK… I have a very sharply-pointed perspective on these kind of structures.

So those entities, their job is to protect their citizens, that’s what justifies their existence. Their citizens are far more at threat from global warming and uncontrolled biological research than they are at threat from other nuclear states. Our enemy isn’t the Chinese or the Russians or the Israelis or the Indians or even the Pakistanis; none of those entities, regardless of how unstable they are, are dumb enough to use their nuclear weapons. Our real enemies are our own stupidity, and the enormous rise in pressure for natural resource from an emerging global middle class.

So to me, we need to build protective structures that use technology to shape the future in ways that we can all live with, and that’s the natural thing that government ought to be doing. It ought to be organising collective defence, not just from other people but from our own stupidity. “Look, we seem to be smoking ourselves into early graves at an enormous rate on tobacco. Let’s have some government-sponsored research to figure out how to get rid of cancer from cigarettes.” If we had taken that approach, we could have had certifiably, provably non-carcinogenic smoking substances in like the 1970s. But because we don’t think the government’s job is to do technology research, we’ve created a situation where the only way that we know how to conduct ourselves is either fighting wars or banning things. There’s no creative engagement with technology from the state, in a way that’s explicitly an instrument of public policy. I think that could be changed extremely rapidly, and it would fix a lot of the problems that we’ve got in innovation funding that you see in venture capital. Because it’s not fair to ask venture capital to solve the world’s problems. You might get lucky with an Elon Musk once in a while, but it’s not fair to ask VCs to do the government’s job for it.

You see what I’m saying, right? It’s just a question of ambition. Silicon Valley is really effective in terms of changing the world, but an awful lot of stuff is being loaded onto its shoulders.

Erik: You thought a lot about the future, from different angles. How have you been influenced by reading a lot of science fiction?

Vinay: My core thing here is that science fiction is basically the literature in which engineers, when they’re young, figure out how they’re going to spend their careers. Each science fiction novel basically lays out a perspective for a set of things that would be interesting, and then it explores how that technology interfaces with society. Most of the young engineers that I know that were motivated by sci-fi, they read something and they liked the scenario that was being painted, and they said, “I’m going to go do that,” and that was true in my life. I read a short story by Bruce Sterling called Green Days in Brunei when I was a teenager, and in it there’s a Chinese-Canadian engineer who sees a bunch of Buddhist monks building food and shelter and housing technology out of plywood, and just becomes involved in the project and that becomes what he does with his life. I remember reading that, in rural Scotland in the 1980s, and just being like “I could do that, I could actually do that,” and it was like “Yeah, that’s what I’m going to do.” and 20 years later we get the hexayurt.

So I think that there’s an intercultural transmission that’s carried down through science fiction. Arthur C. Clarke proposes the communication satellite, then it becomes real. All of this virtual reality stuff, that’s all William Gibson and the rest of his mates in the whole cyberpunk world, all the cryptography stuff is also from the cyberpunk’s… All of these things are manifestos for the future, and people just see something they like and they then dedicate themselves to building it. I don’t know how else engineers become engineers. I feel like science fiction is completely core to their identities, in a way that is not usually acknowledged. I’ve had some dealings with William Shatner recently… I mean, it’s just like… It’s very hard to think when I’m talking to the guy, because his resonance with my entire culture is so powerful. And it sounds absurd, but I took all that stuff up when I was a kid, so it’s completely soaked into my identity in a completely rational way, and I think that’s how science fiction is for everybody.

Erik: To that point on identity, talk more about how your Scottish and Indian descent has influenced you.

Vinay: I grew up in Scotland, before the invention of racism. Scotland in the 1970s and 1980s… I grew up in a super poor neighbourhood, and I mean super poor, like really serious, like as bad as the projects get in America kind of levels of poverty, and it was almost entirely white. There were a couple of Asian families, there were some Vietnamese, a couple of Koreans ,there were a few kids from Bangladesh, there was me, I was half-Indian, and there was just… no racism was ever considered to exist. Even words that you think of as being pejorative, like the word packy, being short for Pakistani, at that point in Scottish history, that word just meant small shop. There was a shop down from my house that was called that, and it was owned by white people, operated by white people, and always had been. So I was lucky enough to grow up as an Asian, in a time and a place in Western culture where my race was just never considered to be a factor, and I think that was an amazing privilege. I’m not sure that anybody has that experience now, not because there’s more racism, but because the combination of racism and antiracism has just made race so much more of an issue.

So I got a pretty utopian experience being of mixed race, just because that was the place and the time. And then as I grew up, I became increasingly aware that I’d never really fitted into either culture. I didn’t have enough of the Indian ways to really get on all that well with my father’s family, there were all kinds of little things that they did that I didn’t quite understand, there were postures and procedures and protocols that I was just alienated from. At the same time, I had absorbed so much of the Indian world model that I just didn’t get the way that my peers operated inside of European culture, they just weren’t philosophical in a way that I could relate to. They were very heady and they very verbal and they weren’t very experiential, and it was quite alienating.

So what I discovered was that I had to make my own culture. I couldn’t really fully reinsert myself into either matrix — I wasn’t Indian enough to be Indian and I wasn’t Scottish enough to be Scottish, I was something different from both cultures — and what I found when I moved to America was that the people that I related to most to in America were also usually from two cultures. And not necessarily ethnic minorities or coming from different ethnic groups, but they were people that were profoundly dislocated from their circumstances at some point in their lives. So I became somebody that was kind of a professional misfit, and that turned into being a professional expatriate, I spent a long time in cultures where I was the traveller rather than the resident. And I think that sense of alienation is pretty much a permanently installed feature now, but there are so many people that have it that we’re kind of getting the tribe of no tribe.

Erik: You mentioned poverty. I know you thought a bunch about poverty, in terms of how what it’s meant to be poor over time, and how that will change in the future, as we enter sort of an abundance world. Can you talk about that?

Vinay: The first thing is that we’re just measuring poverty wrong. I think the only meaningful measure of poverty that I care about is life expectancy and infant mortality. If people are living a long time and their kids are healthy, I don’t really care that much about what’s happening after that. I mean, life goes on, and things are either good or they’re bad, but it’s not the kind of poverty that I’m really emotionally exercised about.

So that kind of poverty, the kind of poverty that shortens lifespan and causes kids to die young, that’s mostly a poverty of stuff: it’s lack of access to vaccinations, it’s doctors that don’t wash their hands, it’s no proper caring after maternity, lack of access to antibiotics, and it can even be outright starvation. That kind of poverty you could wipe out super cheaply. I mean, it’s like maybe $500 per family per lifetime? It’s incredibly cheap! Like the water filters, they’re so cheap! Fuel-efficient cook stoves are incredibly cheap, solar lighting so you don’t have kerosene in your house, it’s like $10 a lamp. So that kind of just absolute, you-die poverty I think we could do an enormous amount to stamp out, just by getting better technology into people’s hands. Solar panels, you could buy solar panels on Amazon that are 24 Watt solar panels, that have USB ports that will charge a smartphone in half a day, and they’re like $25 –problem solved, it’s just amazing! So that kind of poverty I think we could stamp out pretty effectively.

The other kind of poverty is the poverty caused by an enormous rush into the cities, and having the global middle class all competing for the same stuff. As the global middle class grows and grows and grows, the competition for your Grey Poupon mustard and your nice leather jackets becomes incredibly intense. And the fight among the middle class for the status symbols of being middle class I think is the most destructive thing in the world, because the status symbols of being middle class consume about 100 times the natural resources that it needs just to exist. And we’re still in a world where a decent number of people don’t have the basic necessities of life. Are you in San Francisco?

Erik: Yes.

Vinay: Yeah, so you know what I’m saying. You’re perpetually surrounded by people that don’t have the basic necessities of life. They may be educated, they may have had jobs, but things have fallen apart, they’ve got personal misfortune of some kind, and now they’re in a position where they don’t even have access to a shower. You know, living outdoors is not that bad, as long as you’ve got access to stable food supply and a shower, and we deprive these people of both things. And we could fix that, there’s no reason that the San Francisco government couldn’t run showers for homeless people, but we’ve got this feeling that these people are not supposed to be homeless so we’re not going to provide anything required for them to be homeless comfortably.

I feel like that kind of thinking just has to stop. We either provide a decent standard of living for everybody, or we provide the bare convenient minimums under all circumstances. I mean, if we’re going to have homeless and we’re not going to give them apartments, at least we’re going to give them showers. If we’re not going to give them apartments, at least we have to make sure they don’t freeze to death in winter in places like Chicago. If we’re not going to solve these problems properly, we should at least be making sure that people don’t die of these conditions, and that applies both to San Francisco and to the entire world. I don’t think we can support a middle class of nine billion people on current technology, but I also think that we could get rid of the remaining infectious diseases we could vaccinate against, if we really put our minds to it, in less than 10 years.

So there’s a sort of confusion here when you say poverty. Let’s just stamp out the people dying for the lack of anything that costs less than $10, let’s just do that, and not worry too much about the rest of the story until we’ve got that part fixed.

Erik: Are you a fan of sort universal basic income projects? If yes, what could they look like?

Vinay: I can’t make my mind up on UBI. I have a feeling that it’s one of these things we’re going to have to try and then modify. I would love it if some kind of medium-sized countries gave it a shot and we could see how it goes. What I worry about is that it distributes money but not power, and I think that there’s a lot to be said in terms of… I’d quite like to fix democracy when we’re at it. One vote every four years is like a 300-year-old system, and nothing else that’s 300 years old is still good. You don’t want to use a 300-year-old transportation medium, you don’t want to use a 300-year-old toilet, you don’t want to eat 300-year-old styles of food for the most part… Why are we still voting in a way that we did 300 years ago?

So I think if we’re going to do basic income, you might have to pair it with overhauling basic democratic reforms at the same time. Otherwise you wind up in a system where you’re just handing out the money, but the population has no more control over their lives than they do now. I’m not sure that that’s going to be stable.

Erik: That makes sense. One of the critiques people have of communism and socialism historically is that you don’t have price discovery, and you can’t adequately assess what people need according to their “ability”, and so you need markets to better aggregate that information. In a world with blockchain and artificial intelligence, where we have much more information and there is going to be less information asymmetry, could you imagine an AI-driven communism doling out resources in proportion to what people need and what they contributed?

Vinay: There’s a fantastic article called In Soviet Union, Optimisation Problem Solves you, that suggests that communism plus quantum computing could outcompete capitalism. There are some really kind of technical reasons for that, but basically capitalism is essentially a genetic algorithm for allocating capital, because companies that don’t allocate capital well die, and then the resources are liberated and you do something else with it.

The first thing is that I don’t think you necessarily need artificial intelligence, if you’ve got legislation that forces open data. If we make a decision that we’re not going to allow companies to exploit their customers based on information asymmetry, that becomes part of consumer protection legislation. You, as a customer, have a right not to be exploited by the company you’re doing business with on the basis of information asymmetry, this means that everybody gets a fair deal. That in and of itself would produce a capitalism so much more efficient than the current capitalism we have, it would be revolutionary. If I can make Uber give me the information that they’re using to price my ride, so I can figure out when I want to ride and where I want to ride, how much better is my life going to be? Just legislation that’s the modern equivalent of antitrust legislation to force open the silos. By law, I am able to extract my social graph from Facebook and Twitter and put it somewhere else, that’s the law, that’s my property — end of story. That in itself will get you a radically better capitalism.

The differences between capitalism and communism basically boil down to questions that were really rooted in the Industrial Age. Planned economies and the rest of that kind of stuff… We know so much about innovation now, and the role of debt in innovation, it’s hard to imagine that anybody would want to go back to a planned economy. On the other hand, the Chinese model where the government operates to control the rules of competition very carefully — that if you begin to see monopolistic behaviour, the government comes in and squashes it in a really proactive way — clearly produces a more efficient capitalism than winding up in a capitalism where you’ve got inefficient monopolies. I mean, America is ruled by vast, crappy companies that everybody hates: Comcast, Verizon — everybody knows who these companies are. They’re anticompetitive as hell, they’re revolving doors with government regulators and all the rest of that stuff.

So I don’t think that you need AI to fix capitalism, I don’t think you need AI to fix communism. What I do think is that you need AI to fix stupid. Let’s just make decisions based on the data. Force the silos open, take the data, have academics write models that run on top of the data, then demonstrate optimal choices. And those choices are maybe implemented by government, maybe they’re implemented by individuals, maybe they’re implemented by companies. The core thing here is that we shouldn’t be in a position where we’re compartmentalising up the world’s data in ways which are provably economically inefficient as a whole. The very function of the state is to try and make sure that the market operates in a reasonably effective way, and we’re not going to get there, unless we start doing something about information asymmetry producing this kind of decadent, corrupted capitalism.

Erik: It’s interesting, because some people are trying to open those data silos by creating decentralised versions of Uber and Airbnb that will sort of be open in nature, and you’re proposing sort of opening those data silos by legislation. Is that because you’re less confident about decentralisation, or am I reading it incorrectly?

Vinay: Things like DAOs are great in principle, I’ve got nothing against DAOs in principle. But we’ve got zkSNARKS now. Five years ago, blockchain equalled everybody could see everything, everything was open. But once you’ve got zkSNARKS and the other confidential transaction technologies, the fact that it’s on a blockchain doesn’t mean anything to anybody. It could be completely encrypted, completely anonymous, completely private, nobody knows anything, and all the transparency benefits are thrown away. I think a society that runs on that kind of cryptography is going to be like mafia states, I think we will be miserable there, because people will be exploited by people that they can’t even see.

I think that there is a simple trade-off here. The government gives limited liability as a subsidy from the public purse to investors, that’s all that limited liability is: the government waves a magic wand, and fiats away liability from investors and puts that liability in the hands of debtors. If a company goes bankrupt and it owes money, you can’t claim against the people that that company made rich, because they’re shareholders and they’re protected by limited liability. The same thing with patent: the government awards patent as a fiat to the corporations — and to the individuals, but mostly it’s corporations now — and they do whatever the hell they like with their IP for 19 years, and then after that it comes back to the people. Copyright is the same thing: government fiat set into existence, it doesn’t exist.

So we’re in a position where we are producing gigantic government subsidies to entrenched corporate powers, that are completely different to the entities that existed when things like patent were originally invented. The government has the right to change the rules of the game. “You guys can open up your data silos, and if you don’t cooperate with us on doing that, we’re going to cut patent to 10 years, take it or leave it,” and you’re going to get compliance pretty quickly. And that’s not about reaching into corporations and taking away their property; it’s about acknowledging that their property was created by the state, as far as it refers to intellectual property.

So there’s an enormous amount of room for negotiating with the corporations, right up to re-examining whether limited liability is still working for us. What if we have 1% liability? If you’re a shareholder, you’re liable for up to 1% of the profits you made if the company goes bankrupt. There’s an enormous amount of renegotiation in the things that we think of as being the fundamental rules of capitalism, just to change how government fiat is used to create markets. We’re not stuck in this situation with no options; the rules of the game can be rewritten at any time. It just requires a big enough crisis, and people with vision and political will to come up with sensible options. I don’t have particularly good stories about what we ought to do, but I’m telling you that we could do a lot. Somebody will figure it out.

Erik: You also talked about the importance of standardisation. I’m curious if you mean that in the legal sense, in the finance sense, in other senses… Can you unpack that?

Vinay: Sure. My fundamental philosophy on all of this stuff is, number one, just stop wasting stuff, stop unnecessary waste and economic inefficiency — this is dumb, do not do it. So standardisation… Just think of basic things: I ought to be able to get a 3D model of any piece of consumer electronics that I buy, and I ought to be able to know from that whether it will fit inside of the same case that I’ve already bought for something. Can I fit my TV into my car? Why can I not just download a 3D model of my television, or the television I might want to buy, to figure out whether it will fit in the space that I’ve got for it in my house? This should be standard. It’s obvious that there’s a CAD model of the TV available. Why is it not linked to the website as a standard URL so I could go and download it, so I can model whether the damn thing will fit into my life?

The same thing with clothes. Why could we not figure out what size clothes actually are, why is that not actually standard? If it was standard, we could have computer models of our bodies, and we could virtually try on clothes from a whole variety of different vendors, and if we saw something we liked, we could buy it. Instead, there are thousands of people, probably millions of people, that order huge amounts of random clothing off the Internet, try it on, see if they like it, and then ship the other half of it back. Why is this efficient?

We’re still in a position where we just can’t get people to tell the truth about what they’re offering us. How big is it, does it fit, what cable do I need to buy to connect it to this other thing? Airlines: why do airlines not have APIs that will allow me to buy a ticket using my software rather than their software? By law, there should be a necessity that if you make an offer to a consumer, there’s an API that drives that offer and you could use third-party software to exercise it. Why do I have to go through their crappy website with all the stupid forms? Tell me the information that I’m required to provide by law, I will provide that information through the API, and you will sell me a goddamn ticket. All of these kinds of things are coming, because we basically stopped doing consumer protection for new technology. There is no consumer protection for new technology, so as a result nothing works properly. The messes with things like USB standards. How many different USB cables are there, 12? USB C standards, USB 3.0, 3.1, 3.2… The incoherence of all of this stuff is because the governments are unable to make any kind of sensible ruling on it, and industry just turns out to be unable to get it right most of the time.

So I feel like there’s an enormous amount of room for, I don’t know, consumer unions, international federations of consumers, small manufacturer collectives, second-tier governments, like Sweden or Switzerland… I just don’t know what the right mechanism is. But it’s very clear that we need to be putting pressure on companies to do better. Because we’re realising so little of the potential benefits of capitalism, because we’ve written the rules of the game in a way that we get 15 identical scooter companies littering crap all over the streets, and we still can’t figure out a sensible way of doing Internet shopping for clothes. Because all of the vendors want to keep their sizing secret, so that you tend to buy from the same vendor over and over again, because you know that their size 8 fits you. Come on, this is just juvenile! These people need to be just seriously told what they ought to do by a competent authority, so that the clothes have standard sizes.

Erik: Talking about law specifically, how do you see the way that we think about law changing in the next few decades, if at all?

Vinay: The main thing about law is jurisdiction. Where the laws operate is currently something that is seen as being more or less predictably identical with national boundaries: American law runs in America, Chinese law runs in China, off you go. That model is not how things actually work in the world anymore. Take Dubai International Financial Centre: there’s an eight-block corner of Dubai, which, for legal purposes, is England, specifically it’s the City of London, and once a year they take the current law from the City of London, they export it to Dubai, they re-implement it over there on top of their patch of eight acres, and that becomes the law for the next year. Now, that’s happening because it’s possible to do things under English law in a clean, convenient way and everybody knows how it works, and people aren’t facing transactional friction in trying to figure out whether their transaction is legal in Dubai. And the Dubai folks have just said, “Look, if it’s good enough for the English, and you’re just dealing with high finance, it’s good enough for us. But we’re not going to have any compromising on how our traditional legal system works in other places.”

The world is increasingly a piecemeal, interactive map of overlapping power sovereignties. International treaties like NAFTA enable a sort of para-sovereignty, the United Nations has a whole bunch of para-sovereign stuff, international arbitration courts are para-sovereign… We just keep layering more and more layers on the kind of sovereignty stack, so there’s more and more complexity about exactly which sets of laws apply in a given situation from a vast international range.

So I think the first big change in law is that I think jurisdiction is becoming increasingly complicated. There’s a very, very smart guy, a mate of mine, by the name of Boris Mamlyuk, who runs a project called CleanApp, and Boris is thinking about this jurisdictional stuff in a way which is very, very comprehensive, and he’s kind of a natural counterpoint to the Mattereum team; we think about stuff, Boris thinks about space. That kind of thinking about jurisdiction I think is going to turn out to be incredibly fundamental to how the future operates. Because when you’re doing business in a globalised network, just figuring out, legally speaking, where the transactions happen is still an ambiguous thing; once that’s no longer ambiguous, a lot of things will tidy themselves up. So that’s one part of it.

The other part of it is that in areas where you’ve got extremely rapid technological change, the state is, generally speaking, unable to legislate. The good side of that is you get Silicon Valley-style innovation, and the bad side of that is that you get Silicon Valley-style innovation. You get innovation, but you don’t get any standardisation, everything is perpetually broken, and it’s the consumer’s problem if they buy two things and they can’t be interconnected. Those kind of problems are happening because we haven’t figured out that we need to get better at private law. There ought to have been some way of having the computer industry self-regulate standards in a way that had some real legal force. I don’t know exactly what that would look like, but think of something that looks like a public-private partnership for making law. We go to the computer industry and we say, “You’re going to have a standardisation process, at the end of that you’re going to tell us that there are going to be three cables, and those three cables will be the law for the next 15 years. So you guys figure it out, and in six months we’re going to take a vote, and whatever cable wins is what you’re going to get.”

I don’t know if that would be exactly the right way to do it, but there are ways that we could use the power of the state, in partnership with civil society and markets, to give us a vastly more performant, high-tech environment. Technology doesn’t have to be in disorganised shambles; it only looks that way because we’re unable to get government to catch up well enough to come and do its job. And if we don’t do that, the alternative is that we’re going to get ruled by Google, Facebook and Amazon, and I don’t think we want to lose the competitive spirit of Silicon Valley to monopolists. I don’t blame these companies for moving in the direction of being countries, I don’t blame them for being monopolists. We gave them a set of rules to play by, those rules are called capitalist acquisition, and they’re doing it really efficiently. But that has always come with things like antitrust, because the price for limited liability is that you have to do what the government tells you in other areas; limited liability is not a right, it’s a grant.

So if we’re extending this privilege of limited liability to corporations, I think we’ve got the right to then figure out how to get them to play nicely, so that we get efficient technological progress, rather than vastly destructive things like patent battles. The vast majority of the future work that government has to do is technology regulation, and it can’t be done by a state that’s populated entirely by lawyers, and it can’t be done by industry self-regulation. We need hybrid forms, with technological expertise from industry, and technological expertise from government, and civil society representation, so that we can make decisions about technology which are made rapidly, that are implemented cleanly, and that are actually wise.

Erik: One of the things you’ve thought a lot about is energy. Can you give your punchline of what you think we need to do from an energy perspective, and what you think the future should be?

Vinay: There is a really lovely I think master’s thesis by a friend of mine called Ed Borgstein. Ed is a fantastic energy policy analyst, and Ed basically just has a set of diagrams which show you all of the world’s energy use, and it divides up into basically 12 kinds of energy use, and then he shows you some equations for how much energy can be saved. “Here’s industrial furnaces, here’s transportation with wheels,” and he just takes you through all of this stuff. We’re wasting about 70% of the energy in the world, we’re just wasting it: it gets out through the roof, and you can afford to put a better roof on it; it gets out through industrial processes which are hardly ever insulated… It just turns out we’re throwing away energy left, right and centre. We’ve got carbon fibre now. Why do cars need to weigh two tonnes? Like, that’s just… It’s not even wrong.

So the first thing is that we could stop wasting energy, and we’ve done practically no work on energy efficiency. It’s incredibly weird, it seems to be some kind of human blind spot, it’s enormously irrational, but we’ve done practically no work on energy efficiency. That’s the first big thing, that could get fixed. The second thing is there’s an enormous amount of work to be done on making new energy sources fully adopted. The solar panels are here, they are coming along incredibly quickly. There are probably a bunch of places where you’ve got stupid regulation which get in the way of adopting solar panels, like you’re not allowed to put it on your roof because of building codes. That’s why you have federal government, it can stop things like that. Then we get to the kind of weirder energy things, like fusion. I still have high hopes for fusion, I’d love to see it come along, and we need structural funding on that.

And then finally there’s the whole smart grid question of… Buckminster Fuller’s long-term vision for the energy system of the Earth was that you ran a superconducting ring directly around the Equator, and what that superconducting ring gave you was the ability to pump energy from the side of the world where you had solar energy and wind energy and abundance, because the Sun was heating things and cooling things and shining, and to pump it onto the night side of the Earth where you needed it for heating and cooling, and I think Buckminster Fuller got it right. I don’t know how far we are away from having that superconducting ring, but that’s obviously a much smarter way of doing this than giant batteries everywhere.

The real heart of this is this: there’s no car which is as an efficient as an electric bicycle, and you can’t ride an electric bicycle to work, if there’s only a superhighway with eight lanes and a whole bunch of cars on it. There’s a structural problem here, which is we need to make room for the solutions that exist to be deployed, and most of those solutions involve moving to a much, much lower energy burn lifestyle, at the same time as better kinds of technologies come online. I don’t think we’re going to see a better approach to managing our energy footprint than insulate all of the things, and pedestrianise cities so that you get around them by bicycle efficiently. And that’s entirely doable, these aren’t massive capital projects.

Erik: I know you’re big into Buckminster Fuller. What’s the biggest learning we should take from Buckminster Fuller? What do we wish everyone knew about him, or what lesson?

Vinay: Oh wow, it’s such a hard question! I mean, Buckminster Fuller more or less invents environmentalism. He talks about the Operating Manual for Spaceship Earth: the Earth is a spaceship, it’s a spaceship where the crew have gone crazy and they’re all attacking each other, and we can’t make a spaceship run properly if there’s a munity on board, you need world peace before Spaceship Earth will work properly. So that’s the kind of high-level story.

The low-level story is just be efficient. Really think about how your fundamental processes work, and optimise the hell out of them. That’s a perspective where… you could get behind that. You look at the examples that Buckminster Fuller has, the geodesic domes and the fog gun and the Dymaxion car and all the rest of that, and he just sat down and he thought really hard about how smart people would do it, and then he designed it that way. And it wasn’t incremental, on top of what had happened previously; he went right the way back to the human need, and then figured out the most cheap and efficient and elegant way of meeting the human need, and anybody can do that. Whatever field you’re in, you could either do incremental innovation on top of whatever crap is currently dominant in the field, or you could sit down and you could really seriously think about what you’re doing, and come up with something that actually works.

Erik: I saw a talk you gave, and one of the points you mentioned in the talk is that becoming enlightened is sort of the equivalent of becoming a PhD, like 7–10 years of all-intensive study. Another thing I took away is that it’s sort of unclear if it should be a mainstream thing or a thing that we should all strive for, and maybe only that a niche group of people should strive for that particular thing. What would you sort of add or correct to what I just said, and what should everybody know about what it means to become enlightened?

Vinay: I started meditating when I was 14, from a little book called The Calm Technique by a guy called Paul Wilson, who later went on to be very famous for writing a whole bunch of other calm stuff, and The Calm Technique is a really good book. I don’t know about the rest of his work, haven’t read it, don’t know, it sounds a little weird, but The Calm Technique is fantastic. I did that for an hour a day for eight years, and then I had some very strange experiences, and then I did even more of it for another three or four years.

At the end of that process, under the tutelage of a woman that had gone to India and had come back with enormous wisdom, I passed into a condition that she called enlightened, and it seems to fit what people say in the books. All that it really means is you get to be really objective. I get up in the morning, knowing that I am a mortal being with a finite lifespan, that will die, unless something really special happens with the technology. I can live my life in full knowledge of my own death and the death of other people, because my mind doesn’t flinch away from the inevitabilities. That turns out to be really useful, and there’s no doubt at all that you need some of those people around your society to be able to do hard thinking about really difficult things.

But the problem here is the economic cost of enlightenment. I was able to do that because I could spare the time to do it, because it was the 1990s, we had world peace, America’s economy was booming, and my friends would let me crash at their houses, sleep on their floors, and do 3–4 hours a day of meditation, and a ton of physical practice, and that was about what it took for me to get through.

Interestingly, after I got enlightened, the next thing I did was I went back to work, got a job in software, started making bank, and worked my butt off in the real world. Because I’d done the academic study, I’d gotten what I wanted to get out of it, and then I went off to go and try and build myself a material life that worked. It wasn’t to me an escape from the world; I just wanted to understand what was happening, and I couldn’t accept a half measure. I had to go all the way of getting my head on my shoulders.

So that sort of thing, I think there are always going to be people that are intolerant of paradox, and have to get to a fundamental truth before they’re comfortable. Maybe some of those people we ought to support in the process of becoming enlightened, because at the end of the day they just need a ton of free time and they need something to eat, and in that domain they’re much like fine artists who often are just completely driven to create, and if you leave them alone with their paint and a source of food, they’re perfectly happy. I think we can afford a certain amount of support of those kind of outliers. I don’t know whether that’s a reinvigoration of the monastery system, like you see with Monastic Academy, or whether it’s maybe a side effect of basic income hopefully, but I think there’s a lot of room for doing that.

The other side of this is that we’re very confused about enlightenment and mysticism. The only thing I could really say about this is that mysticism is mostly medieval explanations for what must be natural phenomena. If it happens, it’s a natural phenomenon… The medieval explanations for things like meteorites and comets are terrible, but often the observations are pretty good. So I think most of the mystical traditions have a reasonable amount of pretty good observational data from the past, but it’s all tied up inside of medieval explanations which are about as good as the medieval explanations for comets and meteors. So I think we have to kind of go through the traditions, and really say, “Okay, I accept that you saw something. I’m not going to accept your explanation for what you saw, but I’m really going to pay attention to your description of what you saw,” and maybe there’s a certain amount of mining of the past that we could do on that.

As for the rest of it? I’m very down on the mindfulness movement, I’m just not seeing how that’s actually going to help people very much. I think it could be dangerous for some, and for others it’s just going to be kind of a distraction. They’d probably do better getting more physical exercise, maybe.

Erik: What do you think are the biggest misconceptions people have about Buddhism, as it becomes sort of a mainstream philosophy?

Vinay: Oh wow — yeah, hardcore. Slavoj Zizek has a brutal critique of American Buddhism as kind of like the global religion of neoliberalism. I think that’s a little harsh, but if you talk to actual Buddhist monks about Buddhism, what they describe is a million miles away from what I term the American folk Buddhism. American folk Buddhism is this very vague be nice to people, but it also involves a lot of superiority, and people don’t really understand concepts like liberation clearly, they don’t have much of a sense of what the monks are actually doing…

So I think that there’s a sort of very nasty oil slick of this kind of superficial spirituality left over from the ’60s, and you see a lot of the kind of crass and tacky end of things at Burning Man: lots of crystals, lots of sage, lots of moralising, but without anybody actually changing their lives, not very much leading by example, bunches of weird, sticky, nasty, emotional and sexual politics… I just feel like there’s a bit of a kind of New Age tarp out there, which is really unlike what traditional ancient spirituality looks like as it’s actually practiced.

So I kind of feel like we’ve got a whole bunch of failed experiments over there that really need to be cleaned up, and some lab tech just has to come along with a bottle of bleach and a squirt gun and just kind of wipe that stuff out. I don’t think it’s doing anybody any good, and I think it’s making it really hard for people to access the real traditions.

Erik: Yeah, totally. Earlier you were talking about how your Scottish-Indian descent has influenced your philosophy. Is it on this realm? I cut you off a little bit, but do you want to get back to the punchline there?

Vinay: Basically, as my mind expanded as I got into my late teens and early 20s, I just didn’t fit inside of the Scottish worldview anymore. The experiences that I was having, from all the meditation and so on, put me firmly inside of Indian terrain. I remember reading the Yoga Sutras of Patanjali in about 1992, and it was just like “Okay, I’m one of these,” there was this total sense of recognition, like “Okay, I’ve done about 6–7 years of meditation at this point, I’ve had a bunch of the experiences this book describes, I’m less than a third of the way through the path that they project, but this is clearly my people talking to me about my life experience, I am one of these,” and that was the point where I really engaged with Hinduism.

And I engaged with it, having been raised as an agnostic, with no real spiritual beliefs at all. I did many years of meditation with no spiritual beliefs, no mystical experiences; I just did it because it worked. And I think I was very lucky, in that I didn’t have any prior exposure to the tradition, so I was completely pragmatic. And then when we got right down to it, it turned out there was a tradition, I had discovered a whole bunch of the basic stuff in the tradition for myself, and then it said, “Okay, this is the advanced stuff, take off on this track if you liked it,” and that’s what I did.

When I talk to people about what they think yoga is, it’s kind of upsetting. They’re very confused, it’s very sad, they’re not getting what they wanted out of the yoga practice, and it’s very hard to educate them on what yoga actually is, because they think they already know. And that kind of stickiness is intercultural confusion. A tiny percentage of the yoga material has come across into Western mainstream culture, it turns out the system is not stable when you only got a tiny part of it, and it’s just like… If I wasn’t so busy doing the disaster relief stuff, I could easily dedicate three lifetimes to just going and fixing the misunderstandings inside of yoga practice. But there’s no time for me to do it, so I just wind up having to neglect that stuff, because I’ve got practical stuff to do. It’s hard, you know, it’s hard — there just isn’t enough of me to go around, and it’s really frustrating sometimes.

Erik: Going back to crypto: it’s been over a decade, obviously since Bitcoin, and then a few years now, in what seemed like many decades, for Ethereum. What do you think are the biggest learnings we’ve had as a community since Bitcoin and since Ethereum. Looking at the first decade, what’s been the most surprising, or what are the biggest learnings we’ve had as a community?

Vinay: There is a saying that the ICO was basically reality’s way of teaching securities law to computer programmers. My CTO Rob Knight says, “Yes, but at the end of that process what you get is a bunch of computer programmers that understand securities law.” I feel like what we’re discovering here is, frankly, why libertarianism doesn’t work. Brutal as this is, if you look at the total shambles which is the attempts to organise Bitcoin into something that’s capable of innovating, it’s been a total failure. Bitcoin has bunches and bunches of technical problems, there are all kinds of things that Bitcoin could do or should do or might do, there should have been some kind of global fund to enable people to get lobbying done in jurisdictions that might be friendlier to Bitcoin. We’ve still wound up with a whole bunch of enlightened self-interest, resulting in the damn thing being regulated in completely contradictory ways, not only in different countries but often in the same country, and it’s basically just kind of crap. Hundreds of billions of dollars of value, but almost no ability to organise any kind of public good stuff. Everybody that ever critiqued libertarianism said, “Tragedy of the commons, how are you going to pay for public works?” and the libertarians were like “The roads will always get built.” Well, if you look at Bitcoin, what I see is potholes that are large enough to swallow the entire damn currency, if they’re not careful. So the first learning is it turns out that enlightened self-interest is not a substitute for having something that has the ability to do public works.

The second thing is it turns out that securities fraud is incredibly profitable, because the public are really gullible. The SEC knew the public were really gullible, they’d seen that stuff before in the 1920s, and the ICO markets completely confirmed that ordinary people who’ve made a lot of money really quickly are absolutely at risk of basic human psychological flaws, and the people that know how to exploit that stuff can absolutely destroy them. We didn’t do an ICO for Mattereum; we looked at it, we looked at the legals, we said, “There’s no way that we’re going to be able to make this work. By the time we get around to issuing a token, it will be in a fully regulated environment, and there will be a financial instrument that anybody can understand in the pre-crypto era.”

The reason that we’ve wound up at that equilibrium is because it turns out that the existing financial system is 300 years of work by some of the smartest people in the world. Isaac Newton used to run the Royal Mint in the UK and sorted out our currency for us. This stuff is not unsophisticated. As much as we like to laugh at the bankers, it turns out what we’re actually laughing at is the regulators. That’s kind of a final learning on this, is that the regulators are the worst… The inability of the regulators to act in a timely way and to get the nuances right, the haemorrhaging of potential… If the SEC had been able to get on top of the ICO market fast, make bold, public statements about what it was and wasn’t going to count, and reassure people that they were going to have a regulatory framework up and running in six months… All of the money that went through these wasteful, crappy, illegal ICOs, people could have kept it in their wallets, the SEC could have come up with a regulatory framework, we could have started the machinery, and we could have had a vast amount of funding go into whatever that new regulatory framework was, with enormous benefits for everybody: national economies, all the folks that have made money in Bitcoin, the innovation economy itself. But because we couldn’t coordinate with the regulators, we’ve wound up with a disaster where all the innovation happened outside of the regulatory frameworks, nobody has any idea whether they’re going to get their door kicked in by the SEC if they did do an ICO, and we’ve got the worst of all worlds.

So the big lesson here is that we need cooperation between innovation and regulation to get to the sweet spots. We’ve tried it both ways, it doesn’t work at either extreme, we are back in negotiation.

Erik: Let’s talk about Ethereum specifically, both in terms of adding to the biggest lessons from the Ethereum project, and adding more towards in a decade from now, what are we talking about in terms of what Ethereum has accomplished, what it hasn’t, what are the big forks in the road so to speak, no pun intended, for the Ethereum community and ecosystem?

Vinay: The first thing is the biggest lesson from Ethereum is that community really matters more than anything. Vitalik is, for all of his other talents, a genius at making sure that people understand the moral vision behind something. His ability to act as a moral leader whose been a sort of centre of… Nobody has ever suspected Vitalik of acting in a self-centred or self-interested manner, ever. Everybody that spent time with him is completely convinced of the purity of his ideals and his dedication to his mission, and as a result he’s become a kind of North Star for, at this point, maybe half a million people. I mean, he’s become an enormously important leader, and I think the last person that we saw that had that kind of magnetism was probably Richard Stallman, who also came from a place of burning moral purity. I often say to people that I think Stallman will be remembered for centuries after Gandhi is forgotten, because Stallman shipped. We got Linux, we got Wikipedia, we got Android, we got an open ecosystem for the fundamental software that runs civilisation, and out of that we got the entire dotcom revolution. That to me is what success looks like: global change that sticks. Gandhi, as much as we love him, did not manage that.

So, this kind of notion that what we’ve learned is that moral leadership is critical for catalysing large-scale social movements… We’ve seen it with Gandhi, we’ve seen it with Stallman, we’re seeing it around Vitalik. It’s incredibly important. It turns out that morality matters. And that’s a huge learning. Everybody who’s looking at how it changed the world, you do kind of have to look at that and say, “Actually, individuals can make a difference,” but they have to be that intense, that pure and that intelligent, and maybe a few other properties beside.

As for the long-term future of Ethereum, Ethereum right now is sitting at this very delicate balance point, where if we get scaling, maybe the global, distributed, heterogeneous supercomputer will wind up being directly descended from Ethereum, and if we fail to get scaling, it’s probably going to be some variation on Microsoft Azure. We’re in a position where there’s an open vision of the future and there’s a closed vision of the future, and we’re at a kind of face-off between these two sets of potentials. Ethereum Foundation continues to be a difficult organisation with a difficult job, it’s hard to be well-liked under these kind of loads, and I worry a lot that we have not taken the right path on scaling.

If we got it right on scaling, if Vlad Zamfir delivers — not Vlad personally, but all the people around Vlad that are implementing that vision — if we get to 1,000 transactions a second, we get the network stable at speed on a trajectory where people believe it could get faster than that, if we get there, I don’t have any doubt that we could get to a million or 10 million transactions a second. At some point we’ll get rid of the EVM and replace it with something which is a lot more flexible, we probably get a new bytecode because we know so much more now than we did a few years ago… There’s a whole bunch of fundamental transformations which have to happen to get us there, but we’ve got to get over the hump really this year or next year. This is one of those things where I wish I could go back to my old job and actually help them coordinate the releases and do the comms work for a lot of that, because I’m sure that I could make myself useful over there. But no, “I’ve got to go over here and fix the damn property rights.” I really do feel very thin spread right now — I wish there were four of me.

Erik: Any more commentary on what do you think the suggested approach would be for Ethereum scaling, or blockchain scaling more at large?

Vinay: This is about a philosophical point, but basically you don’t get a global, heterogeneous, parallel supercomputer by trying to make Bitcoin go faster. You’ve got to step backwards, you’ve got to look at the history of parallel computing, you’ve got to look at the process calculuses, like Pi calculus and row calculus and all the rest of this stuff, and somewhere in there, probably out of the Pi calculus branch of computer science that was big in the UK, you get a breakthrough on how you actually build large-scale, heterogeneous systems.

I think that we should have gone much further back into the fundamental computer science when we were doing the Ethereum scaling work, and I think that we should have hired an enormous number of people from the big supercomputer labs that were used to building high-performance parallel supercomputers, and we should have really aimed for we want to be able to mobilise 5% of the computing power on the planet for the purpose of doing productive work. Because I just don’t think we’re being ambitious enough when we talk about scaling. I want to see in Ethereum client on every laptop, that just sits there doing computing jobs for the benefit of society or the benefit of its owner, whenever the machine is not in use, and multiply that by all of the machines all over the world. There shouldn’t be a single byte of data that somebody wants to get processed and has to pay for processing, and can’t afford it. Push the price of big data crunching down to a near-zero point.

Nonetheless, I think we could get there incrementally, and if we get to 1,000 transactions a second or 10,000 transactions a second, I think inevitably the attempt to get to the next order of magnitude jumps from there will force us down the fundamental computer science path, rather than the kind of point optimisation on top of existing consensus algorithms that we’re currently going after. I should say for context, by the way, that parallel supercomputer architecture stuff was my fascination in the late-1980s when I was a teenager, I was reading all the stuff on occam and the transputer and all the rest of that stuff, I was very closely tied to Edinburgh University at that point even before I went there… So I’m pretty sure we got it right the first time with the transputer, I think that kind of thinking about supercomputer architecture is inevitably going to win in the long run.

Erik: With that, any last-minute plugs you want to leave our audience with, or things that if they want to learn more about you and your work you’d point them to?

Vinay: The humanitarian work, the website is called myhopeforthe.world, http://myhopeforthe.world/, that has a pretty good summary of the humanitarian work that I did, before I quit and went back into industry. Mattereum is mattereum.com, https://mattereum.com/, we are venture-funded, we are building technology, and we are growing slower than I would like us to. We should have a Stradivarius, or possibly one of the other maker violins, on-chain, with all of the supporting data and all the rest of that stuff in May, possibly June. I don’t think until we’ve gotten that thing done, people are going to understand what we’re talking about on smart property, so all I’m going to say is just… We will be shipping things, we’ll probably do a run of garden gnomes and pink flamingos that people could use for test purposes, and I think that’s about it. Go to Burning Man, bring a hexayurt — you’ll love it!

Erik: To that point, at one point you realised it was important not just to work for passion but also to work for money. Can you talk about that?

Vinay: Yeah, sure — very briefly. I made a vow sometime around 2001 that I was not willing to do anything for money that I wasn’t willing to do free. I made it a vow, it was a religious matter, that was my dharma, that was my destiny, and I kept that for 14 years. I was homeless a couple of times, and I worked in a whole bunch of super important humanitarian stuff that was basically unpaid, and my life was incredibly productive and pure, but it was brutal in terms of the finances. That was even working at high levels of government, by the way, that was just how it was.

Then I saw a play about Robert Anton Wilson, who I’m sure has been an inspiration to many of your listeners, it was the bioplay of his life, and it turned out that Bob’s life was ruined by poverty. He had a child that was killed because she was working a dangerous job to help the family make ends meet, and his other kid went mad as a result of the grief and the shock. I looked at that, and I’m like “Okay, I’m just doing this wrong.” I was watching Elon Musk, and Elon Musk was just swinging for human survival in a super direct way using capitalism as a tool, and I was sitting there, labouring on in monastic obscurity, trying to save the world on a shoestring budget, and I just looked at it and I was like “If Robert Anton Wilson couldn’t figure out how to make it work on no money, there’s no way I’m going to be able to do it. Elon Musk is doing this right, and I am going to follow that trajectory. I’m going to go into market capitalism, I’m going to make as much money as I can, I’m going to pay for the change I want to see in the world.”

Remember Gandhi’s phrase “Be the change you want to see in the world.”? Now I just say, “Buy the change you want to see in the world,” because it works. So I threw over my old lifestyle, I went into capitalism, and I was lucky enough to wind up in Ethereum first, and the rest is history.

Erik: That’s a good note to end on. Vinay, thank you so much for coming on the podcast, it’s been a fantastic episode!