Book - Securing Digital Rights for Communities | Chapter 16. 3 Pillars of Decentralisation

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Here we are.

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All right.

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Let's move on from this.

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Let's do the three pillars of decentralization.

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I'll let you start on this because you were the first one I heard talking about it.

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Yeah.

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Just how do you have a tech stack, right?

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Sorry.

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I just want to preface this.

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Listen to Dan talk a few months ago.

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It gets to the point where you synthesize down and down and down to the raw elements.

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And it's very clear in our opinion that there are three pillars.

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There are three ingredients that you have to have on the base layer that make all of

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this stuff work from a foundational level.

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If you have the three things, then everything runs from that.

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If you don't have the three things in place, you are likely to suffer from censorship,

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centralization, and lack of sovereignty on the base layer.

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And everything comes from that.

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So, yeah.

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I think the first problem is I think everyone can agree the most important thing is freedom

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of speech.

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Because without freedom of speech, you can't really collaborate.

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You can't call who's bad.

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You can't form alliances.

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You can't do anything, really.

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If one group can't communicate and one group can, the group that can is going to win.

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And there's nothing you can do about it.

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Because they can communicate and you're in the dark.

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They can tell you their truths and you can't question it.

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So, obviously, I think the light here is censorship resistance of text.

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How do you get free speech?

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How do you get free speech?

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That should be the first question.

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And then you think about it.

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You say, well, we live in a digital era.

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We're not going to use animals.

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We're going to use pigeon carriers.

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It's actually pretty decentralized, right?

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Like, you got a fucking bird.

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It's going to go to where it is.

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Like, okay.

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That's actually whatever.

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It works.

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How do we do this in a digital era, though?

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And it's very simple.

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It's like, well, I have a database.

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You have a database.

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We have a group of people who have databases spread out all over the world who are being

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incentivized by a neutral protocol.

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But the very basics of that, remove everything.

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Remove what is needed to get that.

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What is needed first.

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Then we'll figure out how to get it.

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Like, what is it?

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What is it?

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What is it?

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What is it?

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What is it?

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What is it?

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What is it?

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What is it?

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We'll figure out what is needed to sustain it.

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What is needed is a distributed database, a database that's distributed in all over

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the world.

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And bad countries, good countries.

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When I say bad, I mean ones that have stupid laws.

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All over the world, right?

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That's the very first measure.

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And if one person tries to change it, the other people have to agree.

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If they don't all agree, then you're fucked.

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So you can't censor it.

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So now we've now created something valuable as humans.

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Unless you get a mass consensus, right?

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Unless you get a mass consensus, which means there's something bad going on,

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Because if the majority of people don't want it,

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then there's a reason for that.

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As long as it's the people's will

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and not some corporation,

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not some centralized force, right?

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This isn't some company running this

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and having an ulterior motive.

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These are people, like, as a community,

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saying this guy's a fucking evil bastard.

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We don't want him.

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Which is actually very, very rare.

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You have to be a pretty fucking evil bastard.

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Even then, you know,

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people just ban you from the front end.

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There's actually never really been,

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besides, you know, the great hostile takeover,

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somebody actually being forked up.

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So you usually have to be attacked for that.

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But either way, now as humans,

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we've created something valuable.

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How have we done that?

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Because we have something that can't be censored.

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That means people can speak freely.

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That is inherently valuable.

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So by tokenizing it,

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you kill two birds with one stone.

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You therefore create the protocol

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that is a neutral incentive system,

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and you create the distributed database all at once

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by tokenizing and distributing the coins

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all over the world.

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Now you can parameter this land, if you will,

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into slots of dollars.

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So you can say, I'm going to get X amount.

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I'm going to back this dollar

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by X amount of this digital real estate,

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this censorship-resistant database.

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So now you parameter this thing into a dollar.

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You need a dollar because without a dollar,

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you have no economy.

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I can't pay you in a fluctuating coin.

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You can't have a parallel economy without the economy.

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You can't have a savings without something stable.

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This has been proven in practice

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because they've airdropped Bitcoin

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to people who need money,

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and they sold it for dollars.

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So we immediately see the need.

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I've seen El Salvador.

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El Salvador.

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We immediately see the need that people need dollars.

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So we're going to fail, period,

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if we don't have dollars

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because they're always going to say,

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that's cool and all, but I need dollars.

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And they're just going to use

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the centralized Lightning Network stable coin

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because that's a dollar, right?

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So if there's nothing they can save their dignity with,

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nothing they can leap to,

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they're forced within a cage,

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and that's what we're trying to prevent.

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We're trying to give people the power of choice,

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not forcing.

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Lifeboat's there.

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Stay in the cage if you want.

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But it's going to become a point

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where your dignity is like,

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I don't want to do this anymore.

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I don't believe this is morally right.

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You at least have an option, right?

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So that's our goal, create an option.

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You parameter into a dollar, zero fees, right?

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You don't need to have fees

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because you parameter the account of validators

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to be low and they can live off inflation.

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So you don't need to worry about fees.

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You don't need to worry about transaction.

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That makes decentralized layer two as possible

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because you can put data on

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without having high fees and having to batch.

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It also allows you to have no fees

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on the transaction layer.

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Transaction layer goes in and out

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of the transaction layer.

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So you have a data availability layer,

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which is basically where you put your data.

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I say hi in text form.

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I put it in the data, right?

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Now people can read that data.

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I want to send a dollar out.

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This is using the highway, the transaction layer.

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No fees.

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Now you have given the world what it needs, right?

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You've solved basically all the problems in one go.

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You say the two biggest things are freedom of speech

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and dollars for all that can't be,

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I say can't be censored,

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just dignified dollars basically

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where you don't, you know,

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you have a way to do it.

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You have a way where one dude can't fucking fuck you over

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and take your bank or freeze your shit.

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Because it's not even the U.S. with the dollars.

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Like you could be in a country

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and they just freeze your shit

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and that has nothing to do with the U.S.

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or the dollar at all.

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It's just like that fucking banking system

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or that centralized government is corrupt.

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It's always nice to be your own bank, right?

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Who would be against you being your own bank?

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Tyrants, right?

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Like the only people I can think of are like bad people.

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It's like you want to be your own bank?

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How dare you, you criminal.

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It's like that sounds weird, right?

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So it's like,

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you know, be your own bank.

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There should be nothing wrong with that.

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That should be the standard.

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And with no fees,

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you don't have to rely on banks.

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So now I have the ability to store my dollars,

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send them all over the world.

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I can freely speak.

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This regime is bad

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or this is a good place, whatever.

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Create my community.

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And then from there,

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it spirals into just, you know,

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tokenized communities,

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all these sort of things that you could think about.

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But don't be the three pillars.

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The three pillars is solving freedom of speech

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with a database,

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a hard drive

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that's all over the world.

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Tokenize that hard drive.

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So now you created a natural incentive mechanism

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and inherently feeds itself.

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It's kind of like the grass and the rain

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and the deer.

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It all fucking just kind of works together, right?

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This is the same thing.

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You've distributed a database.

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You've tokenized it.

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You distributed tokens.

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Now you have a censorship-resistant database

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that's inherently valued.

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So the tokens inherently have value.

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And you can now incentivize people.

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It's inherently valuable because it's got free speech, right?

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Exactly.

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And now you can inherently spread out the database.

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It's even more through the incentives.

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No one controls the incentives.

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And now you have a way to parameter into a dollar

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or whatever asset you want.

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We'll say dollar.

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No fees, right?

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The more spread out the dollar is,

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the more secure it becomes.

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So it's sort of a self-fulfilling prophecy.

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This badass dollar that has no fees,

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that is incredibly useful,

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that you can earn directly from the protocol,

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which is also very important,

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is right there.

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And it's going to spread

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because it's a more secure way to do it.

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The more it spreads,

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the more valuable it becomes.

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So it is really,

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if you look at Hive

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and you look at the pillars that make Hive,

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you see that it is almost game theory engineered

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to just fucking spread like a virus,

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like everywhere.

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Because it's very difficult to stop.

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The more it spreads,

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the more it becomes valuable.

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The dollars are spread freely.

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Everyone needs dollars.

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They get it.

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It works.

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You can cash out.

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I mean,

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it's built to spread.

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Everyone needs freedom of speech.

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You might not need,

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like,

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freedom of speech is by far,

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I think,

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the most important.

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Without it,

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you kind of crumble.

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You don't really have anything.

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But what is needed the most right now

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00:08:06,600 --> 00:08:08,320
is the fee-less dollars.

275
00:08:08,420 --> 00:08:09,400
We've seen this in practice.

276
00:08:09,540 --> 00:08:09,800
We say,

277
00:08:09,880 --> 00:08:10,120
you know,

278
00:08:10,180 --> 00:08:12,160
we're kind of relying on Twitter here,

279
00:08:12,220 --> 00:08:12,520
guys.

280
00:08:12,580 --> 00:08:13,000
And people are like,

281
00:08:13,020 --> 00:08:13,220
yeah,

282
00:08:13,260 --> 00:08:14,060
I need dollars.

283
00:08:14,520 --> 00:08:16,520
So everyone needs fucking dollars.

284
00:08:16,800 --> 00:08:16,940
Like,

285
00:08:17,000 --> 00:08:18,920
people need a stable form of value.

286
00:08:19,380 --> 00:08:21,360
And all of the outlets to dollars

287
00:08:21,360 --> 00:08:22,500
are completely centralized,

288
00:08:22,880 --> 00:08:23,800
controlled by companies.

289
00:08:23,800 --> 00:08:25,400
Because people keep thinking,

290
00:08:25,400 --> 00:08:25,600
oh,

291
00:08:25,680 --> 00:08:26,280
dollars centralized.

292
00:08:26,480 --> 00:08:26,720
It's like,

293
00:08:26,740 --> 00:08:26,860
dude,

294
00:08:26,920 --> 00:08:28,140
you're trusting your bank,

295
00:08:28,520 --> 00:08:29,380
or Stripe,

296
00:08:29,520 --> 00:08:30,720
or whoever the fuck.

297
00:08:30,800 --> 00:08:31,780
And you could be in a country

298
00:08:31,780 --> 00:08:33,080
where you don't have the luxury

299
00:08:33,080 --> 00:08:33,900
of having a good,

300
00:08:34,080 --> 00:08:35,060
reputable person.

301
00:08:36,040 --> 00:08:36,260
You know,

302
00:08:36,300 --> 00:08:37,600
you're at the mercy of whatever.

303
00:08:37,760 --> 00:08:37,900
Like,

304
00:08:37,920 --> 00:08:39,380
I know people trade phone credits

305
00:08:39,380 --> 00:08:39,800
and shit.

306
00:08:39,920 --> 00:08:40,080
Like,

307
00:08:40,140 --> 00:08:41,460
it's real out there.

308
00:08:43,180 --> 00:08:45,120
There's so many levels to the dollar

309
00:08:45,120 --> 00:08:45,740
and centralized

310
00:08:45,740 --> 00:08:46,560
and censorship

311
00:08:46,560 --> 00:08:48,220
and all this shit

312
00:08:48,220 --> 00:08:50,520
that being your own bank

313
00:08:50,520 --> 00:08:52,180
completely disrupts all of that.

314
00:08:53,460 --> 00:08:53,900
So,

315
00:08:54,300 --> 00:08:54,520
yeah,

316
00:08:54,740 --> 00:08:55,380
once you have

317
00:08:55,380 --> 00:08:56,500
the three pillars in place

318
00:08:56,500 --> 00:08:58,980
and luckily you have a spurt

319
00:08:58,980 --> 00:08:59,560
into the world

320
00:08:59,560 --> 00:09:00,780
where it distributes itself

321
00:09:00,780 --> 00:09:02,120
like Hive did

322
00:09:02,120 --> 00:09:02,960
with the social media

323
00:09:02,960 --> 00:09:03,640
Trojan horse,

324
00:09:04,640 --> 00:09:05,860
you hit a,

325
00:09:05,860 --> 00:09:07,720
you pretty much hit

326
00:09:07,720 --> 00:09:08,980
a tipping point

327
00:09:08,980 --> 00:09:10,800
where it gets so big

328
00:09:10,800 --> 00:09:12,620
that it's really hard to control.

329
00:09:12,760 --> 00:09:13,740
I believe we're in that part.

330
00:09:13,980 --> 00:09:15,140
And now you start to see

331
00:09:15,140 --> 00:09:16,200
the actual spread.

332
00:09:18,140 --> 00:09:19,120
And you really don't know

333
00:09:19,120 --> 00:09:20,180
how big that spread is

334
00:09:20,180 --> 00:09:21,140
until shit hits the fan.

335
00:09:21,260 --> 00:09:21,840
And then you realize,

336
00:09:21,840 --> 00:09:22,260
holy shit,

337
00:09:22,340 --> 00:09:23,320
we're literally in every country.

338
00:09:23,640 --> 00:09:23,680
Like,

339
00:09:24,040 --> 00:09:25,360
there's people who are

340
00:09:25,360 --> 00:09:25,800
quiet,

341
00:09:25,940 --> 00:09:26,640
that don't post,

342
00:09:26,720 --> 00:09:27,300
but they know,

343
00:09:27,420 --> 00:09:28,000
they understand,

344
00:09:28,100 --> 00:09:28,940
they use the technology

345
00:09:28,940 --> 00:09:30,180
behind the scenes.

346
00:09:32,800 --> 00:09:33,200
Yeah.

347
00:09:33,720 --> 00:09:35,220
I just want to reiterate

348
00:09:35,220 --> 00:09:36,280
to make it clear here.

349
00:09:36,340 --> 00:09:37,500
The three pillars are

350
00:09:37,500 --> 00:09:39,000
a transaction layer.

351
00:09:40,040 --> 00:09:40,200
Well,

352
00:09:40,300 --> 00:09:41,520
the first one is a text-based

353
00:09:41,520 --> 00:09:42,580
storage layer, right?

354
00:09:42,660 --> 00:09:43,360
It stores text.

355
00:09:43,440 --> 00:09:44,440
It allows you to communicate freely.

356
00:09:44,520 --> 00:09:45,100
It's distributed.

357
00:09:46,760 --> 00:09:48,620
And it just is text,

358
00:09:48,720 --> 00:09:49,320
the most simple,

359
00:09:49,440 --> 00:09:50,560
basic thing you can figure out.

360
00:09:51,420 --> 00:09:52,320
And then that just means

361
00:09:52,320 --> 00:09:53,540
the future cost of operation

362
00:09:53,540 --> 00:09:54,400
and everything like that

363
00:09:54,400 --> 00:09:55,080
are really, really cheap.

364
00:09:55,200 --> 00:09:55,340
And everything else,

365
00:09:55,360 --> 00:09:55,700
everything like that.

366
00:09:56,060 --> 00:09:56,940
And predictable.

367
00:09:57,180 --> 00:09:57,660
And predictable.

368
00:09:57,800 --> 00:09:58,620
You know exactly

369
00:09:58,620 --> 00:09:59,920
how much text is going to weigh

370
00:09:59,920 --> 00:10:01,260
and how much is going to be stored.

371
00:10:01,380 --> 00:10:02,080
So there's no fluctuation.

372
00:10:02,140 --> 00:10:02,780
Like computation,

373
00:10:02,940 --> 00:10:03,660
you can't predict that.

374
00:10:03,680 --> 00:10:04,360
You can't do that with computation.

375
00:10:04,360 --> 00:10:05,380
So it's like,

376
00:10:05,420 --> 00:10:05,960
computation is always related.

377
00:10:05,960 --> 00:10:06,840
It's like a unit of account,

378
00:10:06,920 --> 00:10:07,180
almost,

379
00:10:07,220 --> 00:10:07,860
if you think of text.

380
00:10:07,880 --> 00:10:08,040
Yeah.

381
00:10:08,220 --> 00:10:08,880
Text is almost like

382
00:10:08,880 --> 00:10:09,400
a unit of account.

383
00:10:09,480 --> 00:10:09,760
You're right.

384
00:10:10,040 --> 00:10:10,800
That's what you're doing here.

385
00:10:10,820 --> 00:10:11,700
You're trying to break it down

386
00:10:11,700 --> 00:10:12,500
to units of account.

387
00:10:12,660 --> 00:10:13,860
It's the most fundamental element.

388
00:10:14,160 --> 00:10:15,920
Text is a fundamental storage layer.

389
00:10:17,020 --> 00:10:17,580
Let's just say

390
00:10:17,580 --> 00:10:18,920
fundamental storage layer for text

391
00:10:18,920 --> 00:10:20,740
that's distributed on a network.

392
00:10:21,700 --> 00:10:22,060
And then,

393
00:10:22,280 --> 00:10:23,700
how you set that network up,

394
00:10:23,820 --> 00:10:25,160
we've discussed it many times

395
00:10:25,160 --> 00:10:26,320
in this book so far,

396
00:10:26,460 --> 00:10:27,640
but that's kind of up to you

397
00:10:27,640 --> 00:10:28,120
in many ways.

398
00:10:28,300 --> 00:10:29,120
That fundamental pillar

399
00:10:29,120 --> 00:10:29,680
has to be that.

400
00:10:30,060 --> 00:10:30,840
Text-based storage.

401
00:10:31,500 --> 00:10:32,400
The next thing

402
00:10:32,400 --> 00:10:33,240
that you do on top of that,

403
00:10:33,240 --> 00:10:33,680
because you've got

404
00:10:33,680 --> 00:10:34,420
the text-based storage

405
00:10:34,420 --> 00:10:35,460
that is inherently valuable,

406
00:10:35,540 --> 00:10:35,980
as Dan said,

407
00:10:36,340 --> 00:10:36,920
so then you have

408
00:10:36,920 --> 00:10:38,120
a transaction layer

409
00:10:38,120 --> 00:10:39,540
that allows you to send value

410
00:10:39,540 --> 00:10:40,500
from account to account.

411
00:10:41,260 --> 00:10:42,380
And that value has to be

412
00:10:42,380 --> 00:10:44,360
in governance tokens,

413
00:10:44,560 --> 00:10:45,540
and those governance tokens

414
00:10:45,540 --> 00:10:47,160
will be distributed

415
00:10:47,160 --> 00:10:48,200
by the base protocol

416
00:10:48,200 --> 00:10:49,220
based on the text people

417
00:10:49,220 --> 00:10:49,780
are talking about

418
00:10:49,780 --> 00:10:50,740
on the text storage layer.

419
00:10:52,020 --> 00:10:52,460
And then,

420
00:10:52,980 --> 00:10:54,280
that can be used

421
00:10:54,280 --> 00:10:55,080
to,

422
00:10:55,160 --> 00:10:56,380
to stake

423
00:10:56,380 --> 00:10:57,000
and create

424
00:10:57,000 --> 00:10:58,340
a free transaction layer.

425
00:10:58,500 --> 00:10:59,300
So you don't need to pay

426
00:10:59,300 --> 00:11:00,100
for transactions anymore

427
00:11:00,100 --> 00:11:01,340
because you just stake your value.

428
00:11:02,380 --> 00:11:02,760
And then,

429
00:11:02,940 --> 00:11:04,020
that can be used

430
00:11:04,020 --> 00:11:05,800
to create a stable coin

431
00:11:05,800 --> 00:11:07,680
on the base layer as well.

432
00:11:07,860 --> 00:11:08,400
So you have,

433
00:11:09,480 --> 00:11:10,220
and that stable coin

434
00:11:10,220 --> 00:11:10,940
can be backed

435
00:11:10,940 --> 00:11:12,220
by the main governance token.

436
00:11:12,400 --> 00:11:13,440
As long as the stable coin

437
00:11:13,440 --> 00:11:14,220
is small compared

438
00:11:14,220 --> 00:11:15,120
to the governance token,

439
00:11:15,480 --> 00:11:16,380
it's no issue.

440
00:11:16,900 --> 00:11:17,880
And in the next section,

441
00:11:17,960 --> 00:11:18,540
we'll talk about

442
00:11:18,540 --> 00:11:18,940
how that,

443
00:11:19,220 --> 00:11:19,880
the mechanics of that

444
00:11:19,880 --> 00:11:20,640
and how that works.

445
00:11:21,560 --> 00:11:22,260
But basically,

446
00:11:22,340 --> 00:11:22,900
once you have that,

447
00:11:22,980 --> 00:11:24,460
you have text storage,

448
00:11:24,460 --> 00:11:25,440
transaction layer,

449
00:11:25,700 --> 00:11:26,920
and the third pillar,

450
00:11:27,120 --> 00:11:28,460
which is a stable coin.

451
00:11:28,880 --> 00:11:29,940
And once you can transact

452
00:11:29,940 --> 00:11:30,860
between the stable coin

453
00:11:30,860 --> 00:11:31,640
and the governance token

454
00:11:31,640 --> 00:11:32,840
on the transaction layer,

455
00:11:33,420 --> 00:11:35,140
you have layer one sovereignty

456
00:11:35,140 --> 00:11:36,620
because you no longer need

457
00:11:36,620 --> 00:11:37,740
to rely on a DEX

458
00:11:37,740 --> 00:11:38,660
or a SEX,

459
00:11:39,420 --> 00:11:40,380
a centralized exchange,

460
00:11:40,760 --> 00:11:42,340
to go trade out of your token

461
00:11:42,340 --> 00:11:44,080
and use centralized stable coins,

462
00:11:44,140 --> 00:11:44,780
which is what most

463
00:11:44,780 --> 00:11:45,640
of the cryptos use.

464
00:11:45,940 --> 00:11:47,100
You can use a decentralized,

465
00:11:47,440 --> 00:11:48,860
non-custodial layer one

466
00:11:48,860 --> 00:11:50,060
stable coin

467
00:11:50,060 --> 00:11:50,880
that is created

468
00:11:50,880 --> 00:11:52,000
from the virtue of the fact

469
00:11:52,000 --> 00:11:53,740
that there's an inherent value

470
00:11:53,740 --> 00:11:54,100
to,

471
00:11:54,460 --> 00:11:55,820
text-based storage,

472
00:11:56,240 --> 00:11:56,980
freedom of speech

473
00:11:56,980 --> 00:11:57,560
on that layer,

474
00:11:58,120 --> 00:11:59,600
and governance transaction layer

475
00:11:59,600 --> 00:12:00,780
with zero fees.

476
00:12:01,360 --> 00:12:02,480
That system in itself

477
00:12:02,480 --> 00:12:03,240
is inherently valuable

478
00:12:03,240 --> 00:12:04,080
and that backs the value

479
00:12:04,080 --> 00:12:04,780
of the stable coin.

480
00:12:05,680 --> 00:12:07,360
And that is operating practice

481
00:12:07,360 --> 00:12:08,280
on Hive right now.

482
00:12:09,260 --> 00:12:10,020
So those three layers,

483
00:12:10,360 --> 00:12:11,220
text-based storage,

484
00:12:12,060 --> 00:12:13,060
free transaction layer,

485
00:12:13,420 --> 00:12:14,360
and a stable coin

486
00:12:14,360 --> 00:12:15,120
all on layer one.

487
00:12:15,480 --> 00:12:16,600
And that means you can transact

488
00:12:16,600 --> 00:12:17,800
between your governance token,

489
00:12:17,880 --> 00:12:18,720
which fluctuates in value

490
00:12:18,720 --> 00:12:19,820
based on the network effect

491
00:12:19,820 --> 00:12:20,780
of your ecosystem,

492
00:12:21,340 --> 00:12:22,640
and the stable coin

493
00:12:22,640 --> 00:12:24,240
that's on the layer one

494
00:12:24,240 --> 00:12:24,940
of that ecosystem

495
00:12:24,940 --> 00:12:26,880
internally within the chain

496
00:12:26,880 --> 00:12:27,680
rather than having to rely

497
00:12:27,680 --> 00:12:29,020
on any type of external exchange.

498
00:12:29,100 --> 00:12:29,940
That gives you sovereignty.

499
00:12:31,480 --> 00:12:32,840
So those are the three main pillars.

500
00:12:32,940 --> 00:12:33,880
And then everything else

501
00:12:33,880 --> 00:12:34,640
builds off that.

502
00:12:34,960 --> 00:12:35,740
Everything else comes

503
00:12:35,740 --> 00:12:36,300
from that point.