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All right, so in this segment, this is chapter one, I guess, we're going to talk about the

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underlying principles of what decentralization is, why it's important, and a few of the technical

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things and misunderstandings that we think need clarifying before we go ahead. So yeah, what do

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you think, Don? What's the underlying principles here? What's the mindset of thinking here that we

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need to make sure other people follow? Well, decentralization is a very broad stroke topic

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because it means a lot of different things. Censorship resistance is very black and white.

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You either have censorship resistance or you don't. You can be decentralized with two people,

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you can be decentralized with a hundred people, varying degrees, but there's not really varying

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degrees of censorship resistance. There's a cutoff point, either they can take the assets

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from you or they can't. So they can block your speech or they can't. Exactly. So the goal here is

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very pragmatic. How do we go from point A to point Z,

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starting with the technical stack, getting the environment correct? So if we're trying to

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replicate a species, if we're trying to keep an iguana alive, you don't first look at the iguana,

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you first look at the environment in which iguanas can survive in. So you try to build

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something, it's like you need this, you need a heat rock, you need, you know, trees, you need

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food, you need water, et cetera, right? You need a rooftop so it can't escape and hurt itself,

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just these parameters that are needed. So it's the same thing with censorship resistance. How

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do you create the environment in which this censorship resistance can live and sustain

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itself? Can I come back to a point here? Because I think it was good you just said you touch on

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varying degrees of decentralization, right? There's varying degrees of everything, right?

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What we're specifically talking about in this book is the level of decentralization whereby

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you can guarantee digital rights to all people, from all communities, from all backgrounds,

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from all medical statuses, from all political opinions. Everyone, universal digital rights can

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be guaranteed by actual proper decentralization. And so what it means is wherever you're trying to

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bestow a digital right for all, a universal digital right, a UDR, then you must not compromise on

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certain things. There are certain things you cannot compromise on. There are certain things you cannot

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compromise on. There are certain things you cannot compromise on. There are certain things you cannot

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compromise upon, because then you will, at some point further down the road, lose that digital

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right. And almost everyone in the industry has compromised on this so far. And so as a result,

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further down the road, they will either become regulated, captured, subverted, centralized,

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dictated to. Almost every single blockchain will have this happen to it. And we feel that the

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information very clearly explains to you how you can do this properly without having these

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risks. And therefore, as a result, bestow pure, guaranteed, universal digital rights to

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everybody. Yeah, so this is the level of decentralization we're talking about. It's pure

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decentralization in our opinion. So when we're talking about the technical step, there's a very

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clear distinction. So the most popular thing right now is, well, let's not bloat the blockchain.

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Let's not make the blockchain too big. If you make the blockchain too big, well,

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rewind. You have a blockchain, which is basically a database that is distributed. If you have a

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database in one person's house, that person can get raided. The network goes down. If you have a

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database in Nigeria, and Venezuela, and Canada, and Mexico City, wherever the hell, all over the

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world, well, if one goes down to Mexico City, the ones in Venezuela gone, and Nigeria, they're all

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up. Different jurisdictions, different laws.

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That's how you win, because you can't make something illegal worldwide. Unless it's truly evil, then

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there'd be good reason for it, like murder. But if it's not, if it's good, you're going to have

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countries that say this is okay. And you're going to have countries that say it's bad. Let's take

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weed, for example. You can't go now, any person, right? Let's say somebody super powerful. Let's say

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the United States says weed's illegal. Well, does that mean it's going to be illegal worldwide? No.

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It's the same concept here, because some people look at weed as a medicine. Some people look at weed as a good thing. Some people look at it as a bad thing. Same thing with censorship resistance. Some people are going to say, well, no, people shouldn't have rights over their assets. And then some countries are going to say, well, that's a human right, and of course you should. And the people can pick accordingly.

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Which is also a very important security measure, because if it does happen in the jurisdiction you're in, the censorship

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resistance activities that you're involved in become illegal, then you can, if you so deem, you can move to another jurisdiction. On top of which, jurisdictions, they never quite agree with each other. They're always in competition. So there's always an element of, well, if we can get capital to flow into our jurisdiction, that's better for us, as opposed to another richer country, let's say, that makes things more authoritarian eventually. They will be more likely to censor things. There's other places that will say, well, every man's rubbish is another man's gold, right?

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And so there's always going to be another jurisdiction somewhere that's going to say, you know what? We like this censorship resistance stuff. It's going to flow capital into our country. It's going to bring bright people to our country. It's going to bring freedom lovers to our country. So we'll make that a protected thing here. And so as a result, the possibility of actually banning decentralization and censorship resistance everywhere across the world, universally at the same time, is incredibly difficult to do. And this is the beauty. This is the defense mechanism.

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So there's a game theory here. If you look at it...

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Crypto is highly, it's highly desirable. There's going to be people in the world that want to have crypto, own crypto, and be inside the crypto ecosystem. So what happens when a major country makes it illegal? That means all the people who are pro-crypto leave when they can, and they're going to go to a country where it is legal. Well, if enough countries make it illegal, it's almost like a rare file on proof of access.

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It's the case.

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So the countries that allow it are going to be worth more because to be in that country is going to be highly desirable by people who want crypto, or at least pro-crypto regulations. These people generally have money. So it becomes a cat and mouse game where, oh, well, you know, these countries all align against crypto, but these countries are pro. Well, what's going to happen? The countries who are negative are going to get negatively effective tax-wise. They're going to have a brain drain.

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Crypto is a small scale. Crypto is much, much, much bigger. If you were to do it again, you're going to degrade the value of the society as a whole. You're going to make U.S., you're going to make a lot of these countries who have a lot of smart people who are petri dish in their own for different types of people.

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Coming together. Well, you're going to really take some of the brightest entrepreneurs and force them out of the country. So very basis of censorship resistance to how liquid it is. You can't destroy it. It's like energy. You can't destroy it. You can just replace it somewhere else. You could displace it. You could put it somewhere else. But it's like a balloon. If you push down on one end, another end gets bigger.

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The other thing as well is that.

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To a level above that, you see it today happening. This is the year 2023. You see today where it's very clear that Democrats on the left in the USA are going to try to ban crypto, whereas Republicans on the right are going to go for the people who want to be pro crypto. And they're actually going to try and support it. You see people running already in the presidential election saying that they're not going to protect people's Bitcoin rights.

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So there's that top layer on top where within individual countries.

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The more this the currencies get spread and distributed and Trojan horse and spread out into the local communities, the more that's going to get to the political class and the political class is eventually going to support it.

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Well, there's going to be factions of political class that support crypto.

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The question is, and we'll try to explain this during this. The remainder of this book is whether or not they'll support crypto that cannot be censored.

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And this is the key critical distinction here.

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A lot of the crypto today.

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I think the political class is starting to realize that they can actually regulate it.

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They can actually shut it down.

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So they're starting to say, oh, okay, it's okay.

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Right.

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Whereas when they start to come across those last set of cryptos that are left that cannot be censored, that cannot be shut down and cannot be regulated because they were done, they were released properly.

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Those cryptos will see what happens with those.

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But we this is the battle is going to fight that we're going to fight and we'll see how it goes going forwards.

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And we hopefully outline a number of tools in the following paragraphs that explain how you can protect people.

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Protect those crypto specifically.

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To roll them out properly.

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Hold on, hold on.

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Let's talk about balancing underlying censorship resistance versus high performance and scalability.

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Balancing high performance.

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Okay.

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So if we're going to be talking about technical stacks.

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Balancing censorship resistance, high performance and scalability.

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In order to make a tech stack work, we should look at it very pro magnet, like very.

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From a practical point of view, it has to work first.

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Right.

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So for all the people who say, oh, well, you need to limit the size of the amount of data that can go into the chain to a small amount.

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So small that where if there's any demand for it, the fees go high.

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We call that a high fee base layer.

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You see in Bitcoin, Ethereum.

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And they say the reason for this is because we want to keep the nose size small so everybody can run it.

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That's what they say.

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So this is why I believe we're an idiocracy.

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I don't know if that should be good in the book or not.

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So they can feed you that.

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They can feed you that.

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So go run a Bitcoin node on your Raspberry Pi and try to mine Bitcoin.

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Or better yet, try to take your one Ethereum and become a validator with your big hard drive.

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Because you can fit the entire Ethereum blockchain on your hard drive.

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So that's good.

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That's the whole point.

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Right.

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So everyone can join.

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So they keep it really small and high fee base layer.

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And you have your hard drive and you have your one Ethereum.

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And then you realize, oh, well, I have to join Lido or Rocket Pool because my one Ethereum is not enough.

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I need 32, which means you need to be rich, which means the whole thing is broken.

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Right.

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They're telling you the sky is red and you're believing it.

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They're saying the blockchain needs to be small so everyone can run a node.

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But to run a node, you need to be rich because you need 32 Ethereum.

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Which is it?

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So they should have just said you're going to need staking pools.

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That's how this whole game works is staking pools because you're never going to be able to be a validator.

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It doesn't matter the size of the blockchain.

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It's irrelevant because you're never going to be a validator because you're never going to have 32 Ethereum.

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Therefore, it's all going to be run by staking pools.

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And these staking pools are going to need to be giant and badass because they're going to be handling a lot of Ethereum.

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And they're going to need to have badass staking pools to handle the infrastructure.

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Therefore, the infrastructure is going to be run by a few anyway.

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So why are you limiting the size of the block if you can make it bigger if you're going to have staking pools anyway or basically super validators?

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And when you really break it down and look at it, you realize that it's.

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A broken version of delegated proof of stake.

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It's proof of stake without voting and without parameters.

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And what happens when you build a highway and you don't have guard rails and you don't have signs?

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You get destruction and chaos.

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Well, if you try to have proof of stake without parameters, a.k.a. no parameter validator count, meaning you need at least 20 to run the network.

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You can't have one. You need 20.

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It needs to be two thirds plus one consensus on that 20.

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So no matter how badass you are, Lito, you need to compete with Rocket Pool and fucking 16 others.

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It doesn't matter what you think of them.

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You have to think of these people and you can have a lot more stake than them.

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But as long as you don't have a 51% controlling stake, which means the system is broken anyway, your vote is just as strong as the next.

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The other ones.

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So if you don't have parameters on any coin voting, you get chaos.

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You get one staking pool.

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If you're lucky, you get two.

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And you can throw hardware requirements out of the window because you're never going to be a solo validator on proof of stake.

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So these are the very basics that people need to understand.

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They say, OK, look, let's just use some common sense here.

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If we know 1000% of the time it's always going to be a staking pool, a.k.a. people are going to delegate to somebody else to do the job for them.

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If we know that's what's going to happen, if we can all agree on that.

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Then it makes sense to have a top 20, a top 10, top 30, whatever.

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Let's just say top 20 voted in by the coin voters who don't want to do the responsibility themselves.

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And then say, hey, we can have a fast base layer because we have 20 people who are super badass, who are expected to be badass.

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We don't want Johnny and his Raspberry Pi.

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We want somebody with a badass computer, a badass server to run this for us.

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And then they fool you again.

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This makes me think Vitalik's almost controlled opposition.

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Let me give you a second to think of what you're going to say here.

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So to summarize part of this is what you have is instead of everyone being able to.

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So on proof of work, everyone's a validator, right?

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It makes it super secure.

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But it's like a Panzer tank.

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It's too secure for certain applications for the store of value and a liquidity layer.

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OK.

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But for like social media, it makes it too cumbersome and slow.

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And then you've got fees.

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You've got to deal with fees.

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So then you come to proof of stake where what you're doing is you're saying, OK, everyone can still run a node.

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But the guys with the most stake get to really get the throughput going on that chain.

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So it makes it much more lightweight and much more flexible and fast.

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But there's still fees.

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The problem with that, as Dan was just saying, is that you ultimately get that then accumulating into voting pools.

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And then you get one, two, three pools that rule the whole chain.

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And by the way, you didn't mention, Dan, but all of those pools will be regulatable entities in jurisdictions that are regulatable funded by the ICO funds, right?

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So the only way.

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Let me just finish this point.

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So then the next thing is to come to say, well, if you have the community elect 20 people and they're just running a super lightweight layer.

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Then the chain can be fast and those individuals can be funded by the community.

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Some of them can be anonymous.

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And all 20 have an equal weight.

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Of say, as opposed to on proof of state where you get say based on your stakes.

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You get an overweighted one, two, three pools that run everything.

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This is where the richest guy in the room can still get voted in.

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But he can't control the chain because his vote is strong as the other as the 20th guy.

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You know, everyone gets that gets voted in by the community has the same equal weighted vote.

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And that allows for a fair governance model as for super fast, super lightweight, low, low, lightweight chain on the base layer.

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That can then start.

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That can then start rewarding and interacting and creating transactions for the high throughput social media chain requirements for the speech for the anti censorship requirements.

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And that's the point that we're trying to make here.

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So if you look at.

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You have coin voting without parameters.

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We know it leads to a few staking pools.

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Why is it lead to a few staking pools?

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Because there's no guard rose.

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There's no parameters.

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And you're always going to choose the best.

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You're not going to choose the fifth best.

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You're going to choose the best.

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These four monopolies, right?

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That's why Walmart kills mom and pop stores because they offer a better deal.

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That's the same thing as Lido and Rocket Pool.

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What's the fifth most popular staking pool on Ethereum?

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I don't know.

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And you probably don't know.

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And the reason for that is because it's going to be dominated by one or two.

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So.

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If you look at people saying, look, I need to give up my responsibilities.

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I do not want to.

199
00:17:43,780 --> 00:17:44,780
I don't either.

200
00:17:44,780 --> 00:17:49,780
I'm incapable or I do not want this responsibility.

201
00:17:49,780 --> 00:18:02,780
If you look at it from a very pragmatic point of view, you're saying, OK, well, not only do you have a few validators because it's proof of stake without parameters, you crippled the block size.

202
00:18:02,780 --> 00:18:05,780
You crippled the block size and you made it high.

203
00:18:05,780 --> 00:18:09,780
So that means you have one or two and you have a crippled blockchain.

204
00:18:09,780 --> 00:18:10,780
And yes, Lido could.

205
00:18:10,780 --> 00:18:12,780
Lido could be decentralized.

206
00:18:12,780 --> 00:18:14,780
Let's see what this entails.

207
00:18:14,780 --> 00:18:21,780
So I have my crippled high fee coin voting without parameter base layer.

208
00:18:21,780 --> 00:18:25,780
And now I have one or two pools running it.

209
00:18:25,780 --> 00:18:27,780
What do these pools have to do?

210
00:18:27,780 --> 00:18:29,780
Same thing with the Lightning Network.

211
00:18:29,780 --> 00:18:30,780
Same problem.

212
00:18:30,780 --> 00:18:33,780
They're centralized because they're saying, well, we're layer two, yada, yada, yada.

213
00:18:33,780 --> 00:18:38,780
But really, if they if they need to, if they want to be censorship resistance, they have to have layer one security.

214
00:18:38,780 --> 00:18:39,780
So look how Clown showed this.

215
00:18:39,780 --> 00:18:44,780
You have a crippled layer one coin voting without parameters.

216
00:18:44,780 --> 00:18:48,780
And it's run by a staking pool, obviously, like the parasite that takes over the host.

217
00:18:48,780 --> 00:18:56,780
And now in order for this to work in practice to get censorship resistance, this this pool needs to be layer one security.

218
00:18:56,780 --> 00:18:57,780
So it needs to have distribution.

219
00:18:57,780 --> 00:18:59,780
It needs to have everything.

220
00:18:59,780 --> 00:19:07,780
The ongoing distribution, the sustainability, the, you know, the incentivized proof of stake, everything, everything you need that Hive has.

221
00:19:07,780 --> 00:19:08,780
It needs to have that.

222
00:19:08,780 --> 00:19:17,780
Therefore, it's like, why the hell do I even talk to this old rickety chain when I can just.

223
00:19:17,780 --> 00:19:23,780
It's so when you look at it from that point of view, it becomes Depos, but they become centralized because it's the easy way.

224
00:19:23,780 --> 00:19:28,780
And it doesn't make any sense for them to become their own layer one, because then they would just say, well, my own layer one.

225
00:19:28,780 --> 00:19:29,780
I have my own security.

226
00:19:29,780 --> 00:19:32,780
I don't need you Ethereum or whatever this high fee layer is.

227
00:19:32,780 --> 00:19:34,780
I can become my own chain.

228
00:19:34,780 --> 00:19:35,780
And that's why it never, ever works.

229
00:19:35,780 --> 00:19:37,780
There's never, ever going to be a censorship resistance.

230
00:19:38,780 --> 00:19:42,780
Staking pool on Ethereum, because then there would just be its own chain.

231
00:19:42,780 --> 00:19:48,780
Wouldn't need to deal with Ethereum.

232
00:19:48,780 --> 00:19:49,780
So, yeah, that's the reason.

233
00:19:49,780 --> 00:20:05,780
The reason that Dan mentions this is because Lido is trying to they've effectively reinvented Depos on top of Ethereum as a staking pool within Ethereum, which is kind of funny because Depos has been invented for a long, long time.

234
00:20:05,780 --> 00:20:07,780
And it's coded into the layer one chain.

235
00:20:07,780 --> 00:20:09,780
Whereas Lido is on the layer two of Ethereum.

236
00:20:09,780 --> 00:20:14,780
It's effectively a layer two on a layer one of Ethereum that's trying to mimic Depos.

237
00:20:14,780 --> 00:20:17,780
But again, there was an ICO.

238
00:20:17,780 --> 00:20:19,780
There was a pre-mine.

239
00:20:19,780 --> 00:20:22,780
Maybe we could just touch on ICOs and pre-mines.

240
00:20:22,780 --> 00:20:26,780
Well, just one little tidbit here.

241
00:20:26,780 --> 00:20:30,780
So Vitalik's like, we need to cap the chain, make it small.

242
00:20:30,780 --> 00:20:31,780
Not Vitalik, everybody.

243
00:20:31,780 --> 00:20:35,780
Everybody's in the high fee camp small chain.

244
00:20:35,780 --> 00:20:36,780
So where does it make sense to have that?

245
00:20:36,780 --> 00:20:37,780
Yeah.

246
00:20:37,780 --> 00:20:38,780
We have layer one smart contracts.

247
00:20:38,780 --> 00:20:39,780
They're like, okay, we need.

248
00:20:39,780 --> 00:20:40,780
We'll get onto that later.

249
00:20:40,780 --> 00:20:41,780
Okay.

250
00:20:41,780 --> 00:20:42,780
Do you want to do it now?

251
00:20:42,780 --> 00:20:43,780
Well, it's on my mind.

252
00:20:43,780 --> 00:20:44,780
It's always on your mind.

253
00:20:44,780 --> 00:20:55,780
I don't have to talk about it for an hour, but it's just how funny is that where they're saying, look, we need to compromise and be very efficient on the base layer.

254
00:20:55,780 --> 00:21:00,780
And we can't allow a lot of data, but we're going to allow smart contracts.

255
00:21:00,780 --> 00:21:06,780
Now, if you understand, I'm not a dev, Matt's not a dev, but we understand enough that smart contracts are not easy.

256
00:21:06,780 --> 00:21:08,780
They take up a lot of fucking space.

257
00:21:08,780 --> 00:21:20,780
That's why the fees become astronomical on these base layers that are layer ones with smart contracts that have any kind of usage, even the ones that do DPOS, all of that.

258
00:21:20,780 --> 00:21:23,780
So just think logically, why are they lying to you?

259
00:21:23,780 --> 00:21:25,780
Why are they saying these things?

260
00:21:25,780 --> 00:21:27,780
And then it's not true.

261
00:21:27,780 --> 00:21:28,780
They do the opposite.

262
00:21:28,780 --> 00:21:34,780
They say, oh, we, you know, we need to make it high fee because everyone needs to run.

263
00:21:34,780 --> 00:21:35,780
And you realize, well, it's going to be one stage.

264
00:21:35,780 --> 00:21:38,780
Well, it's going to be one staking pool and it's smart contracts anyway.

265
00:21:38,780 --> 00:21:44,780
So it's going to be bloated and ridiculously high fee to run a validator to run a validator is not free.

266
00:21:44,780 --> 00:21:48,780
And all these fees are very difficult when you have to send money back and forth.

267
00:21:48,780 --> 00:21:51,780
It becomes a rich person game.

268
00:21:51,780 --> 00:21:53,780
And then now you start to connect the dots.

269
00:21:53,780 --> 00:21:57,780
Who's going to run these high fee layers?

270
00:21:57,780 --> 00:21:58,780
Centralizing entities.

271
00:21:58,780 --> 00:22:00,780
Yeah, that's where it ends up.

272
00:22:00,780 --> 00:22:02,780
That's where it ultimately ends up.

273
00:22:02,780 --> 00:22:04,780
And this is why we believe that.

274
00:22:04,780 --> 00:22:07,780
The proof of state guys have got it wrong.

275
00:22:07,780 --> 00:22:11,780
The proof of work guys have got it right for store of value.

276
00:22:11,780 --> 00:22:13,780
Guarantee of transaction.

277
00:22:13,780 --> 00:22:16,780
Maybe some forms of store of information.

278
00:22:16,780 --> 00:22:17,780
Maybe liquidity.

279
00:22:17,780 --> 00:22:18,780
But they haven't.

280
00:22:18,780 --> 00:22:19,780
They can't.

281
00:22:19,780 --> 00:22:21,780
Because proof of work is like a Panzer tank.

282
00:22:21,780 --> 00:22:25,780
It's over engineered because everyone has to run a node and all the nodes have to be processed.

283
00:22:25,780 --> 00:22:27,780
Not everyone has to, but everyone can.

284
00:22:27,780 --> 00:22:33,780
Then it means that you have a very slow over secured layer that's not flexible and can't do social media.

285
00:22:33,780 --> 00:22:43,780
Proof of state could maybe do that, but then it's still like Dan was just saying, got the high fee system because they're trying to keep the base layer light.

286
00:22:43,780 --> 00:22:46,780
Although they put smart contracts on the base layer for some reason.

287
00:22:46,780 --> 00:22:48,780
And so as a result, that's messed up.

288
00:22:48,780 --> 00:22:52,780
And no one seems to have realized this in the Bitcoin in the crypto industry so far either.

289
00:22:52,780 --> 00:23:00,780
So we come to delegate proof of state, which is 20 validators that each have equal say and have voted in by the community.

290
00:23:00,780 --> 00:23:02,780
And let smart contracts on layer two.

291
00:23:02,780 --> 00:23:06,780
But we'll come to that in a separate paragraph.

292
00:23:06,780 --> 00:23:11,780
So then there's like there's a certain set of promises, as Dan's mentioned several times.

293
00:23:11,780 --> 00:23:14,780
We don't have to go too much into what the promises are right here right now.

294
00:23:14,780 --> 00:23:17,780
But just saying that there's there's like promises that you're looking for.

295
00:23:17,780 --> 00:23:28,780
Right. When you first start distributing these tokens, creating these ecosystems as actual decentralized ecosystems, you want to see that the tokens are being distributed.

296
00:23:28,780 --> 00:23:31,780
And one of the problems is, is that.

297
00:23:32,780 --> 00:23:36,780
Proof of stake is primarily focused on DeFi.

298
00:23:36,780 --> 00:23:43,780
So people are distributing tokens via DeFi and then people coming back and buying more Ethereum on the layer one using their DeFi rewards, for example.

299
00:23:43,780 --> 00:23:48,780
Proof of work and proof of stake reward the miners, the node operators.

300
00:23:48,780 --> 00:23:53,780
But there's no way to reward the average Joe that creates value but isn't technical.

301
00:23:53,780 --> 00:23:58,780
And so your distribution is messed up because you're only rewarding the guys who are technical.

302
00:23:58,780 --> 00:24:01,780
And so you're not spreading the tokens far and wide enough from the protocol.

303
00:24:01,780 --> 00:24:04,780
Maybe you can do that by trading and people trading in and out and buying the tokens.

304
00:24:04,780 --> 00:24:10,780
But you can't actually earn the tokens if you're like a non-technical person.

305
00:24:10,780 --> 00:24:19,780
Well, we believe in order to have actual decentralization, the more you distribute the token, the more powerful and more secure the ecosystem is, especially if you're doing coin voting.

306
00:24:19,780 --> 00:24:30,780
And so you have to have a way to decentralize the token, which means things like you need to be able to make social media content and be able to have the community have a way to distribute rewards.

307
00:24:30,780 --> 00:24:42,780
Rewards to those social media users that are making valuable content and valuable contributions to the community that can show that via the social media without having any technical knowledge.

308
00:24:42,780 --> 00:24:45,780
And now you can start distributing the tokens even further and wider.

309
00:24:45,780 --> 00:24:52,780
And if you start distributing the majority of the rewards to those people whilst keeping enough of the rewards to keep the validators and the witnesses.

310
00:24:52,780 --> 00:24:54,780
And it's only 20 witnesses, by the way, on Depos.

311
00:24:54,780 --> 00:24:58,780
It's not thousands of witnesses or validators or whatever you want to call them.

312
00:24:58,780 --> 00:25:00,780
So you don't need that much.

313
00:25:00,780 --> 00:25:05,780
You don't need that much money to keep the witnesses incorruptible.

314
00:25:05,780 --> 00:25:08,780
So you have to have this distribution mechanism.

315
00:25:08,780 --> 00:25:23,780
And then what you want to see is, we call it the petri dish cultivation model, where you don't want to see a small number of people getting really, really rich and hoarding all the tokens.

316
00:25:23,780 --> 00:25:28,780
You don't want to see the tokens getting distributed too easily to people for not creating any value at all either.

317
00:25:28,780 --> 00:25:32,780
You want people to have to work for their tokens so they actually earn them and therefore they have value.

318
00:25:32,780 --> 00:25:47,780
And yeah, you just want to see there's no ICO, no initial coin offering, no pre-mine, no one was able to control the tokens and move them early on and distribute the tokens to their friends or the people that sent them money.

319
00:25:47,780 --> 00:25:51,780
That's not decentralized and that is regulatable and that will be regulated by the governments.

320
00:25:51,780 --> 00:25:57,780
And you just kind of set these parameters up so that you can watch the system grow.

321
00:25:57,780 --> 00:26:00,780
And if the system remains decentralized over time, you're good.

322
00:26:00,780 --> 00:26:14,780
If the system becomes centralized, you've either got a technical distribution model problem where you're distributing rewards to someone over-representing rewards to one party compared to the other party.

323
00:26:14,780 --> 00:26:20,780
So that party can gain additional rewards over time and grow and become too powerful and then take over the chain.

324
00:26:20,780 --> 00:26:24,780
Or you're doing it on the opposite end where you're not distributing enough tokens.

325
00:26:24,780 --> 00:26:27,780
You're not keeping the amount of tokens.

326
00:26:27,780 --> 00:26:30,780
You're keeping the investors and the value creators rewarded well enough.

327
00:26:30,780 --> 00:26:38,780
But you can set up a system where you just monitor that and you see, does the system remain well decentralized?

328
00:26:38,780 --> 00:26:40,780
Is there a growing middle class?

329
00:26:40,780 --> 00:26:42,780
Are the whales accumulating more tokens?

330
00:26:42,780 --> 00:26:48,780
Are the poor class, are they interacting with the ecosystem still?

331
00:26:48,780 --> 00:26:50,780
Is their interaction level the same?

332
00:26:50,780 --> 00:26:56,780
And as long as you see that happening, you're able to say, yes, this system is still decentralized.

333
00:26:56,780 --> 00:27:00,780
You don't see hardly any crypto ecosystems, especially in pre for stake, even looking at that type of stuff.

334
00:27:00,780 --> 00:27:04,780
Because they're obsessed with accumulating rewards.

335
00:27:04,780 --> 00:27:07,780
They're obsessed with DeFi and becoming as rich as possible.

336
00:27:07,780 --> 00:27:12,780
And no one seems to pay any attention to how many tokens a Richard Hart has on PulseChain.

337
00:27:12,780 --> 00:27:24,780
No one seems to pay attention to how much of the stake Vitalik Buterin controls or Joe Lubin controls on Ethereum and how therefore susceptible and insecure that makes the ecosystem.

338
00:27:24,780 --> 00:27:25,780
Right?

339
00:27:25,780 --> 00:27:27,780
This is the problem.

340
00:27:27,780 --> 00:27:33,780
Whereas on truly decentralized chains, you'll notice the whales, they don't want to accumulate all the tokens.

341
00:27:33,780 --> 00:27:39,780
They want to accumulate a nice amount, but they don't want to accumulate so many of the tokens that they become a threat to the community.

342
00:27:39,780 --> 00:27:52,780
Because once they've got too many tokens, they could be corrupted, arrested, persuaded to vote in such a way that's against the interests of the community and affect the well-being of the community.

343
00:27:52,780 --> 00:27:54,780
And that makes them a threat to the community.

344
00:27:54,780 --> 00:28:03,780
So you'll notice on truly decentralized chains that the whales are very careful how much stake they accumulate and how much they publicly at least let people know that they have.

345
00:28:03,780 --> 00:28:04,780
Okay.

346
00:28:04,780 --> 00:28:07,780
In this section, we're going to talk about the underlying principles.

347
00:28:10,780 --> 00:28:15,780
So in this section, we're going to talk about the underlying principles of these systems.

348
00:28:15,780 --> 00:28:22,780
We'll talk generally about the difficulties at arriving at true decentralization.

349
00:28:22,780 --> 00:28:26,780
How arriving at the theory is often a freak event.

350
00:28:26,780 --> 00:28:29,780
How arriving at an actual decentralized system is a freak event.

351
00:28:29,780 --> 00:28:31,780
And it kind of has to be.

352
00:28:31,780 --> 00:28:37,780
And how often the founders that built these systems didn't understand necessarily what they were building.

353
00:28:37,780 --> 00:28:44,780
And it's only been possible to understand what's been built when you look back in history through the path that some of these systems have taken.

354
00:28:44,780 --> 00:28:50,780
If you plan forward and try and plan logically, it's very, very difficult to design and predict the future.

355
00:28:50,780 --> 00:28:53,780
Design and predict what these systems are going to do.

356
00:28:53,780 --> 00:29:01,780
Generally, the counterintuitive option is nearly always the most decentralized option to take.

357
00:29:01,780 --> 00:29:11,780
And the counterintuitive option is generally not taking the money, which is what most people have done in the so-called decentralization world.

358
00:29:11,780 --> 00:29:16,780
I want to talk a little bit about the Petri dish cultivation model.

359
00:29:16,780 --> 00:29:19,780
Universal digital human rights.

360
00:29:19,780 --> 00:29:22,780
And why everyone did it all wrong.

361
00:29:22,780 --> 00:29:25,780
Any thoughts on this, Dan?

362
00:29:25,780 --> 00:29:30,780
Just talking about how it's so difficult to arrive at.

363
00:29:30,780 --> 00:29:32,780
How the founder got it wrong.

364
00:29:32,780 --> 00:29:37,780
How only looking back at history do you realize what we've done.

365
00:29:37,780 --> 00:29:39,780
How it's all counterintuitive.

366
00:29:39,780 --> 00:29:40,780
Yeah.

367
00:29:40,780 --> 00:29:44,780
I would use to say that it was difficult.

368
00:29:44,780 --> 00:29:46,780
It's not difficult.

369
00:29:46,780 --> 00:29:49,780
It's either incredibly easy or it doesn't happen.

370
00:29:49,780 --> 00:29:51,780
Because it happens voluntarily.

371
00:29:51,780 --> 00:29:52,780
It's not something that can be forced.

372
00:29:52,780 --> 00:29:53,780
It's impossible.

373
00:29:53,780 --> 00:29:57,780
You would say, oh, I'm going to go and try to do this.

374
00:29:57,780 --> 00:29:59,780
It would be impossible.

375
00:29:59,780 --> 00:30:02,780
Because you can't force it into reality.

376
00:30:02,780 --> 00:30:16,780
There was a protocol that got enough people voluntarily to support it that it grew censorship resistance, which then gave itself value.

377
00:30:16,780 --> 00:30:18,780
Everything else is basically a corporation.

378
00:30:18,780 --> 00:30:21,780
It was run by a CEO.

379
00:30:21,780 --> 00:30:25,780
The reason Hive happened, it started off as Steam.

380
00:30:25,780 --> 00:30:27,780
And really people called it Steemit.

381
00:30:27,780 --> 00:30:32,780
And they might as well because it was Steemit's blockchain.

382
00:30:32,780 --> 00:30:35,780
Because of the controlling stake.

383
00:30:35,780 --> 00:30:42,780
Now, the interesting thing, the phenomenon that happened here is because all centralized chains are different.

384
00:30:42,780 --> 00:30:44,780
All founders are different.

385
00:30:44,780 --> 00:30:47,780
The original creator of the protocol peaced out.

386
00:30:47,780 --> 00:30:48,780
I'm going to leave.

387
00:30:48,780 --> 00:30:51,780
Because he didn't like the shady business that was going on with the Ninja Mine.

388
00:30:51,780 --> 00:30:53,780
And he knew it was just going to look bad.

389
00:30:53,780 --> 00:30:58,780
So that was an interesting phenomenon that just kind of freak accident.

390
00:30:58,780 --> 00:31:06,780
And then you had a basically it seemed like he was like, oh, shit, I'm thrust into a situation I didn't think I was going to be in.

391
00:31:06,780 --> 00:31:08,780
And he wasn't really a leader.

392
00:31:08,780 --> 00:31:11,780
And he couldn't handle the pressure.

393
00:31:11,780 --> 00:31:14,780
So really he took it.

394
00:31:14,780 --> 00:31:16,780
And he was like, I'm just going to cash out.

395
00:31:16,780 --> 00:31:25,780
And selling it to someone like Justin Sun who then basically Godzilla-ed the community.

396
00:31:25,780 --> 00:31:32,780
And really the whole point of this is saying that it's a freak accident in terms of none of this could have been manufactured.

397
00:31:32,780 --> 00:31:34,780
It couldn't have been bought.

398
00:31:34,780 --> 00:31:36,780
You couldn't have forced this into reality.

399
00:31:36,780 --> 00:31:45,780
It was a freak accident where most of the time the controlling centralized stake doesn't want the community pissed at them.

400
00:31:45,780 --> 00:31:48,780
Especially not pissed enough where they can fork.

401
00:31:48,780 --> 00:31:54,780
Now, I'd say every community out there, most, let's say 99%, aren't capable of forking.

402
00:31:54,780 --> 00:31:57,780
They aren't capable technically of actually doing that.

403
00:31:57,780 --> 00:32:02,780
Where the interesting thing here was the founder was only here for money.

404
00:32:02,780 --> 00:32:05,780
He was like kind of like backseat lazy.

405
00:32:05,780 --> 00:32:11,780
And the community thought the protocol was interesting because of the value for value model and just how it spread.

406
00:32:11,780 --> 00:32:13,780
That the core developers.

407
00:32:13,780 --> 00:32:14,780
Yes.

408
00:32:14,780 --> 00:32:16,780
You had Steemit, Inc.

409
00:32:16,780 --> 00:32:18,780
But the witnesses weren't Steemit, Inc.

410
00:32:18,780 --> 00:32:23,780
The witnesses were normal voluntary people who got voted in.

411
00:32:23,780 --> 00:32:31,780
So when we were able to fork, we were able to keep that framework, that network effect that was built from the value for value model.

412
00:32:31,780 --> 00:32:42,780
And the lazy founder, instead of trying to control everything like a Binance chain where the validators are all closely monitored or a Tron.

413
00:32:42,780 --> 00:32:48,780
It was sort of given to the community in a weird way to have a little bit more freedom.

414
00:32:48,780 --> 00:32:55,780
And just with the social value for value model, you created a censorship resistant fork that doesn't have a controlling stake.

415
00:32:55,780 --> 00:32:59,780
Now, you can't buy any of that.

416
00:32:59,780 --> 00:33:03,780
It takes a community that had enough freedom.

417
00:33:03,780 --> 00:33:06,780
Really, it was the reputation that did it.

418
00:33:06,780 --> 00:33:08,780
We had a social feature.

419
00:33:08,780 --> 00:33:10,780
People built reputation.

420
00:33:10,780 --> 00:33:11,780
And people will do a lot.

421
00:33:11,780 --> 00:33:13,780
Right?

422
00:33:13,780 --> 00:33:16,780
Like, reputation is important to a lot of people.

423
00:33:16,780 --> 00:33:19,780
Without that, none of this would have happened.

424
00:33:19,780 --> 00:33:22,780
So when the fork happened, people stepped up.

425
00:33:22,780 --> 00:33:24,780
Because they cared about the community.

426
00:33:24,780 --> 00:33:26,780
They cared about keeping their reputations.

427
00:33:26,780 --> 00:33:28,780
Like, this is what happens in a time of crisis.

428
00:33:28,780 --> 00:33:30,780
This is when you're judged.

429
00:33:30,780 --> 00:33:33,780
This is when you show what you're made of.

430
00:33:33,780 --> 00:33:35,780
And we saw overwhelming support.

431
00:33:35,780 --> 00:33:37,780
It's serendipity.

432
00:33:37,780 --> 00:33:40,780
Like, this is all a movie in terms of if you look at the script.

433
00:33:40,780 --> 00:33:51,780
Hive was brute forced into reality by a crazy ass ninja mine owner who did everything he could to just get everything off the chain.

434
00:33:51,780 --> 00:33:59,780
And we had enough chip on our shoulder and competent enough to actually overtake it.

435
00:33:59,780 --> 00:34:01,780
Now you have something dangerous.

436
00:34:01,780 --> 00:34:07,780
And the crazy part was if this happened with any other chain, we would have been fucked.

437
00:34:07,780 --> 00:34:08,780
It wouldn't have worked.

438
00:34:08,780 --> 00:34:11,780
Because they have layer one smart contracts.

439
00:34:11,780 --> 00:34:13,780
They're not built in the proper way.

440
00:34:13,780 --> 00:34:15,780
They don't have an algo stable coin.

441
00:34:15,780 --> 00:34:21,780
I think Luna was a psyop to sort of like show people algo stable coins are bad.

442
00:34:21,780 --> 00:34:25,780
When they realize that's the only way to actually fucking do it.

443
00:34:25,780 --> 00:34:27,780
And that scares and terrifies them.

444
00:34:27,780 --> 00:34:36,780
So, just the fact, like, it's so weird that we have an algo stable coin when we were built and how it was made.

445
00:34:36,780 --> 00:34:37,780
It's fucking weird.

446
00:34:37,780 --> 00:34:38,780
It's freaky.

447
00:34:38,780 --> 00:34:39,780
It's crazy.

448
00:34:39,780 --> 00:34:44,780
They did it because it's like, oh, when you earn, people might want some stable dollars.

449
00:34:44,780 --> 00:34:52,780
But the fact that it's like this Trojan beast that can destroy and create circular economies, it's so powerful.

450
00:34:52,780 --> 00:34:54,780
And without it, none of this would work.

451
00:34:54,780 --> 00:34:58,780
The fact that we didn't do layer one smart contracts, it happened.

452
00:34:58,780 --> 00:35:00,780
It's only happened to one chain.

453
00:35:00,780 --> 00:35:05,780
And it happened on the one chain that actually did it right technically.

454
00:35:05,780 --> 00:35:07,780
The odds of that are astronomical.

455
00:35:07,780 --> 00:35:12,780
It doesn't make any sense like when you go all the way through the history until we have now.

456
00:35:12,780 --> 00:35:16,780
So, the odds of replicating that I would say are near impossible.

457
00:35:16,780 --> 00:35:21,780
Especially since all the other chains are scaled wrong.

458
00:35:21,780 --> 00:35:26,780
We have one game in town when it comes to creating censorship resistance.

459
00:35:26,780 --> 00:35:28,780
A lot of the world will be centralized.

460
00:35:28,780 --> 00:35:30,780
A lot of people will be fine with that.

461
00:35:30,780 --> 00:35:33,780
But at core, we will have our digital dignity.

462
00:35:33,780 --> 00:35:36,780
There will be people who, if they want to step up, will have a place to go.

463
00:35:36,780 --> 00:35:43,780
Okay.

464
00:35:43,780 --> 00:35:55,780
So, from the underlying principles point of view, what we want to talk about initially is the difficulty arriving at true decentralization.

465
00:35:55,780 --> 00:35:59,780
Most of this is completely counterintuitive.

466
00:35:59,780 --> 00:36:05,780
Most of the decisions that a community has to take in order to maintain itself on the path of decentralization.

467
00:36:05,780 --> 00:36:15,780
And censorship resistance and sovereignty are nearly always counterintuitive to the initial human instincts of profit first.

468
00:36:15,780 --> 00:36:19,780
Generally, the mistakes that people have made in this industry are that they have chased the profits.

469
00:36:19,780 --> 00:36:23,780
And they have forfeited the decentralization.

470
00:36:23,780 --> 00:36:29,780
They maintain a mirage and a smoke screen of decentralization.

471
00:36:29,780 --> 00:36:31,780
And a portion of decentralization.

472
00:36:31,780 --> 00:36:33,780
But they are not actually fully decentralized.

473
00:36:33,780 --> 00:36:35,780
And the only way that you can provide that.

474
00:36:35,780 --> 00:36:42,780
Full digital human rights is by having a fully decentralized base layer.

475
00:36:42,780 --> 00:36:47,780
And again, we will come into how you do that, how you achieve that as this book proceeds.

476
00:36:47,780 --> 00:36:55,780
But yeah, most people got it wrong because they chased the profit and they sacrificed the decentralization.

477
00:36:55,780 --> 00:37:03,780
So now, they have got semi-decentralized chains where they don't really provide people with digital human rights.

478
00:37:03,780 --> 00:37:06,780
They really should or had the opportunity to do.

479
00:37:06,780 --> 00:37:11,780
Arriving at the theory was a freak event.

480
00:37:11,780 --> 00:37:19,780
As Dan mentioned prior, the takeover of Steam, which led to the Hive Blockchain fork.

481
00:37:19,780 --> 00:37:23,780
Is kind of a monumental moment in blockchain history as far as we are concerned.

482
00:37:23,780 --> 00:37:31,780
And it allowed us to look back at the mistakes that Steam made.

483
00:37:31,780 --> 00:37:32,780
In order to allow it.

484
00:37:32,780 --> 00:37:34,780
In order to allow it to be taken over.

485
00:37:34,780 --> 00:37:39,780
Compared to the rectifications that Hive put in place.

486
00:37:39,780 --> 00:37:42,780
So that that type of takeover cannot happen again.

487
00:37:42,780 --> 00:37:48,780
And when you look back through the history of the route that this community took.

488
00:37:48,780 --> 00:37:53,780
To get to where it is today in the decentralized form that it exists in.

489
00:37:53,780 --> 00:37:57,780
It's very difficult to plan that forwards.

490
00:37:57,780 --> 00:38:01,780
You know, the creator could never have sat and planned all that forwards.

491
00:38:02,780 --> 00:38:08,780
It was only possible by a few freak events that we went through.

492
00:38:08,780 --> 00:38:13,780
The decisions to which we took were very counterintuitive and principled.

493
00:38:13,780 --> 00:38:19,780
And it's resulted in a decentralized ecosystem that cannot be shut down.

494
00:38:19,780 --> 00:38:23,780
And cannot be commandeered as far as we can foresee.

495
00:38:23,780 --> 00:38:26,780
Whereas Steam was done in a different way.

496
00:38:26,780 --> 00:38:28,780
And it eventually became commandeered.

497
00:38:28,780 --> 00:38:31,780
Because it had the centralizing ninja mind.

498
00:38:31,780 --> 00:38:38,780
Which was bought out by Justin Sun in the early part of 2021.

499
00:38:38,780 --> 00:38:50,780
So, the other example I want to give is that the creator of Steam, Dan Larimer.

500
00:38:50,780 --> 00:38:52,780
Very respected guy in the industry.

501
00:38:52,780 --> 00:38:54,780
We respect him very much.

502
00:38:54,780 --> 00:38:56,780
He forked away to EOS.

503
00:38:56,780 --> 00:39:00,780
He left Steam to go to work on EOS.

504
00:39:00,780 --> 00:39:06,780
And on EOS, he didn't keep in the 13-week power down parameter.

505
00:39:06,780 --> 00:39:08,780
So, when you lock up Steam, you have to power down.

506
00:39:08,780 --> 00:39:13,780
And it takes 13 weeks if you want to get your liquid Steam back to sell into the market.

507
00:39:13,780 --> 00:39:16,780
The benefit that gives you is that you can vote.

508
00:39:16,780 --> 00:39:20,780
But of course, it means you have to stick around for 13 weeks.

509
00:39:20,780 --> 00:39:26,780
So, he took that away in the EOS technology that he built.

510
00:39:26,780 --> 00:39:29,780
But of course, when you then send funds.

511
00:39:29,780 --> 00:39:31,780
Funds to exchanges.

512
00:39:31,780 --> 00:39:35,780
Those exchanges have large custodial accounts.

513
00:39:35,780 --> 00:39:39,780
And then, if the power down time is very short.

514
00:39:39,780 --> 00:39:42,780
They can power that up.

515
00:39:42,780 --> 00:39:44,780
Or stake it.

516
00:39:44,780 --> 00:39:49,780
And vote with custodial stake that they haven't purchased themselves.

517
00:39:49,780 --> 00:39:51,780
Or they haven't earned themselves.

518
00:39:51,780 --> 00:39:55,780
And they can then provide that back to the users when they request it.

519
00:39:55,780 --> 00:39:58,780
Because they have very short power down or unstaking times.

520
00:39:59,780 --> 00:40:01,780
Whereas on Hive, that's not possible.

521
00:40:01,780 --> 00:40:06,780
Because there's a very long power down or unstaking time of 13 weeks.

522
00:40:06,780 --> 00:40:09,780
So, the exchanges don't power up.

523
00:40:09,780 --> 00:40:13,780
This is a very important security mechanism on Hive.

524
00:40:13,780 --> 00:40:16,780
That doesn't exist on EOS.

525
00:40:16,780 --> 00:40:19,780
So, it's obvious that the founder of Hive.

526
00:40:19,780 --> 00:40:21,780
The guy that built Hive, Dan Larimer.

527
00:40:21,780 --> 00:40:23,780
He probably understood it.

528
00:40:23,780 --> 00:40:26,780
But he chose not to pursue that security measure on EOS.

529
00:40:26,780 --> 00:40:27,780
And now.

530
00:40:27,780 --> 00:40:30,780
Well, there was a very important event in EOS in history.

531
00:40:30,780 --> 00:40:34,780
Where the exchanges powered up their EOS tokens.

532
00:40:34,780 --> 00:40:37,780
And took over control of the chain.

533
00:40:37,780 --> 00:40:40,780
That hasn't happened on Hive.

534
00:40:40,780 --> 00:40:43,780
And we believe it's down to the 13-week power down.

535
00:40:43,780 --> 00:40:47,780
Which demonstrates to us that Dan probably didn't fully understand.

536
00:40:47,780 --> 00:40:53,780
Or appreciate the importance of the security feature of the 13-week power down.

537
00:40:53,780 --> 00:40:55,780
And then, that leads to the question of.

538
00:40:55,780 --> 00:40:56,780
Did he understand that?

539
00:40:56,780 --> 00:40:58,780
Did he understand everything?

540
00:40:58,780 --> 00:40:59,780
I'm assuming no.

541
00:40:59,780 --> 00:41:02,780
I'm assuming that there's a scenario here.

542
00:41:02,780 --> 00:41:04,780
That's very plausible, most likely.

543
00:41:04,780 --> 00:41:07,780
That he's built a system that he didn't fully understand.

544
00:41:07,780 --> 00:41:08,780
Or didn't fully.

545
00:41:08,780 --> 00:41:10,780
Maybe he understood it.

546
00:41:10,780 --> 00:41:13,780
But he didn't make the choices to keep the security features in place.

547
00:41:13,780 --> 00:41:15,780
On other chains that he worked on.

548
00:41:15,780 --> 00:41:17,780
So, it's kind of a bit of a freak.

549
00:41:17,780 --> 00:41:20,780
That the founder left.

550
00:41:20,780 --> 00:41:23,780
And then went on to build other security features.

551
00:41:23,780 --> 00:41:25,780
Into other chains that he built.

552
00:41:25,780 --> 00:41:28,780
That subsequently failed.

553
00:41:28,780 --> 00:41:31,780
Yet, Hive still remains.

554
00:41:31,780 --> 00:41:33,780
And so, we think it's.

555
00:41:33,780 --> 00:41:34,780
Like Dan was saying earlier.

556
00:41:34,780 --> 00:41:35,780
It's a freaky design.

557
00:41:35,780 --> 00:41:36,780
It's a freaky situation.

558
00:41:36,780 --> 00:41:39,780
Where the founder even didn't fully understand what he built.

559
00:41:39,780 --> 00:41:42,780
Or at least appreciate the security features.

560
00:41:50,780 --> 00:41:53,780
So, when you follow these principles.

561
00:41:53,780 --> 00:41:55,780
It's very intuitive.

562
00:41:55,780 --> 00:42:00,780
Security features and choices.

563
00:42:00,780 --> 00:42:02,780
A takeover of some sort.

564
00:42:02,780 --> 00:42:03,780
Like Dan was saying earlier.

565
00:42:03,780 --> 00:42:05,780
A very small, very obscure community.

566
00:42:05,780 --> 00:42:06,780
For a long time.

567
00:42:06,780 --> 00:42:07,780
That people thought was stupid.

568
00:42:07,780 --> 00:42:09,780
Or going to fail.

569
00:42:09,780 --> 00:42:12,780
You'll see this in genuinely decentralized systems.

570
00:42:12,780 --> 00:42:15,780
It repeats almost every time.

571
00:42:15,780 --> 00:42:17,780
It's like a system that comes out of nowhere.

572
00:42:17,780 --> 00:42:19,780
It's doomed to fail.

573
00:42:19,780 --> 00:42:20,780
There's no venture capital.

574
00:42:20,780 --> 00:42:21,780
There's no CEO.

575
00:42:21,780 --> 00:42:22,780
There's no pre-mine.

576
00:42:22,780 --> 00:42:26,780
There's no company or foundation.

577
00:42:26,780 --> 00:42:28,780
Backing the community.

578
00:42:28,780 --> 00:42:29,780
It's just community run.

579
00:42:29,780 --> 00:42:31,780
Voluntarily.

580
00:42:31,780 --> 00:42:33,780
Community funded.

581
00:42:33,780 --> 00:42:36,780
Token stays very low.

582
00:42:36,780 --> 00:42:38,780
The price of the token stays very low for a long time.

583
00:42:38,780 --> 00:42:39,780
And then eventually.

584
00:42:39,780 --> 00:42:41,780
It comes out of nowhere.

585
00:42:41,780 --> 00:42:47,780
It's always the same thing that gets repeated almost every single time.

586
00:42:47,780 --> 00:42:50,780
The freak thing about Hive, of course.

587
00:42:50,780 --> 00:42:51,780
Is that they took.

588
00:42:51,780 --> 00:42:56,780
The pre-mine or ninja mine stake on Steam.

589
00:42:56,780 --> 00:42:59,780
And moved it to a DAO account on Hive.

590
00:42:59,780 --> 00:43:01,780
And zeroed the founders balance on Hive.

591
00:43:01,780 --> 00:43:06,780
So that it removed the founders influence from the chain.

592
00:43:06,780 --> 00:43:09,780
These are a series of freak events that happened.

593
00:43:09,780 --> 00:43:14,780
And it's very common to see that in truly decentralized ecosystems.

594
00:43:14,780 --> 00:43:19,780
And they should be followed and replicated in future.

595
00:43:19,780 --> 00:43:20,780
Decentralized ecosystems.

596
00:43:20,780 --> 00:43:22,780
If that's even possible at this point.

597
00:43:22,780 --> 00:43:26,780
It's also possible that this is such a freak of nature event.

598
00:43:26,780 --> 00:43:30,780
That it won't be repeated again.

599
00:43:30,780 --> 00:43:32,780
But because of these series of events.

600
00:43:32,780 --> 00:43:34,780
And because of the neutrality of the layer one.

601
00:43:34,780 --> 00:43:37,780
As a result of there not being a CEO or a pre-mine.

602
00:43:37,780 --> 00:43:39,780
Or an ICO or a company backing it.

603
00:43:39,780 --> 00:43:41,780
Or venture capital backing it.

604
00:43:41,780 --> 00:43:44,780
It creates a truly neutral layer one.

605
00:43:44,780 --> 00:43:46,780
That can't be shut down.

606
00:43:46,780 --> 00:43:48,780
Can't be controlled by any individual party.

607
00:43:48,780 --> 00:43:50,780
And when you have a neutral layer one.

608
00:43:50,780 --> 00:43:56,780
You have digital human rights bestowed upon the users that use that layer one.

609
00:43:56,780 --> 00:43:58,780
And that's what this is all about at the end of the day.

610
00:43:58,780 --> 00:44:02,780
It's ensuring that everyone on the planet has digital human rights.

611
00:44:02,780 --> 00:44:06,780
To transact and interact with these ecosystems.

612
00:44:06,780 --> 00:44:12,780
Without having to ask permission of anyone.

613
00:44:12,780 --> 00:44:15,780
So then it brings us to the point where everyone else did it wrong.

614
00:44:15,780 --> 00:44:16,780
Almost everyone else.

615
00:44:16,780 --> 00:44:18,780
Ethereum.

616
00:44:18,780 --> 00:44:20,780
I don't know.

617
00:44:20,780 --> 00:44:22,780
You name the blockchain.

618
00:44:22,780 --> 00:44:24,780
Almost every other blockchain.

619
00:44:24,780 --> 00:44:26,780
Apart from Bitcoin.

620
00:44:26,780 --> 00:44:28,780
Bitcoin didn't have a founder.

621
00:44:28,780 --> 00:44:30,780
Well it had a founder.

622
00:44:30,780 --> 00:44:32,780
But it didn't have a founder stake.

623
00:44:32,780 --> 00:44:34,780
Didn't have a pre-mine or an ICO.

624
00:44:34,780 --> 00:44:36,780
Or a company backing it.

625
00:44:36,780 --> 00:44:38,780
Or any VC capital.

626
00:44:38,780 --> 00:44:40,780
That's the same story on Hive.

627
00:44:40,780 --> 00:44:42,780
Exactly the same story on Hive.

628
00:44:42,780 --> 00:44:46,780
And almost every other chain didn't follow that plan.

629
00:44:46,780 --> 00:44:48,780
Didn't follow that path.

630
00:44:48,780 --> 00:44:50,780
And so they've all got it wrong.

631
00:44:50,780 --> 00:44:52,780
They all claim decentralization.

632
00:44:52,780 --> 00:44:54,780
But once you have any of those centralizing factors in place.

633
00:44:54,780 --> 00:45:04,780
Especially if those companies or CEOs or venture capitalist companies are registered in countries as businesses.

634
00:45:04,780 --> 00:45:06,780
Where those countries are pro-regulation.

635
00:45:06,780 --> 00:45:08,780
Pro-KYC.

636
00:45:08,780 --> 00:45:14,780
You will ultimately get a tend towards centralization.

637
00:45:14,780 --> 00:45:17,780
And this is a huge, huge problem in the industry.

638
00:45:17,780 --> 00:45:19,780
And it's where almost everyone else got it wrong.

639
00:45:19,780 --> 00:45:21,780
They nearly always register a company.

640
00:45:21,780 --> 00:45:23,780
Or there's always a CEO.

641
00:45:23,780 --> 00:45:25,780
Or a founder.

642
00:45:25,780 --> 00:45:27,780
Or a pre-mine.

643
00:45:27,780 --> 00:45:29,780
Because they say we need to self-fund.

644
00:45:29,780 --> 00:45:31,780
We need to justify it by funding ourselves.

645
00:45:31,780 --> 00:45:33,780
By giving ourselves 10% or 20% of the token supply.

646
00:45:33,780 --> 00:45:35,780
Some 80%.

647
00:45:35,780 --> 00:45:37,780
Some 40%.

648
00:45:37,780 --> 00:45:39,780
There's various examples.

649
00:45:39,780 --> 00:45:41,780
Well Bitcoin never did that.

650
00:45:41,780 --> 00:45:43,780
Hive never did that.

651
00:45:43,780 --> 00:45:45,780
SPK Network never did that.

652
00:45:45,780 --> 00:45:47,780
They're all community funded.

653
00:45:47,780 --> 00:45:49,780
They never took the supplies.

654
00:45:49,780 --> 00:45:51,780
They never took a centralizing control in the ecosystem.

655
00:45:51,780 --> 00:45:53,780
And so as a result.

656
00:45:53,780 --> 00:45:55,780
It's going to be very difficult if not impossible to regulate them.

657
00:45:55,780 --> 00:45:57,780
They will be regulated by the community.

658
00:45:57,780 --> 00:45:59,780
Whereas a lot of the other chains that got it wrong.

659
00:45:59,780 --> 00:46:01,780
They will be regulated.

660
00:46:01,780 --> 00:46:03,780
By the governments.

661
00:46:03,780 --> 00:46:05,780
By the regulators.

662
00:46:05,780 --> 00:46:07,780
People haven't quite realized this yet.

663
00:46:07,780 --> 00:46:09,780
But this is something that's starting to become apparent.

664
00:46:09,780 --> 00:46:11,780
And it's very, very important.

665
00:46:11,780 --> 00:46:17,780
Because it's the difference between a centralized chain and a non-centralized chain.

666
00:46:17,780 --> 00:46:19,780
The ultimate key is.

667
00:46:19,780 --> 00:46:21,780
Can it be KYC?

668
00:46:21,780 --> 00:46:23,780
Can you be know your customer.

669
00:46:23,780 --> 00:46:25,780
On any of these chains.

670
00:46:25,780 --> 00:46:27,780
If the answer is yes.

671
00:46:27,780 --> 00:46:29,780
Or it looks like it's tending towards yes.

672
00:46:29,780 --> 00:46:31,780
You probably have a decentralized.

673
00:46:31,780 --> 00:46:33,780
Sorry.

674
00:46:33,780 --> 00:46:35,780
You probably have a centralized system on your hands.

675
00:46:35,780 --> 00:46:37,780
If you cannot be KYC.

676
00:46:37,780 --> 00:46:39,780
Then you probably have a decentralized system on your hands.

677
00:46:39,780 --> 00:46:41,780
Do you want to talk Dan about the petri dish cultivation model?

678
00:46:41,780 --> 00:46:43,780
Yes.

679
00:46:43,780 --> 00:46:45,780
Yes.

680
00:46:45,780 --> 00:46:47,780
Yes.

681
00:46:47,780 --> 00:46:49,780
Yeah.

682
00:46:49,780 --> 00:46:51,780
Cause I don't remember what it was about.

683
00:46:51,780 --> 00:46:53,780
Um.

684
00:46:53,780 --> 00:46:55,780
So.

685
00:46:55,780 --> 00:46:57,780
It's basically.

686
00:46:57,780 --> 00:46:59,780
Creating a framework.

687
00:46:59,780 --> 00:47:01,780
In which something can grow.

688
00:47:01,780 --> 00:47:03,780
Um.

689
00:47:03,780 --> 00:47:05,780
And if you have the right.

690
00:47:05,780 --> 00:47:07,780
Ecosystem.

691
00:47:07,780 --> 00:47:09,780
Right.

692
00:47:09,780 --> 00:47:11,780
You can't force it.

693
00:47:11,780 --> 00:47:13,780
Yep.

694
00:47:13,780 --> 00:47:15,780
So all you can do is create a ecosystem.

695
00:47:15,780 --> 00:47:17,780
Or a.

696
00:47:17,780 --> 00:47:23,420
set up where then when people voluntarily come a certain outcome comes

697
00:47:23,420 --> 00:47:30,740
up but you can't force this you can only create the environment in which

698
00:47:30,740 --> 00:47:35,940
censorship resistance can grow and it needs to be cultivated it needs to be

699
00:47:35,940 --> 00:47:41,000
sustained and taken after you need to make sure that it's not

700
00:47:41,000 --> 00:47:47,660
neglected you can't take it for granted but the great thing about censorship

701
00:47:47,660 --> 00:47:51,420
resistance is when it comes about it's because there's enough people that care

702
00:47:51,420 --> 00:47:56,180
about the same thing and they tend not to stop caring about that thing because

703
00:47:56,180 --> 00:48:00,680
it's very important we've got into a place where freedom of speech and all

704
00:48:00,680 --> 00:48:12,500
these things are at stake so in order to have something where you have enough

705
00:48:12,500 --> 00:48:17,660
people volunteer it has to be important so a patriotist model

706
00:48:17,660 --> 00:48:26,540
starts ultimately with the tech stack it needs a foundation something that is

707
00:48:26,540 --> 00:48:36,560
parametered correctly and enough people who are incentivized not by a CEO or

708
00:48:36,560 --> 00:48:42,620
centralized force but by the very ecosystem itself just as the grass is

709
00:48:42,620 --> 00:48:47,060
incentivized to grow because it gets the rain and it gets the Sun there is no

710
00:48:47,060 --> 00:48:47,560
sun

711
00:48:47,660 --> 00:48:54,280
CEO. There is no middleman involved. The ecosystem itself, as you get a part of it, it rewards you.

712
00:48:55,620 --> 00:48:59,740
So it's sort of like the closest living thing you can have in the digital world.

713
00:49:00,460 --> 00:49:07,780
It relies on people who care about it, not on the funding. No amount of funding can create it.

714
00:49:08,460 --> 00:49:12,100
If you try to brute force it, you get the opposite effect. It becomes toxic.

715
00:49:12,100 --> 00:49:20,300
Force is the toxic. That's like injecting ink into an aquarium. It is what kills it.

716
00:49:21,080 --> 00:49:26,740
It doesn't give it life. And the thing about it is it's scarce, and it's fleeting.

717
00:49:27,900 --> 00:49:30,360
If it wasn't, then it wouldn't be so sought after.

718
00:49:32,660 --> 00:49:39,520
So once you create a tech stack, and if you think of a tech stack, you just think of it as a parameter.

719
00:49:40,520 --> 00:49:42,020
You give a weight.

720
00:49:42,100 --> 00:49:45,240
It's like a way for people to get involved and actually volunteer.

721
00:49:45,860 --> 00:49:47,000
Give them a weapon.

722
00:49:47,000 --> 00:49:53,020
Give them something where, oh, if I get, stand up, I'm going to take a bunch of arrows, and then it's over.

723
00:49:53,020 --> 00:50:01,920
It's like give them a way to join a wave, a foundation to grow together where one can't be plucked, and it's all over.

724
00:50:02,000 --> 00:50:03,480
That gives us the defense.

725
00:50:04,000 --> 00:50:07,020
People feel value and safety in that defense.

726
00:50:07,940 --> 00:50:12,080
And now you have an environment where people are willing to partake and grow and sacrifice.

727
00:50:12,100 --> 00:50:14,040
And put themselves out there.

728
00:50:14,300 --> 00:50:17,960
A lot of people on Hive have done a lot of amazing things.

729
00:50:18,800 --> 00:50:22,500
And we all take the risk of what we're doing.

730
00:50:23,300 --> 00:50:25,720
We don't know what the future is going to hold.

731
00:50:26,400 --> 00:50:30,260
But that is what a Petri dish model is all about, is because we care about it.

732
00:50:31,480 --> 00:50:32,920
We all want to be here.

733
00:50:33,660 --> 00:50:37,880
And as it grows, with the value for value model,

734
00:50:37,880 --> 00:50:41,880
which is really just seeds being planted.

735
00:50:42,100 --> 00:50:47,840
You see somebody providing value.

736
00:50:48,380 --> 00:50:49,280
They plant the seed.

737
00:50:49,280 --> 00:50:50,580
They start their reputation.

738
00:50:50,580 --> 00:50:53,240
Before you know it, it grows, it grows, and grows.

739
00:50:53,640 --> 00:50:56,160
And then they get the ability to give seeds to another.

740
00:50:56,360 --> 00:51:03,680
And then you have to have that, well, I want to get involved.

741
00:51:03,680 --> 00:51:07,400
How? How do you grow an ecosystem?

742
00:51:07,400 --> 00:51:08,580
How do you become a part of it?

743
00:51:08,800 --> 00:51:10,460
And Hive seems to absorb people.

744
00:51:10,960 --> 00:51:11,900
If you're providing value.

745
00:51:11,900 --> 00:51:13,840
If you're providing value and you're genuinely a good person,

746
00:51:13,840 --> 00:51:17,580
it just absorbs, you just get, you just, you know, you just fit right in.

747
00:51:17,720 --> 00:51:18,520
You grow right in.

748
00:51:18,520 --> 00:51:24,820
They're incredibly rare because it's, they're very,

749
00:51:24,820 --> 00:51:26,520
very sought after, but they're rare.

750
00:51:28,480 --> 00:51:30,980
The reason they're rare is because they're so sought after.

751
00:51:31,500 --> 00:51:33,700
People keep trying to brute force them.

752
00:51:34,360 --> 00:51:38,680
So they create fake versions that suck up network effect.

753
00:51:39,760 --> 00:51:41,880
And since it's so rare and so stupid,

754
00:51:41,880 --> 00:51:44,060
and so scarce, there's only so many.

755
00:51:44,060 --> 00:51:46,980
And they can only absorb so much network effect.

756
00:51:46,980 --> 00:51:49,660
And since they can't be brute forced or volunteered,

757
00:51:49,660 --> 00:51:50,840
you have all this noise.

758
00:51:51,360 --> 00:51:52,560
But it only takes one.

759
00:51:53,280 --> 00:51:57,380
Hive has proven we have the base, the foundation.

760
00:51:58,360 --> 00:52:03,580
This value for value model is really what runs it initially

761
00:52:03,580 --> 00:52:06,620
to get it started with a Trojan horse stable coin.

762
00:52:06,620 --> 00:52:11,500
I can get into the details of, you know,

763
00:52:11,880 --> 00:52:17,760
why you need certain tech stacks for a Petri dish model

764
00:52:17,760 --> 00:52:20,860
to actually survive, or do you want to get into?

765
00:52:20,860 --> 00:52:22,160
I think it's good.

766
00:52:22,160 --> 00:52:25,280
We can talk about it later on in the next talk.