Why Open Blockchains Matter


[Music] Hi!
Wow… Oh my god. This is quite amazing. I’m really excited to be here at this conference. I’m so excited to be talking to all of you,
who apparently are developers? That’s what it says back there on the screen. I assume it’s true. How many people in this room have
used open-source software? [Audience raises hands] Trick question! I’m just trying to get you to warm up with
some morning exercise. Everybody raises their hand. Okay, great. Let me ask you a simpler question. How many of you use open-source software
because ‘it doesn’t cost anything’? How many of you use it because it gives you freedom? Okay, now we’re getting at it. Many of you probably work
with open-source software. Many of you probably work with collaborative
programming and open systems. You work on open applications,
programming interfaces. You work with open libraries. You work with patent-free software and technologies,
with open protocols and open interfaces. None of that is because of how much it costs. It’s because it gives you freedom. I think that’s one of the main things that
people outside our industry do not understand. But if you’re as old as me, you probably remember
that it wasn’t always like that. Throughout the ’80s and ’90s, there was a
big battle over the future of software; whether proprietary software would dominate, whether
open software would be available to everyone and used by everyone. I remember a time when I had to persuade
companies that an open-source version… the Unix operating system was not only
as good, but probably better, than the closed-source Sun Microsystems
operating system that they used. I had to persuade them that they could use
these systems to replace their proprietary servers, file servers, network
servers, firewalls, routers, etc. There was a time when Bill Gates from Microsoft
said that the internet would be one component of the information super-highway. Just one component. Because what was more interesting, was how
data would be used in proprietary fashion and propagated over proprietary protocols
and closed systems. The idea was that corporations wouldn’t open
to the internet, because it was “too messy,” “too weird,” and had too much porn. Instead, corporate systems would be perfect
closed gardens. Secure with quality, curated content that
was protected from the wide world. If you worked in a company that actually tried
to put that into practice, you discovered that those systems ended up being insecure,
virus-infested wastelands of stale, useless content. Eventually, most of the people who worked
in these companies had a second phone (maybe a smartphone) so they could
look up things on the internet. The internet won. The open, uncontrolled, unrestrained internet
won. But it wasn’t obvious that it was going to
win. TCP/IP won. There was a time when people said ridiculous
things like “I’m not so interested in the Web.” “I’m interested in the technology
behind the Web: HTML.” [Laughter] To misunderstand the power and
purpose of a system like the Web so much, as to think that the value of that comes from
a representational format for data, and the ability to link it to other data. And miss the point that the really interesting thing is
the ability of anyone, anywhere, to become a publisher. The democratisation of publishing. The open access to all of the information
in the world, where if it is closed then it is irrelevant. If it is not accessible, it is irrelevant. Today, people say, “I’m not interested in
Bitcoin. I’m interested in the technology behind Bitcoin:
the blockchain.” Two days ago when this conference opened, people
were asked ‘what is the thing you’re most interested in?’ “Blockchain” was right in the middle
of the screen, the biggest word there. Blockchain. The blockchain is a data structure. It’s not even a particularly interesting data structure.
It is a hashed linked list. From a technical perspective, it’s kind of
boring. What’s really interesting about the blockchain
is how the blockchain is created. What is the process for recording data in
a blockchain? Bitcoin introduced a mechanism to do that
which is open, decentralised, neutral, borderless, and censorship resistant — kind of like the Web. That’s really the interesting thing about
the open Web: that it is open, that no one really controls all of it, and even
when some companies control big parts of it, there are still parts that are free,
weird, encrypted, underground. Still open to creating incredible
new inventions like Bitcoin. It popped out of the internet and no one expected it. Neutral. For the most part, content is routed across
the Web without regard to the content itself, or really to the source and destination. Censorship-resistant. You cannot erase the Web, you cannot
(easily) remove information from the Web. Bitcoin introduced a way to apply this to
trusted information, specifically the most important and trusted information,
which is the ownership of currency. Money. It created a way to have a recording of ownership
in the blockchain without allowing anyone to have control over who can own money, how
they can spend it, or who can record on this blockchain. Bitcoin made money open, neutral, borderless,
censorship-resistant, and decentralised. The artefact of that technology,
the deliverable, the product, the thing that gets recorded on
your software node, is the blockchain. That blockchain is a necessary but not
sufficient component to create the real magic, which is a platform for trust that is not controlled
by anyone, that cannot be erased or changed after it has been recorded. A system that is open, neutral, borderless,
and censorship-resistant. It’s not about the blockchain. In fact, if you take the blockchain technology,
and you apply it in an environment that is closed, controlled by one party that can decide which transactions get recorded and which ones do not… [There are] “good” transactions and “bad” transactions,
“evil” transactions, ones that should be censored. Then you lose all of the interesting properties
of the open blockchain. Whenever I talk about this space, I always
put at least one word before “blockchain,” and that is ‘open.’ ‘Open’ means open-source, open-access, open
to innovation without permission. It means innovation at the edge, not the center. It means no one is in control. It means there is no censorship. It means it is neutral. You don’t require any patent to participate
in this technology. It is neutral because in this system of trust,
the source, destination, content, and even purpose of your transaction does not matter. It will be routed and there is no way to stop
someone from routing. Almost every day, I meet people who come to
me and say, “I’m kind of interested in Bitcoin, but I’m more interested in all the other applications
we can do with the blockchain.” Not even “the blockchain,” just “blockchain.” It’s become a generic, abstract word. In most cases, that word is meaningless. What it means to them is “I’m trying to do
everything where I previously used a database, only now we can do it with something that is a
hundred-thousand times slower and less well-tested.” If you create a centralised blockchain, if
you have a central point of control; if it’s not open, borderless, censorship-resistant,
and neutral, then you should have used Microsoft SQL Server Enterprise Edition or Oracle. The problem is, no one is going to pay a consultant
to re-build Dubai’s real-estate records on Microsoft SQL. That’s not going to get you any magic venture
capital money sprinkled over you. [That only happens] when you go to Silicon Valley,
go in front of the bathroom mirror in your hotel room, turn off the light and say “blockchain,
blockchain, blockchain” three times. A venture capitalist [will] jump out of the
bathtub and start throwing money at you! [Laughter] I did a talk which was censored on Facebook
the first day it was published. It was called “Blockchain versus Bullshit.” Apparently that word “bullshit” is not good
for Facebook and censorship is something they do, which kind of proves the point [about
centralised blockchains] really. It’s about decentralisation, censorship
resistance, open-access. It’s about the ability to use a ‘bad’ word
to make an important point, to use the shock value to get people’s attention and [hope they]
listen to the rest of the message. But that’s okay, because I don’t use Facebook anyway! The bottom line is that this technology is
interesting because, for the first time in history, it takes one of humanity’s oldest
technology (money) and one of the most important aspects of human behaviour (trust), and embeds
these in an open, inter-operable network protocol without central control. This has never happened before. Yes, you could imagine a myriad of applications
where the ability to trust in the network protocol and not have to trust in the other party
you’re interacting with, without a third-party that acts as an intermediary. You can imagine many different applications. The problem is that a lot of those applications
really depend on first establishing… the first fundamental application:
value as a content type. When you turn money into a content type, make
it something that is routable across the internet from any point to any other point, without reference
to any third party, self-verifiable, self-authorising, Independently routable money as a network protocol. That creates the basis for all of the other
applications. That creates the basis for applications of
security and trust that we need to build as an infrastructure to start everything else. If the blockchain is open, decentralised,
neutral, and censorship-resistant, then it can be used for so many
other interesting applications. But most of the companies you work for
will not use it that way. They see the internet of money
and they want to build an intranet. The natural motivation of a corporation is control. The natural motivation of a government is control. They see this open system and they say,
“We kind of like it. Immutability, recordability… Auditability, forensic analysis, cryptography…
all of these cute things. Can we have them without the open, borderless,
neutral, censorship-resistant aspects of it? We would like to make it closed, controlled,
censurable, and profitable (for us).” They will build great intranets of money
and they will be stale wastelands just like the Microsoft FrontPage / Outlook shit you have
in the back office of your corporation. [Applause] When somebody says, “I’m going to apply
the blockchain to my new application,” the first question you should ask is,
“What kind of blockchain? Why do you need one?” I only have one slide, but if I wanted to do
a perfect presentation about blockchains to a corporate environment, as one of my friends
on Twitter recently said: “You only need one slide… It says ‘you don’t need a blockchain.’
Thank you! Questions?” [Laughter] The bottom line is that the number of applications
where you truly need a borderless, global, censorship-resistant, neutral platform to
establish a level of trust and immutability that cannot be attacked or compromised
by anyone — even colluding state-level actors and giant multi-national corporations…
despotic, disgusting, dictatorial regimes and other censorship ridden hell holes… The only applications you need that for
can be counted on the fingers of one hand. But I’ll tell you which application
immediately is important: money. We don’t like to think that money is an important
application, especially in western liberal culture. Here, money is dirty and “the root of all evil.” It’s not the money that’s dirty,
it’s the current architecture of money. Centralised, hierarchical, controlled. That is dirty. [We have turned] money into a network protocol
that we can spread to the entire world. [We can] give it to every person who currently
doesn’t have access to banking facilities, to billions of people who are cut off from the financial
system just to give us a bourgeois sense of safety — which is a lie. [The financial system] is a system of control
so pervasive that it has been weaponised throughout the West, to be used as a system
of political power and control. Proprietary money is the cancer of modern societies. It has infected democracy.
It is killing democracy. The answer to that is open, neutral, borderless,
censorship-resistant, open-source money as a network protocol.
As an open interface. As a system that can be [used by] anyone who
has an IP connected device of the most basic functionality, which gives them the power
to independently verify, authorise, authenticate, transact globally with anyone. Once we have that solid platform, we can build
applications of trust like authenticated voting, ownership of real-estate, and other assets. Applications like open-source law through
smart contracts. Realise that cryptocurrencies today are the
largest open, public, consumer / civilian deployment of public key cryptography that
has ever happened (besides SSL). We have now arrived at the golden age of cryptography. The cypherpunks are finally winning. We can apply that amazing technology to one of
humanity’s most ancient and fundamental technologies: a system for the communication of value,
that we call money. For the first time in history,
money is a content-type, a protocol. Thank you. [Applause]

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