1
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so I'm gonna go back and really try and
nail this thing down so that you wind up
with an operational understanding of the

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blockchain that will allow you to
correctly interpret its significance in

3
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your life right and to do that we have
to go back really 50 or so years into

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the early days of computing because what
what is making this so confusing is that

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most of the practitioners in the
blockchain space have 50 years of

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history parked into their heads which
forms an implicit matrix in which words

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like distributed database hang so to
really get this to hang together we've

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got to go all the way back and we're
gonna go through this kind of quickly

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but I want to try and lay out the
foundations in the past so that we can

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00:00:45,899 --> 00:00:51,989
meaningfully talk about the future
so we conveniently have this stage which
is set out in lumps and I'm gonna make

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each one of these basically a ten year
span so right back somewhere over here

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in the darkness of history we've got the
Second World War which is where the

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computer was was originally created
right the computer as it currently

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exists was developed as a weapon to
defeat the Nazis it was used to crack

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the codes that allowed the Allies to
paralyze the German war effort and

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eventually defeat them and the link
between cryptography and computation

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goes all the way back to the birth in
fact if you go even further back the

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analog computers these monsters brass
devices which were used way back in the
day were actually created to calculate

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gunnery tables for naval ships at war
they wanted to be able to calculate the

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trajectory of artillery so you come
forward into the 1950s and you get this

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kind of demilitarized computing all
these machines and all these engineers

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that have left of services and are
coming in to you know create a new

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generation and we're gonna take all this
former military gear and we're gonna put
it in the hands of businesses and back

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in this prehistory the computers are the
size of this room they weighed tons the

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guy from IBM famously says that there
might be a world market for perhaps five

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computers a year right the data is
stored on

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cards and then eventually one inch wide
magnetic tapes and the complexity of

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these systems is such that it takes a
roomful of programmers to get a simple

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reliable system to do something a
process an invoice right this is the
prehistory and this is the mid mid-1960s

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that were talking about so the game
really begins to be recognizable in 1970

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when you get the creation of an
abstraction called

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SQL in IBM by a guy called coder Edward
Cod and it caught so SQL is this
extremely forceful application of

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mathematics to bring order to the chaos
of tape machines back here you've got a

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whole bunch of data basically just
spattered across magnetic tape and

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you've got huge machines that process
the tape but when you want to retrieve

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something you have to go and fish for
the day to yourself move tape number

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three forward 17 feet find me the record
and give me back the first name and
programming these things is glacially

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slow it's a nightmarish so here is the
first place where the heavy mouth really

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enters the picture in this story which
is the SQL abstraction assumes that you

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create a multi-dimensional cube one tape
machine per axis of the cube five tape

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machines five dimensional cube you can
imagine it kind of hanging in space you
then have an abstract algebra which

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allows you to take a locus a set space
inside of the five dimensional cube

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specify in ways which make sense the
programmers fairly intuitively see where
there might be a gap there and pull that

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and that set of data out into something
that looks like a spreadsheet and that

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conceptual jump was at the time so
revolutionary it took people were five

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00:04:08,819 --> 00:04:13,440
years to accept that it had happened and
that actually worked and what came out

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00:04:13,440 --> 00:04:22,169
of that was the golden age of SQL right
1970 to 1990 just about all that we did

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was take every single thing that we
could fit into a database in business or

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in the white
world and we shoved it into a database

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and right here in 1970 the machines were
incredibly expensive and incredibly

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fragile the people working with the
machines actually wore white coats

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because if you weren't wearing a white
coat stray fibers from your clothing
could interfere with the tapes Jam the

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tape machines and destroy your customer
data Ron
so amount in this very fragile very

54
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arcane very expensive system it's only
just become technically feasible these

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things are like laboratory artifacts
right it's like going into you know CERN

56
00:05:03,830 --> 00:05:07,850
or something like that when you want to
inspect one of them and this sets the

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mindset for databases right the way
through 70s up until the beginning of
the 80s that's the psychological

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condition of the database and the
organization's become siloed because all

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the information that makes your
organization work is stored inside of

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one of these data temples right right
around 84 you get the microcomputer

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revolution the IBM PC the Apple all this
kind of stuff and these are appliances

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there are things that you can buy like a
television and plug into your office

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they are robust they're reasonably cheap
as as well as four or five thousand

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dollars amazing they are fairly easy to
maintain and repair they are relatively

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resistant to dust and humidity they're
pretty much like a television in terms

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of their operating characteristics one
per desk seems possible and weirdly
enough they can absolutely run database

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software on them you can actually have a
database kind of sort of like the big

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thing you had over here but actually
living on the machine that you have in

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front of you and the kind of first real
heavy use of an application that works

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00:06:15,980 --> 00:06:20,030
in that environment is a thing called
Lotus 1-2-3 which is the first
spreadsheet and this begins a revolution

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that goes all the way through accounting
but we're not gonna talk about

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accounting too much but if you want to
think about computers and Ledger's

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starts here back in the 80s now this is
15 years from you know enormous with

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fragile machinery and enormous expanse
through to its

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00:06:40,810 --> 00:06:44,530
on a desktop can you imagine how
disoriented the people that live through
that technological transformation were

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00:06:46,090 --> 00:06:51,130
it was just as weird as what's happening
now but it was happening somewhere over

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there because we hadn't invented the
Internet to bring you the news that

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something weird it happened with
computers now we get to kill in 1990 the

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00:07:00,910 --> 00:07:06,520
networking push really starts a long way
back but it takes a long time to get the
networking stuff to work 1990 is about

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00:07:09,340 --> 00:07:14,080
where you begin to get networking that's
practical for real stuff yeah I got my

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00:07:14,080 --> 00:07:21,610
first email account about 91 and at that
point there was no World Wide Web there

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00:07:21,610 --> 00:07:26,740
was a computer there was email there
were chat programs but if you wanted a

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00:07:26,740 --> 00:07:30,610
document from another machine you got an
interface that looked a bit like a file

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browser and you clicked on the document
you want then it loaded it onto your
machine and then you opened it in

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something to take a look at it and the
notion that you could build the thing to

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00:07:38,800 --> 00:07:43,600
read the document into the thing that
got you the document was quite radical

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00:07:43,600 --> 00:07:49,840
that was sort of a big deal and that was
why the web was a big deal no one were
bit weird paradigm stuff over here

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00:07:53,289 --> 00:07:57,940
through this period the computing is
very much centered around data it's

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structured it's hard it's rigid it's
formulated it's tabulated the stuff is

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00:08:04,120 --> 00:08:09,400
very rigid the web builds on a different
model of computing which is called

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00:08:09,400 --> 00:08:15,789
document-centric right document-centric
computers are paper simulators right

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they harm do things which look like
documents you get email it looks like a

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00:08:19,000 --> 00:08:24,310
letter am you open up a graphics program
it looks like a canvas there are things

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that look like paintbrushes in term
model of computing that we're using

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00:08:27,729 --> 00:08:33,880
right now is document-centric computing
and the connection between databases and

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00:08:33,880 --> 00:08:38,770
that sort of data centric computing and
document-centric computing is extremely

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weak there are two completely different
ways of getting the machine to do stuff

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for you and getting data into documents
is tricky as anybody who's ever done in

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00:08:48,760 --> 00:08:53,200
Excel merge knows and seriously right
it's hard

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00:08:53,200 --> 00:08:57,460
getting documents into data is even
harder which is the entire mass of

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00:08:57,460 --> 00:09:02,380
content management systems right
scanning documents all of us these two

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things don't mix together at all well so
we come out through the 90s and you kind

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00:09:08,200 --> 00:09:14,470
of get to mid 95 maybe early 96 and
people suddenly realize that one day in

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the future you'll be able to make money
on the internet there's just one problem
there's no security which means if you

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00:09:20,890 --> 00:09:25,450
type your credit card into an internet
form it will be bounced all around the

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internet anybody can read it and they
can steal money out of your account
it's another five years until we get a

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00:09:31,450 --> 00:09:36,070
widely deployed solution that allows us
to have encryption which lets us move

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credit cards around the internet
e-commerce doesn't really become a thing
into hot 1999 2000 so we were already

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here by the time you've got a computer
that is capable of taking a payment from

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you know the the internet again how fast
is the rate of change does anybody even

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00:09:56,620 --> 00:10:00,610
remember when you couldn't put credit
cards into the internet but you were all

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00:10:00,610 --> 00:10:05,530
alive pretty much but we forget so
quickly what was possible or impossible

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00:10:05,530 --> 00:10:09,220
when you technology arrived so we're
just gonna wash the memory out it's

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00:10:09,220 --> 00:10:12,670
quite hard even to think about what it
was like before we had cell phones so
you come forward to 2010 by 2010 I'm

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00:10:16,870 --> 00:10:20,140
gonna suggest that more or less
everything you could do in a webpage had

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00:10:20,140 --> 00:10:24,280
been done to at least the first
approximation more or less all the basic

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00:10:24,280 --> 00:10:27,790
stuff was there if you could do it with
a computer that was basically a paper

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simulator it had been done more or less
now this is also roughly when Bitcoin

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00:10:34,150 --> 00:10:38,350
gets started and Bitcoin starts in some
you know festering little weird

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00:10:38,350 --> 00:10:41,950
counterculture on the internet which I
spent my entire 1990s and called

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cyberpunk and the cypherpunks are
straight out of science fiction they
can't tell the difference between

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science fiction and reality they
generally speaking have an emotional
intelligence Koecher around 75 to 50 it

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took me a long time to grow over and one
of the things which makes that scene

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work the way that does is the enormous
prevalence of autism so whenever you

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00:11:04,090 --> 00:11:08,339
hear somebody ragging on the Nerds
right but ever you hear somebody ragging

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00:11:08,339 --> 00:11:11,160
on the nerds remember what they're doing
generally speaking is picking on
autistic people right it's really

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00:11:14,130 --> 00:11:17,399
important to understand that the people
building the technologies on put your

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00:11:17,399 --> 00:11:22,500
society completely depends the people
without whom the lights go out and the

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00:11:22,500 --> 00:11:27,959
food stays cold are heavily heavily
heavily tending towards being on the

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autistic spectrum so when you hear
people laughing at the Nerds remember

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they're often at people that are
disabled there are also the people that

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your civilization depends on so don't
screw with them right so the cypherpunks
come out and basically say in a very

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naive way why do we need government and
they go and they build this thing which

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is essentially a central bank of the
internet now you sort of think well that

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00:11:53,339 --> 00:11:57,209
was a bit of a big jump how did we go
from we can finally take a credit card
to central bank of the internet that's

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what all of us spent about five years
wondering as well what the hell did they

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00:12:03,690 --> 00:12:08,940
do because the technology arrived raw we
could go to ask what satoshis intent was

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because Satoshi was a ghost right the
software was dropped onto the internet

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there was some early discussion and then
the guy vanished so we have no idea who

140
00:12:18,120 --> 00:12:21,330
Satoshi was we don't know what the
intent was there is nobody to go to

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conferences and pitch the technology we
were left with an artifact that to all
intents and purposes might have been

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created by a time-travel or under
dropped it's about bigger jump um so

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what did they do what they did was this
right back over here the databases were

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singular they existed in an atomic state
one database per enterprise the network
existed in some relational sense between

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enterprises but because the database was
perceived has been too fragile to let

146
00:12:52,770 --> 00:12:57,180
anybody touch the database never
directly communicated with the network

147
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you always had a lots and lots and lots
of guards and buffers and other stuff in

148
00:13:01,230 --> 00:13:04,950
between to prevent the two things
working properly and if you did actually

149
00:13:04,950 --> 00:13:09,180
connect the databases kind of directly
to each other you got another problem
which was the database encoded the

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00:13:11,100 --> 00:13:15,779
worldview of the organization to
organizations to different world views

151
00:13:15,779 --> 00:13:18,900
you always needed something in between
to translate

152
00:13:18,900 --> 00:13:24,570
so you never got large-scale
computer-to-computer connections that

153
00:13:24,570 --> 00:13:28,140
allows you to create a shared model of
reality between lots of different
organizations and this shows up everyday

154
00:13:30,779 --> 00:13:35,820
when you try and do something like
process a claim on insurance and you

155
00:13:35,820 --> 00:13:39,930
have to fill in the name and address
details seventy four times for different
organizations often three or four times

156
00:13:42,029 --> 00:13:46,140
for the same organization the databases
are kept separate from each other

157
00:13:46,140 --> 00:13:49,680
there's no real connectivity between
them and when you try and build

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00:13:49,680 --> 00:13:53,460
connections between the systems the
complexity builds to the point where

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00:13:53,460 --> 00:13:59,339
it's too expensive to do so what they
say you know mean when they say the word

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00:13:59,339 --> 00:14:05,880
distributed database is a database which
is both like a database and like a
network and this is the genius of

161
00:14:07,920 --> 00:14:13,350
Bitcoin it fuses together the database
and the network into a seamless hole

162
00:14:13,350 --> 00:14:18,060
called blockchain everywhere there is
data there is Network and everywhere
there is Network there is data they're

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00:14:19,890 --> 00:14:25,110
completely fused inside of these systems
so what that means is rather than having

164
00:14:25,110 --> 00:14:29,220
all of these individual kind of ivory
tower computer systems connected by a

165
00:14:29,220 --> 00:14:33,029
network and then all the costs of moving
things in and out you have a single

166
00:14:33,029 --> 00:14:39,660
shared story of reality spread across
all the machines simultaneously and when

167
00:14:39,660 --> 00:14:44,010
it changes in one place it changes
everywhere and this is such a powerful

168
00:14:44,010 --> 00:14:48,360
abstraction it's such a powerful
technology that the first thing they

169
00:14:48,360 --> 00:14:53,790
implemented was the central bank of the
internet that was the first thing they

170
00:14:53,790 --> 00:15:03,300
did can you imagine to write you open by
creating a single global currency which

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00:15:03,300 --> 00:15:06,540
is the first thing that has worked that
way since we went off the gold standard

172
00:15:06,540 --> 00:15:10,920
and the technology deployed is so
powerful that it was done by either one

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00:15:10,920 --> 00:15:14,730
individual or a small group that
remained a secret they basically

174
00:15:14,730 --> 00:15:22,020
reinvented gold and that was the first
move this is unimaginable strangeness to

175
00:15:22,020 --> 00:15:24,300
somebody that spent their entire
lifetime monkeying around with computers

176
00:15:24,300 --> 00:15:32,400
oh my god what have we done so you get
up to kind of where we are now right

177
00:15:32,400 --> 00:15:38,670
basically 2015-2016 we're sort of midway
through the process Bitcoin is well

178
00:15:38,670 --> 00:15:43,170
established as a reality everybody is
comfortable with bitcoins existence to

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00:15:43,170 --> 00:15:49,830
some degree what is it it's a bank
account that stores magic internet money

180
00:15:49,830 --> 00:15:52,590
that comes from the central bank of the
internet which is a decentralized

181
00:15:52,590 --> 00:15:55,110
database which is everywhere anoher
maintained by a bunch of people you

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00:15:55,110 --> 00:16:01,020
don't understand but the funny thing is
that if I describe to you how your

183
00:16:01,020 --> 00:16:08,130
government works it's even worse right
so every four years we hold a popularity

184
00:16:08,130 --> 00:16:14,040
contest regionally we pick the person
that is most likeable on television more

185
00:16:14,040 --> 00:16:17,610
or less regardless of their values we
know nothing about them because they're

186
00:16:17,610 --> 00:16:21,450
protected by privacy that surrounds most
individuals so they could be a person

187
00:16:21,450 --> 00:16:24,870
playing a role and then we assemble
these people into a large group that

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00:16:24,870 --> 00:16:33,180
gets to decide who lives and who dies
every day right so you know don't assume

189
00:16:33,180 --> 00:16:36,930
that because the new stuff is weird it's
any weirder than the old stuff the old

190
00:16:36,930 --> 00:16:43,650
stuff is just weird stuff you got used
to now let me move a little forward to

191
00:16:43,650 --> 00:16:48,900
this whole smart contract thing right so
the smart contract is the third big

192
00:16:48,900 --> 00:16:53,130
integrative step first we merge the
network and the database to make the

193
00:16:53,130 --> 00:16:59,310
blockchain then we take computer
software code and put it into the shared

194
00:16:59,310 --> 00:17:04,230
database into the blockchain so we take
a little program and they can only be

195
00:17:04,230 --> 00:17:07,260
little because it's just the beginning
of the story and we take the little

196
00:17:07,260 --> 00:17:12,240
program and we store it in the
blockchain and that means everybody

197
00:17:12,240 --> 00:17:16,520
that's connected to the block chain has
the copy of exactly the same program and

198
00:17:16,520 --> 00:17:23,480
programs when you run the program same
data same code same result so now

199
00:17:23,480 --> 00:17:28,109
everybody's got a copy of the database
everybody's got a copy the code we all
run the code at the same time we all put

200
00:17:30,420 --> 00:17:34,260
the output back into the blockchain if
there's a disagreement we find it

201
00:17:34,260 --> 00:17:38,550
immediately we sort it out so in that
sort of environment you have these

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little programs which are just as
transactional sending people money it's

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like a wire transfer you
go here and my fools across the network

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it pops up there it's like a Bitcoin
payment what kind of things the world
programs do if this job has been done

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pay bob if the job hasn't been done by
the 31st of March send the money back to
ours how you tiny little pieces of

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business logic pulled out of the
application stack and put onto the box

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chain instead and this is the third big
unification I work for a company called

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consensus systems that uses aetherium
which is the first really durable smart
contract platform to build lots of

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applications and those little programs
do things like make sure the artists get

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paid when their music is listened to
they do things like streamline

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transactions between banks through all
kinds of simple useful things and we're

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still only at the very beginning of the
story right now the Bitcoin system
processes about seven transactions a

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second the etherium system does
something like 20 so these are way back

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in terms of speed they're way back over
there her computers were in the 1960s on

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punched cards now brace yourselves right
now the challenge is to produce a thing

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called a scaled blockchain and a scaled
blockchain is watch-chain that doesn't

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do 20 transactions a second it does
roughly the same number of transactions

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a second as Visa or Swift ten thousand
50 thousand a hundred thousand

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transactions a second quarter of a
million transactions a second and the

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scaled blockchain is something that
begins to provide us with something that

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looks like a global computing surface
onto which things like the internet

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things could be loaded you could take
the entire global financial system and

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push it into a scale box chain you could
take the entire Internet of Things and

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push it into a scale blockchain you
could take all of those machines in the

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cloud you could put blockchain software
onto them as Microsoft recently did with

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a thing called a Dewar and then you
could have a single global computing

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surface that took all of our different
bits and pieces of computing power and

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turned them into a global knowledge
resource that basically manages the

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fundamental infrastructure of our
society

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instead of the cobbled-together nonsense
that you get every time you talk to your

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bank right and because these computer
systems don't create new woe curses of

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political control when they're built
because they're decentralized what you

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don't get is a position where the basic
infrastructure of your society a stock

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that your society runs on is
automatically owned by a set of

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corporations or even a set of
governments what you have is something

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which is constituted by the will of the
people and serves their purposes which

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is after all the original intention of
government now this is where we have to

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go back and separate reality from
fantasy because this is the mistake
that's made it almost impossible for

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people to understand Bitcoin remember I
mentioned the cypherpunks back here and
their inability to tell the difference

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between science fiction and political
reality the notion that we're simply

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going to automate away all of the things
which constitute government makes a ton

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of sense to people that spend 23 hours a
day online and I'm really framing this

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very carefully because this is causing
enormous trouble but if you're somebody

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that spends only a little bit of your
time interacting with computers it's

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pretty obvious that the computer only
exists as a rectangle of glowing light
somewhere in your room or in your hand

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and and out here from that perspective
it's pretty clear that if you teach

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computers governed resources a lot of
trivial stuff in your life gets a lot
easier like paying your taxes or making

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sure that your telephone works or you
know doing your banking whatever happens

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to be but it's not obvious that this is
a replacement for the general edifice of

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government and the tension between the
way the world looks to the technologists

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and the way the world looks to everybody
else is what's at the heart of the fight

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with entities like uber because uber
makes perfect sense to a technologist

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and it really upsets people that have
run a taxi monopoly for 150 years and

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those kind of discussions and tensions
are as much about the different

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neurological makeup of the people who
developed the world view as they are

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about the technology what we're really
having here is a discussion about what

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kinds of minds run our society is our
society predominantly run by charming

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glib slightly sociopathic people who are
good on television or is it

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predominantly run by people that live in
front of computers and control the world

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with numbers and that debate has gone on
inside of our culture since the two

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cultures period of British history where
there was this discussion about whether

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arts and sciences could ever get along
well turns out the sciences guys are now
figuring out how to govern instead of

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the lawyers and this is creating an
enormous amount of turbulence but the

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turbulence is not well described because
it's happening extremely quickly and the

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only place that there's a literary canon
that really describes these processes is
science fiction right if you want mental

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models of how to think about the reality
that we're currently in you have to go

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back to the science fiction a thirty
years ago published under a general

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title of cyberpunk right and cyberpunk
was the fiction that describes the
reality that we're now in it's about

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virtual reality it's about drones it's
about biotechnology that regrows your

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nervous system
it's about virtual currencies and

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artificial intelligence and we would all
have a much better grip on the reality

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that we found ourselves in if science
fiction hadn't been kicked out of the

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Witter recon and sometime after World
War two

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there's a definite push where science
fiction is pushed away from the

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mainstream of literature and into its
own kind of genre box and as a result

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the place where most of the thinking and
analysis has been done about these
technologies and what they mean to us as

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a society has been banished from polite
company it all exists in a place called

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genre fiction and it's no longer
considered to be real literature as a

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result the mainstream can arts
population have been left without mythic

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narratives to allow them to interpret
the reality that the technicians have

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created and what we've seen this evening
is a perfect demonstration of that gap

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because actually getting the message
across requires a completely different

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perspective to the one which is natural
to the technicians

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you know I'm lucky in that I've managed
to bridge that gap because I was always
as much a writer as I was a programmer

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and I've done about you comments are
both in my life so the thing that I

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wanted to leave you with is this the
dialogue about how these technologies

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are going to fit into our society
is going to be a dialogue about class

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it's going to be about whether the
society is run by lawyers or technicians

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both are the wrong answer it has to be
run by the people but for the people to

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be able to intelligently make decisions
in a society where the core technologies

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that run our society are rapidly
becoming so complicated we no longer

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understand them we have to do better the
guessing which technocrat or which

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lawyer to put in charge without a
fundamental reawaken event of

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reawakening of interest in science and
technology and without reclaiming

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science fiction as a fundamental
literacy for the present that we're in

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we're going to be left making decisions
more or less at random depending on what

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charming person tells us the news story
so my challenge to all of you is start

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reading cyberpunk it's painful right
it's painful right it's much of it is

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not very well written many of the ideas
look almost like it's kind of weird

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potboiler fiction about the present but
if you sift through carefully and it

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suggests starting with an anthology
called mirror shades which is a short

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will book with short stories nothing to
challenge you too much if you go back
and read that stuff what you could begin

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to flash out is the stories that all of
the programmers hand in their heads when
they built these technologies and that's

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how you get your head around what's
happening if you share the myths at the

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technical class half when they create
these things you can begin to understand

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the technology in a mythic way which is
how we understand it you have to learn

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the ways of our people because you're
living in the world that we create for

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you